Comprehensive Analysis of

Corporate Strategies applied to

India Tobacco Company Limited

Team:
Anchita Prithani - H003
Anushka Arora - H004
Heer Kothari - H008
Tanushri Bamb -H027
Advaith Kumar - H042
Sanjiv Puri, ITC Devansh Goswami - H043
Chairman &
Managing Director
OVERVIEW OF ITC LIMITED
Established in 1910, ITC Limited is one of India’s foremost private sector companies and a leading diversified conglomerate.
Contribution to the Indian economy with a gross revenue of ₹69,446 crores
Net profit of ₹20,422 crores (as of March 31, 2024)【Source: ITC Annual Report 2024】.
ITC is ranked as India's most admired company by Fortune India, in collaboration with the Hay Group【Source: ITC Annual
Report 2024】.

THE ITC VISION THE ITC MISSION

Sustain ITC's position as one of To enhance the wealth
India's most valuable generating capability of the
corporations through world class enterprise in a globalising
performance, creating growing environment, delivering
value for the Indian economy and superior and sustainable
the Company's stakeholders stakeholder value

【Source: ITC Sustainability Report 2024】. 02

 ITC’S FMCG MARKET SHARE

OVERVIEW OF ITC LIMITED Cigarettes: Over 40% Savlon:

75-80% packaged
Aashirvaad atta 20-25%
FMCG perboards
Pa
ITC’S HOTEL MARKET

Significant player in India's luxury hotel

segment..
Pioneers in "Responsible Luxury" with LEED®
C hotels ackaging
IT P Platinum certification

ITC’S AGRI-BUSINESS MARKET

Core Business Activities
ITC operates across several One of India’s largest integrated agri-
key business verticals businesses.
e-Choupal: Connects over 4 million farmers
ri-Busines ITC’s FMCG segment Infotech Leaders of rural agri-supply chain
Ag s ITC
digitization.
contributed over 25% of
total revenues in 2022, ITC’S IT MARKET
showing rapid growth Niche expertise in: Banking
across personal care, & Financial Services,
food, and stationery. Healthcare, Manufacturing
and more.
PAPERBOARDS & PACKAGING

[Source: Own Analysis using ITC Annual Report 2022] Market leader with 50%+ market share in premium
paperboards in India.
[Source: ITC Sustainability Report 2024]
 Stability Strategies

Pause/ Proceed with

No Change Strategy Profit Strategy
caution strtegy

Source: Teacher’s notes

No Change Strategy
ITC's Cigarettes segment has largely
employed a no-change strategy over the
years.
Major market brands Gold Flake, Navy Cut,
Classic.
46% of ITC’s Total revenue is contributed by
cigarettes as of FY2023.
ITC holds a market share of over 75% in the
organized cigarette market in India,
showcasing the stability and dominance of
this segment.
06

Source: Statista
 No change startegy

SUCCESS FAILURE
Profitability Regulatory pressures
Economies of Scale Health concerns
Brand Loyalty

Source: Own Analysis using ITC Annual Report 2023

 Profit Strategy
Profit maximization strategy in its FMCG business,
particularly in packaged foods (Aashrivad,
Sunfeast) and personal care (Savlon, Fiama).
ITC's revenue from its(FMCG) business in 2022-23
(FY23) rose 20 per cent to Rs 29,000 crore from Rs
24,000 crore in FY22.
It was mainly driven by supply-chain agility, cost
management and the Centre's production-linked
incentive (PLI) scheme.
ITC's FMCG revenue up 20% in FY23
Localising brand names under Swadeshi
movement.
Reduced investment in hotels during Covid-19. 06
Source: Economic Times
 Profit Startegy

SUCCESS FAILURE
Innovation, Premium products, Low margins comapred to
Aggressive marketing. cigarette business.
Pandemic-driven demand for Less profitability
health and hygiene products.
Despite reduced investments,
the company reported a net
profit of ₹15,404 crore in FY
2021, a 14.8% growth from the
previous year.

Source: Own Analysis using ITC Annual Report 2023

Pause/Proceed with caution strategy
ITC’s Hotel business paused major expansion plans.
Focused on cost optimization while maintaining
quality and brand reputation.
ITC’s hotels segment contributed ₹1,681 crore in FY
2023
Focusing on sustainability initiatives while pausing
aggressive capacity expansions in Paperboard &
packaging business.
ITC’s paperboard division contributed ₹8,295 crore in
FY 2023.
Premiumization and cost efficiency.
06
Source: ITC Sustainability report
Pause/Proceed with caution

SUCCESS FAILURE
Slowed recovery in the hotels
Minimized losses during
division
uncertain economic
Lower-than-expected revenue
conditions
growth compared to peers
Premiumisation helped ITC
Paperboard segment has also
strengthen its brand equity
faced environmental
and market presence.
regulatory challenges

Source: Own Analysis

 ANSOFF’ PRODUCT-MARKET MATRIX STRATEGIES
ITC uses concentration strategies to focus on core businesses, primarily FMCG and Tobacco, through:

PRODUCT
PRESENT NEW
MARKET

PRESENT

1. [Source: Market Research Reports, ITC

NEW Annual Report 2022]
2. [Source: Nielsen FMCG Market Report,
2022]
3. [Source: ITC Global Market Strategy
Report]
04
Concentration Strategies: Source

ITC Annual Report

2022

Success factors Failure factors

Market Leadership: ITC's dominant Market Saturation: Over-reliance on Nielsen Tobacco
position in the Indian cigarette market (77% core markets (e.g., cigarettes) risks Market Report 2022
share) shows successful market saturation, limiting growth potential.
penetration, leveraging brand strength. Slow Diversification: ITC’s gradual
FMCG Growth: ITC's focus on product diversification into FMCG has faced
development and diversification has competition from established brands like ITC Agribusiness
resulted in a 15% year-on-year growth in its HUL and Nestle , slowing market share Division Report 2022
FMCG business, making it a key revenue gains.
driver. Limited International Reach:
Core Competency: Specialization in key Concentrating largely on the Indian
segments like tobacco and FMCG ensures market limits ITC’s exposure to global ITC Paperboards &
deep market knowledge, competitive growth opportunities. Packaging Report
advantage, and operational efficiency. Cash Flow Pressures: High investments 2022
Strong Brand Equity: Through continuous in expansion without immediate returns
product development and market can create cash flow pressures,
penetration, ITC has built a strong brand especially in new segments like hotels ITC Hotels
across multiple industries, from FMCG to and FMCG. Sustainability Report
hospitality. 2022
 FORWARD INTEGRATION

[Soucre: https://youtu.be/s8LIT7K1i4c?
si=zwE-RiKEojJ_y0AJ,
https://www.itcportal.com/media-
centre/press-reports-content.aspx?
id=1597&type=C&news=ITC-looks-at-
direct-supply-of-products-to-retail-
outlets ]

BACKWARD INTEGRATION
 INTEGRATION STRATEGIES

HORIZONTAL VERTICAL
ITC expanded into related
industries through internal
development and acquisitions
in packaged food (Aashirvaad)
and personal care (Fiama,
Vivel).
FORWARD BACKWARD
This allowed the company to ITC established direct retail channels, reducing ITC’s agribusiness ensures the supply of high-quality raw materials
achieve economies of scale, dependency on third-party retailers like wheat and paper pulp.
lower costs, and diversify its Strengthening the customer interface. Improving cost efficiency and product quality in its FMCG and
FMCG portfolio. Serves its own FMCG needs packaging segments.
[Source: ITC Annual Report 2022] Also, provides packaging solutions for other ITC's e-Choupal digital initiative directly connects with over 4 million
industries, contributing to revenue diversification. farmers to source agricultural produce, improving procurement
[Source: ITC Packaging Division Report, 2022] [Source: ITC Agribusiness Division Report, 2022]

QUASI TAPER
Partial Ownership: ITC holds stakes in related firms for long-term supply of key raw Partial Backward Integration (Packaging): ITC produces part of its packaging needs while sourcing
materials like wheat and spices. the rest from external vendors, optimizing costs and efficiency.
e-Choupal: Direct connection with 4 million farmers provides semi-formal Excess Production: Surplus packaging materials are sold to third parties, generating extra
ownership-like control over the agricultural supply chain. revenue.
Benefit: Ensures steady supply without full vertical ownership, sharing profits and Partial Forward Integration (Retail): ITC sells some products through its own outlets while relying
enhancing trust. on third-party retailers for broader distribution, balancing direct feedback with market reach.
[Source: ITC e-Choupal Agribusiness Report 2022] [Source: ITC Packaging and Paperboards Report 2022]
08
 Source
Integration Strategies:
ITC Annual Report
2022

Success factors Failure factors Nielsen Tobacco

Market Report 2022
Cost Efficiency: Backward integration High Capital Costs: Significant
reduces input costs, secures raw investments in integration lead to
materials, and enhances quality slower ROI in areas like hotels and
control. paperboards. ITC Agribusiness
Synergies: Agribusiness and Limited Flexibility: Integration can Division Report 2022
packaging divisions work together, reduce adaptability to changing
optimizing resources and operational market conditions.
efficiency. Operational Complexity: Managing
Sustainability: Forward integration in diverse, integrated operations can ITC Paperboards &
hotels, with "Responsible Luxury," lead to inefficiencies. Packaging Report
2022
differentiates ITC in the premium Overextension: Wide-ranging
segment. integration risks spreading
Taper Integration: Balances in-house resources too thin, affecting core
ITC Hotels
production with external sourcing, competencies. Sustainability Report
optimizing costs and expanding reach. 2022
Let’s Look at Our Portfolio, and Find out our Strategies :

OPTIONS

Market Market
01 02
penetration development

Product Backward
03 04
development integration

Forward Quasi
05 06
Integration Integration

Quasi
07
Integration

Link to caselets :
https://www.canva.com/design/DAGSwwY5XdU/UREZFP03brpa5J3xVmbPFg/view? 07
[Source: Own Analysis using ITC Website, Youtube ITC stories ] utm_content=DAGSwwY5XdU&utm_campaign=share_your_design&utm_medium=lin
k&utm_source=shareyourdesignpanel
Diversification

Source : Company Website

 Diversification Types

CONCENTRIC STRATEGY CONGLOMERATE STRATEGY

Leveraging packaging solutions from ITC Hotels and ITC Infotech operate in
Paperboards for ITC’s FMCG products. completely different markets compared to
Growing from tobacco into food products its core FMCG business.
and personal care as a logical progression Allows risk diversification and the
based on existing distribution and R&D opportunity to enter fast-growing markets
capabilities. outside of the core.

Marketing-related Concentric Technology-related Concentric Marketing- and Technology-related

Diversification Diversification Concentric Diversification

Packaged Foods: Entry into Sunfeast Biodegradable Packaging: Expansion of Personal Care Products: Launch of Fiama and
Paperboards business into eco-friendly Vivel, leveraging R&D and marketing from
biscuits and Bingo! chips using established
packaging for FMCG. existing FMCG expertise.
distribution channels from tobacco.
e-Choupal Initiative: Utilizing digital Stationery Products: Expansion from
Personal Care: Launch of Savlon
technology to enhance agri-business Classmate notebooks to a full stationery
leveraging brand-building capabilities
operations. portfolio (pens, geometry boxes) .
from FMCG products like Vivel and Fiama.

[Source: Own Analysis using ITC Annual Report 2022]

 Diversification

Concentric Conglomerate
[Source: Own Analysis]
 Diversification

SUCCESS FAILURE
Lifestyle Retail (Wills Lifestyle): ITC’s entry
FMCG Growth: ITC successfully into the fashion and retail sector faced
leveraged its brand and distribution stiff competition, and they eventually
network to expand into FMCG exited.
ITC Infotech: ITC’s venture into IT Hotel Business: While ITC Hotels has a
services has become a global prestigious presence, its capital-intensive
player. nature hasn’t generated returns.
Agri-Business: ITC's diversification Complexity: Managing such diverse
into agribusiness through its e- portfolios has led to increased
Choupal initiative revolutionized administrative costs and operational
rural agriculture. challenges.

[Source: Own Analysis using ITC Annual Report 2022]

Source : Company Website
Internationalisation
 Entry Modes
Entry Mode Examples of ITC's Activities Revenue Contribution / Benefits

- FMCG Products: Aashirvaad (Atta), Sunfeast

Export Entry Mode (Biscuits), Yippee! (Noodles) exported to Middle - FMCG exports contribute to 8-10% of global sales.
East, Africa, Europe.

- Example: Aashirvaad Atta sold in Gulf countries. - Increased global presence and brand recognition.

- Franchising: Wills Lifestyle (Lifestyle Retail

Contractual Entry - Expands presence without significant capital
Business) operates through franchise agreements
Mode investment.
in some international markets.

- Licensing: Partnering with local manufacturers for - Enables faster market entry and reduces
food products. production and operational costs.

- ITC Infotech: Direct foreign investments, wholly- - ITC Infotech generates over 50% of its revenue
Investment Entry
owned subsidiaries in US, UK, Europe for IT from international markets, supporting ITC’s

[Source: Own Analysis]

Mode
consulting and services. diversification strategy.

- Joint Ventures: Collaborates with international

- Strengthens market presence and operational
firms in agribusiness, focusing on food exports to
capacity in global food export markets.
Europe and Africa.
Types of Internationalization Strategies
Global Strategy (Example: ITC Transnational Strategy:
Infotech): Combines global efficiency and local
ITC Infotech offers standardized IT responsiveness.
solutions to clients globally (e.g., ITC Hotels (through "Responsible Luxury"
banking, retail, hospitality sectors) by branding) offers eco-friendly, premium
focusing on efficiency and cost- services to cater to diverse international
effectiveness. travelers while maintaining global
Example: Strategic alliances with global standards.
technology leaders.

International Strategy (Example: Multi-Domestic Strategy (Example:

FMCG Exports): Personal Care Products):
Exporting Indian products like FMCG Customized FMCG offerings like
brands globally without significant different packaging sizes and
modifications. flavors for international markets to
Focus: Premium products that suit local tastes.
leverage ITC’s brand reputation.

[Source: Own Analysis using ITC Annual Report 2022]

 Diversification

SUCCESS FAILURE
FMCG Exports: ITC successfully expanded its Limited Market Penetration: ITC has faced
FMCG brands to international markets, challenges in achieving deeper market
especially in the Middle East and Africa, penetration in highly competitive global
contributing to global revenue growth. markets.
ITC Infotech: ITC’s IT consulting arm has Capital-Intensive Expansion: Expanding
gained a strong foothold in the US, UK, and through investment-heavy ventures has
Europe through direct foreign investments. required significant capital.
Agri-Business Expansion: ITC’s Cultural and Regulatory Barriers: ITC has
collaboration with international firms have encountered difficulties in adapting to local
strengthened food exports, particularly in preferences and navigating complex
Europe and Africa. regulatory environments.

[Source: Own Analysis using ITC Annual Report 2022]

DIGITALIZATION
The company's sixth sense marketing
01
command centre mines unstructured
data to gain deep, valuable consumer
insights and knowledge of market
trends

ITCMAARS (Metamarket for Advanced

02
Agriculture and Rural Services) a
cutting-edge super-app, empowers
farmers with hyperlocal crop
advisories, quality inputs, market
linkages, and allied services.

Project Astra, an AI/ML and advanced

03
analytics-based platform, supports
smart buying decisions, price
discovery, and operational efficiency in
ITC's Agri Business.

05

[Source: Dataquest,,ITC portal]

 Methods of Digitalization
Deconstruction Cannabilzation Techno-Intensification
Digital versions of product Online Sales Replacing Traditional Automation in Hospitality: ITC
manuals, recipes, and Retail: The ITC e-Store and Hotels is implementing online
warranty cards, reducing the partnerships with e-commerce booking platforms, chatbots, and
need for paper and platforms like Amazon and Flipkart AI-powered customer service
improving sustainability.

ITC’s personal care and food Automation in Hospitality: ITC AI & Automation in Customer
products have increasingly Hotels is implementing online Service: ITC has implemented AI-
adopted digital platforms to booking platforms, chatbots, and driven customer service across its
deliver marketing content AI-powered customer service FMCG, agri-business, and hotel
and product information sectors.

[Sources: YourStory,ITC portal]

 Digitalization

SUCCESS FAILURE
Disintermediation: E-Choupal connected Digital Divide in Rural Areas: While e-
farmers directly with ITC, improving Choupal is successful, lack of widespread
procurement, reducing intermediaries internet access in rural areas still limits its
Enhanced Supply Chain Efficiency: ITC reach.
streamlined its supply chain with AI and IoT High Initial Costs: Investments in
integration, improving real-time monitoring technologies like AI, IoT, and cloud
and reducing operational costs. infrastructure under Project Astra have high
Sustainability Goals Support: Digital upfront costs, posing financial pressure
initiatives such as smart manufacturing and Challenges in Managing Diverse Digital
the reduction of paper use through Strategies: Managing digital initiatives
deconstruction have helped ITC achieve its across ITC’s diverse business segments has
sustainability targets. proven complex, making coordination and
integration challenging.

[Source: Own Analysis using ITC Annual Report 2022]

COOPERATIVE

Acquisitions JV&Alliances

: In 2020, ITC acquired a 100% stake in ITC Hotels and Marriott International
01 Sunrise Foods Private Ltd., a market 01 have a joint venture in India through The
leader in the spices segment in Eastern Luxury Collection brand
India

ITC's acquisition of the Savlon and ITC partnered with IBM to drive digital
02 Shower to Shower brands from Johnson 02 transformation across its operations. This
& Johnson in 2015 was a significant step strategic alliance focuses on automating
to expand its personal care product line. ITC’s processes using AI and data
analytics.

ITC Limited acquired the B Natural juice ITC’s alliance with Bayer Crop Science in
03 brand from Balan Natural Food in 2014 03 2020 to provide farmers with advanced
and rebranded it in 2015 crop protection products and
technologies

[Source: Marketing 360,Business

Standard}
 Cooperative
SUCCESS FAILURE
Sustainable Packaging: supporting its goal Farmer Resistance: certain regions faced
of achieving a plastic-neutral status and resistance from farmers who were
enhancing its brand reputation in the FMCG unfamiliar with digital technology or
sector. skeptical of adopting a new system.
Partnerships with Technology Firms: IBM Cultural Mismatch: ITC has faced
for Project Astra allowed ITC to leverage challenges in aligning with foreign partners
advanced digital tools due to differences in corporate cultures and
Collaborative Farming: partnerships with local market understanding.
Agritech startups and local governments Regulatory Hurdles: ITC’s acquisition
helped increase farm productivity and efforts, particularly in the FMCG and
improve the livelihoods hospitality sectors, have faced several
regulatory challenges delaying or derailing
potential deals.

[Source: Own Analysis using ITC Annual Report 2022]

Sources- ITC Portal
Sources- Business Today
Business Standard
Sources- Business Today
Sources- Business Standard
Sources- ITC JP Morgan Presentation
Sources- CNBC TV 18
Sources- The Economic Times
7 / Strategic Transformation in ITC: Enhancing Profitability and Market Competitiveness

Sources- ITC Portal

C
O
M S
B T
I R
N T
SIMULTANEOUS

A E
T G
I Y
O
N SEQUENTIAL
Source: Own source
SIMULTANEOUS COMBINATION SEQUENTIAL
STRATEGY

[Source: Own Analysis and

Teacher’s notes]
 AASHIRVAAD AATA
Simiultaneous Current Market Share of 52% (as of 2024)

Combination in the Packaged Aata industry. Aashirvaad

has also expanded into organic and
health-focused food products.

SUNFEAST
A. EXPANSION Sunfeast diversified into
premium biscuits, cookies, and

VS STABILITY cakes. The new launches

include Sunfeast Farmlite Super
Millets, Sunfeast Bounce day &
Night, Sunfeast Celebration
pack.

Conclusion- https://www.itcportal.com/bran
ds-microsite/sunfeast.aspx
Expansion strategy helped in getting higher market share and
profits
YIPPIE!
Yippee! has expanded its
instant noodles line with new
Sources variants targeting younger
consumers and health-
https://blog.osum.com/aashirvaad-atta-market-share/ conscious markets.
https://www.itcportal.com/brands-microsite/sunfeast.aspx
 Regulations
Simiultaneous Despite regulatory pressures, cigarettes

Combination remain ITC’s highest profit-making

segment, contributing 63% of EBIT
(Earnings Before Interest and Tax) in
FY2023

A. EXPANSION Market Share

VS STABILITY ITC holds a dominant 73%
market share in the Indian
cigarette market, led by brands
like Gold Flake, Classic, and
Navy Cut

Conclusion-
Stability strategies helped them maintain their market share and No growth
continue to reap profits from this segment.
While regulatory and taxation
challenges continue, ITC has
maintained stability by
optimizing its supply chain and
Sources leveraging its pricing power.
The segment’s net revenue
https://www.tobaccotactics.org/article/india-country-profile/ grew by 12% in FY2023, despite
modest volume growth .
 Simiultaneous ITC Hotels
Combination Post-Pandemic Recovery- No aggresive
expansion even when post Covid
profits were high. Focus on recovery.
Operational Efficiency- Instead of
launching new hotels aggressively, ITC
has focused on ensuring that its

B. STABILITY VS existing properties are efficiently run

and cater to luxury consumers.

RETRENCHMENT
Conclusion- Lifestyle
While retrenchment helped ITC shed underperforming assets, Increased competition from global
the stability strategy in hotels allowed it to sustain profitability fast fashion brands like Zara and
without significant expansion or contraction. H&M.
Changing consumer preferences
toward more affordable and fast-
Sources moving fashion.
High costs related to store operations,
https://economictimes.indiatimes.com/industry/services/retail/itc-exits-from-lifestyle-
inventory management, and supply
retailing-business/articleshow/93303296.cms?from=mdr
https://economictimes.indiatimes.com/industry/services/hotels-/-restaurants/itc- chain inefficiencies.
chairman-puri-says-companys-hotels-business-to-provide-stability-to-the-
business/articleshow/102638522.cms?from=mdr#
 Stability Strategy (Mid
Growth Strategy (2002)
2010 )
Sequential Geographic Expansion-
focus on both cities and Packaging Innovations-
Combination rural areas Vaccum sealed

Product Diversification- Brand Loyalty

spices, salt, and dairy Programs- Get Chakki
products points and redeem.
(levels)

Retrenchment Strategy Growth and Stability in

(Post 2020) New Categories (Late
Rationalization of SKUs- 2020s)
Aashirvaad Svasti restricted
Steady Growth- Focus
to only high demand areas
on quality of atta while
Source- https://aashirvaadchakki.com/pages/rewards? of Tamil Nadu, Kerala,
srsltid=AfmBOoplKG7HEYZmf11x_Zbx_RBl3U6qTQvEEUHxrdkDUJbOUx0NrLid
https://www.aashirvaadsvasti.in/#:~:text=Aashirvaad%20Svasti%20Pure%20Cow%
Karnataka, Delhi – NCR,
introducing ready to eat
20Ghee%20is%20available%20in%20the%20markets,through%20leading%20e%2Dc
ommerce%20platforms.
Hyderabad and Kolkata chapatis
Conclusion : Suggesting corporate level strategies to the chosen
company for better profits.

Source: Own Analysis

Some other suggestions for Corporate
level strategies

Expand in Health and Wellness Segment

Sustainability and Digital Transformation
Global Expansion in FMCG
Aggressive Expansion in Hospitality

Source: Own Analysis

 Work Allocation

Introduction - Tanushri

Stability - Anushka

Expansion
1. Concentration & Integration - Tanushri
2. Diversification & Internationalisation - Heer
3. Co-operative & Digitalisation - Advaith

Retrenchment - Devansh

Combination - Anchita

Conclusion - Anushka
Thank you !