HIMANSHU SHEKHAR 12EX021
PIYUSH DWIVEDI 12EX035
SREEKANT SUKUMAR 12EX049
VIVEK KUMAR 12EX056
OPERATION STRATEGY BY ITC
THE ITC VISION
Sustain ITC's position as one of India's most
valuable corporations through world
class performance, creating growing
value for the Indian economy and the
THE ITC MISSION
To enhance the wealth generating capability of
the enterprise in a globalising
environment, delivering superior and sustainable
Incorporated in 1910, as Imperial Tobacco
Company of India Limited
Changed to Indian Tobacco Limited in 1970
and then to I.T.C Limited in 1974
With wide portfolio from FMCG to hotels
renamed to ITC limited in 2001
Companies Diversification tobacco
Started as a cigarette, tobacco leave
Packaging and printing business started in
1925 to backward integrate with cigarette
1985 Surya tobacco Co in Nepal set up,
renamed to Surya Nepal Pvt Ltd in 2002
becoming a subsidy of ITC
In 2010, ITC launched its hand rolled
Companies Diversification paper
1979 entry in paper business, ITC
1990, Tribeni tissues limited acquired,
speciality paper for cigarette
Nov 2002, Tribeni tissues division and
Bhadrachalam paper board combines to form
Paperboards & Specialty Papers Division
Companies Diversification stationery
Paperkraft notebooks launched in 2002
Classmate range launched in 2003
2007 Practical Books, Drawing Books,
Geometry Boxes, Pens and Pencils under
the 'Classmate' brand
Paperkraft -eco friendly premium business
Colour crew- art stationery brand launched in
Companies Diversification apparels
2000 launch of Wills lifestyle
Wills Classic formal wear (2002) and Wills
Clublife evening wear (2003)
Men's wear brand, John Players, in 2002
Wills Lifestyle India Fashion Week launched
in 2006 acts as a platform for B2B for fashion
Companies Diversification food
Kitchens of India- ready to eat food launched in
Mint-o, Candyman & Ashirvad launched in 2002
2003 saw the raise of Sunfeast as a major player
in biscuit segment
Entry into snack with Bingo in 2007 & noodle
industry with Sunfeast Yipee in 2010
Companies Diversification others
Launched in 2005 Personal Care portfolio has
grown under 'Essenza Di Wills', 'Fiama Di
Wills', 'Vivel' and 'Superia'
1975 ITC- Welcomgroup hotel Chola
acquired in Chennai, now known as Fortune
2000 launched the ITC Infotech
Enters matchboxes industry in 2002 and 2003
launches incense sticks
In 2001 Government of India has announced
ban on the advertising by cigarettes
Companies. Therefore many policies have
come up like this.
Increased in Excise duties.
A growing portfolio of business encompassing FMCG,
Paperboards &Packaging, Agri & Foods Business, Hotels
and Information Technology.
Total Shareholder Returns, measured in terms of increase in
market capitalization and dividends, grew at a compound
rate of over 24% per annum over the last 5 years.
The new FMCG businesses support the competitiveness,
technology up gradation and market reach of over 200 Small
and Medium Enterprises (SMEs).
ITC Group provides direct employment to more than
ITC‟s globally recognized E-choupal initiative is the world‟s
largest rural digital infrastructure benefiting over 4 million
ITC‟s Watershed Development initiative brings precious
water to over 46,000 hectares of dry lands and moisture-
ITC‟s Sustainable Community Development initiatives
include women‟s empowerment, supplementary education.
Wholly own subsidiary named “ITC
India‟s fastest growing IT services and
Providing services in more than 140countries
Major strategies followed by ITC:
Entering into less competitive or unexplored
markets (ready to eat, staples, wafers).
A managed supply chain network.
Innovation-Regular introduction of new products
(all products). Supported by R & D.
Market differentiation ( Ready to eat, biscuits)
Cost control strategy (all products)
Extensive advertising (biscuits, confectionary,
PROS of Diversification
Economies of scale and scope
Operational synergies can be realized.
Spreading the firm's unutilized organizational resources to other areas can create
Leveraging skills across businesses can create value.
Internal capital market
Cash from some businesses can be used to make profitable investments.
External finance may be more costly due to transaction costs, monitoring
Diversifying shareholders’ portfolios
Individual shareholders may benefit from investing in a
Identifying undervalued firms
Shareholders may benefit from diversification if its
managers are able to identify firms that are under valued
by the stock market.
CONS of Diversification
Combining two businesses in a single firm is likely to result
insubstantial influence costs.
Resource allocation can be influenced by lobbying.
Costly control systems may be needed that reward managers based on
division profits and discipline managers by tying their careers to
business unit objectives.
Internal capital markets may not work well in practice.
Shareholders can diversify their own personal portfolios. Corporate
managers are not really needed to do this.
Identifying undervalued firms may not be as easy as it sounds.
Future Positioning of ITC
Aleading FMCG playerin India
CigaretteTrade Marketing capability
Expanded FMCG distribution capability
e-choupal rural two-way
A basis for strategic partnerships with other
FMCG brand owners
VPN providing SCM, ERP & CRM capability
Leverage upon its existing skills and competencies. Benchmarked
it‟s operations and quality control techniques.
Strong branding capabilities backed by good quality.
Won numerous awards like „Enterprise Business
Transformation Award‘, NASSCOM - CNBC IT User Award
ITC‟s strong distribution capabilities and a strong brand name are
a useful asset.
Using its agri sourcing network to source raw materials for its
biscuits and atta businesses.