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SM Itc

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Strategic Management in ITC Ltd.

Pulkit Datta Roll No -----18

The Corporate Mission



Governance structure Strategic supervision Strategic management Executive management Core values Nation Orientation; Trusteeship; Excellence; Customer focus; respect for people; Innovation

Vision & Mission statements


Vision: Sustain ITCs position as one of Indias most valuable corporations through world class performance, creating growing value for the Indian economy and the Companys stakeholders. Mission: To enhance the wealth generating capability of the enterprise in a globalizing environment, delivering superior and sustainable stakeholder value.

Business Mix of ITC Ltd.


FMCG Cigarettes

Foods Lifestyle Retailing Greeting, Gifting & Safety Matches Agarbattis

Stationery

Paperboards & Packaging Paperboards & Specialty Papers Packaging

Business Mix (Contd)


Agri - Business Agri-Exports

e-Choupal Leaf Tobacco

Hotels Group Companies ITC Infotech; etc.

SWOT Analysis
Strength Brand Management Opportunity Rural market E-choupal Weakness Unrelated diversification

Threats Increasing tax in Cigarettes Health hazard

Business wise Sales data


Business/ Year Growth Value (Rs in Crore) % 2005 2004 8.4 10002.54 9230.27

FMCGCigarettes FMCG-Others Hotels Agribusiness Paper & pkg.

85.2
124.1 4.2 24.9

563.39
577.25 1780.07 1565.31

304.16
257.53 1708.77 1253.29

Net revenue
Source: Annual Accounts

12.99

13349.58 11815.04

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.

Source: Annual Accounts/Equity research

Segment

Dominance

Cigarettes 70% share Paper & Packg. Packaging board No. 1 in Asia

Contribution % Revenue PBIT 77.0% 87.7% 7.3% 10.7% 7.0% 4.3% 4.4% 3.7% 5.4% -7.5%

Agri 1of the largest business xporters from India Hotels ITC Group ranks No.2 FMCG 20% share of greeting (Others) cards market, 'Aashirvaad' atta is No.1 in branded segment
Source: Equity research reports

Limitations
Assumes market growth rate. A firm may grow the market. A Dog may be helping other products. High market share/Growth is not the only success factor. Linkage between market share and profitability is questionable.

The BCG Matrix for ITC Ltd.


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

Dogs

Act III - Action- Learning points


and conclusions
Question Marks (? ) To be handled with care. Strategic forays into emerging high growth markets. E-Choupal is a transformational strategy. Strong brand building capability will be tested.

Learning points (Contd)


Corporate strategy of creating multiple drivers of growth anchored on its core competencies and distribution reach. Embracing difficult and challenging corporate strategy. (Ex: Paperboards). EHS philosophy: Contribution to the triple bottom line- Economic, Environment and social capital.

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