3. News Analysis
• In terms of size, non-cigarette FMCG is around Rs 16,000 crore. “That
puts ITC among the top ones in the FMCG segment,” said Puri.
• He also said that the carefully selected FMCG portfolio, with
substantial headroom to grow, was estimated to have a total
addressable market potential of Rs 5,00,000 crore by 2030, which is
amongst the highest in the Indian FMCG space.
• Exports from FMCG were also expected to make a substantial
contribution to ITC’s growth.
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4. 3
LEARNING OBJECTIVES
You will be able to understand and
describe portfolio approach.
You will be able to create BCG matrix
for a given multi-business entity.
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6. BOSTON CONSULTING GROUP (BCG) MATRIX is developed by BRUCE
HENDERSON of the BOSTON CONSULTING GROUP IN THE EARLY 1970’s.
According to this technique, businesses or products are classified as low or
high performers depending upon their market growth rate and relative market
share.
RELATIVE MARKET SHARE (RMS)
RMS = Business unit sales this year
Leading rival sales this year
7. Example
Market Share of the World's Largest Music Companies
COMPANY MARKET SHARE IN 2007
Universal Music Group 27%
Time Warner Music 17
Sony 16
Bertelsmann's BMG 14
EMI 10
Independents 17
RMS = Business unit sales this year = 16 = 0.59%
Leading rival sales this year 27
8. Market growth (MGR) is used as a measure of a
market’s attractiveness.
MGR = Individual sales - individual sales
this year last year
Individual sales last year
Markets experiencing high growth are ones where
the total market share available is expanding, and
there’s plenty of opportunity for everyone to make
money.
16. • ITC's lifestyle biz has been hit by competition and aggressive discount
being offered by e-commerce players like Flipkart and Amazon. In the
offline space too, the company has been facing stiff competition from
value fashion retailers such as Reliance Trends, Future Group’s FBB
and Lifestyle’s Max.
• ITC also said the GST rollout impacted its lifestyle business adversely.
Wills Lifestyle currently runs 350 outlets across multiple channels,
including e-commerce.
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19. • ITC executive director Nakul Anand, who is in charge of the hospitality
business, said that out of 10,000 keys in ITC hotels, around 5,300 keys
fall in the ‘managed’ segment and most of the new additions would be
in this category. Going forward, out of 14,000 keys, around 8,600 will
be in the ‘managed’ category.
• Puri also said that the company would sweat existing assets and
examine alternative structures for enhanced value creation. On
lifestyle retail, Puri said ITC would shrink the segment further if it
does not have a new business idea.
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