BCG Matrix for ITC Ltd.  Ranjan Varma http://financexchange.blogspot.com
Structure  Learning points and conclusions Action! Act III The BCG matrix Camera! Act II ITC- A Background Lights! Act I
Act –I  [Lights!] <ul><li>Governance structure </li></ul><ul><li>Strategic supervision </li></ul><ul><li>Strategic managem...
Vision & Mission statements <ul><li>Vision: Sustain ITC’s position as one of India’s most valuable corporations through wo...
Business Mix of ITC Ltd. <ul><li>FMCG  •  Cigarettes  •  Foods  •  Lifestyle Retailing  •  Greeting, Gifting &    Statione...
Business Mix (Cont’d) <ul><li>Agri - Business •  Agri-Exports •  e-Choupal •  Leaf Tobacco </li></ul><ul><li>Hotels </li><...
Business wise Sales data Net revenue Paper & pkg. Agribusiness Hotels FMCG-Others FMCG-Cigarettes Business/ Year 12.99 24....
CAGR during FY 2005-2008 Fast track, decent share. 60.2 % FMCG-Others E-choupal, choupal sagar, 34.3 % Agri business Capac...
Market share of ITC Ltd. <ul><li>Outstanding market leader  </li></ul><ul><li>Cigarettes, Hotels, Paperboards, Packaging a...
-7.5% 4.4% 20% share of greeting cards market, 'Aashirvaad' atta is No.1 in branded segment FMCG (Others) 5.4% 4.3% ITC Gr...
Market attractiveness & Competitive strength is also important. Act 2
Limitations  <ul><li>Assumes market growth rate. A firm may grow the market.  </li></ul><ul><li>A “Dog” may be helping oth...
The BCG Matrix for ITC Ltd. Dogs  <ul><li>Cows </li></ul><ul><li>FMCG-Cigarettes </li></ul><ul><li>? </li></ul><ul><li>FMC...
Act III - Action-  Learning points and conclusions <ul><li>? -  To be handled with care. </li></ul><ul><li>Strategic foray...
Learning points (Cont’d) <ul><li>Corporate strategy of creating multiple drivers of growth anchored on its  core competenc...
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BCG Matrix for ITC Ltd

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Project on understanding the BCG Matrix and applying it to ITC Ltd. Segregating the businesses of ITC into Cash Cows, Stars, Question Marks and Dogs.

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Transcript of "BCG Matrix for ITC Ltd"

  1. 1. BCG Matrix for ITC Ltd. Ranjan Varma http://financexchange.blogspot.com
  2. 2. Structure Learning points and conclusions Action! Act III The BCG matrix Camera! Act II ITC- A Background Lights! Act I
  3. 3. Act –I [Lights!] <ul><li>Governance structure </li></ul><ul><li>Strategic supervision </li></ul><ul><li>Strategic management </li></ul><ul><li>Executive management </li></ul><ul><li>Core values </li></ul><ul><li>Nation Orientation; Trusteeship; Excellence; </li></ul><ul><li>Customer focus; respect for people; Innovation </li></ul>
  4. 4. Vision & Mission statements <ul><li>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 Company’s stakeholders. </li></ul><ul><li>Mission: To enhance the wealth generating capability of the enterprise in a globalizing environment, delivering superior and sustainable stakeholder value. </li></ul>
  5. 5. Business Mix of ITC Ltd. <ul><li>FMCG • Cigarettes • Foods • Lifestyle Retailing • Greeting, Gifting & Stationery • Safety Matches • Agarbattis Paperboards & Packaging • Paperboards & Specialty Papers • Packaging </li></ul>
  6. 6. Business Mix (Cont’d) <ul><li>Agri - Business • Agri-Exports • e-Choupal • Leaf Tobacco </li></ul><ul><li>Hotels </li></ul><ul><li>Group Companies • ITC Infotech; etc. </li></ul>
  7. 7. Business wise Sales data Net revenue Paper & pkg. Agribusiness Hotels FMCG-Others FMCG-Cigarettes Business/ Year 12.99 24.9 4.2 124.1 85.2 8.4 Growth % 11815.04 13349.58 1253.29 1565.31 1708.77 1780.07 257.53 577.25 304.16 563.39 Value (Rs in Crore) 9230.27 10002.54 2004 2005
  8. 8. CAGR during FY 2005-2008 Fast track, decent share. 60.2 % FMCG-Others E-choupal, choupal sagar, 34.3 % Agri business Capacity utilization, value added products 17.2 % Paper Inward traffic, occupancy 22.7% Hotels Pricing power 10.9 % Cigarettes Growth parameters CAGR Category
  9. 9. Market share of ITC Ltd. <ul><li>Outstanding market leader </li></ul><ul><li>Cigarettes, Hotels, Paperboards, Packaging and Agri-Exports. </li></ul><ul><li>Gaining market share </li></ul><ul><li>Nascent businesses of Packaged Foods & Confectionery, Branded Apparel and Greeting Cards. </li></ul>
  10. 10. -7.5% 4.4% 20% share of greeting cards market, 'Aashirvaad' atta is No.1 in branded segment FMCG (Others) 5.4% 4.3% ITC Group ranks No.2 Hotels 3.7% 7.0% 1of the largest xporters from India Agri business 10.7% 7.3% Packaging board – No. 1 in Asia Paper & Packg. 87.7% 77.0% 70% share Cigarettes Contribution % Revenue PBIT Dominance Segment
  11. 11. Market attractiveness & Competitive strength is also important. Act 2
  12. 12. Limitations <ul><li>Assumes market growth rate. A firm may grow the market. </li></ul><ul><li>A “Dog” may be helping other products. </li></ul><ul><li>High market share/Growth is not the only success factor. </li></ul><ul><li>Linkage between market share and profitability is questionable. </li></ul>
  13. 13. The BCG Matrix for ITC Ltd. Dogs <ul><li>Cows </li></ul><ul><li>FMCG-Cigarettes </li></ul><ul><li>? </li></ul><ul><li>FMCG- Others </li></ul><ul><li>Stars </li></ul><ul><li>Hotels </li></ul><ul><li>Paperboards/ Packaging. </li></ul><ul><li>Agri business. </li></ul>
  14. 14. Act III - Action- Learning points and conclusions <ul><li>? - To be handled with care. </li></ul><ul><li>Strategic forays into emerging high growth markets. </li></ul><ul><li>E-Choupal is a transformational strategy. </li></ul><ul><li>Strong brand building capability will be tested. </li></ul>
  15. 15. Learning points (Cont’d) <ul><li>Corporate strategy of creating multiple drivers of growth anchored on its core competencies and distribution reach. </li></ul><ul><li>Embracing difficult and challenging corporate strategy. (Ex: Paperboards). </li></ul><ul><li>EHS philosophy: Contribution to the triple bottom line- Economic, Environment and social capital. </li></ul>
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