SU BM ITTED BY

H IM AN SH U SH EKH AR
12EX021
PIYU SH D W IVED I
12EX035
SREEKAN T SU KU M AR
12EX049
VIVEK KU M AR 12EX056
OPERATION STRATEGY BY ITC
THE ITC VISION
Sustain ITC's position as one of India's most valuable
corporations through world class
performance, creating growing value for
the Indian economy and the Company's
stakeholders

THE ITC MISSION
To enhance the wealth generating capability of the
enterprise in a globalising environment, delivering
superior and sustainable stakeholder value
INTR

Incorporated in !"!#, as Imperial Tobacco

Company of India $imited

Changed to Indian Tobacco $imited in !"%#

and then to I&T&C $imited in !"%'

(ith wide portfolio from )*C+ to hotels

renamed to ITC limited in ,##!
Companies -iversification tobacco

Started as a cigarette, tobacco leave

manufacturing

.ackaging and printing business started in !",/

to backward integrate with cigarette business

!"0/ Surya tobacco Co in Nepal set up,

renamed to Surya Nepal .vt $td in ,##,
becoming a subsidy of ITC

In ,#!#, ITC launched its hand rolled

cigar, Armenteros
Companies -iversification paper

!"%" entry in paper business, ITC

1hadrachalam

!""#, Tribeni tissues limited ac2uired,

speciality paper for cigarette

Nov ,##,, Tribeni tissues division and

1hadrachalam paper board combines to form
.aperboards 3 Specialty .apers -ivision
Companies -iversification stationery

.aperkraft notebooks launched in ,##,

Classmate range launched in ,##4

,##% .ractical 1ooks, -rawing 1ooks,

+eometry 1o5es, .ens and .encils under
the 'Classmate' brand

.aperkraft 6eco friendly premium business

paper

Colour crew6 art stationery brand launched in

,#!#
Companies -iversification apparels

,### launch of (ills lifestyle

(ills Classic formal wear 7,##,8 and (ills

Clublife evening wear 7,##48

*en's wear brand, John Players, in ,##,

(ills $ifestyle India )ashion (eek launched

in ,##9 acts as a platform for 1,1 for fashion
industry
Companies -iversification food

:itchens of India6 ready to eat food launched in ,##!

*int6o, Candyman 3 ;shirvad launched in ,##,

,##4 saw the raise of Sunfeast as a ma<or player in

biscuit segment

=ntry into snack with 1ingo in ,##% 3 noodle

industry with Sunfeast >ipee in ,#!#
Companies -iversification others

$aunched in ,##/ .ersonal Care portfolio has

grown under 'Essenza Di Wills', 'iama Di
Wills', 'Vi!el' and 'S"#eria'

!"%/ ITC6 (elcomgroup hotel Chola

ac2uired in Chennai, now known as )ortune
?otels

,### launched the ITC Infotech

=nters matchbo5es industry in ,##, and ,##4

launches incense sticks
S(T ;nalysis
Stren$th

1rand

*anagement
Wea%ness

@nrelated diversification
O##ort"nity

Rural market

=6choupal
Threats

Increasing ta5 in
Cigarettes

?ealth haAard
The 1C+ *atri5
Stars
?otels
.aperboardsB
.ackaging&
;gri business&
&
)*C+6 thers
Co's
)*C+6Cigarettes
Do$s
.olitical ;spects

In ,##! +overnment of India has announced

ban on the advertising by cigarettes
Companies& Therefore many policies have
come up like this&

Increased in =5cise duties&

=conomical ;spects

; growing portfolio of business encompassing )*C+,

.aperboards 3.ackaging, ;gri 3 )oods 1usiness, ?otels and
Information Technology&

Total Shareholder Returns, measured in terms of increase in

market capitaliAation and dividends, grew at a compound rate
of over ,'C per annum over the last / years&

The new )*C+ businesses support the competitiveness,

technology up gradation and market reach of over ,## Small
and *edium =nterprises 7S*=s8&
Social ;spects

ITC +roup provides direct employment to more than

,9,###people&

ITCDs globally recogniAed =6choupal initiative is the worldDs

largest rural digital infrastructure benefiting over ' million farmers&

ITCDs (atershed -evelopment initiative brings precious water to

over '9,### hectares of dry lands and moisture6stressed areas&

ITCDs Sustainable Community -evelopment initiatives include

womenDs empowerment, supplementary education&
Technological ;spects

(holly own subsidiary named FITC

IN)T=C?G

IndiaDs fastest growing IT services and solution

providers

.roviding services in more than !'#countries

*a<or strategies followed by ITCH

=ntering into less competitive or une5plored

markets 7ready to eat, staples, wafers8&

; managed supply chain network&

Innovation6Regular introduction of new products

7all products8& Supported by R 3 -&

*arket differentiation 7 Ready to eat, biscuits8

Cost control strategy 7all products8

=5tensive advertising 7biscuits, confectionary,

wafers8
Competitors

?@$

1RIT;NNI;

.;R$=

N=ST$=
-iversification
.RS of -iversification

E(onomies o) s(ale an* s(o#e

perational synergies can be realiAed&

Spreading the firm's unutiliAed organiAational resources to other areas can create
value&

$everaging skills across businesses can create value&

Internal (a#ital mar%et

Cash from some businesses can be used to make profitable investments&

=5ternal finance may be more costly due to transaction costs, monitoring costs, etc&
ContdI

Di!ersi)yin$ sharehol*ers+ #ort)olios

Individual shareholders may benefit from investing in a

diversified portfolio&

I*enti)yin$ "n*er!al"e* )irms

Shareholders may benefit from diversification if its

managers are able to identify firms that are under valued
by the stock market&
CNS of -iversification

Combining two businesses in a single firm is likely to result insubstantial

influence costs&

Resource allocation can be influenced by lobbying&

Costly control systems may be needed that reward managers based on division
profits and discipline managers by tying their careers to business unit
ob<ectives&

Internal capital markets may not work well in practice&

Shareholders can diversify their own personal portfolios& Corporate managers

are not really needed to do this&

Identifying undervalued firms may not be as easy as it sounds&

"t"re Positionin$ o) ITC
A lea*in$ MC, #layer in In*ia
F
A
R
M
E
R
S
M
A
R
K
E
T
S
Cigarette Trade Marketing capability
Branded
Foods
Expanded FMCG distribution capability
e-choupal rural to-ay
!ul"ll#ent capability
A basis !or strategic partnerships ith other
FMCG brand oners
$%& pro'iding SCM( ER% ) CRM
capability
Lifestyle
retailing
Greeting
cards/stat
ionery
Matches &
Agarbattis
Conclusion

$everage upon its e5isting skills and competencies& 1enchmarked itDs

operations and 2uality control techni2ues&

Strong branding capabilities backed by good 2uality&

(on numerous awards like JEnter#rise -"siness Trans)ormation

A'ar*., NASSCOM / CN-C IT 0ser A'ar* et(1

ITCDs strong distribution capabilities and a strong brand name are a

useful asset&

@sing its agri sourcing network to source raw materials for its biscuits
and atta businesses&
;head of Competition