1. BCG Matrix for ITC Ltd.
Ranjan Varma
http://financexchange.blogspot.com

2. Structure
Act I Lights! ITC- A Background
Act II Camera! The BCG matrix
Act III Action! Learning points and
conclusions

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. 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. Business Mix of ITC Ltd.
FMCG
• Cigarettes
• Foods
• Lifestyle Retailing
• Greeting, Gifting & Stationery
• Safety Matches
• Agarbattis
Paperboards & Packaging
• Paperboards & Specialty Papers
• Packaging

6. Business Mix (Cont’d)
Agri - Business
• Agri-Exports
• e-Choupal
• Leaf Tobacco
Hotels
Group Companies
• ITC Infotech; etc.

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. 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. 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. 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. Market attractiveness & Competitive
strength is also important.
A
c
t
2

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. The BCG Matrix for ITC
Ltd.
Stars
•Hotels
•Paperboards/
Packaging.
•Agri business.
?
•FMCG- Others
Cows
•FMCG-Cigarettes
Dogs

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. 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.