Imperial Tobacco Company of

India Limited (ITC).

Presented by
Anuja Jain
Arihant Darda
Arun Chahar
Ashwini Jain
Charu Pahwa
ITC. Touching your life. Everyday Mohit Rathi
 INTRODUCTION
• ITC Limited which previously stood for ‘Imperial Tobacco Company
one of India's foremost private sector companies with a market
capitalization of nearly US $ 18 billion and a turnover of over US $
4.75 billion.
• ITC's diversified status originates from its corporate strategy aimed at
creating multiple drivers of growth anchored on its time-tested core
competencies: unmatched distribution reach, superior brand-building
capabilities, effective supply chain management and acknowledged
service skills in hoteliering.
• continues in its traditional businesses of Cigarettes, Hotels,
Paperboards, Packaging and Agri-Exports, it is gaining market share
in its nascent businesses of Packaged Foods & Confectionery, Branded
Apparel and Greeting Cards.

ITC. Touching your life. Everyday

 Contd..
• ITC's wholly owned Information Technology subsidiary, ITC
InfoTech India Limited, is pursuing emerging opportunities in
providing end-to-end IT solutions, including e-enabled services
and business process outsourcing.
• ITC's Agri-Business is one of India's largest exporters of
agricultural products.
• ITC's Agri-Business is one of India's largest exporters of
agricultural products.

ITC. Touching your life. Everyday

ITC. Touching your life. Everyday
Strategy of Organisation to manage diversity of
Portfolio

Formal 3-tiered governance structure:

ŸBoard of Directors :
ŸComprising executive (4) and non-executive directors (11)
ŸStrategic supervision

ŸCorporate Management Committee :

ŸComprising executive directors and senior managers
ŸStrategic management

ŸDivisional Chief Executive & Divisional Management Committee :

ŸExecutive management

ITC. Touching your life. Everyday

Board of directors

ITC. Touching your life. Everyday

 VISION & MISSION

• 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.
• Mission: To enhance the wealth generating capability of
the enterprise in a globalizing environment, delivering
superior and sustainable stakeholder value.

ITC. Touching your life. Everyday

 Values

• ITC's Core Values are aimed at developing a

customer-focused, high-performance organisation

• Customer Focus we are always customer focused

and will deliver what the customer needs in terms of
value, quality and satisfaction.

ITC. WORKING FOR YOU. WORKING FOR

INDIA. ITC. Touching your life. Everyday
 ENDURING VALUE
• Expressing concern and desire to help, is the spirit of
ITC’s rural development initiatives. A social mission
reaching out to join hands, convert old relationships into
new partnerships, put on the ground solutions that bring
lasting benefits to society.
• .
• ITC regards corporations as critical tools of social
development, and considers public - private - people
partnerships – bringing together community, government
and business– as the only sustainable basis for social
sector and infrastructure development.

ITC. Touching your life. Everyday

 Corporate Social Responsibility
•Environmental
2. ITC has been Carbon Positive 3 years in a row.
3. Water Positive 6years in a row.
4. 100% solid waste recycling
• Social
6. ITC's businesses generate livelihoods for over 5 million people.

7. ITC's globally recognised e-Choupal initiative is the world's largest rural digital infrastructure
benefiting over 4 million farming families.

8. ITC's Social and Farm Forestry initiative has greened over 80,000 hectares creating an
estimated 35 million person days of employment among the disadvantaged.

9. ITC's Watershed Development Initiative brings precious water to nearly 35,000 hectares of dry
lands and moisture-stressed areas.

10. ITC's Sustainable Community Development initiatives include women empowerment,

supplementary education, integrated animal husbandry programmes.
ITC. showcasing
11. The first ITC Sangeet Sammelan Touching yourthe
life. Everyday
best in Indian classical music was held in
Delhi in 1971
CORPORATE SOCIAL
RESPONSIBILITY

ITC. Touching your life. Everyday

Pest analysis

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SWOT Analysis

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 TOWS MATRIX
  Strengths Weaknesses

•Market expansion •Emphasize on

Opportunities •Promotion personal care
•Awareness
•Affordability

•Strategic alliances
•Diversification with international
Threats players

ITC. Touching your life. Everyday

Future SWOT of ITC

ITC. Touching your life. Everyday

Porters 5 forces

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 Market share of ITC Ltd.
Outstanding market leader
• Cigarettes, Hotels, Paperboards,
Packaging and Agri-Exports.
Gaining market share
• Nascent businesses of Packaged Foods
& Confectionery, Branded Apparel and
Greeting Cards.

ITC. Touching your life. Everyday

Source: Annual Accounts/Equity research
 H1 Segment Revenue

Rs crs
Half Year Half Year Goly
ended ended (%)
30.09.2008 30.09.2007

1. Segment Revenue (Net)

a) FMCG - Cigarettes 3552 3211 10.6%
- Others 1449 1126 28.7%
Total FMCG 5001 4337 15.3%
b) Hotels 467 412 13.4%
c) Agri Business 2699 2127 26.8%
d) Paperboards, Paper & Packaging 1306 1038 25.8%
Total 9473 7915 19.7%
Less : Inter-segment revenue 1810 1351 34.0%
Net sales / Income from operations 7663 6564 16.7%
ITC. Touching your life. Everyday
 ITC. Touching your life. Everyday
Source: Equity research reports
 CAGR during FY 2005-2008

ITC. Touching your life. Everyday

Source: Equity research reports
The BCG Matrix for ITC Ltd.

ITC. Touching your life. Everyday

 Corporate Strategies
Ø Sustain multiple drivers of growth, matching internal capabilities
with emerging market opportunities
Ø Pursue World class competitiveness in all businesses and across
the entire value chain
Ø Best-in-class in terms of:
Ÿ Internal Vitality
Ÿ Market Standing
Ÿ Profitability
Ø Strategy of Organisation and Governance processes geared to
manage multiple businesses
Ø Blend core competencies and leverage ITC umbrella strengths to
create new avenues of growth
ITC. Touching your life. Everyday
 GOVERNANCE,
COMMITMENTS &
• Our Corporate Governance processes are designed to support effective
management of multiple businesses while retaining focus on each one of them.
The practice of Corporate Governance in ITC takes place at three interlinked
levels –

• Strategic supervision- by the Board of Directors

• Strategic management- by the Corporate Management Committee
• Executive management- by the Divisional/Strategic Business Unit (SBU)
Chief Executive assisted by the respective Divisional/SBU Management
Committee

• The role, powers and composition of the Board of Directors, Board

Committees, Corporate Management Committee and Divisional Management
Committees are articulated and available on the Company’s corporate website.

ITC. Touching your life. Everyday

 Critical Success Factor
•SITE AND LOCATION
•POSITIONING AND GUEST PROFILE
•FINANCIAL STRENGTH
•BRAND RECOGNITION
•YIELD MANAGEMENT
•DIFFERENTIAL PRICING

ITC. Touching your life. Everyday

 Positioning of ITC

O UR
N G Y .
C HI D A Y
• T O U E R Y
E E V
LIF

ITC. Touching your life. Everyday

 SPANCOP
• S:- Suspect who can buy our product
• P:- Prospect the chances and needs for which
customers may buy the product
• A:- Approach the prospect with the USP’s of our
product
• N:- Negotiate the deal for the product
• C:- Closing of deal
• O:- Get the order
• P:- Payment follow up
ITC. Touching your life. Everyday
 Cigarettes
• ITC, 32% owned by British American
Tobacco Plc., raised prices of its Gold
Flake and Classic cigarette brands
• ITC commands around 70% of India's
Rs 130 bn domestic cigarette market
(value terms). Out of the top 10
cigarette brands in India, 6 belong to
ITC.
ITC. Touching your life. Everyday
 OBJECTIVES
• Cigarette revenues to increase by 9% during FY09
as a result of the full impact of price hikes and
improved realizations on account of favourable
product mix.
• The company expect to register 17% CAGR in net
profit over FY09-11. At the current market price of
Rs175, the stock is trading at EPS of Rs12.1.

ITC. Touching your life. Everyday

ITC. Touching your life. Everyday
ITC. Touching your life. Everyday
 ITC’s Distribution channel
ITC’s Distribution channel is as follows:-
COMPANY HUB FACTORY

Carried and forward agent

Wholesale dealer

small Wholesale dealer

Retailer

consumer

ITC. WORKING FOR YOU. WORKING

FOR INDIA. ITC. Touching your life. Everyday
 Promotion

Direct marketing:- Sign boards, posters at shops on

point of sale
Delivery vans
Sales force
ITC has just packed a classic punch
(Jazz,Blues,Rocks)
Bann on T.V commercial

ITC. Touching your life. Everyday

 STP
Segmentation
Geographic:
• Rural
• Urban
Demographic:
• Age
• Gender
• Occupation
Psychographic:
• Lifestyle
ITC. Touching your life. Everyday
 Targeting

ITC. Touching your life. Everyday

 POSITIONING
In 70’s they have positioned themselves by
saying:-
• “For the gracious people”
• “A touch of Gold”
• "A tribute to the gracious people”
It is still differentiating itself on the purity
and quality of its experience.
• The brand stands for a celebratory attitude.
“Celebrate the feeling” is the new message

ITC. Touching your life. Everyday

 COMPETITOR ANALYSIS
q The cigarette market in India has 3 players
• Godfrey Phillips India (GPI), a Philip Morris affiliate,13%
of market share
• Vazir Sultan Tobacco (VST), a BAT affiliate, 13% of the
total market share
• Golden Tobacco Company (GTC) with 8% of the market
share.
q Domestic competitors
• Kanhayya tobacco
• MR tobacco
• Sapna enterprises
• Sudarshan tobacco

q ITC still attains a gigantic market share of 66%

ITC. Touching your life. Everyday
 7’S OF ITC

• STRATEGY
• STRUCTURE
• SYSTEM
• STYLE
• SKILLS
• STAFF
• SHARED VALUES
ITC. Touching your life. Everyday
 CONFRONTATION

NAVY CUT,CLASSIC,INSIGNIA,INDIA KINGS,CAPSTEN,GOLD

FLAKE,SISSORS,SILK CUT,BRISTOL,BERKELEY

ITC. Touching your life. Everyday

 Diversification

• ITC over the years has been investing cash flows from its cigarette
business into various lucrative segments like foods, personal care,
hotels and paper.
• With the paperboard division coming out of a major capex cycle and a
reduction in losses from FMCG-others division from FY10E, we
expect the non-cigarette businesses to become self-sufficient.
• The agriculture division continues to provide a strong support as an
excellent raw material sourcing base. Hotels segment though is likely
to register slower growth in FY10E due to economic slowdown and
terror attacks.

ITC. Touching your life. Everyday

 Per Capita Adult Cigarette Consumption
(Sticks)

1753
1662

1190

561
488

141

USA China Pakistan Nepal India World Avg.

Source : Based on Cigarette consumption data(2003) from

“World Cigarettes”,ERC Group plc.

ITC. Touching your life. Everyday

FINANCIAL ANALYSIS

ITC. Touching your life. Everyday

FINANCIAL ANALYSIS

ITC. Touching your life. Everyday

Financial analysis

ITC. Touching your life. Everyday

 HRM POLICY
• ITC believes that all its employees must live with social and economic
dignity and freedom, regardless of nationality, gender, race, economic
status or religion.
• ITC upholds international human rights standards, does not condone
human rights abuses, and creates and nurtures a working environment
where human rights are respected without prejudice.
• The Corporate Human Resources function conducts non-
discrimination reviews annually on a sample basis with unit heads and
through on-site assessments.
• ITC Unit has appropriate systems and checks to ensure compliance
with the Policy and statutory provisions, including means for filing of
grievances, collective bargaining agreements and minutes from worker
meetings.

ITC. Touching your life. Everyday

 CONTD..
• ITC does not employ any person below the age of eighteen years in
the workplace. ITC prohibits the use of forced or compulsory labour at
all its units. No employee is made to work against his/her will or work
as bonded/forced labour.
• All major changes in operations involving work processes, manning
norms and other productivity linked issues are carried out after
discussions with the employees and the recognized unions at each
location.
• ITC is committed to providing a safe and healthy work environment to
all its employees. These policy guidelines on HIV/AIDS are an
endorsement of this commitment and, in particular, of the Company's
commitment to specific programmes and actions in response to the
HIV epidemic.

ITC. Touching your life. Everyday

 OPERATIONS AND
LOGISTICS
• Operation management emphasis the current programs of an
organizations and planning which essentially deals with the future and
two intimately related activities.
• A distinction should be made between planning and forecasting .
• Planning departments are key in critiquing strategies ,crystallizing
goals ,setting objectives, maintain control.
• NEEDS FOR STRATEGY:
1) resources are finite
2) uncertainty about competitive strength and behavior
3)when commitment is irreversible

ITC. Touching your life. Everyday

 Contd…
• Logistic/supply chain management enabling technologies cover a wide
spectrum of technology that facilitates smooth flow of goods and
services and related information as well as integration of business
processes.
• The overall competitiveness of industry would increase by having
proper operations and logistic managements.

ITC. Touching your life. Everyday

 Research and development
• ITC is committed to delivering world class product and services. this
requires clear focus on continuously striving to create a higher value to
customers by achieving excellence in all companies operations.
• ITC development of its integrated quality management system (IOMS)
is based on its strong foundation of implementing
ISO9001:2000,ISO14001,OHSAS18001,SA8000,HACCP(for foods)
and IQRS(Performance rating and benchmarking of the quality
management system.
• ITC R&D centre are at
bengalure,hyderabad,bhadrachalam,rajamundry,the company has
assembled a pool of world class scientist focused on providing the
requiste R&D support system.

ITC. Touching your life. Everyday

 Contd…
• ITC research and developed facilities Rajahmundry in AP cover
all aspects of tobacco crop cultivation. its collaboration with the
central tobacco board research institute and tobacco board ITC
pioneered FCV tobacco cultivation in India and introduced the
burley and HDBRG varieties.

ITC. Touching your life. Everyday

 Information system in ITC
• IT plays a very critical role in driving the ITC business
strategies.
• IT is an enabler of the business process to ensure business
growth through efficient management of operations in the value
chain.
• IT creates new business process or restructure the current
business process to enhance customer service availability ,
efficient manufacturing / supply chain operations etc

ITC. Touching your life. Everyday

 HI-TECH SUPPLY SOLUTIONS
• Thousands of small retailers in India who sell cigarettes and
confectionery supplied by ITC Ltd, and who have thus far
had to wait for the next arrival of the company’s delivery
van.
• Place orders through mobile phones
• Vans go without knowing actual demand so after using this
they can save cost as well as time.
• Mobility based applications can bring down the cost of
operation by 20-30% from the manual basis of operation

ITC. Touching your life. Everyday

 FUTURE OF CIGARETTES
• An average of 2,800 people die every day in India
with tobacco-related diseases.
• Cancer of lungs, lips, tongue, oral cavity, throat
and larynx, uterus and urinary bladder are some of
the common tobacco-related diseases.
• Adding some 184 million people consume
cigarettes, beedis and gutka every day.
• ITC researchers are continuously doing research
on ayurvedic cigarette which would be harmless.
ITC. Touching your life. Everyday
 ITC CAN BE A FOLLOWER
Guardian pharmacy has launched a herbal cigarette
named HONEYROSE which is 100% harmless.
• Nicotine-free, tobacco-free” cigarette seemed like
an oxymoron
• Cigarettes are made with naturally grown
Marshmallow herb, Red Clover and Rose
• As ITC has got more experience and brand image
it can improve its quality and thus can tab the
health consiouspeople FORTRESS STRATEGY

ITC. Touching your life. Everyday

 CERTIFICATIONS, HONOURS
& AWARDS
• All the Environment, Health and Safety (EHS) Management systems &
Sustainability Reporting in ITC conform to the best international standards.
• SA 8000 - Social Accountability
Leaf processing plants at Chirala and Anaparti, Cigarette factory at Kolkata
and SNPL factory at Simra have achieved this certification.
• OHSAS 18001- Occupational Health & Safety Management Systems
All the manufacturing units of ITC and Corporate EHS Department have
achieved this certification.
• ISO 14001- Environment Management Systems
All manufacturing units of ITC, all the major hotels, Corporate EHS
Department & ITC R&D Centre at Bengaluru have achieved this
certification.

ITC. Touching your life. Everyday

 Recommendation
•Improved security for hotel guests.
•Floor access control in hotels through key card system.
•Precision analysis of products in Food Business.
•Process optimisation for product development in Food Business.
•Automation of lighting controls.
•Use of Solar energy for hot water generation and outside area illumination.
•Installation of PNG (Piped Natural Gas) fuelled generator sets and PNG
fired calendar and tumbler drier machines in hotel laundries.
•Improvements to reduce heat gain/cooling losses from building envelops in
hotels.
•Impact of measures for reduction of energy consumption and consequent
impact on the cost of production of goods.

ITC. Touching your life. Everyday

 CONCLUSION
• ITC promoting their brands through advertisement campaign
as well as door to door promotion.
• ITC is also focusing on Retailers and Wholesalers to promote
their brand.
• The demand of their product in very low, because people
don’t know about their brands very well.
• ITC knows their strength and weakness in the personal care
market, so they are applying new concept to overcome their
weaknesses.
• ITC now offering more margins, exiting offers and long credit
period to retailers and wholesalers.

ITC. WORKING FOR YOU. WORKING FOR

INDIA. ITC. Touching your life. Everyday
THANK YOU

ITC. Touching your life. Everyday