ITC-Business Strategy

Touching your life everyday !
Vision
Mission
Values
 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
Society
Where company Stands?
 ITC is one of India's foremost private sector

companies with a market capitalization of nearly
US $ 14 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,

 ITC ranks among India's `10 Most Valuable (Company)
Brands‘

 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
swot
PESTL
Political (incl. Legal) Economic Social Technological
Environmental regulations and Economic growth Income distribution Government research

protection spending
Tax policies Interest rates & Demographics, Population Industry focus on

monetary policies growth rates, Age technological effort
distribution
International trade Government spending Labor / social mobility New inventions and
regulations and restrictions development
Contract enforcement law Unemployment policy Lifestyle changes Rate of technology transfer
Consumer protection
Employment laws Taxation Work/career and leisure Life cycle and speed of
attitudes technological obsolescence
Entrepreneurial spirit
Government organization / Exchange rates Education Energy use and costs

attitude
Competition regulation Inflation rates Fashion, hypes (Changes in) Information

Technology
Political Stability Stage of the business Health consciousness & (Changes in) Internet
cycle welfare, feelings on safety
Safety regulations Consumer confidence Living conditions (Changes in) Mobile

Technology
5’Forces Model
Threat of
New
Entrants
Bargaining Power
of Suppliers
Rivalry Among
Existing
Competitors
Threat of
Substitutes Bargaining Power
of Customers
Purpose of 5 Force Analysis
 The five forces are environmental

forces that impact on a company’s
ability to compete in a given
market.
 The purpose of five-forces analysis is
to diagnose the principal
competitive pressures in a market
and assess how strong and
important each one is.

Threat of New Entrants
Economies of Scale - Not Easy to Achieve - posit
Product Differentiation – Requires huge R & D - po
Capital Requirements - high - positive
Switching Costs - low - negative
Access to Distribution Channels - Not Easy - p
Cost Disadvantages Independent of Scale

- more - positive
Government Policy – Are More - positive

Bargaining Power of Suppliers
Supplier industry is dominated by a few

firms
Suppliers’ products have few substitutes
Buyer is not an important customer to

supplier
Suppliers’ product is an important input to
buyers’ product
Suppliers’ products are differentiated
Suppliers’ products have high switching
costs
Supplier poses credible threat of forward
integration
Bargaining Power of Buyers
Buyer groups are likely to be
powerful if:
Buyers are concentrated or purchases are
 large relative to seller’s sales
Purchase accounts for a significant
fraction of supplier’s sales
Products are undifferentiated
Buyers face few switching costs
Buyers’ industry earns low profits
Buyer presents a credible threat of
backward integration
Product unimportant to quality
Buyer has full information
Threat of Substitute Products
Keys to evaluate substitute


products:

 Products with improving
price/performance tradeoffs relative to
present industry products

Rivalry Among Existing
Competitors
Intense rivalry often plays out in
the following ways :
Using price competition
Staging advertising battles
Increasing consumer warranties or

service
Making new product introductions
Cont’d
Occurs when a firm is pressured or

sees an opportunity
Price competition often leaves the entire

industry worse off
Advertising battles may increase total

industry demand, but may be costly to
smaller competitors
Cutthroat competition is more
likely to occur when:
 CNumerous or equally balanced competitors
Slow growth industry
High fixed costs
High storage costs
Lack of differentiation or switching
costs
Capacity added in large increments
Diverse competitors
High strategic stakes
High exit barriers
Model for ITC -Fmcg
Bargaining Power supplier is high
argaining Power ofRivalry

Buyer isAmong
Verythe
Highcompetitors
Threat of is very Highis Moderate or Hi
substitutes
Threat of New Entrants is Low

Competitor Analysis
 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.
 qDomestic competitors
 • Kanhayya tobacco
 • MR tobacco
 • Sapna enterprises
 • Sudarshan tobacco
 qITC still attains a gigantic market share of 66
Competitor Analysis
 HUL:Net sales of the company grew by

19.7% y-o-y to Rs 4027.9crore
driven by 22.5% growth in FMCG–HPC
business ,
 17.5% growth in FMCG – Foods business
and underlying volume growth of 7%.
 P&G

 Parle

 Britannia
Marketing Conglomerate
Diversification
FMCG
Apparels Food Personal Care Stationary & Sticks

fe
l i
u b
Cl re
o r t
l l s tu l e
i c Sp Wi na ss d d
s ls  ig i i
s
a W i l S M m
l
C  l s s r
s i l s r
e pp e
il l W er y
a u
l

 y P r
W l a
o
 P f
n
J o h
f e
 il
n g
l i
 ITC's Packaging & Printing Business is the
country's largest convertor of
paperboard into packaging. It converts over
35,000 tonnes of paper and paperboard per
annum into a variety of value-added
packaging solutions for the food & beverage,
personal products, cigarette, liquor, cellular
phone and IT packaging industries. It has also
entered the Flexibles and Corrugated Cartons
business.
 The Division, which was set up in 1925 as a
strategic backward integration for ITC's
Cigarettes business, is today India's most
sophisticated packaging house. State-of-the-
art technology, world-class quality and a
highly skilled and dedicated team have
combined to position ITC as the first - choice
supplier of high value added packaging .

OPERATIONS
Ansoff’s Market Matrix
Existing Prod. New Product
Market Penetration
Product Development
Existing
Market
New Market
Market Development Diversification

New Product Launchings
Product portfolio
Target Market
Urban Urban & Semi- Rural

(High Income ) urban
'Essenza Di (Upper & middle
Wills' class)
'Fiama Di
Wills'
'Vivel Di Wills'
‘Superia'
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
7’S FOR ITC
Backward Integration
 ITC PRINTING & PACKAGING IN 1925


 &
NOW

 ITC INFOTECH
FORWARD INTEGRATION
 Classmates

 E-choupal

 Sunfeast
Competitive Tactics
 FIRST MOVER: Cigarettes, HOTELS, E-

choupal

 EARLY IMMITATERS: PAPER
PACKAGING ITC INFOTECH.

 LATE MOVERS: FMCG, FOODS
Promotion Strategy
 Push Strategy: In Popular category

with innovative incentive schemes
to distributors.

 Pull strategy: 1) Luxury products

Ex. Wills Signature, Essensa

2) Strong Brands Ex.
Pasta, MTR, BINGO
Pricing Strategy
 Competitive reference pricing in mass

products or popular category


 Value pricing for luxury products.
Growth strategies
 Synergy of all SBU.


 Intra SBU Communication.

 Emerge as clean in practices in CSR,
Corporate Governance &
Sustainability.
 Outsourcing
R &D
  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.

FINANCIAL OBJECTIVES
THANK YOU

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Touching your life everyday !

 ITC is one of India's foremost private sector

Foods & Confectionery, Information Technology,

Environmental regulations and Economic growth Income distribution Government research

Tax policies Interest rates & Demographics, Population Industry focus on

Government organization / Exchange rates Education Energy use and costs

Competition regulation Inflation rates Fashion, hypes (Changes in) Information

Safety regulations Consumer confidence Living conditions (Changes in) Mobile

 The five forces are environmental

Economies of Scale - Not Easy to Achieve - posit

Product Differentiation – Requires huge R & D - po

Capital Requirements - high - positive

Switching Costs - low - negative

Access to Distribution Channels - Not Easy - p

Cost Disadvantages Independent of Scale

Government Policy – Are More - positive

Supplier industry is dominated by a few

Buyer is not an important customer to

Keys to evaluate substitute

Using price competition

Staging advertising battles

Increasing consumer warranties or

Occurs when a firm is pressured or

Price competition often leaves the entire

Advertising battles may increase total

argaining Power ofRivalry

Threat of New Entrants is Low

 The cigarette market in India has 3 players

 HUL:Net sales of the company grew by

Apparels Food Personal Care Stationary & Sticks

Market Development Diversification

Urban Urban & Semi- Rural

 In 70’s they have positioned themselves by

 ITC PRINTING & PACKAGING IN 1925

 FIRST MOVER: Cigarettes, HOTELS, E-

 Push Strategy: In Popular category

 Pull strategy: 1) Luxury products

 Competitive reference pricing in mass

 Synergy of all SBU.

  ITC research and developed facilities

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