Slideshow Transcript

1. Slide 1: ITC Ltd. One of India’s Most Valuable Corporations
2. Slide 2: The ITC Profile  ITC is one of India's foremost private sector companies with a market capitalisation of nearly US $ 18 billion and a turnover of over US $ 4.75 billion.  ITC has a diversified presence in  Cigarettes,  Hotels,  Paperboards & Specialty Papers,  Packaging,  Agri-Business,  Packaged Foods & Confectionery,  Information Technology,  Branded Apparel,  Personal Care,  Greeting Cards,  Safety Matches and other FMCG products. st-akhilgupta@ismc.edu.in
3. Slide 3: The ITC Profile  ITC is an outstanding market leader in its traditional businesses of Cigarettes, Hotels, Paperboards, Packaging and Agri-Exports.  It is rapidly gaining market share even in its nascent businesses of Packaged Foods & Confectionery, Branded Apparel and Greeting Cards. st-akhilgupta@ismc.edu.in
4. Slide 4: Company’s Strategy  ITC's diversified status originates from its corporate strategy aimed at creating multiple drivers of growth anchored on its time-tested core competencies:  unmatched distribution reach,  superior brand-building capabilities,  effective supply chain management and  acknowledged service skills st-akhilgupta@ismc.edu.in
5. Slide 5: ITCs Rural Development Philosophy at Work LET'S PUT INDIA FIRST ITC believes that the inter-dependence between its Agri-based businesses and the farm sector constitutes a sustainable platform to enlarge its contribution to the Indian rural sector.
6. Slide 6: e-Choupal
7. Slide 7: About e-Choupal Reaches to 3.5 million farmers Launched In June 2000 6500 kiosks around nine states Covers 38,500 villages st-akhilgupta@ismc.edu.in
8. Slide 8: Business Model  The e-Chaupal 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. st-akhilgupta@ismc.edu.in
9. Slide 9: The Value Chain – Farm to Factory Gate: st-akhilgupta@ismc.edu.in
10. Slide 10: The e-Choupal Services  Relevant & Real-time Information  Commodity prices, Local Weather, News  Customized Knowledge  Farm Management, Risk Management  Supply Chain for Farm Inputs  Screened for Quality, Demand Aggregation for Competitive Prices & Efficient Logistics  Direct Marketing Channel for Farm Producers  Lower Transaction Costs, Better Value through Traceability st-akhilgupta@ismc.edu.in
11. Slide 11: Other Services through E-Choupal  Distribution of Products and Services to Rural Markets  Micro marketing  Product/Services Demos  Marketing and Brand Building activities  Pilots  Bhoomi  E-Health with Private Health Service Providers  E-Education  Rural BPO st-akhilgupta@ismc.edu.in
12. Slide 12: Problems Encountered  The problems encountered while setting up and managing these ‘e-Choupal’ are primarily of  Infrastructural inadequacies,  Including power supply,  Telecom connectivity and bandwidth,  Apart from the challenge of imparting skills to the first time internet users in remote and inaccessible areas of rural India. st-akhilgupta@ismc.edu.in
13. Slide 13: Alternative & Innovative Solutions  Some of the expensive solutions are being deployed to overcome these challenges. These are: -  Power back-up through batteries charged by Solar panels,  Upgrading BSNL exchanges with RNS kits,  Installation of VSAT equipment,  Mobile Choupals,  Local caching of static content on website to stream in the dynamic content more efficiently,  24x7 helpdesk etc. st-akhilgupta@ismc.edu.in
14. Slide 14: Future Plans  Going forward, the roadmap includes plans to integrate bulk storage, handling & transportation facilities to improve logistics efficiencies.  Establish ‘e-Choupal’ as the new age cooperative for all practical purposes.  ITC plans for the extension of the ‘e-Choupal’ initiative to altogether 15 states across India over the next few years.  Planning to launch some other services with their e-Choupal program like: -  Micro-Credit  Health  Education st-akhilgupta@ismc.edu.in
15. Slide 15: Deployment Principles
16. Slide 16: #1 Co Creation  End-to-end solution is designed collaboratively  Identify major problems and  solve them with efficiency and transparency  When they started, it was with a FMCG approach, with reliance on  Market Research  Focus Groups  … and then the approach quickly changed to ‘Prototypes’ to enable experience and obtain feedback  An iterative approach to build models to solve the real world problems of the Individual and of the Community st-akhilgupta@ismc.edu.in
17. Slide 17: Solution : Access to Price Information – Anytime & In the Village st-akhilgupta@ismc.edu.in
18. Slide 18: Solution : Transparency and Accuracy in Weighment st-akhilgupta@ismc.edu.in
19. Slide 19: Solution : Modern Methods for Quality Assessment st-akhilgupta@ismc.edu.in
20. Slide 20: #2 Must have a well thought out Business Model  Who Pays ?  Who Runs ?  Who Monitors Quality?  What are the Value Propositions to the Stake Holders ? st-akhilgupta@ismc.edu.in
21. Slide 21: The ITC e-Choupal Proposition  Step 1: Leveraging ITCs for empowered access to markets (inputs & outputs)  Step 2: Economic viability of IT infrastructure investments is justified through Win-Win business models, hence also scaleable  Step 3: Customer responsive IT infrastructure in the villages facilitates access to supplementary Education, Health, Employment, e-Governance services st-akhilgupta@ismc.edu.in
22. Slide 22: ITCs make it possible !  The e-Choupal Price Discovery : Farmer @ Receiving End Vs Empowered  Value through Unbundling what was bundled together earlier (Information & Transaction)  Unbundled  Price information is now available at the door step without a necessity to go to mandi  Has an option to fix price at the village itself. However, at the time of selling, still retains the freedom to go to mandi if he believes he gets better offer there.  The Input Transaction  Value through Bundling (Information, Knowledge, Transaction) what was available unbundled earlier  Bundles  Information on Weather and Best Practices from the website  Knowledge of ‘what to do’ from the Experts  Efficient supply platform for inputs purchase that enables aggregation and scale efficiencies st-akhilgupta@ismc.edu.in
23. Slide 23: #3 The Orchestrator  Who Orchestrates the multiple entities?  The scale and complexity inherent makes it a high maintenance network  The Orchestrator has to ensure  There is a ‘Big Picture’ to what is initiated  ‘Changing Needs’ are tracked and are efficiently responded  ‘Continuous Innovation’ of the business model is ensured for its long term relevance st-akhilgupta@ismc.edu.in
24. Slide 24: #4 The Infrastructure  Must have Three Tiers  Local part for Responsiveness  Regional level for Controlling  Apex element for Resources Allocation st-akhilgupta@ismc.edu.in
25. Slide 25: 3 X 3 e-Choupal Infrastructure  ITC Kiosk with Internet Access  In the house of one trained farmer, Sanchalak  Within walking distance of target farmers  Warehousing Hub / Store  Managed by the erstwhile middleman, Samyojak  Within tractorable distance of target farmers  Collaborative Network of Companies  Orchestrated by ITC  With a Pan-Indian presence st-akhilgupta@ismc.edu.in
26. Slide 26: #5 Capability Building  Build Customer Orientation right across the Chain  “Customer is the reason”  … and also the necessary Functional and Process skills  Working Capital  Demand Creation / assessment  … along with the Soft Skills  Feedback  Quality / Customer Service st-akhilgupta@ismc.edu.in
27. Slide 27: Taking ITCs & Biz Models to Rural India Training st-akhilgupta@ismc.edu.in
28. Slide 28: Taking ITCs & Biz Models to Rural India Power Connectivity Website st-akhilgupta@ismc.edu.in
29. Slide 29: ITC Limited e-Choupal Sagar st-akhilgupta@ismc.edu.in
30. Slide 30: st-akhilgupta@ismc.edu.in
31. Slide 31: Choupal Sagar Unlocking the Rural Markets
32. Slide 32: Business Thought \"It is a place where the farmer does both selling and buying. On an average a farmer can receive up to Rs 50,000 for the Soya he brings in and we give him the money in cash... farmers still prefer getting their money in cash. Since he has already hired a vehicle, it makes sense for him to take all his requirement of fertiliser, pesticide, etc, as well as diesel worth Rs 3,000 to Rs 4,000 back to his village. A BPCL outlet will open soon to facilitate his diesel purchase and a nationalised bank will also open a branch here. As we also sell life insurance through the choupal network, an insurance counter will be put up at the mall.\" st-akhilgupta@ismc.edu.in
33. Slide 33: About Choupal Sagar  Choupal Sagar is the culmination of all farming activities in one place.  Seven thousand sq ft stacked with brand names... a place where  Sonata watches and Usha,  Prestige and Hawkins home appliances jostle for space with  Italio, Cosmo, Springwood and John Players shirts, jeans, and Philips and LG products.  TVS Victor motorcycle and, a few rows down the hall, you can buy fertilisers and pesticides or motor pumps. st-akhilgupta@ismc.edu.in
34. Slide 34: st-akhilgupta@ismc.edu.in
35. Slide 35: st-akhilgupta@ismc.edu.in
36. Slide 36: ITC
37. Slide 37: Product Portfolio (Rural Market) Rural & Urban Based Products Cigarettes Food Retail Commodity Ex. Capstan Sunfeast Choupal Sagar E-Choupal Flake Bingo Gold Flake Mint-o fresh Scissors st-akhilgupta@ismc.edu.in
38. Slide 38: Sunfeast  ITC launched delicious biscuits of international quality under the Sunfeast range on 28th July 2003.  The biscuits were launched after a great deal of market research. Sunfeast Glucose, Sunfeast Marie and Dream Cream biscuits were the first to make an appearance in the market.  In a short span of 3 years Sunfeast has launched many new varieties and has its presence in almost all types of biscuit categories. st-akhilgupta@ismc.edu.in
39. Slide 39: Product Range  Sunfeast Glucose  Sunfeast Marie Light  Sunfeast Orange Marie  Sunfeast Dream Cream  Orange  Mango  Pine-apple  Elaichi  Chocolate  Strawberry  Milk st-akhilgupta@ismc.edu.in
40. Slide 40: Competition  Sunfeast is majorily facing competition by the two, namely: -  Britannia  Parle  By Priyagold in Northern India. st-akhilgupta@ismc.edu.in
41. Slide 41: Market Share st-akhilgupta@ismc.edu.in
42. Slide 42: Reason to enter into Food Segment Rs. 5,50,000 crores market in India Only 6% is packaged Rs. 4,000 12-14% yearly crores biscuit growth in the market in India biscuit segment st-akhilgupta@ismc.edu.in
43. Slide 43: Distribution Channel  The company used its existing network of convenience stores –  The company's name for the hole-in-the-wall pan-beedi shops -- for sunfeast.  The company also looked at grocery stores and other retail formats.  The brand is now available in nearly 1.8 million outlets. Britannia claims it has a superior distribution clout with its presence in nearly 3.3 million outlets. Parle, the seasoned player itself, says it is available in 1.5 million outlets. Sunfeast is now available in 1.8million shops of India as compared to Britannia and Parle. They are available in 3.3 and 1.5 million shops respectively st-akhilgupta@ismc.edu.in
44. Slide 44: Advertising  Advertisement  TVC  Newspaper  Advertisements behind the buses. Annual Advertising  Outdoor Advertising budget of ITC biscuit segment is 115-120 crore. st-akhilgupta@ismc.edu.in
45. Slide 45: Pricing Models  The biscuit industry is basically based on two models: -  Low price models.  Two-pronged strategy  Sunfeast has adopted this strategy. They are playing with the volumes and low margin in their glucose and Marie segment. While in their cream variant they are playing with high margins. st-akhilgupta@ismc.edu.in
46. Slide 46: st-akhilgupta@ismc.edu.in