Bcg matrix-of-itc-ltd-v02-1222197387335911-8(2)

BCG Matrixof ITC Ltd.

V0.2

ITM Executive MBA, Batch 13B, Term 1, Subject: Concepts of Marketing

Main Sources: ITC Portal (www.itcportal.com) , Angel Broking & NSE.

ITC Ltd.Formerly Known as Indian Tobacco Company

Formerly Known as Imperial Tobacco Company

1910 2008

1910 Incorporation of 'Imperial Tobacco Company of India Limited'. 1925 Setup of Packaging & Printing Business1975 Launched its Hotels business.1979 Entered the Paperboards business1990 Set up the Agri Business Division 2000 Launched a line of high quality greeting cards under the brand name 'Expressions'2000 Entered the Lifestyle Retailing business with the Wills Sport.2000 Spun off ITC Infotech India Limited.

1925 1975 1979 1990 2000

ITC Timeline

1910 20082001 2005

ITC Timeline

FMCG-Cigarettes

Insignia, India Kings, Classic, Gold Flake, Silk Cut, Navy Cut, Scissors, Capstan, Berkeley, Bristol and Flake

'Best Manufacturer of Cigarettes for the year 2007'

FMCG-Cigarettes

Started in 1910 As Company’s Core Business

Market leadership in all segments - geographic & price (70% Market Share)

Extensive FMCG distribution network (Direct servicing of 1,00,000 markets & 2 million retail outlet)

Cigarettes account for only 15% of tobacco consumed in India unlike world pattern of 85% due to prolonged punitive taxation. Of the 58% of adult Indian males who consume tobacco, barely 15% can afford cigarettes. (Biri : Cigarettes ratio = 10 : 1)

Annual per capita adult cigarette consumption in India is appx. one tenth world average which is 141

In 2001 - Lost 15% of Its Business Because of Rise in Excise Duty

In 2007 - VAT Was charged at 12.5% which increased the price of cigarettes by 84ps per cigarette. Hence ITC had to shut down their business of Plains (i.e. Non Filter Cigarettes) which was 20% of total FMCG Cigarette Business.

FMCG-Others

Ashirvad Atta, Kitchens Of India, Mint-o, Sunfeast, Candyman, Bingo,Superia, Wills LifeStyle, Fiama Di Wills, Expressions, Classmate

‘Superbrand 2006‘ - Superbrand Council.

FMCG-Others

Ashirvad Atta is now #1 selling.

Sunfeast Biscuits is ranked #3.

Bingo, launched in August 2007, now enjoys 16% market share.

November 2007 Mint-o overtakes its competitor Chlormint

‘Classmate’ brand already the most widely distributed stationary brand in India

Kitchens of India has about 48% market share in India and a huge export potential. Ready to Eat food Market is estimated to be Rs.700m.

Safety Matches market at Rs. 1250 crores p.a. for 24 billion match boxes which is targeted by ITC’s iKno, Aim, Aim Mega, Aim Metro.

Successful acquisition of 94% of WIMCO Ltd. i.e. Homelites, Ship.

‘Mangaldeep’ the only National brand in the country serves the nation’s 900cr incense sticks market.

Hotels

ITC Maurya (Delhi), ITC Maratha (Mumbai), ITC Grand Central (Mumbai), ITC Sonar (Kolkatta), ITC Windsor (Bengaluru), ITC Kakatiya (Hyderabad), ITC Mughal (Agra).

‘Bukhara’ Restaurant named as Best Indian Restaurant in the World.

Hotels

Hotel Brands: ITC-WelcomGroup, WelcomHeritage & Fortune.

Totally 90 Hotels, 77 Destinations and 5500 Rooms under management.

Destinations include most of India as well as Singapore and Dubai.

Hosted a galaxy of world dignitaries like Bill Gates to Bill Clinton, Condoleezza Rice to Benazir Bhutto.

Restaurant Brands: Bukhara, Dum Pukht and Dakshin.

Agri Business

Innovation for India Award 2006 for ITC e-Choupal in the Social Innovations category for business organizations

eChoupal, Agri Exports, Leaf Tobacco

Agri Business

ITC Agri Business is one of India’s largest exporter of agricultural commodities.

June 2000, eChoupal – strategic and cost effective sourcing support to the Foods business (support creation of verticals in wheat, soya, corn, potato etc.)

eChoupal - Services reaches to 4 million Farmers who are growing Wheat, Rice, Pulses, Soyabean, Coffee in over 40,000 villages thru nearly 6,500 kiosks across nine states.

Diverse range of goods/services : FMCG, consumer durables, agri-inputs.

Farmer Financial Services - insurance (focus: weather), credit (focus: Kisan credit card scheme)

Rural Retail – 18 Choupal Sagars

Agenda 2012 is to cover 15 states with 1,00,000 Villages with about 20,000 eChoupal Kiosks servicing about 10 million farmers.

Agri Business – Leaf Tobacco (ILTD)

Largest Buyer, Processor and Exporter of leaf tobacco in India. Exports to about 48 countries.

ITC processes about 120 million kgs of high quality tobacco yearly. Overall 550m Kg of tobacco is produced in India.

Factories have integrated warehousing complexes.

Enabled successful venture into spices business.

Golden Leaf Awards 2007 in the categories ‘Most Committed to Quality’

The International Quality Rating System – IQRS Level 7, awarded by Det Norske Veritas in March 2006.

Packaging & Paperboards

Packaging & Paperboards and Specialty Paper

Indian Manufacturing Excellence Gold Award 2007 and 2006 to Unit Bollaram by Frost & Sullivan

Annual paperboard demand – appx. 1.1 million tonnes

Indian paperboard market growing at 7% p.a.

Significant export opportunities for high quality Indian manufacturers ITC paperboards exports - Rs. 2 billion appx.

ITC’s packaging unit - India’s largest converter of paperboard into high quality printed packaging

Provides superior packaging solutions to the cigarettes and new FMCG businesses

India has low per capita usage at around 6 kgs p.a. (World average – over 50 kgs p.a.)

ITC Bought 0.5% in Ballarpur Industries in July 2008.

Packaging & Paperboards

Infotech

ITC Infotech Ltd.

Featured amongst Top 100 Global Outsourcing Companies in the Leaders category - International Association of

Outsourcing Professionals

ITC Infotech Ltd. Is a wholly owned subsidiary of ITC Ltd.

ITC Infotech is responsible for developing & maintaining the entire ITC eChoupal infrastructure.

Although a separate entity and brand, ITC Infotech’s primary job is to keep ITC as a group upto date with latest technology.

Infotech

BCG Matrix

BCG Matrix a.k.a. Growth-Share Matrix, Boston Box, Boston Matrix, Boston Consulting Group analysis.

Created by Bruce Henderson for the Boston Consulting Group in 1970 to help corporations with analyzing their business units or product lines.

This helps the company allocate resources and is used as an analytical tool in brand marketing, product management, strategic management, and portfolio analysis.

BCG Matrix

BCG Matrix

ITC Ltd on BCG Matrix

MARKET SHARE

GROWTH

Star Question mark

DogCash Cow

REVENUES Growth-Share

Matrix

Y/E March (Rs cr) FY2008 FY2007% Growth

% Contrib. % Market Share Growth Share

FMCG-Cigarettes 13,825.6 12,833.7 7.7 58.41 70% Low HighFMCG-Others 2,511.1 1,689.5 48.6 10.61 16% High LowHotels 1,100.2 985.7 11.6 4.65 90 Hotels High High

Agri Business 3,868.4 3,501.3 10.5 16.342nd Largest

Exporter High HighPaperboards & Packaging 2,364.3 2,100.1 12.6 9.99 1st in Asia High HighITC Infotech - - - - - Low Low

Summary on ITC’s SBUs

ITC Ltd on BCG Matrix (Conclusion)

MARKET SHARE

GROWTH

Star Question mark

DogCash Cow

•FMCG-Cigarettes •ITC Infotech

•FMCG-Foods•Agri Business•Hotels•Paperboards & Packaging

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