Strategic Management in ITC ltd.
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Strategic Management in ITC ltd.

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An overview of Strategy in ITC

An overview of Strategy in ITC

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    Strategic Management in ITC ltd. Strategic Management in ITC ltd. Presentation Transcript

    • Strategic Management in ITC Ltd. Ganesh Naik Nand Kumar Aradhye Raj Kumar Ranjan Varma
    • The Corporate Mission
      • Governance structure
      • Strategic supervision
      • Strategic management
      • Executive management
      • Core values
      • Nation Orientation; Trusteeship; Excellence;
      • Customer focus; respect for people; Innovation
    • Vision & Mission statements
      • 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.
      • Mission: To enhance the wealth generating capability of the enterprise in a globalizing environment, delivering superior and sustainable stakeholder value.
    • Business Mix of ITC Ltd.
      • FMCG • Cigarettes • Foods • Lifestyle Retailing • Greeting, Gifting & Stationery • Safety Matches • Agarbattis Paperboards & Packaging • Paperboards & Specialty Papers • Packaging
    • Business Mix (Cont’d)
      • Agri - Business • Agri-Exports • e-Choupal • Leaf Tobacco
      • Hotels
      • Group Companies • ITC Infotech; etc.
    • SWOT Analysis
      • Threats
      • Increasing tax in Cigarettes
      • Health hazard
      • Opportunity
      • Rural market
      • E-choupal
      • Weakness
      • Unrelated diversification
      • Strength
      • Brand
      • Management
    • Business wise Sales data Source: Annual Accounts 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
    • CAGR during FY 2005-2008 Source: Equity research reports 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
    • Market share of ITC Ltd.
      • Outstanding market leader
      • Cigarettes, Hotels, Paperboards, Packaging and Agri-Exports.
      • Gaining market share
      • Nascent businesses of Packaged Foods & Confectionery, Branded Apparel and Greeting Cards.
      Source: Annual Accounts/Equity research
    • Source: Equity research reports -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
    • Market attractiveness & Competitive strength is also important. Act 2
    • Limitations
      • Assumes market growth rate. A firm may grow the market.
      • A “Dog” may be helping other products.
      • High market share/Growth is not the only success factor.
      • Linkage between market share and profitability is questionable.
    • The BCG Matrix for ITC Ltd. Dogs
      • Cows
      • FMCG-Cigarettes
      • ?
      • FMCG- Others
      • Stars
      • Hotels
      • Paperboards/ Packaging.
      • Agri business.
    • Act III - Action- Learning points and conclusions
      • Question Marks (? ) To be handled with care.
      • Strategic forays into emerging high growth markets.
      • E-Choupal is a transformational strategy.
      • Strong brand building capability will be tested.
    • Learning points (Cont’d)
      • Corporate strategy of creating multiple drivers of growth anchored on its core competencies and distribution reach.
      • Embracing difficult and challenging corporate strategy. (Ex: Paperboards).
      • EHS philosophy: Contribution to the triple bottom line- Economic, Environment and social capital.