BCG

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BCG

  1. 1. BCG Matrix for ITC Ltd. Group 4
  2. 2. Structure Act I Lights! ITC- A Background Act II Camera! The BCG matrix Act III Action! Learning points and conclusions
  3. 3. Act –I [Lights!] Governance structure  Strategic supervision  Strategic management  Executive management Core values  Nation Orientation; Trusteeship; Excellence;  Customer focus; respect for people; Innovation
  4. 4. 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.
  5. 5. Business Mix of ITC Ltd. FMCG • Cigarettes • Foods • Lifestyle Retailing • Greeting, Gifting & Stationery • Safety Matches • Agarbattis Paperboards & Packaging • Paperboards & Specialty Papers • Packaging
  6. 6. Business Mix (Cont’d) Agri - Business • Agri-Exports • e-Choupal • Leaf Tobacco Hotels Group Companies • ITC Infotech; etc.
  7. 7. Business wise Sales data Business/ Year Growth % Value (Rs in Crore) 2005 2004 FMCG-Cigarettes 8.4 10002.54 9230.27 FMCG-Others 85.2 563.39 304.16 Hotels 124.1 577.25 257.53 Agribusiness 4.2 1780.07 1708.77 Paper & pkg. 24.9 1565.31 1253.29 Net revenue 12.99 13349.58 11815.04
  8. 8. CAGR during FY 2005-2008 Category CAGR Growth parameters Cigarettes 10.9 % Pricing power Hotels 22.7% Inward traffic, occupancy Paper 17.2 % Capacity utilization, value added products Agri business 34.3 % E-choupal, choupal sagar, FMCG- Others 60.2 % Fast track, decent share.
  9. 9. 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.
  10. 10. Segment Dominance Contribution % Revenue PBIT Cigarettes 70% share 77.0% 87.7% Paper & Packg. Packaging board – No. 1 in Asia 7.3% 10.7% Agri business 1of the largest xporters from India 7.0% 3.7% Hotels ITC Group ranks No.2 4.3% 5.4% FMCG (Others) 20% share of greeting cards market, 'Aashirvaad' atta is No.1 in branded segment 4.4% -7.5%
  11. 11. Market attractiveness & Competitive strength is also important. A c t 2
  12. 12. 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.
  13. 13. The BCG Matrix for ITC Ltd. Stars •Hotels •Paperboards/ Packaging. •Agri business. ? •FMCG- Others Cows •FMCG-Cigarettes Dogs •Maybe ITC Infotech.
  14. 14. Act III - Action- Learning points and conclusions  ? - 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.
  15. 15. 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.

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