Bsiness Environment & Strategic Analysis Of Itc Hotels
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Bsiness Environment & Strategic Analysis Of Itc Hotels






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Bsiness Environment & Strategic Analysis Of Itc Hotels Bsiness Environment & Strategic Analysis Of Itc Hotels Presentation Transcript

  • ITC Limited One of India’s Most Valuable Corporations HIMANSHU DIXIT MBA
  • Performance Track Record- Snapshot Rs. 1 crore= Rs. 10 million Rs crores
  • ITC - Key Financials – H1 08/09
  • Q2 Segment Results
  • H1 Segment Revenue
  • H1 Segment Results
  • Segment Capital Employed
    • One of the 8 Indian Companies to feature in ‘Forbes A-list’ for 2004
      • Featuring 400 of the World’s ‘best big companies’ with M-cap. > USD 5 bln. & are rated as the ‘most attractive companies for investors’
    • Only Indian FMCG Company to feature in Forbes 2000 List
      • A comprehensive ranking of world’s biggest companies measured by a composite of sales, profits, assets & market value
    • Among top in :
      • Sustained value creation (BT-Stern Stewart survey)
      • Operating profits
      • Cash Profits
    • Ranks No. 5 among Indian listed Private Sector Companies by market cap . (@ 30/09/08)
      • No. 1 in FMCG Sector
    • Rated as one of India’s Most Respected Companies (IMRB-Businessworld Survey 2006)
    ITC One of India’s most valuable corporations
  • Awards & Accolades (1)
    • ‘ ITC received the FICCI Outstanding Vision Corporate Triple Impact Award 2007 for invaluable contribution to the triple bottom line benchmarks of building economic, social and natural capital for the nation.
    • Sustainability Leadership Award 2007 conferred on Chairman Y C Deveshwar by the Sustainability Forum, Zurich and SAM/SPG at the International Sustainability Leadership Symposium
    • Business Today Award for the Best Managed Company – Retail and Consumer Products , has been conferred on ITC in recognition of its outstanding initiatives in the consumer products segment.
    • Asian CSR Award 2007 for Environmental Excellence given by the Asian Institute of Management
    • Ryutaro Hashimoto Incentive Prize 2007 for Environment & Development from the Asia Pacific Forum
    • In the first of its kind S&P Environmental, Social and Corporate Governance (ESG) ratings released recently, ITC ranked second among top Indian companies .
    • The Company has won the Corporate Social Responsibility Crown Award for Water Practices from UNESCO and Water Digest for its distinguished work carried out in the water sector in India.
    • NDTV Profit Business Leadership Award for being the Best Food Company of 2007 .
  • Accolades & Awards (2)
    • e-Choupal initiative wins global recognition:
      • Stockholm Challenge Award 2006 in the Economic Development category which recognises initiatives that leverage Information Technology to improve living conditions and foster economic growth in all parts of the world.
      • First Indian Company to win the Development Gateway Award 2005 for the most exemplary contribution in the field of Information & Communication Technologies (ICT) for development during the last 10 years
      • World Business Award 2004 : International Chamber of Commerce & the HRH Prince of Wales & International Business forum
      • Harvard University case study
      • Recognised in World Development Report 2008 published by World Bank
      • Applauded by President of India Dr APJ Kalam in his “special address during the national symposium to commemorate 60th year of independence”
  • ITC - Business Portfolio ITC FMCG: Cigarettes Other FMCG Hotels Agri Business Leaf Tobacco Agri Commodities Paperboard Paper & Packaging
  • Strategy of Organisation to manage diversity of Portfolio
    • Formal 3-tiered governance structure:
    • Board of Directors :
      • Comprising executive (4) and non-executive directors (11)
      • Strategic supervision
    • Corporate Management Committee :
      • Comprising executive directors and senior managers
      • Strategic management
    • Divisional Chief Executive & Divisional Management Committee :
      • Executive management
    • Sustain multiple drivers of growth, matching internal capabilities with emerging market opportunities
    • Pursue World class competitiveness in all businesses and across the entire value chain
    • Best-in-class in terms of:
      • Internal Vitality
      • Market Standing
      • Profitability
    • Strategy of Organisation and Governance processes geared to manage multiple businesses
    • Blend core competencies and leverage ITC umbrella strengths to create new avenues of growth
    Corporate Strategies
  • Hotels & Tourism
  • Hotels & Tourism industry
    • Foreign arrivals into India: 5 million appx. Vs. 35 million in China
      • The two nations were on par 2 decades ago at 750,000 arrivals
    • Today, Beijing alone has as many hotel rooms as the whole of India
    • India’s luxury rooms availability lower than even smaller East Asian countries
    Source: Compendium of Tourism statistics, WTO
  • Indian hotel industry
    • Current supply – appx. 110,000 rooms of which 5 Star category accounts for appx. 30%
    • India needs an additional 50,000 rooms in the next 2/3 years to service projected tourist arrivals
    • Present mismatch between supply and demand expected to persist over the short term
    • As infrastructure for trade & commerce improves - growing potential for leisure tourism
  • Economic impact of the Travel & Tourism Sector Full potential yet to be harnessed in the Indian context
  • ITC’s Hotel Business
    • ITC-Welcomgroup : a leading hotel chain in India
      • Established presence in key business locations
      • Over 6000 rooms under 4 distinct brands
    • Capacity expansion underway at Bangalore and Chennai; plans for other locations also being progressed. Positions on land taken at other locations such as Hyderabad and Ahmedabad
    • Fastest growing hotel chain with highest operating efficiency (PBDIT/Net Income @ 45%) amongst the 3 leading chains
    • Leverages unique service proposition and international alliance with Starwood Hotels & Resorts
      • ‘ Luxury Collection’ / ‘Sheraton’
  • ITC’s Hotel Business
    • Manages 24 full service mid-market properties (1700 + rooms ) under the Fortune Hotels brand
      • 100% subsidiary company : Fortune Park Hotels Ltd.
    • Also operates 60 properties under the ‘WelcomHeritage’ brand in 19 states
      • Maharaja Heritage Resorts Ltd. 50% JV with Marudhar Hotels (P) Ltd.
    • Business growth expected to be impacted by financial meltdown
  • e-choupal:Strategic Thrust
    • Procurement: cost & quality optimisation
      • strategic sourcing support to the Foods business (support creation of verticals in wheat, soya, corn, potato etc.)
      • cost-effective sourcing for exports/domestic external business
    • Rural Distribution
      • ‘ last mile connectivity’: 100 partnering companies
      • diverse range of goods/services : FMCG, consumer durables,agri-inputs, paid extension services etc.
    • Financial Services
      • insurance (focus: weather)
      • credit (focus: Kisan credit card scheme)
    • Rural retail
      • 23 Choupal Saagars operational
      • Rapid expansion planned in identified rural markets and Tier 2, 3 & 4 towns
  • Positioning of ITC A leading FMCG player in India F A R M E R S M A R K E T S Cigarette Trade Marketing capability Branded Foods Expanded FMCG distribution capability e-choupal rural two-way fulfillment capability A basis for strategic partnerships with other FMCG brand owners VPN providing SCM, ERP & CRM capability Lifestyle retailing Education Stationery Matches & Agarbattis Personal Care Products
  • The Value Chain
    • Primary activities
    • Inbound logistic
    • Outbound logistic
    • Operations
    • Marketing & Sales
    • Service
    • Support activities
    • Procurement
    • HRM
    • Technology development
    • Firm infrastructure
  • The Environment
    • Tourism
    • Business factor
    • Room occupancy
    • Seasonality
    • Political Scenario
    • Tax structure
    • Differential Pricing
  • BCG Matrix
    • Star
    • Hotels
    • Paperboard/ Packaging
    • Agro Business
    • Question Marks
    • FMCG- Others
    • Cows
    • FMCG-Cigarettes
  • Competitors
    • EIH
  • Critical Success Factor
  • SWOT Analysis
    • Strength
    • Brand
    • Distribution network
    • Management
    • Weakness
    • Dependence on tobacco revenues
    • Negative Connection of Tobacco
    • Opportunity
    • Low per capita consumption
    • Of personal care products
    • Rural Market
    • e-Choupal
    • Threat
    • Competition both Domestic & International
    • Increasing Tax on cigarettes
  • Corporate Social Responsibility
    • Environmental
    • ITC has been Carbon Positive 3 years in a row.
    • Water Positive 6years in a row.
    • 100% solid waste recycling
    • Social
    • ITC's businesses generate livelihoods for over 5 million people.  
    • ITC's globally recognised e-Choupal initiative is  the world's largest rural digital infrastructure benefiting over 4 million farming families.  
    • ITC's Social and Farm Forestry initiative has greened over 80,000 hectares creating an estimated 35 million person days of employment among the disadvantaged.  
    • ITC's Watershed Development  Initiative brings precious water to nearly 35,000 hectares of dry lands and moisture-stressed areas.  
    • ITC's Sustainable Community Development initiatives include women empowerment, supplementary education, integrated animal husbandry programmes.
  • Recommendation
    • Improved security for hotel guests.
    • Floor access control in hotels through key card system.
    • Precision analysis of products in Food Business.
    • Process optimisation for product development in Food Business.
    • Automation of lighting controls.
    • Use of Solar energy for hot water generation and outside area illumination.
    • Installation of PNG (Piped Natural Gas) fuelled generator sets and PNG fired calendar and tumbler drier machines in hotel laundries.
    • Improvements to reduce heat gain/cooling losses from building envelops in hotels.
    • Impact of measures for reduction of energy consumption and consequent impact on the cost of production of goods.