ITC LTD.

INTRODUCTION

Imperial Tobacco company India Ltd was incorporated on 24 August,1910 when British American Tobacco (BAT) consolidated its Indian operations under a single umbrella. Imperial Tobacco company India Ltd was managing the entire gamut of BAT's tobacco operations in India. Companys name changed to Indian Tobacco company Ltd in the year 1970 & then to I.T.C. Ltd in the year 1974 Company diversified into many segments other than Cigarettes such as FMCG, HOTEL, Stationary, packaging, Information Technology & Agricultural exports

HISTORY
In year 1928, Imperial Tobacco Company was managing BATs operations in
India at headquarters in Kolkata

Main competitors of Imperial Tobacco Company were Golden Tobacco,

Godfrey Phillip.

To symbolize the move beyond tobacco, the companys name was changed
to I.T.C. Ltd.

ITC ERAS
HASKAR ERA (1969-1983) : CHAIRMAN : Ajit Narain Haksar SAPRU ERA (1983- 1989) : CHAIRMAN: Jagdish Sapru CHUGH ERA (1989 1997): CHAIRMAN : K.L CHUGH , DEBESHWAR ERA (1997 onwards): CHAIRMAN: Y.C. Deveshwar ,

ITC MIX
FMCG Cigarettes Foods Lifestyle Retailing Greeting, Gifting & Stationery Safety Matches Agarbattis

STRENGTHS
Strong Management Diversification Brand image ITC leveraged it traditional businesses to develop Sustainability CSR

new brands.

WEAKNESS

Unrelated diversifications Dependent upon its tobacco revenues Heavy taxation policy

OPPORTUNITIES
Rural market Merger Franchise New Venture

THREATS
Increasing tax in Cigarettes Health hazard Competitors FDI in retail

ITC ETOP ANALYSIS

POLITICAL High Excise duty Advertising cannot be done Additional tax in some states (Luxury tax) FDI in retail

ECONOMICAL

High Profit Margin

SOCIO CULTURAL

Companies mounted by WHO People changing their attitude towards tobacco

TECHNICAL

Total quality management Quality Checking

PORTER 5 FORCES ANALYSIS

Consumer power Consumer faces low buying power as the substitute product price is almost same. Supplier power Suppliers are not having more power because they are getting order in huge quantity and increasing sale of ITC make the supplier sales increase. Threat of new entrants The amount of capital investment required is more to enter in certain consumer products, so the threat of new entries is low. Threat of substitutes Brand name plays a role, ITC is having good brand name and substitute pricing is marginal same, so there is no threat of substitute. Degree of rivalry Quality product have its loyal customer, so no rivalry of product.

Sales Data of ITC

Business/ Year FMCG-Cigarettes FMCG-Others Growth % 8.4 85.2 Value (Rs in Crore) 2005 10002.54 563.39 2004 9230.27 304.16

Hotels
Agribusiness

124.1
4.2

577.25
1780.07

257.53
1708.77

Paper & pkg. Net revenue

24.9 12.99

1565.31 13349.58

1253.29 11815.04

BCG Matrix of ITC Ltd.

Stars Hotels Agro business. Paperboards/ Packaging. Cash Cows Cigarettes ? FMCG-Others

Dogs

PROBLEMS AND SOLUTION After independence company faced many problem of high tax rates for which it hiked its price and thus it resulted into loss of percentage in market share. In late 1960s filter cigarettes came, it introduced Wills Filter with tagline Made for each other, which help in sale of cigarettes on large scale and showed relation between filter and cigarettes and thus company have achieved success again its market share.

In early 1970s there were lot of changes in indian economic, poltical and environment norms and launch of Tirade by Golden Tobacco against ITC ITC Board had made two fine strategies to overcome the problem. 1. Enter in new industry that can help in earning foreign exchange 2. Entering in the core sector of industry where Government have difficult to attract finances by industrial. It made change in company name I.T.C. Ltd. And given new direction to company. Haksar and team diversifies business in Paperboards, Hotels and Marine Foods.

 Chugh also identified the need of Financial Services and Global Trading. ITC Peregrine Mutual Funds and ITC Peregrine Capita.

 Chugh realized that global company will be spreading their brand in India ITC had done marketing research and than taken decision of relaunched and repositioned each brands of cigarettes : India Kings, Classic, Wills, Scissors, Bristol, Gold Flake and Capstan.

Corporate Strategies of ITC Sustaining growth, adding internal capabilities along with emerging opportunities Practice of quality competitiveness in all area of business and across the entire value chain. Internal vitality Market Standing Profitability

Recommendations Maintain the current level of market share by Investing more in cigarettes . For market growth investing high in Hotels, paper and packaging and agricultural business. Invest in foods, agarbattis and matches and look over its growth.