Group 8 Sec B SM2 ITC

Simulation

Indian Tobacco Company(ITC) in FMCG Presented by group 8

Saurabh Srivastava(WMP10034)Shirish Agarwal(WMP10036)Shubhank Rathour(WMP10037)Anshul Verma(WMP10055)Syed Fuzal Hasan(WMP10087)1ITC - OverviewITC Limited, a multi-business conglomerate, has diversified presence in FMCG, Hotels, Paperboards and Packaging, Agri Business and Information Technology.

ITC was incorporated on August 24, 1910 under the nameImperial Tobacco Company of India Limited and I.T.C. Limited in 1974.

Fast Moving Consumer Goodscomprising Foods, Personal Care, Cigarettes and Cigars, Branded Apparel, Education and Stationery Products, Incense Sticks and Safety Matches,Hotels, Paperboards & Specialty Papers, Packaging, Agri-Business and Information Technology.

ITC PositionThe fast movingconsumer goods(FMCG) segment is the fourth largest sector in the Indian economy. The market size of FMCG in India is estimated to grow from US$ 30 billion in 2011 to US$ 74 billion in 2018.Food products is the leading segment, accounting for 43 per cent of the overall market share. Personal care (22 per cent) fabric care (12 per cent)Consumer durables market is expected to double at 14.7 per cent CAGR to US$ 12.5 billion in FY15 from US$ 6.3 billion in FY10.Growing awareness, easier access, and changing lifestyles have been the key growth drivers for the sector.

2ITC: Vision, Mission & Strategic IntentVisionSustain 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.

MissionTo enhance the wealth generating capability of the enterprise in a globalizing environment, delivering superior and sustainable stakeholder value.

Strategic IntentITC's strategic intent to secure long-term growth by synergizing and blending the diverse pool of competencies residing in its various businesses to exploit emerging opportunities in the FMCG sector.

3Core Values at ITCTrusteeship ITC actualizes stakeholder value and interest on a longterm sustainable basis.Customer Focus- ITC is always customer focused and deliver what the customer needs in terms of value , quality and satisfaction.Respect for people ITC is result oriented, setting high performance standards for ourselves as individuals and teams ,simultaneously respect and value people and uphold humanness andhuman dignity.Excellence - We do what is right, do it well and win. We will strive for excellence in whatever we do.Innovation - We will constantly pursue newer and better processes, products, services and management practicesNation orientation - We are aware ofour responsibility to generate economic value for the Nation. In pursuit of ourgoals, we will make nocompromise incomplying with applicable laws and regulations at all levels.

Key characteristics of Culture at ITCIndividual Initiative - ITC provides high freedom, less responsibility due to set procedures.Direction Organisational objectives are very well defined and practiced.Management Support Highly supportive management towards employees and their families.Identity High degree of identification towards organization by employees.Conflict Tolerance ITC offers high tolerance whereas newer division averse to conflict tolerance.Risk Tolerance IntegrationControlReward SystemCommunication Patterns

Corporate StrategyFocus on the chosen business portfolioFMCGHotelsPaperboardsPaper & PackagingAgri BusinessInformation Technology

Blend diverse core competencies residing in various Businesses to enhance the competitive power of the portfolio

Position each business to attain leadership on the strength of world-class standards in quality and costs

Craft appropriate Strategy of Organisation and governance processes to :Enable focus on each business andHarness diversity of portfolio to create unique sources of competitive advantage

ITCs Business PortfolioFMCGPaperboards, Paper & PackagingHotelsAgri BusinessInformation TechnologyCigarettesPersonal CareFoodsLifestyle RetailingEducation & StationerySafety Matches & Incense Sticks7Brands8Major Awards & Accolades 2014/15John Players ranked 4th Most Exciting Brand in the Apparel Category by Brand Equity, Economic Times.'Sunfeast' and 'Vivel' voted as the 'Buzziest Brands' in the Foods and Personal Care categories, respectively by Afaqs one of the world's largest marketing and advertising portals'Classmate' was voted the "Most Popular School Accessories Brand" at the 'Child Most Popular Awards' 2014.ITC Hotels won the 'Best Luxury Hotel Chain of the Year' award at the 10th Hospitality India and Explore the World Annual International AwardsITC Grand Bharat, ranked No. 4 amongst the Top 100 Hotels & Resorts of the World on the coveted Conde Nast Traveler U.S. Readers Choice Awards 2015

9Major Awards & Accolades 2014/15The Kovai Unit of ITC's Paperboards and Specialty Papers Business received the Tamil Nadu stateaward for Green InitiativesandEnvironmentalBest Practices.ITC's Packaging & Printing Business won 4 'World Star Awards' from the WorldPackaging Organisation, 4 'Asia Star Awards' from the Asian Packaging Federation and17 'India Star Awards'from the Indian InstituteofPackagingforexcellenceinpackaging solutions.ITC's Karnataka Green Leaf ThreshingProjectatMysore received the 'Gold' rating from the Indian Green Building Council.10Key success factors of the industryChanging customer preference

Health and wellness is a mega trend shaping consumer preferences and shopping habits

According to the PwC-FICCI report Winds of change, 2013: the wellness consumer, nutrition foods, beverages and supplements comprise a INR 145 billion to 150 billion market in India, is growing at a CAGR of 10 to 12%.Major drivers of FMCG SalesAvailability : Given the Indian FMCG consumers preference for traditional trade outlets, its understandable that availability is the biggest driver of FMCG sales.

Awareness: While the extent of the impact is smaller, yet, the effect of lower television gross rating points (GRP) has affected sales.

Macro factors: Growing economy has helped increase consumers purchasing power.

Sachet (Low volume packs): New product launches through sachets have fuelled growth over the years. The growth in the number of low-volume packs hit 31.1% from 2009 to 2010.External Environment Analysis of the Firm

13Macro-Environmental Factors affecting firm continued..Negative GDP growth rate shows the decreasing trend during the year 2011-12 because of economic policy and fall in production.

Inflation rate refers to a general rise in prices measured against a standard level of purchasing power.

The Government of India (GOI) has recently approved 51 per cent FDI in multi-brand retail, which will boost the nascent organised retail market in the country. It has also allowed 100 per cent FDI in the cash and carry segment and in single-brand retail.

Interest rates on deposits growth rate was 1.08 per cent which shows the fluctuating trend from 7.5 to 9.5 during this period. The Interest rate is increased which helps to encourage the saving habit of an individual.

Reduction in purchasing powerMarket share can decrease Decrease in consumer spending

14Macro-Environmental Factors affecting firm continued..Analysis of the macro -environmental factors on FMCG IndustryYearTotal Income (in Cr.)Total Expenses (in Cr.)Total Sales (in Cr.)PAT (in Cr.)GDP (%)Inflation (%)Interest Rate (%)Exchange Rate(Rs/$)2010-201122309.3514316.8221458.984987.618.408.879.5045.572011-201226064.7516390.7925173.826162.376.509.309.3047.952012-201331.86.3219520.1129901.277418.395.1010.929.0054.152013-201434474.1520912.1733238.708785.216.906.378.7558.52014-201538265.0623248.3836507.409607.737.305.698.566.00Compound Annual Growth Rate (%)10.4310.4410.5310.34-6.491.671.082.6615Macro-Environmental Factors affecting firm continued..

Industry Performance TrendsThe overall fast moving consumer goods (FMCG) market is expected to increase at compound annual growth rate (CAGR) of 14.7 per cent , with the rural FMCG market expected to increase at a CAGR of 16.3 per cent

Rising incomes and growing youth population have been key growth drivers for the sector. Brand Consciousness has also aided demand. It is estimated that First Time Modern Trade Shoppers spend has reached $ 1 billion by 2015.

The industry has witnessed healthy foreign direct investment (FDI) inflow, as the sector accounted for 2 per cent of the countrys total FDI inflow over April 2000 to March 2013. Organised retail share is expected to double to 14-18 per cent of the overall retail market by 2015.

Rural demand growth is expected to occur mainly with consumers moving up towards premium products.

17Internal Analysis of the FirmYear No. Of EmployeesEPSMfg facilityROCE(%)Total net income(In Cr)Economic value added (EVA) (In Cr)Current ratioInventory turnover ratio2014-1525,78711.992645.7438,0509264.962.056.432013-1425,91711.052548.2134,3467699.282.104.522012-1325,9629.392348.2930.8403349.591.704.532011-1225,1657.882147.6925,9733124.521.584.472010-1124,0276.452045.8822,0392938.461.095.85YearEmployee Cost%changeBetaRf %Rm %COC%NPBTTaxNOPATCOCEVA%Change2010-11745-0.290.040.850.274571.771480.973090.8152.332938.46-2011-12903.3721.251.180.060.150.114825.741565.133260.61136.083124.526.332012-131014.8712.34-2.510.07-0.250.806015.311965.434049.88700.283349.597.202013-141178.4616.11-3.250.090.29-0.667268.162287.694980.47-431.127699.28129.852014-151265.417.373.380.08-0.08-0.578897.532737.086160.45-367.439264.9620.33Rs. In CrsITC Performance Track RecordSensex (CAGR 95-96 to 14-15) : 11.8%Rs. cr.19Market Cap and TSR based on FY-end prices for FY96 and FY151995-962014-1519-yr Cagr 95-96 to 14-15Gross Revenue5,11549,96512.7%Net Revenue2,53636,08315.0%PBT45213,99819.8%PAT2619,60820.9%Capital Employed1,88632,42016.1%ROCE %28.443.4Market Capitalisation5,5712,60,86522.4%Total Shareholder Returns %24.3%Segment Revenue - 2014/1520Rs. cr.Net Sales up 9.7%

Non-Cigarette FMCG segment registers a healthy growth of 11.3% amidst subdued demand conditionsFull Year2014-152013-14Goly(%)Segment Revenue (Net)FMCG- Cigarettes- OthersTotal FMCGHotelsAgri BusinessPaperboards, Paper & PackagingTotalLess : Inter segment revenueNet sales / income from operations1680590111545680998.711.325816235559.61187838049741133775248614.88.12.340357373018.242744418(3.3)36083328839.7ITC Sales Revenue (Segmented)ITC Segment Profit(Segmented)ITCs Economic Contribution to the Nation2310 year Value addition ~ Rs. 2.2 lakh crore (US$ 43 billion)~75% of value addition accrued to the ExchequerAmong the top tax payers in the nation (Private sector)Excise payments represent ~ 7% of Indias total Excise collection

Foreign exchange earnings in the last 10 years: US$ 6.6 blnOf which agri exports constituted ~57%Competitors - Key Financial RatioITC Competitors Key Financial Ratios ComparisonProfitability RatiosYear 2015year 2014Year 2013Year 2012Year 2011Operating Profit Margin(%)ITC36.937.4735.5435.1534.54HUL16.915.9715.5114.8813.57Nestle20.721.3922.2920.9719.91Dabur17.2716.9517.3417.4719.06Britania10.759.456.615.615.48Profit Before Interest And Tax Margin(%)ITC32.8833.6431.8831.3430.65HUL15.6614.7114.2613.7212.28Nestle17.1217.6118.8918.8717.77Dabur15.6615.4915.3515.4917.76Britania98.45.544.64.37Gross Profit Margin(%)ITC34.2734.7632.8832.3731.48HUL15.9715.0414.5913.8912.45Nestle17.2717.7718.9618.9317.87Dabur16.0615.8415.6615.7217.91Britania9.118.455.594.664.42Net Profit Margin(%)ITC26.3126.4324.824.4723.24HUL1413.814.712.1611.68Nestle12.0212.2712.8112.7913Dabur14.0413.813.5812.3214.39Britania8.675.864.163.753.44Competitors Analysis

25Key success factors of the industryRural set to rise

Rural areas expected to be the major driver for FMCG, as growth continues to be high in these regions. Rural areas saw a 16 per cent, as against 12 per cent rise in urban areas. The Government of India has also been supporting the rural population with higher minimum support prices (MSPs), loan waivers, and disbursements through the National Rural Employment Guarantee Act (NREGA) programme. This has has helped in reducing poverty inrural Indiaand given a boost to rural purchasing power.Hence rural demand is set to rise with rising incomes and greater awareness of brands.

Urban trends

With rise in disposable incomes, mid- and high-income consumers in urban areas have shifted their purchasing trend from essential to premium products. In response, firms have started enhancing their premium products portfolio.Porters 5 force analysisPorter's forcesMeasuresThreat of new entrants - Low1. Economics of scale2. Product Differentiation3. Capital Requirement4. Access to Distribution ChannelsThreat of substitutes - High1. There are scarce customers because the industry saturated and the competitors try to snatch their share of market.2. Market players use all sorts of tactics and activities from intensive advertisement campaigns to promotional stuff and price wars etc. 3. Products with improving price/performance tradeoff relative to present industry products.

Rivalry among competitors - High1. Market players use all sorts of tactics and activities from intensive advertisement campaigns to promotional stuff and price wars etc. 2. Using price competition3. Making new product introduction

Porters 5 force analysisPorter's forcesMeasuresBargaining power of suppliers - High1. There is large number of supplier available and the raw materials are also readily available. 2. There is no monopoly situation in the supplier side because the suppliers are also competing among themselves.3. Buyer is not an important customer to supplierBargaining power of buyers - High1. Low switching cost2. Buyers are numerous and fragmented3. There is no threat of buying one product over other.Value Chain

Primary Activities

Source ITC Sustainability report 2015 Raw material and inventory cost almost 60% of the production cost.

ITC has close knit mutual understanding with its suppliers in all the tier cities.

Triple Bottom Line philosophy for creating value that encompasses the economic, environmental and social dimensions.Value chain activities Inbound logistics The firm uses high degree of renewable sources of energy, recycling of solid waste generated and pursues unwavering focus on quality, cost consciousness, integrated operations, customer service and ability to create new market segments to negate the impact of the cost escalations.

Capitalizing R &D efforts on varietal improvement in collaboration with Central Tobacco Research institute and the Tobacco Board of India. This leads to proof of concepts which gives valuable insights in several technical aspects of plant breeding and genetics of these species.

Important CSR initiatives to promote sports and tourism under the Surya Nepal Khelparyatan programme, in collaboration with Nepal Tourism Board.Value chain activities Operations Well established delivery channels from all the plants.

The firm is increasingly capturing the North Indian Market and setting up new manufacturing facilities like state of the art cigarette factory in Pokhara in May 2014 by adopting the EHS strategies by optimizing natural resources usage and providing a safe and healthy workplace. Value chain activities Outbound logistics Company has unique strengths in marketing & distribution and uses marketing communications strategies like advertising, sponsorships and promotions.

ITCs various initiatives like e-Choupal in Rural India and ITC was voted the Buzziest Brand in the Corporate category by afaqs, one of the worlds largest marketing and advertising portals.

Campaigns like Made for Each other for its Wills Brand, branding for the Sunfeast with Sharukh Khan as the Ambassador and increasing the visibility by becoming the official sponsors of Sunfeast Open in WTA championships have helped them to attract new customer base while maintaining the existing one.

Value chain activities Marketing & sales ITC Hotels is acknowledged worldwide for its fine art of hospitability, ITC InfoTech is regarded as a specialized global scale full service provider for BFSI, Airlines and Hospitability sectors.

ITC has continued focus on providing services in rural areas towards enhancing the competitiveness of Indian agriculture and plays a critical enabling role in integrating the farmers, input vendors and government agencies.

ITC endeavors to integrate sustainability in the procurement process for its products and services across its diversified business portfolio . The policy followed is Responsible Sourcing encourages resource efficiency with a Code of Conduct for Vendors and Service Providers so that they can adopt sustainable practices.

Value chain activities ServicesArena (Product categories)2010-112011-122012-132013-142014-15CigarettesHotelsPaperboards & Specialty PapersPackagingAgri-BusinessPackaged foods & ConfectionaryInformation TechnologyBranded ApparelPersonal CareStationarySafety MatchesFMCG ProductsLaunch of Hand rolled cigar ArmenterosSunfeast Dark Fantasy Cookies & ChocolatesCigarettesHotelsPaperboards & Specialty PapersPackagingAgri-BusinessPackaged foods & ConfectionaryInformation TechnologyBranded ApparelPersonal CareStationarySafety MatchesFMCG ProductsLaunch of Bingo TanglesSunfeast Dream Cream & Candiman Toffichoo LycheeCigarettesHotelsPaperboards & Specialty PapersPackagingAgri-BusinessPackaged foods & ConfectionaryInformation TechnologyBranded ApparelPersonal CareStationarySafety MatchesFMCG ProductsEngage DeodorantColor Crew art stationary

CigarettesHotelsPaperboards & Specialty PapersPackagingAgri-BusinessPackaged foods & ConfectionaryInformation TechnologyBranded ApparelPersonal CareStationarySafety MatchesFMCG ProductsKwiknic nicotine gumsCigarettesHotelsPaperboards & Specialty PapersPackagingAgri-BusinessPackaged foods & ConfectionaryInformation TechnologyBranded ApparelPersonal CareStationarySafety MatchesFMCG ProductsHealth biscuit Sunfeast farmliteVariants of Cigarettes like Gold Flake with Quad Core FilterArena (Market Segments 2010-15)FMCG productsBrandsCigaretteDomestic market - India Kings, Gold Flake, Navy Cut, Scissors, Capstan, Berkeley and Bristol (Mid Segment)USA - Checkers, Hi-Val, Royale Classic and Gold Crest (Super Premium Segment)Middle East - Royale Classic, Gold Cut and Scissors Filter King (Premium Segment)Ready to eat foodsKitchens of India (Mid Segment)StaplesAashirvaad (Mid Segment)ConfectioneryMint-O, Candy man (Mid Segment)Snack foodsSun feast (Mid Segment)Lifestyle retailingRelaxed Wear - Wills Sport (Mid Segment)Formal Wear - Wills Classic (Mid Segment)Evening Wear and Designer Accessories - Wills Club life (Premium Segment)Branded mens apparel - John Players ( Premium Segment)Greeting cardsEnglish cards Expressions (Mid Segment)Vernacular cards Matrubhasha (Mid Segment)NotebooksSchool notebooks Classmate (Mid Segment)College and office notebooks Paperkraft (Mid Segment)Safety matchesiKno, Mangal Deep,VaxLit, Delite, Aim (Mid Segment)Incense sticksMangaldeep (Mid Segment)Arena (Geographical Area 2010-15)CigarettesHas launched its own brands in the US and Middle EastLargest company in NepalFoods & agri-productsPackaged foods brand Kitchens of India exported to US, Canada, UK and SwitzerlandBranded sea foods exported to US, Europe and JapanSupply chain partner of several leading international customers for agri products- Coke, Abudhabi Flour Mill, MitsubishiSupplies tobacco to customers in 37 countriesPaper & packagingExports of coated boards to Malaysia, Sri Lanka, Bangladesh, Iran, Australia, UAE, Saudi Arabia, Singapore, UK, Italy, Netherlands and ChinaExports of cigarette tissues and dcor paper for laminates to Iran, Indonesia, Philippines, Nepal, Bhutan and BangladeshSupplies packaging for 15 billion cigarette sticks a year for the export marketSafety matchesExport of premium brands of safety matches to Europe, Africa and the USAIncense sticksExported to US, Europe and south-east AsiaVehicle & Staging (2010-15)2010-15: Largest Subsidiary Launched in Nepal & company continued its practice on Triple Bottom Line philosophy for creating value that encompasses the economic, environmental and social dimensions.

DifferentiatorsRural Area Market - ITCs major initiatives in rural area s are e-Choupal trading and information system. This is worlds largest rural digital infrastructure serving more than 4 million farmers. It is an initiative to link directly with rural farmers via the Internet for procurement of agricultural and aquaculture products like soybeans, wheat, coffee, and prawns.

The e-Choupal model has been specifically designed to tackle the challenges posed by the unique features of Indian agriculture, characterised by fragmented farms, weak infrastructure and the involvement of numerous intermediaries, among others.

39Differentiators continued Choupal Pradarshan Khet: Another path-breaking initiative - brings the benefits of agricultural best practices to small and marginal farmers. Backed by intensive research and knowledge, this initiative provides Agri-extension services which are qualitatively superior and involves pro-active handholding of farmers to ensure productivity gains.

Social and Farm forestry initiative has greened nearly 200,000 hectares and generated nearly 90 million person-days of employment for rural households, including poor tribal and marginal farmers.

Unique Customer Relationship Management programme for commodity customers in both domestic and international markets.

Significant thrust on social sector investments under Mission Sunehra Kal initiatives Natural resource management Sustainable livelihoods Community development programmes in the economic vicinity of operating locationsCreating over twice the rainwater harvesting potential than ITCs net water consumptionOver 43% of total energy consumed is from renewable sources Solid waste recycling positive40Economic LogicBlend diverse core competencies residing in various Businesses to enhance the competitive power of the portfolio.

Purchase of raw materials direct from farmers through e-Choupal.

Also it nominates the source of supply for raw materials and sets the standards and fixes the price of the product at every stage of the value chain.

ITC closely control the specification and price of the products.

Over 35000 villages linked through around 6100 e-Choupals servicing around 4 million farmers

Use of world class technology to reduce cost and maintain quality.

41Economic Logic continued..Fully integrated with in-house pulping capacity in paperboard segment.

Over 43% of total energy consumed is from renewable sources

ITC collaborates with local NGOs and other organizations which work with SHGs, and the company in thus indirectly able to access cheap capital and other benefits.

ITC identified small-scale suppliers which manufacture the final product.

42Internal/External factors alignmentTop-down approachThe company's "top-down" approach is to cracking categories in the FMCG business. It's a strategy the company perfected in its mainstay cigarette business and has replicated in the personal care, food and stationery operations. Under this approach, ITC enters any new category at the premium end, builds its brands, and then rolls out the mass range.

Triple Bottom Line' approachTriple Bottom Line commitment of the Company to simultaneously build economic, social and environmental capital has spurred innovation to orchestrate a symphony of efforts that address some of the most challenging societal issues including widespread poverty and environmental degradation.

Diversification is one of the main key factor of ITC which they started in early 70s by entering into Hotels business and since then ITC has been constantly making efforts to de-emphasize its tobacco business. Its corporate strategy aimed at creating multiple drivers of growth based on its core competencies.

43Internal/External factors alignment continued..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.ITC leverages e-Choupal in a novel way.

Per capita consumption of personal care products in India is the lowest in the world offering an opportunity for ITCs soaps, shampoos and fragrances under their Wills brand.

ITCused 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.

Multiple drivers of growth & unmatched distribution reach, superior brand building capabilities, effective supply chain management into new businesses are expected to garner a significant share of their emerging high growth market in India.

44Social ImpactDirect employment ITC Group : over 32,000

Supported creation of 6 million sustainable livelihoods

e-Choupal: Worlds largest rural digital infrastructure serving more than 4 million farmers

Social and Farm forestry initiative has greened nearly 200,000 hectares and generated nearly 90 million person-days of employment for rural households, including poor tribal and marginal farmers.

Significant thrust on social sector investments under Mission Sunehra Kal initiativesNatural resource managementSustainable livelihoodsCommunity development programmes in the economic vicinity of operatinglocations

Environmental ImpactCarbon positive enterprise 10 years in a rowSequesteringovertwicetheamountofCO2 thatthe company emits

Water positive - 13 years in a rowCreating over twice the rainwater harvesting potential than ITCs net water consumption

Solid waste recycling positive 8 years in a rowOver 43% of total energy consumed is from renewable sourcesOnly Company in the world of comparable dimensions to have achieved andsustained the 3 key global indices of environmental sustainability of being Carbon positive, Water positive and Solid waste recycling positive46International StrategySurya Nepal Private Limited (SNPL) is an Indo-Nepal-UK joint venture, which started operations in Nepal in 1986. SNPL, a subsidiary of ITC Ltd, India, is the largest private sector enterprise in Nepal.Welcom Hotels Lanka (Private) Limited ('WLPL'), a wholly-owned subsidiary of ITC Ltd., India, was incorporated in Sri Lanka with the objective of constructing, building and operating a mixed use development project ('Project') including a luxury hotel at Colombo.ITC Infotech has established offices across 18 countries, with 10 global development centers and client engagements in 35+ countries.Presence mostly in Indian sub continent with IT arms presence across the globe.Not aggressive in Internationalization rather focus on diversification leveraging existing operations.

Globalisation at a glanceContribution of more than US$ 2 billion to India's exports in the last decadeITC's International Business Division is one of the largest Indian exporters of agri-products and is a preferred supply chain partner to companies like Coca Cola, Mitsubishi etcMarkets its own bran of cigarettes in the US and Middle EastLargest exporter of coated boards from IndiaLargest exporter of cigarette tobaccos from India Corporate Social ResponsibilityE-Choupal in Agri Business A more efficient supply chain aimed at delivering value to its customers around the world on sustainable basis.ITC realized that by owning the agri-product procurement value chain, they could serve the needs of the end customer better andreduce their "true cost of contract.

The Value chain Farm to Factory Gate

Total Spend on CSR in last 4 years2012201320142015Total Spend on CSR5878107214.06Avg. Net Profit6003732088479607.7CSR spends as a % of Average Net Profits0.96%1.06%1.20%2.22%Core challenges Faced by ITCRestructuring the Companys Business Portfolio and investment.

Diversification of the business.

Issue with customer loyalty due to substitutes.

Large MNC entering Indian market

Illegal FMCG sales

Recommendations-ITC should try to penetrate the e-cigarettes and non-tobacco smoking market being a established well-known cigarette brand.

-ITC should try to focus more on paperboard and packaging industry as it is the most profitable industry after FMCG-Cigarette.

-Increase customer loyalty by rapid product innovation.

-The company can come up with the concept of retail branding of food products across all over India as it follows the marketing strategy of Umbrella branding.

-The company can approach the government or distribute their products in Military canteens and can sell them to organization that provides the afternoon meals to the children as part of mid-day meal scheme.Thank you52