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ITC is one of India's foremost private sector companies with a market


capitalisation of over US $ 22 billion and a turnover of US $ 6 billion.*
ITC is rated among the World's Best Big Companies, Asia's 'Fab 50'
and the World's Most Reputable Companies by Forbes magazine,
among India's Most Respected Companies by BusinessWorld and
among India's Most Valuable Companies by Business Today.

ITC ranks among India's `10 Most Valuable (Company) Brands', in a


study conducted by Brand Finance and published by the Economic
Times. ITC also ranks among Asia's 50 best performing companies
compiled by Business Week.

ITC has a diversified presence in Cigarettes, Hotels, Paperboards &


Specialty Papers, Packaging, Agri-Business, Packaged Foods &
Confectionery, Information Technology, Branded Apparel, Personal
Care, Stationery, Safety Matches and other FMCG products.

While ITC is an outstanding market leader in its traditional businesses


of Cigarettes, Hotels, Paperboards, Packaging and Agri-Exports, it is
rapidly gaining market share even in its nascent businesses of
Packaged Foods & Confectionery, Branded Apparel, Personal Care
and Stationery.

As one of India's most valuable and respected corporations, ITC is


widely perceived to be dedicatedly nation-oriented. Chairman Y C
Deveshwar calls this source of inspiration "a commitment beyond the
market". In his own words: "ITC believes that its aspiration to create
enduring value for the nation provides the motive force to sustain
growing shareholder value. ITC practices this philosophy by not only
driving each of its businesses towards international competitiveness
but by also consciously contributing to enhancing the
competitiveness of the larger value chain of which it is a part."

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.

Over time, the strategic forays into new businesses are expected to
garner a significant share of these emerging high-growth markets in
India.

ITC's Agri-Business is one of India's largest exporters of agricultural


products. ITC is one of the country's biggest foreign exchange
earners (US $ 3.2 billion in the last decade).

The Company's 'e-Choupal' initiative is enabling Indian agriculture


significantly enhance its competitiveness by empowering Indian
farmers through the power of the Internet.

This transformational strategy, which has already become the subject


matter of a case study at Harvard Business School, is expected to
progressively create for ITC a huge rural distribution infrastructure,
significantly enhancing the Company's marketing reach.

ITC's wholly owned Information Technology subsidiary, ITC Infotech


India Ltd, provides IT services and solutions to leading global
customers. ITC Infotech has carved a niche for itself by addressing
customer challenges through innovative IT solutions.

ITC's production facilities and hotels have won numerous national


and international awards for quality, productivity, safety and
environment management systems. ITC was the first company in
India to voluntarily seek a corporate governance rating.

ITC employs over 26,000 people at more than 60 locations across


India. The Company continuously endeavors to enhance its wealth
generating capabilities in a globalising environment to consistently
reward more than 3,53,000 shareholders, fulfill the aspirations of its
stakeholders and meet societal expectations.

This over-arching vision of the company is expressively captured in


its corporate positioning statement: "Enduring Value. For the nation.
For the Shareholder."

HISTORY
ITC was incorporated on August 24, 1910 under the name Imperial
Tobacco Company of India Limited. As the Company's ownership
progressively Indianised, the name of the Company was
changed from Imperial Tobacco Company of India Limited to India
Tobacco Company Limited in 1970 and then to I.T.C. Limited in 1974.

In recognition of the Company's multi-business portfolio


encompassing a wide range of businesses - Cigarettes & Tobacco,
Hotels, Information Technology, Packaging, Paperboards & Specialty
Papers, Agri-business, Foods, Lifestyle Retailing, Education &
Stationery and Personal Care - the full stops in the Company's name
were removed effective September 18, 2001.

The Company now stands rechristened 'ITC Limited'.

BACKGROUND-

The Company¶s beginnings were humble. A leased office on Radha


Bazar Lane, Kolkata, was the centre of the Company's existence. The
Company celebrated its 16th birthday on August 24, 1926, by
purchasing the plot of land situated at 37, Chowringhee, (now
renamed J.L. Nehru Road) Kolkata, for the sum of Rs 310,000.

This decision of the Company was historic in more ways than one. It
was to mark the beginning of a long and eventful journey into India's
future. The Company's headquarter building, 'Virginia House', which
came up on that plot of land two years later, would go on to become
one of Kolkata's most venerated landmarks.
Though the first six decades of the Company's existence were
primarily devoted to the growth and consolidation of the Cigarettes
and Leaf Tobacco businesses, the Seventies witnessed the
beginnings of a corporate transformation that would usher in
momentous changes in the life of the Company.

ITC's Packaging & Printing Business was set up in 1925 as a strategic


backward integration for ITC's Cigarettes business. It is today India's
most sophisticated packaging house.

In 1975 the Company launched its Hotels business with the


acquisition of a hotel in Chennai which was rechristened 'ITC-
Welcomgroup Hotel Chola'. The objective of ITC's entry into the hotels
business was rooted in the concept of creating value for the nation.

ITC chose the hotels business for its potential to earn high levels of
foreign exchange, create tourism infrastructure and generate large
scale direct and indirect employment. Since then ITC's Hotels
business has grown to occupy a position of leadership, with over
100 owned and managed properties spread across India.

In 1979, ITC entered the Paperboards business by promoting ITC


Bhadrachalam Paperboards Limited, which today has become the
market leader in India. Bhadrachalam Paperboards amalgamated with
the Company effective March 13, 2002 and became a Division of the
Company, Bhadrachalam Paperboards Division.

In November 2002, this division merged with the Company's Tribeni


Tissues Division to form the Paperboards & Specialty Papers
Division. ITC's paperboards' technology, productivity, quality and
manufacturing processes are comparable to the best in the world.

It has also made an immense contribution to the development of


Sarapaka, an economically backward area in the state of Andhra
Pradesh. It is directly involved in education, environmental protection
and community development. In 2004, ITC acquired the paperboard
manufacturing facility of BILT Industrial Packaging Co. Ltd (BIPCO),
near Coimbatore, Tamil Nadu. The Kovai Unit allows ITC to improve
customer service with reduced lead time and a wider product range.
In 1985, ITC set up Surya Tobacco Co. in Nepal as an Indo-Nepal and
British joint venture. Since inception, its shares have been held by
ITC, British American Tobacco and various independent shareholders
in Nepal.

In August 2002, Surya Tobacco became a subsidiary of ITC Limited


and its name was changed to Surya Nepal Private Limited (Surya
Nepal).

In 1990, ITC acquired Tribeni Tissues Limited, a Specialty paper


manufacturing company and a major supplier of tissue paper to the
cigarette industry. The merged entity was named the Tribeni Tissues
Division (TTD).

To harness strategic and operational synergies, TTD was merged with


the Bhadrachalam Paperboards Division to form the Paperboards &
Specialty Papers Division in November 2002.

Also in 1990, leveraging its agri-sourcing competency, ITC set up


the Agri Business Division for export of agri-commodities. The
Division is today one of India's largest exporters.

ITC's unique and now widely acknowledged e-Choupal initiative


began in 2000 with soya farmers in Madhya Pradesh. Now it extends
to 10 states covering over 4 million farmers.

ITC's first rural mall, christened 'Choupal Saagar' was inaugurated in


August 2004 at Sehore. On the rural retail front, 24 'Choupal Saagars'
are now operatonal in the 3 states of Madhya Pradesh, Maharashtra
and Uttar Pradesh.

In 2000, ITC forayed into the Greeting, Gifting and Stationery products
business with the launch of Expressions range of greeting cards. A
line of premium range of notebooks under brand ³Paperkraft´ was
launched in 2002.

To augment its offering and to reach a wider student population, the


popular range of notebooks was launched under brand ³Classmate´in
2003.
³Classmate´ over the years has grown to become India¶s largest
notebook brandand has also increased its portfolio to occupy a
greater share of the school bag. Years 2007- 2009 saw the launch of
Children Books, Slam Books, Geometry Boxes, Pens and Pencils
under the ³Classmate´ brand.

In 2008, ITC repositioned the business as the Education and


Stationery Products Business and launched India's first environment
friendly premium business paper under the ³Paperkraft´ Brand.
³Paperkraft´ offers a diverse portfolio in the premium executive
stationery and office consumables segment.

Paperkraft entered new categories in the office consumable segment


with the launch of Textliners, Permanent Ink Markers and White Board
Markers in 2009.

ITC also entered the Lifestyle Retailing business with the Wills
Sport range of international quality relaxed wear for men and women
in 2000. The Wills Lifestyle chain of exclusive stores later expanded
its range to include Wills Classic formal wear (2002) andWills Clublife
evening wear (2003).

ITC also initiated a foray into the popular segment with its men's wear
brand, John Players, in 2002. In 2006, Wills Lifestyle became title
partner of the country's most premier fashion event - Wills Lifestyle
India Fashion Week - that has gained recognition from buyers and
retailers as the single largest B-2-B platform for the Fashion Design
industry.

To mark the occasion, ITC launched a special 'Celebration Series',


taking the event forward to consumers.

In 2000, ITC spun off its information technology business into a


wholly owned subsidiary,ITC Infotech India Limited, to more
aggressively pursue emerging opportunities in this area.

Today ITC Infotech is one of India¶s fastest growing global IT and IT-
enabled services companies and has established itself as a key player
in offshore outsourcing, providing outsourced IT solutions and
services to leading global customers across key focus verticals -
Manufacturing, BFSI (Banking, Financial Services & Insurance),
CPG&R (Consumer Packaged Goods & Retail), THT (Travel,
Hospitality and Transportation) and Media & Entertainment.

ITC's foray into the Foods business is an outstanding example of


successfully blending multiple internal competencies to create a new
driver of business growth. It began in August 2001 with the
introduction of 'Kitchens of India' ready-to-eat Indian gourmet dishes.

In 2002, ITC entered the confectionery and staples segments with the
launch of the brands mint-oand Candyman confectionery
and Aashirvaad atta (wheat flour). 2003 witnessed the introduction
of Sunfeast as the Company entered the biscuits segment.

ITC's entered the fast growing branded snacks category


with Bingo! in 2007. In eight years, the Foods business has grown to a
significant size with over 200 differentiated products under six
distinctive brands, with an enviable distribution reach, a rapidly
growing market share and a solid market standing.

In 2002, ITC's philosophy of contributing to enhancing the


competitiveness of the entire value chain found yet another
expression in the Safety Matches initiative. ITC now markets popular
safety matches brands like iKno, Mangaldeep, Aim, Aim
Mega and Aim Metro.

ITC's foray into the marketing of Agarbattis (incense sticks) in 2003


marked the manifestation of its partnership with the cottage sector.
ITC's popular agarbattis brands
include Spriha and Mangaldeep across a range of fragrances like
Rose, Jasmine, Bouquet, Sandalwood, Madhur, Sambrani and
Nagchampa.

ITC introduced Essenza Di Wills, an exclusive range of fine fragrances


and bath & body care products for men and women in July
2005. Inizio, the signature range under Essenza Di Wills provides a
comprehensive grooming regimen with distinct lines for men (Inizio
Homme) and women (Inizio Femme).

Continuing with its tradition of bringing world class products to


Indian consumers the Company launched 'Fiama Di Wills', a premium
range of Shampoos, Shower Gels and Soaps in September, October
and December 2007 respectively.

The Company also launched the 'Superia' range of Soaps and


Shampoos in the mass-market segment at select markets in October
2007 and Vivel De Wills & Vivel range of soaps in February
and Vivel range of shampoos in June 2008.

ITC is involved in following businesses:strategic


business unit(SBU¶S OF ITC LTD.)c

Cigarettes:cc
ITC is the market leader in cigarettes in India and has a wide range of
popular brands such as Insignia, India Kings, Classic, Gold Flake, Silk
Cut, Navy Cut, Scissors, Capstan, Berkeley, Bristol and Flake in its
portfolio.
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Packaging:cc
ITC's Packaging & Printing Business is the country's largest
convertor of paperboard into packaging. It was set up in 1925 as a
strategic backward integration for ITC's Cigarettes business. It offers
a variety of value-added packaging solutions for the food & beverage,
personal products, cigarette, liquor, cellular phone and IT packaging
industries.

Hotels:
ITC entered the hotels business in 1975 with the acquisition of a hotel
in Chennai which was rechristened Hotel Chola. Today ITC-
Welcomgroup with over 70 hotels is one of the foremost hotel chains
in India.
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Paperboards:cc
In 1979, ITC entered the Paperboards business by promoting ITC
Bhadrachalam Paperboards. ITC's Paperboards business has a
manufacturing capacity of over 360,000 tonnes per year and is a
market leader in India across all carton-consuming segments.

Greeting, Gifting & Stationery:cc


ITC's stationery brands "Paper Kraft" & "Classmate" are widely
distributed brands across India. The Paperkraft designer stationery
range consists of notepads & multi subject notebooks in hard, soft
covers & multiple binding formats including spirals, wiros etc. ITC's
Greeting & Gifting products include Expressions range of greeting
cards and gifting products cc
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Safety Matches:cc
ITC's brands of safety matches include iKno, Mangaldeep, VaxLit,
Delite and Aim. The Aim is the largest selling brand of Safety Matches
in India. ITC also exports premium brands to markets such as Europe,
Africa and the USA.

Aggarbattis:cc
ITC has launched Mangaldeep brand of Aggarbattis with a wide range
of fragrances like Rose, Jasmine, Bouquet, Sandalwood, Madhur,
Durbar, Tarangini, Anushri, Ananth and Mogra. Mangaldeep is also
being exported to USA, UAE, Bahrain, Nepal, Singapore, Malaysia,
Oman and South Africa.

Lifestyle Retailing:
ITC entered the Lifestyle Retailing business with the Wills Sport range
of international quality relaxed wear for men and women in 2000. The
Wills Lifestyle chain of exclusive stores later expanded its range to
include Wills Classic formal wear (2002) and Wills Clublife evening
wear (2003). In 2002, ITC entered into the popular segment with its
men's wear brand, John Players. In 2005, ITC introduced Essenza Di
Wills, an exclusive line of prestige fragrance products.

Food:cc
ITC made its entry into the branded & packaged Foods business in
August 2001 with the launch of the "Kitchens of India" brand. In 2002
it expanded into Confectionery, Staples and Snack Foods segments.
ITC's brand in Food category include: Kitchens of India, Aashirvaad,
Sunfeast, Mint-O, Candyman, and Bingo!.

Agri Exports:cc
ITC's International Business Division (IBD) is the country's second
largest exporter of agri-products. ITC exports Feed Ingredients
(Soyameal), Foodgrains (Rice, Wheat, Pulses), Coffee & Spices,
Edible Nuts, Marine Products, and Processed Fruits.

e-choupal:cc
The e-Choupal model of ITC has been very effective in tackling the
challenges posed by the unique features of Indian agriculture,
characterised by fragmented farms, weak infrastructure and the
involvement of numerous intermediaries, among others. ITC's e-
Choupal won the Stockholm Challenge 2006 award is for using
information technology for the economic development of rural
communities c

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SWOT Analysisc
SWOTc analysisc is a tool for auditing an organization and its
environment. It is the first stage of planning and helps marketers to
focus on key issuesc
Strengthsc

ITC leveraged it traditional businesses to


develop new brands for new segments.

For example- ITC used its experience of


transporting and distributing tobacco
products to remote and distant parts of
India to the advantage of its FMCG
products.

ITC master chefs from its hotel chain are


often asked to develop new food concepts for its FMCG business.

ITC is a diversified company trading in a number of business sectors


including cigarettes, hotels, paper, agriculture, packaged foods and
confectionary, branded apparel, personal care, greetings cards,
Information Technology, safety matches, incense sticks and
stationery.

Weaknesses
The company's original business was traded in tobacco. ITC stands
for Imperial Tobacco Company of India Limited.

It is interesting that a business that is now so involved in branding


continues to use its original name, despite the negative connection of
tobacco with poor health and premature death.

To fund its cash guzzling FMCG start-up, the company is still


dependent upon its tobacco revenues. Cigarettes account for 47 per
cent of the company's turnover, and that in itself is responsible for
80% of its profits.

So there is an argument that ITC's move into FMCG (Fast Moving


Consumer Goods) is being subsidized by its tobacco operations. Its
Gold Flake tobacco brand is the largest FMCG brand in India - and
this single brand alone hold 70% of the tobacco market.

Opportunities
Core brands such as Aashirvaad, Mint-o, Bingo! And Sun Feast (and
others) can be developed using strategies of market development,
product development and marketing penetration.

ITC is moving into new and emerging sectors including Information


Technology, supporting business solutions.

e-Choupal is a community of practice that links rural Indian farmers


using the Internet. This is an original and well thought of initiative that
could be used in other sectors in many other parts of the world.

It is also an ambitious project that has a goal of reaching 10 million


farmers in 100,000 villages.

ITC leverages e-Choupal in a novel way. The company researched the


tastes of consumers in the North, West and East of India of atta (a
popular type of wheat flour), then used the network to source and
create the raw materials from farmers and then blend them for
consumers under purposeful brand names such as Aashirvaad Select
in the Northern market, Aashirvaad MP Chakki in the Western market
and Aashirvaad in the Eastern market.

This concept is tremendously difficult for competitors to emulate.

Chairman Yogi Deveshwar's strategic vision is to turn his Indian


conglomerate into the country's premier FMCG business.

Per capita consumption of personal care products in India is the


lowest in the world offering an opportunity for ITC's soaps, shampoos
and fragrances under their Wills brand.

Threats

The obvious threat is from competition, both domestic and


international. The laws of economics dictate that if competitors see
that there is a solid profit to be made in an emerging consumer
society that ultimately new products and services will be made
available.

Western companies will see India as an exciting opportunity for


themselves to find new market segments for their own offerings.

ITC's opportunities are likely to be opportunities for other companies


as well. Therefore the dynamic of competition will alter in the medium-
term.

Then ITC will need to decide whether being a diversified


conglomerate is the most competitive strategic formation for a secure
future.

ITC was incorporated on August 24, 1910 under the name of 'Imperial
Tobacco Company of India Limited'. Its beginnings were humble.

A leased office on Radha Bazar Lane, Kolkata, was the centre of the
Company's existence. The Company celebrated its 16th birthday on
August 24, 1926, by purchasing the plot of land situated at 37,
Chowringhee, (now renamed J.L. Nehru Road) Kolkata, for the sum of
Rs 310,000.
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CIGARRATES:

ITC is the market leader in cigarettes in India. With its wide range of
invaluable brands, it has a leadership position in every segment of
the market. It's highly popular portfolio of brands includes Insignia,
India Kings, Classic, Gold Flake, Silk Cut, Navy Cut, Scissors,
Capstan, Berkeley, Bristol and Flake.
STATIONERY PRODUCTS:

ITC's Classmate range of stationery, created to inspire young minds


is creating a buzz in classrooms with over 300 variants: Notebooks,
Graph Books, Drawing Books, Practical Notebooks, Reminder Pads
and more. Attractively designed, featuring jokes, general knowledge
nuggets and more, Classmate notebooks are the prized possessions
of school kids eager to explore their potential. Classmate even
provides personalized stationery with school emblems.
AGARBATTIS AND MATCHES:

As part of ITC's business strategy of creating multiple drivers of


growth in the FMCG sector, the Company commenced marketing
Agarbattis (Incense Sticks) sourced from small-scale and cottage
units in 2003. Mangaldeep Agarbattis are available in a wide range of
fragrances like Rose, Jasmine, Bouquet, Sandalwood, Madhur,
Durbar, Tarangini, Anushri, Ananth and Mogra.

As part of its strategic initiative to create multiple drivers of growth


in the FMCG sector, ITC commenced marketing safety matches
sourced from the small-scale sector.
The Matches business leverages the core strengths of ITC in
marketing and distribution, brand building, supply chain
management and paperboard & packaging to offer Indian
consumers high quality safety matches.

ITC¶s range of Safety matches include popular brands like i Kno,


Mangaldeep, Aim, Aim Mega and Aim Metro. With differentiated
product features and innovative value additions, these brands
effectively address the needs of different consumer segments.

The Aim brand is the largest selling brand of Safety Matches in India.

ITC FOODS-

ITC made its entry into the branded & packaged Foods business in
August 2001 with the launch of theKitchens of India brand. A more
broad-based entry has been made since June 2002 with brand
launches in the Confectionery, Staples and Snack Foods segments.

The packaged foods business is an ideal avenue to leverage ITC's


proven strengths in the areas of hospitality and branded cuisine,
contemporary packaging and sourcing of agricultural commodities.

ITC's world famous restaurants like the Bukhara and the Dum Pukht,
nurtured by the Company's Hotels business, demonstrate that ITC
has a deep understanding of the Indian palate and the expertise
required to translate this knowledge into delightful dining
experiences for the consumer.

ITC has stood for quality products for over 100 years to the Indian
consumer and several of its brands are today internationally
benchmarked for quality.

The Foods business is today represented in 4 categories in the


market. These are:

þc Ready To Eat Foods


þc Staples

þc Confectionery

þc Snack Foods

Some of which are-


þc Kitchens of India ±pickles, masalas, curry pastes, ready
made foods

þc Aashirvaad ± atta, salt, paste, chilli powders

þc Sunfeast ± biscuits, cakes, pasta

þc mint-o ± toffees ( ³minto fresh khao laila majnu ko patao´)

þc Candyman ± eclairs, fruity, different flavours

þc Bingo! ± chips and snacks

In order to assure consumers of the highest standards of food


safety and hygiene, ITC is engaged in assisting outsourced
manufacturers in implementing world-class hygiene standards
through HACCP certification. The unwavering commitment to
internationally benchmarked quality standards enabled ITC to
rapidly gain market standing in all its 6 brands:
READY TO EAT FOODS:

Let your kids dig into ITC's tasty Sunfeast biscuits. And watch the
smile spread as they demolish wholesome delights like Butterscotch
Cream, Orange Marie, Bourbon and Orange Cream.
Milky Magic, made with cow's milk, gives them high energy, stamina
and health; while the Jagmag 'flavour bursts' of the Strawberry and
Pineapple Cream biscuits melt in their mouths.
ITC's Sunfeast is a brand driven by innovative product development
at ITC's state-of-the-art food technology centre in Bengaluru. Every
Sunfeast product is made with utmost care, ensuring world class
standards of hygiene.
Sunfeast symbolises ITC's commitment to create brands that enrich
the quality of life for every Indian. Because our people and our
country deserve the best.

ITC in March launched it's ready-to-eat snacks 'Bingo' to mark it's


entry into the Rs 2,000 crore fast-moving branded snacks market. As
usual the company has backed the launch by a well designed ad
campaign and the taste and variants of the product are based on
extensive research on tastes of consumers . The launch of Bingo
represents ITC Foods' fifth major line of foods business after
Staples, Biscuits, Ready-to-Eat and Confectionery businesses. The
launch represents the attempt made by the company to reduce the
dependence on tobacco in it's total turnover.

LIFESTYLE RETAILING:
ITC's Lifestyle Retailing Business Division has established a
nationwide retailing presence through itsWills Lifestyle chain of
exclusive specialty stores. Wills Lifestyle, the fashion destination,
offers a tempting choice of Wills Classic work wear, Wills
Sport relaxed wear, Wills Clublife evening wear, fashion accessories
and Essenza Di Wills - an exclusive range of fine fragrances and
bath & body care products and Fiama Di Wills - a range of premium
shampoos and shower gels. Wills Lifestyle has also introduced Wills
Signature designer wear, designed by the leading designers of the
country.

PAPERBOARDS AND SPECIALITY PAPERS:

ITC's Paperboards and Specialty Papers Division is India's largest,


technologically advanced and most eco-friendly, paper and
paperboards business.

The business caters to a wide spectrum of packaging, graphic,


communication, writing, printing and specialty paper requirements
through its four world-class manufacturing units, 6 sales offices and
a network of more than 50 dealers in India, along with an
international trade network of 15 distributors / agents.
PERSONAL CARE PRODUCTS:

In line with ITC's aspiration to be India's premier FMCG company,


recognised for its world-class quality and enduring consumer trust,
ITC forayed into the Personal Care business in July 2005. In the
short period since its entry, ITC has already launched an array of
brands, each of which offers a unique and superior value
proposition to discerning consumers.

Anchored on extensive consumer research and product


development, ITC's personal care portfolio brings world-class
products with clearly differentiated benefits to quality-seeking
consumers.

ITC's Personal Care portfolio under the 'Essenza Di Wills', 'Fiama Di


Wills', 'Vivel Di Wills' 'Vivel UltraPro', 'Vivel' and 'Superia' brands has
received encouraging consumer response and is being
progressively extended nationally.
ITC launched Fiama Di Wills, a premium range of shampoos today,
following the success of Essenza Di Wills, its exclusive range of fine
fragrances and super premium personal care products. Fiama Di
Wills continues ITC¶s tradition of bringing world class products to
the Indian consumer.

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Keys towards business strategies:

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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

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Mission:
To enhance the wealth generating capability of the enterprise in a
globalising environment, delivering superior and sustainable
stakeholder value
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Objective:cc
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The primary focus of ITC's Social Development Initiatives is to
create sustainable sources of farm and off-farm livelihoods and to
improve the social infrastructure especially in areas where it
impacts women and children. In pursuit of these objectives, the
following goals have been set for the next five years:

þc Web-enable 10 million farmers through 20,000 e-Choupals in


100,000 villages.

þc Bring at least 50,000 hectares under soil and moisture


conservation practices.

þc Transform at least 1,00,000 hectares of wastelands into


productive and revenue-generating assets for the poor.

þc Create at least 10,000 women entrepreneurs with a sustainable


source of supplementary incomes.

þc Improve the genetic stock of at least 150,000 cattle through


artificial insemination practices.

þc Provide supplementary education support services to at least


100,000 children.

In its endeavour to preserve India's cultural and artistic heritage, ITC


will also continue to ensure that its initiatives in the areas of
preservation and promotion of Indian music, art and theatre are
strengthened.

Goals:

þc Poverty:
To halve by 2015 the proportion of the world¶s people whose
income is less than $1/day.

þc Hunger:
To halve by 2015 the proportion of the world¶s people who
suffer from hunger.

þc Universal Primary Education :


To ensure that, by 2015, children everywhere will be able to
complete a full course of primary schooling.

þc Gender Equality :
Progress towards gender equality and the empowerment of
women should be demonstrated by ensuring that girls and
boys have equal access to primary and secondary education.

þc Environmental Sustainability:
To stop the unsustainable exploitation of natural resources
and to halve, by 2015 the proportion of people who are unable
to reach or to afford safe drinking water.

þc Sustaining itc¶s position as one of india¶s most valuable


corporations

þc Achieving leadership in each of the business segments within a


reasonable time frame

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ITC's Core Values
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ITC's Core Values are aimed at developing a customer-focused, high-
performance organisation which creates value for all its stakeholders:

þc Trusteeship

As professional managers, we are conscious that ITC has been given


to us in "trust" by all our stakeholders. We will actualise stakeholder
value and interest on a long term sustainable basis.

þc Customer Focus
We are always customer focused and will deliver what the customer
needs in terms of value, quality and satisfaction.
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þc Respect For People

We are result oriented, setting high performance standards for


ourselves as individuals and teams.

We will simultaneously respect and value people and uphold


humanness and human dignity.

We acknowledge that every individual brings different perspectives


and capabilities to the team and that a strong team is founded on a
variety of perspectives.

We want individuals to dream, value differences, create and


experiment in pursuit of opportunities and achieve leadership through
teamwork.

þc Excellence

We do what is right, do it well and win. We will strive for excellence in


whatever we do.

þc Innovation

We will constantly pursue newer and better processes, products,


services and management practices.

þc Nation Orientation

We are aware of our responsibility to generate economic value for the


Nation. In pursuit of our goals, we will make no compromise in
complying with applicable laws and regulations at all levels.
STRATEGIES-

þc ITC¶S low carbon growth strategy placed ITC in the forefront of


the corporations that contribute to the goals of the national
action plan on climate change.

þc ITC¶S deep commitment to pursue a triple bottom strategy has


earned it global and national recognition for the leadership it
provides in responsible and sustainable business practices.
c
c
c

c
c
c
c

c
c
c
c
7¶S MCKINSEY MODEL-
c
c
Most of us grew up learning about à Và of the marketing mix:
product, price, place, promotion. And this model still works when the
focus is on product marketing. However most developed economies
have moved on, with an ever-increasing focus on service businesses,
and therefore service marketing.

To better represent the challenges of service marketing, McKinsey


developed a new framework for analyzing and improving
organizational effectiveness,  
 The  across the
top of the model are described as à  à
c
cStrategy:cc
The direction and scope of the company over the long term.
Continue to focus on the chosen portfolio of FMCG, Hotels, Paper,
Paperboards & Packaging, Agri Business and Information
Technology.
Ensure that each of its businesses is world class and internationally
competitive.

Enhance the competitive power of the portfolio through synergies


derived by blending the diverse skills and capabilities residing in
ITC¶s various businesses
c
cStructure:cc
The basic organization of the company, its departments, reporting
lines, areas of expertise, and responsibility (and how they inter-
relate).

cSystems:cc

Formal and informal procedures that govern everyday activity,


covering everything from management information systems,
through to the systems at the point of contact with the customer
c
(retail systems, call centre systems, online systems, etc).
In combination they provide another effective framework for analyzing
the organization and its activities.

In a marketing-led company they can be used to explore the extent to


which the company is working coherently towards a distinctive and
motivating place in the mind of consumer.

Most of us grew up learning about 'the 4Ps' of the marketing mix:


product, price, place, promotion. And this model still works when the
focus is on product marketing. However most developed economies
have moved on, with an ever-increasing focus on service businesses,
and therefore service marketing. To better represent the challenges of
service marketing, McKinsey developed a new framework for
analyzing and improving organizational effectiveness, the 7S model:
c
The 4Ss across the bottom of the model are less tangible, more
cultural in nature, and were termed 'Soft Ss' by McKinsey:
c Skills:c
The capabilities and competencies that exist within the
company. What it does best.

þc Eg- Ensure that the Company's record of attraction and


retention of talent is superior to other companies in the
comparative sample.
þc Enable employees to perform to their fullest potential to
add value to the enterprise, nation and themselves.
þc Enhance the Company's employee value proposition so
c that ITC retains its position as an employer of choice.
þc Endeavour to eliminate accidents and injuries both
onsite and offsite.

c
c Shared values:c
The values and beliefs of the company. Ultimately they guide
employees towards 'valued' behavior.
c
Eg- shared values at ITC ltd for the employees and staff are-
³We do what is right, do it well and win. We will strive for
excellence in whatever we do.´
c
c Staff:c The company's people resources and how they are
developed, trained, and motivated.

Egcc

Management:cc
The Company leadership 'walking the talk' and a relentless
focus on implementing the policy underlines the Company's
approach to employment practices and creating a decent work
environment.

The Human Resources and EHS functions of each business


are the primary custodians of ITC's labour and EHS policies
and employment practices, the implementation of which is
reviewed periodically at the Unit and the Divisional levels.

The Corporate Human Resources and EHS functions provide


specialist services to assist in the implementation and
monitoring of the same. The multi-layered and multi-
dimensional audit framework of the Company also helps in
monitoring compliance with laid down policies and statutory
regulations.

Training & Awareness:cc


The policy is shared with employees and potential employees
through training programmes, communication sessions, the
Company portal, intranet sites and pre-placement
presentations. Managers from HR, EHS and Engineering
departments are provided regular training for effective
implementation of these policies.

c
c Style:cc
The leadership approach of top management and the
company's overall operating approach.

Eg- The ITC board is a balanced board comprising Executive


and Non-Executive Directors. The Board ensures that the
Company has clear goals relating to shareholder value and its
c
growthc

In combination they provide another effective framework for analyzing


the organization and its activities. In a marketing-led company they
can be used to explore the extent to which the company is working
coherently towards a distinctive and motivating place in the mind of
consumer c

INTRODUCTION-BCG MATRIX
c
BOSTON CONSULTING GROUP (BCG) MATRIX is developed by
BRUCE HENDERSON of the BOSTON CONSULTING GROUP IN
THE EARLY 1970¶s.

According to this technique, businesses or products are


classified as low or high performers depending upon their
market growth rate and relative market share.
c
THE BCG GROWTH-SHARE MATRIX
c
It is a portfolio planning model which is based on the
observation that a company¶s business units can be classified
in to four categories:

a) Stars
b) Question marks
c) Cash cows
d) Dogs

It is based on the combination of market growth and market


share relative to the next best competitor.
c
c
Market attractiveness & Competitive strength is also important

c
c
c
c
c
c
c
c
c
c
c
Limitations

c Assumes market growth rate. A firm may grow the market.


c A ³Dog´ may be helping other products.
c High market share/Growth is not the only success factor.
c Linkage between market share and profitability is questionable

STARS-High growth, High market share


þc Stars are leaders in business.
þc They also require heavy investment, to maintain its large
market share.

þc It leads to large amount of cash consumption and cash


generation.
þc Attempts should be made to hold the market share
otherwise the star will become a CASH COW.

CASH COWS-Low growth , High market share

þc They are foundation of the company and often the stars of


yesterday.
þc They generate more cash than required.
þc They extract the profits by investing as little cash as
possible
þc They are located in an industry that is mature, not growing
or declining.

DOGS-Low growth, Low market share


þc Dogs are the cash traps.
þc Dogs do not have potential to bring in much cash.
þc Number of dogs in the company should be minimized.
þc Business is situated at a declining stage.

QUESTION MARKS'High growth , Low market share

þc Most businesses start of as question marks.


þc They will absorb great amounts of cash if the market
share remains unchanged, (low).
þc Why question marks?
þc Question marks have potential to become star and
eventually cash cow but can also become a dog.
þc Investments should be high for question marks.

c
c
c
c
c
c
Ac Strategic management and organization structure/structure
follows strategy:
c
c Once the mission,vision,goals,objectives,strategies,values
and programmes are defined for an organization.the
manager has to implement and execute the chosen
strategy by developing the organizational capabilities to
reach the target objectives on schedule

c Strategy execution on strategy implementation is an acton


oriented process which aims to achieve competencies and
capabilities for an effective organization

c As firms grow,their structure generally changes from


single to complex structure for eg-small firms are
functionally structured.as they grow in size and are
medium sized they lend to be divisionally structured
whereas large organizations are matrix structured

c There are many internal and external factors that affects


the organization structure.however the basic aim of
organization structure is to facilitate corporate objectives
effectively and efficiently.
c
There are four types of organization structure and they are as
follows-

c
cThe functional strategy:
This is the simplest and least expensive structure.in this the
activities are grouped by the business functions such as
marketing,finance,hr,operations,etc.it promotes specialization
and encourages perfection at a given task.quick decisions
making is possible.however the big disadvantage is that it
allows for top down approach and puts lot of pressure on the
top management to perform.the functional structure can be
diagrammatically represented as follows:-
c
cThe divisional structure-
As the small business grows it has more difficulty in managing
different functions in different geographical markets.this
requires a structure that controls operations,competes
successfully in various locations this kind of structure is called
as divisional structure.a banks divisional structure can be
shown on the foll basis:
c Geographic area
North zone,east zone,west zone and south zone

c Products and services


Corporate finance,consumer finance

c Customer
Retail segment,HNI,NRI segment etc..HNI(high networth
individuals)

cStrategic business unit(sbu¶s)structure


c
As the business grows in size and diversity organizational
control and evaluation becomes more difficult
c
The span of control becomes too large and thus increase in
revenueneed not be an increase in profits

In order to define a profit center,a sbu is needed.sbu groups


similar division into unique and delegates authority and
responsibility for each unit to a single executive and directly
reports to a ceo
This increases co-ordination and communication leading to
increased profitability and overall efficiency
The SBU structure of ITC are as follows-
c

c
c
c
c
c

cMatrix structure:
This is the most complex of all design as it depends on both
ways ie authority and communication
Traditionally on functional and divisional organizational
structure depends on suthority,responsibility, and
communication with a top down approach

In a matrix structure there are dual times budgetary,authority


and control.this kind of system is not prevalent in the exisiting
Indian corporate sector but is very popular in USA by
organizations heading new products new markets and latest
technologies.

The disadvantages of this structure is that it isvery


complex,costly and requires more management position.

Structure- ITC has a three-tier management structure.[MATRIX


STRUCTURE OF ITC LTD]

c At the top are Chairman and Board of Directors, who are


responsible for the strategic supervision of ITC, its wholly
owned subsidiaries and their wholly owned subsidiaries. The
ITC board is a balanced board comprising Executive and Non-
Executive Directors. The Board ensures that the Company has
clear goals relating to shareholder value and its growth. It sets
strategic goals and seeks accountability for their fulfillment.
There are four board committees, namely, the Audit Committee,
the Nominations Committee, the Compensation Committee and
the Investor Services Committee.

c At the second level is the Corporate Management Committee,


which is responsible for the strategic management of the
company's businesses within Board-approved
direction/framework. It comprises all the Executive Directors and
three or four key senior members of management.

c Third level consists of divisional CEOs of each business


assisted by their own divisional management committees.
Corporate Functions of the Executive Management Team
includes Planning and Treasury, Accounting, Legal, Secretarial,
Human Resources, Communications, Internal Audit and
Information Technology.

c The company¶s organizational structure and governance


processes are designed to support effective management of
multiple businesses while retaining focus on each of them." This
three-tier governance structure ensures that:

c For and on behalf of the shareholders the company believes in


incorporating strategic governance in its work culture so as to
ensure that despite being free from involvement in the task of
strategic management of the Company, it can be conducted by
the Board with objectivity, thereby sharpening and ensuring
accountability of management;
c With mundane tasks of everyday executive management being
delegated the management remains focused on issues of
immediate importance;

c The Executive management of the individual businesses that are


free of handling strategic management responsibilities of ITC as
a whole is then able to channelize their energies and time in
enhancing the effectiveness and overall growth of their
individual units.

c Corporate Governance as defined by ITC is a systemic process


by which companies are directed and controlled to enhance
their wealth-generating capacity. A company employs vast sums
of societal resources during this process of wealth generation.
ITC is of the firm belief that the governance process being
followed should ensure that these resources are used optimally
to meet the aspirations of its stakeholders and society. This is
further reflected in the deep commitment of the company to
contribute to the µTriple Bottom Line¶, which is the development
of the nation¶s economic, ecological and social resources.

c The company believes in empowering the executive


management. But corporate governance ensures a system of
checks and balances to ensure that these powers that are
bestowed upon the executive management are used in a
responsible manner so as to meet shareholder and societal
expectations. The core strengths of ITC's governance
philosophy are trusteeship, transparency, empowerment and
accountability, control and ethical corporate citizenship. The
practice of each of these creates the right corporate culture that
fulfils the true purpose of Corporate Governance.

c Overall, the structure of ITC has high complexity because of


horizontal differentiation within the organization. The most
visible evidence is that of specialization and departmentation.
Complexity also increases because of spatial differentiation.

c The ITC Code of Conduct, as adopted by the Board of Directors,


is applicable to all Directors, senior management and employees
of the Company. This Code is derived from three interlinked
fundamental principles, viz. good corporate governance, good
corporate citizenship and exemplary personal conduct. The
Code covers ITC's commitment to sustainable development,
concern for occupational health, safety and environment, a
gender friendly workplace, transparency and auditability, legal
compliance, and the philosophy of leading by personal example.
Since non-adherence to the code is brought to the attention of
the immediate reporting authority, formalization is also there in
ITC.

c Decision-making is decentralized, as the company believes in


giving executive freedom to the management to drive the
enterprise forward without undue restraints but this freedom of
management should be exercised within a framework of
effective accountability.
LEVELS OF STRATEGIC MANAGEMENT
The strategic can be broadly divided into three levels they are as
follows««

1. Corporate strategy
2. Business strategy
3. Functional strategy

The above three levels can be diagrametically rapresent are as


follows,c
c
c
c c

ccc cc
c

c
c

 c  c
c
c

c
 
 c  c
c
c
The above levels of management is explain as follows«..

Ac CORPORATE STRATEGY:[CEO,MD]
1. It describe the companies over all direction in terms of its
general attitude towards growth and the management of
its various businesses and the product line.
2. Corporate strategy refers to the principle strategy of the
diversified firm.
3. It is also concerned with selection of businesses.
4. It is also called as highest level of strategy

ITC¶s corporate strategies are :

a) ITC is a board-managed professional company, committed


to creating enduring value for the shareholder and for the
nation. It has a rich organisational culture rooted in its core
values of respect for people and belief in empowerment. Its
philosophy of all-round value creation is backed by strong
corporate governance policies and systems.

b) Create multiple drivers of growth by developing a portfolio


of world class businesses that best matches
organisational capability with opportunities in domestic
and export markets.

c) Continue to focus on the chosen portfolio of FMCG, Hotels,


Paper, Paperboards & Packaging, Agri Business and
Information Technology.

d) Benchmark the health of each business comprehensively


across the criteria of Market Standing, Profitability and
Internal Vitality.
e) Ensure that each of its businesses is world class and
internationally competitive.

f) Enhance the competitive power of the portfolio through


synergies derived by blending the diverse skills and
capabilities residing in ITC¶s various businesses.

g) Create distributed leadership within the organisation by


nurturing talented and focused top management teams for
each of the businesses.

h) Continuously strengthen and refine Corporate Governance


processes and systems to catalyse the entrepreneurial
energies of management by striking the golden balance
between executive freedom and the need for effective
control and accountability.

Ac Business strategy:[HOD]
1. It is usually occurs at the strategic business unit level or
product levels.
2. It emphasis improvement of the competitive position of a
firms product or services in a specified industry
3. Business strategy includes mktg strategy`s, H.R
strategy`s, financial strategy`s, legal strategy`s and
information technology development strategies.
4. This level is based on short and medium term plan and
each department functional responsibilities.
FUTURE BUSINESS STRATEGY OF ITC ARE-

þc No new investments in cigarrates

þc New ventures in agri business

þc Use the distribution network to reach rural areas

þc Tie ups and acquisitions to boost IT business

þc Increased exports

þc Cut down prices in the biscuit domain

þc Introduce low fat chips in respect of ITC foods

Hr strategies-

þc Employee training
þc Self-managing teams
þc Pay for performance

Ac FUNCTIONAL STRATEGY:[SUPERVISORS,WORKERS,STAFFS]
1. It relates to the functional areas such as production,
mktg, financing, personal, etc.
2. The functional strategy aims at achieving functional
objectives.
3. This level is also called as operation strategy level or
departmental strategy level.
4. It is lowest level of strategy management. It is deal with
day to day operation level of the business.

The functional strategies of ITC are-


Marketing and efficiency in respect of-

þc Promotion
þc Advertising
þc Pricing
þc Distribution
þc Product design

Production and efficiency in respect of-

þc Economies of scale
þc Flexible manufacturing

This strategy were encouraged by PETER DRUCKER in his theory of


Management By Objectives(MBO)c

c
Strategic management process

1) strategic management is the systematic approach to a major and


increasing important responsibility of general management to
position and relate the firm to its environment in a away which will
assure its continue success and make it secure from surprises

2) Strategic management is a stream of decision and actions which


lead to the development of an effective strategy or strategies to help
achieve corporate objectives .

Thus strategic management process is the way in which strategies


determine objectives and make strategy decisions

3) The strategic management process can be broadly divided into


3phases each phases consists of number of steps these phases are
as follows

Phases 1) strategy formulation -

Strategy formulation can also be called as strategic planning .

A strategic formulation is done at the top management level at the top


management level or at the top management level or at the co-operate
level stage with the levels of strategic management .
Example- At the top are Chairman and Board of Directors, who
are responsible for the strategic supervision of ITC, its wholly
owned subsidiaries and their wholly owned subsidiaries.

The ITC board is a balanced board comprising Executive and


Non-Executive Directors. The Board ensures that the Company
has clear goals relating to shareholder value and its growth.

It sets strategic goals and seeks accountability for their


fulfillment.

There are four board committees, namely, the Audit Committee,


the Nominations Committee, the Compensation Committee and
the Investor Services Committee.

The strategic formulation phase evolves the following steps

Step 1 framing mission and objectives


Eg-
Mission:
To enhance the wealth generating capability of the enterprise
in a globalising environment, delivering superior and
sustainable stakeholder value
Objective-
þc Web-enable 10 million farmers through 20,000 e-
Choupals in 100,000 villages.
þc Bring at least 50,000 hectares under soil and moisture
conservation practices.

Step 2 analysis of internal environment


After setting the objective or goals the analysis of internal
environment may be done the internal environment refers to the study
of men power machines method procedure of the organization that is
it reveals strength and weakness of the organization

The internal environment

All factors that are internal to the organization are known as the
'internal environment'. They are generally audited by applying the
'Five Ms' which are Men, Money, Machinery, Materials and Markets.
The internal environment is as important for managing change as the
external. As marketers we call the process of managing internal
change à    '
Men:
ITC employs over 25,000 people at more than 60 locations across
India. The Company continuously endeavors to enhance its wealth
generating capabilities in a globalizing environment to consistently
reward more than 3, 53,000 shareholders, fulfill the aspirations of its
stakeholders and meet societal expectations.

Money:
ITC is one of India's foremost private sector companies with a market
capitalization of nearly US $ 14 billion and a turnover of over US $ 5
billion. ITC is one of the country's biggest foreign exchange earners
(US $ 3.2 billion in the last decade).

Machinery:
ITC is using world class machinery so that they can match with
demand of the market. Their most of the facilities are fully automated.

Materials:
ITC is using quality raw material so that they can give world class
quality product to their customers. They are very selective while
selecting supplier for them.

Markets:
Its businesses and brands are focused almost entirely on the Indian
markets, and despite being most well-known for its tobacco brands
such as Gold Flake, the business is now diversifying into new FMCG
(Fast Moving Consumer Goods) brands in a number of market sectors
- including cigarettes, hotels, paper, agriculture, packaged foods and
confectionary, branded apparel, personal care, greetings cards,
Information Technology, safety matches, incense sticks and
stationery.

Step 3 analysis of external environment .

The external environment refers to study of government competition


consumer technology development affecting the organization that is it
reveals opportunity and threats of the organization.

Customers ,Competitors ,Market trends ,Suppliers ,Partners ,Social


changes ,New technology ,Economic environment

Example-

Supplier: Raw materials, intermediates and the final product


sourcing/distribution in widespread across the country. Few items
have more than 1 supplier for the raw material e.g. filter rods can be
sourced from Mumbai, Bangalore or Devas in MP.

Huge supply-demand network for cigarette business, which must


operate in the cost optimal way to maximize the profits. Few
segments are particular to factories e.g. Kingsize.

Consumer: Organisations survive on the basis of meeting the


needs, wants and providing benefits for their customers.

Failure to do so will result in a failed business strategy. Its


businesses and brands are focused almost entirely on the Indian
markets, and despite being most well-known for its tobacco brands
such as Gold Flake, the business is now diversifying into new FMCG
(Fast Moving Consumer Goods) brands in a number of market
sectors.

The macro-environment

This includes all factors that can influence and organization, but that
are out of their direct control. A company does not generally influence
any laws (although it is accepted that they could lobby or be part of a
trade organization). It is continuously changing, and the company
needs to be flexible to adapt. There may be aggressive competition
and rivalry in a market. Globalization means that there is always the
threat of substitute products and new entrants. The wider
environment is also ever changing, and the marketer needs to
compensate for changes in culture, politics, economics and
technology.

Economic Factors Marketers need to consider the state of a


trading economy in the short and long-terms. This is especially true
when planning for international marketing.

India has been one of the best performers in the world economy in
recent years, but rapidly rising inflation and the complexities of
running the world¶s biggest democracy are proving challenging.

India¶s economy has been one of the stars of global economics in


recent years, growing 9.2% in 2007 and 9.6% in 2006. Growth had
been supported by markets reforms, huge inflows of FDI, rising
foreign exchange reserves, both an IT and real estate boom, and a
flourishing capital market.

Socio-Cultural Factors The social and cultural influences on


business vary from country to country. It is very important that such
factors are considered Envisioning a larger societal purpose has
always been a hallmark of ITC. Following are the factor which should
be kept in mind while doing business in india:

1. India, being a multi-cultural and multi-religious society,


celebrates holidays and festivals of various religions

2. India is one of the most religiously diverse nations in the world,


with some of the most deeply religious societies and cultures.
Religion still plays a central and definitive role in the life of most
of its people.

3. The demographics of India is remarkably diverse. India's


population of approximately 1.17 billion people (estimate for
July, 2009) consists of approximately one-sixth of the world's
population

4. India is a young country with an average age between 23-24


years.

As a corporate citizen with enduring relationships in rural India, ITC


has a history of collaboration with communities and government
institutions to enhance farm productivity and the rural resource base.

ITC¶s commitments in agricultural R&D and knowledge sharing have


spanned vital aspects of competitiveness ± efficient farm practices,
soil and water management.

Technology factor: Technology is vital for competitive advantage,


and is a major driver of globalization. Technology in India accounts
for a substantial part of the country's GDP and export earnings while
providing employment to a significant number of its tertiary sector
workforce.

Technically proficient immigrants from India sought jobs in the


western world from the 1950s onwards as India's education system
produced more engineers than its industry could absorb.

India¶s growing stature in the information age enabled it to form close


ties with both the United States of America and the European Union

ƒc IT plays a very critical role in driving the ITC business


strategies.

ƒc IT is an enabler of the business process to ensure business


growth through efficient management of operations in the value
chain.

ƒc IT creates new business process or restructure the current


business process to enhance customer service availability
,efficient manufacturing / supply chain operations etc

Political factors: The political arena has a huge influence upon the
regulation of businesses, and the spending power of consumers and
other businesses. The Indian polity is increasingly seen by political
observers as the problem. When populist political appeals stir the
passions of the masses, government institutions appear less capable
than ever before of accommodating conflicts in a society mobilized
along competing ethnic and religious lines

ƒc Budget impact Among the FMCG stocks Marico and ITC


are the biggest gainers. Marico has added 7.3% to Rs 77.
ITC has surged 7% to Rs 212, after no change in excise
cuts on cigarettes

ƒc Due to Govt new conditions ITC Maurya winning the 'Best


eco-friendly hotel ± Special Prize' award by the Ministry of
Tourism, Government of India.

Step 4 gap analysis

the management also conduct for this purpose the management must
compare and analyze its present performance level and the desired
future performances level

eg- Advertisement for the Aashirvaad atta was found to be ineffective


and infrequent and did not attract the target customers especially
housewives

Step 5 framing alternative strategy-

After framing mission objectives doing swot analysis is gap analysis


the management needs to frame alternative strategies to accomplish
objectives of the firm.

Eg- ITC came up with an aggressive advertisement to attract the


Indian housewives as they are found to be the decision maker in the
buying of Atta.
Choice of strategies = The organization cannot implement all the
alternatives strategies therefore the company has to be selective in
nature.

Eg-For increasing the sales of ashirwad aata the company selected


the marketing strategy of advertisement through which it increased it
sales

Phase 2 strategic implementation

The strategies are formulated to each and every functional


development of the business that is marketing finance , hr, operations
,etc once the strategies are formulated then the next stage is
implemented of such strategies the strategies involves the following
steps

Step 1 formulation of plans program project

These is a need to frame plans programs and project as strategy by


itself does not lead to action that is plans result in different kinds of
program that is program lead to formulation of project

Eg-LOW CARBON GROWTH STRATEGY

ITC made a plan and was the only enterprise in the world of its size to
have achieved and sustained three global environmental distinctions
Step2 project implementation

A project passes through various stages before the actual


implementation .The various phases include conception phase,
definition phase, implementation phase and clean up phase

Eg-This plan was effectively carried out as 31% of the energy


consumed by ITC was from clean and renewable source such as wind
power

Step3 procedural implementation


The organisation needs to the aware of the regulatory frame work of
the government authorities before implementing strategies. The
government (regulatory) frame work that needs to be checked out
may be such as form regulations, foreign collaboration procedure
foreign trade regulation etc

Eg-This strategy was implemented to contribute to the goals of


national action plan on climate change

Step4 : resources allocation

It deals with the arrangement and commitment of different types of


resources of various activities so as to achieve the goals of the
organization

Eg-ITC¶s agri-business with its deep rural linkages is well poised as a


supply chain partner to create value for ITC FOODS and tobacco
business
Step 5 : structural implementation

Organisation structure is the frame work to which the organization


operates there can be various organisational structure for the
implementation of the strategy

Eg-chairman and board of directors,corporate management


committee and divisional CEO¶s are responsible with the
implementation of the strategies.

Step 6 :functional implementation

it deals with the implementation of functional plans and policies that


is for effective implementation of strategy, strategists have to provide
direction to functional manager

eg-Promotion, Advertising,Pricing

Steps 7 :behavioral implementation

It deals with issues of leadership co-operate politics, use of power


personal value ,business ethics and social responsibility

ITC¶s social responsibility towards society-

ITC e-Choupal won the Award for the importance of its u  c c
 c c c 
cu  its scale and replicability,
sustainability and transparency.c
The Company continues to sustain its unique position as the only
company in the world to be µcarbon positive¶, µwater positive¶ and
µsolid waste recycling positive¶.

Phase 3 strategic evaluation


Evaluation of strategy is that phase of strategic management process
in which managers try to assure that the strategic choice is properly
implemented and its meeting the objectives of the company . The
strategic evaluation involves the following steps

Step 1 :setting of standards


The strategies need to establish performance target standards
objectives strategy and implimentation plans standards needs to be
define and the employees must accept it

Eg-cThe company's original business was traded in tobacco. ITC


stands for Imperial Tobacco Company of India Limited.cThe company
was into the manufacturing of cigarrates earlier.
c

Step 2 measurement of performance


The next step is to measure the actual performance both in
quantitative terms and qualitative terms

Cigarettes accounted for 47 per cent of the company's turnover, and


that in itself is responsible for 80% of its profits of ITC.

Step 3 comparison of actual performance with standards


The actual performance needs to be compared with standards to find
out eviction if any

It is interesting that a business that is now so involved in branding


continues to use its original name, despite the negative connection of
tobacco with poor health and premature death.

Step 4 finding out deviation after comparison the manager may


noticed the deviation

Although the ITC group is marketing its image as an ideal corporate


citizen and a company that takes its social responsibility seriously, it
still earns 80% of revenues from selling cigarettes and other tobacco
related products.

Step 5 analyzing deviation = the deviations may be reported to higher


authorities and the higher authorities must analyses the cause of
deviation

The cause of deviation was noted to be more dependence of the


company on tobacco related products for its profits so ITC has
transformed itself from a leading cigarette manufacturer to an
umbrella group that offers a diversified product mix to enhance its
brand image and reduce dependency on tobacco related products.

Step 6 taking corrective measure after identifying the causes of


eviations,the manager needs to take the corrective steps to correct
the deviation

So there is an argument that ITC's move into FMCG (Fast Moving


Consumer Goods)and diversify its business operations
Thus the strategic management process is the complicated complex
and challenging tax which involves 19steps and that can be
diagrammatically represented as follows

Recommendations:

a. According to the survey conducted and after analyzing the


Price, Promotion, Place and Product of the ITC and the
consumer behavior in the market the company can
implement the following measure for increasing the sales
and volume of their products.

b. Advertisement for the Aashirvaad atta is found to be


ineffective and infrequent. So,the company can come up
with an aggressive advertisement to attract the
Indianhousewife as they are found to be the decision
maker in the buying of Atta.

c. The company can come up the concept of forming a Retail


chain of Food products across all over India as it is
follows the marketing strategy of Umbrella branding.In
such retail chains all the food division products can be
sold at the discounted rate, as more and more products
are coming under the Umbrella products likefood
processing.

d. The branded atta can be exported to other countries


where we are currently exporting the whole wheat.

e. The company can approach the government or


distributing their products in Military canteens and can
sell them to organization that provides the afternoon
meals to the children as a part of mid-day meal scheme.

f. Precision analysis of products in Food Business.


g. Process optimization for product development in Food
Business.
h. Impact of measures for reduction of energy consumption
and consequent impact on the cost of production of goods.
c

CONCLUSION:
c
ƒc ITC promoting their brands through advertisement campaign as
well as door to door promotion.

ƒc ITC is also focusing on Retailers and Wholesalers to promote


their brand.

ƒc The demand of their product in very low, because people don¶t


know about their brands very well.

ƒc ITC knows their strength and weakness in the personal care


market, so they are applying new concept to overcome their
weaknesses.

ƒc ITC now offering more margins, exiting offers and long credit
period to retailers and wholesalers.
c

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