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Strategy Management - ITC LTD
The document provides an overview of ITC Limited, a diversified company in India. It discusses ITC's various business segments including cigarettes, food, personal care, hotels, paper, and agribusiness. It also summarizes ITC's financial performance in recent years, showing increasing revenues and profits across most business segments. Finally, it attempts to suggest future strategies for ITC, such as further diversifying away from tobacco into non-tobacco FMCG and agriculture through mergers and acquisitions.
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Strategy Management - ITC LTD
- 1. Strategic Management Case Study Strategic management Case study: ITC Limited Prepared By: Manohar M. M. Iyer XMBA Batch 19 , ITM Vashi, 2012.
- 2. Disclaimer Strategic Management Case Study – This presentation is prepared purely as an educational project assignment to be submitted as a component of the XMBA curriculum being conducted by ITM (Institute for Technology and Management) at Vashi, Navi mumbai. – The information contained within this presentation is for sample representation purposes only. – Though this document is prepared by taking due references from various websites, however, no information contained in this document should be considered by any individual, investor,share holder, group, organization, company or any other entity as a true & correct information provided directly by ITC Ltd. – The reader of this presentation is strongly advised not to use this as a guide that may influence any of your ideas/views/interests/feedback related to ITC Ltd. Prepared By: Manohar M. M. Iyer XMBA Batch 19 , ITM Vashi, 2012.
- 3. Introduction Strategic Management Case Study • To understand the strategic management initiatives implemented by ITC Ltd. by perusing the following areas – What is ITC Ltd? – Diversifications – Contribution of products towards the Group – Performance over the years • An attempt to suggest future strategy Prepared By: Manohar M. M. Iyer XMBA Batch 19 , ITM Vashi, 2012.
- 4. Strategic Management Case Study What is ITC Ltd.? Prepared By: Manohar M. M. Iyer XMBA Batch 19 , ITM Vashi, 2012.
- 5. The ITC Profile StrategicManagement Case Study • Started on August 24, 1910 as Imperial Tobacco Company of India Limited • Became India Tobacco Company Limited in 1970 • Renamed as I.T.C. Limited in 1974 • Over the years built a portfolio encompassing a wide range of businesses. • Rechristened as 'ITC Limited‘ on September 18, 2001 • Current Market capitalization of over US $ 33 billion • Current Turnover of US $ 7 billion Prepared By: Manohar M. M. Iyer XMBA Batch 19 , ITM Vashi, 2012.
- 6. ITC list ofBusinesses Strategic Management Case Study • Cigarettes • LRBD • Hotels • Paperboards & Specialty Papers • Packaging • Agri Business Division • Agri Business Division - ILTD • e-Choupal Prepared By: Manohar M. M. Iyer XMBA Batch 19 , ITM Vashi, 2012.
- 7. ITC Purpose Strategic Management Case Study • 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 . • Core Values Aimed at developing a customer-focused, high-performance organization which creates value for all its stakeholders, includes Trusteeship, Customer Focus, Respect For People, Excellence, Innovation and Nation Orientation. Prepared By: Manohar M. M. Iyer XMBA Batch 19 , ITM Vashi, 2012.
- 8. Chairman Speaks Strategic Management Case Study • "ITC believes that its aspiration to create enduring value for the nation provides the motive force to sustain growing shareholder value. ITC practices this philosophy by not only driving each of its businesses towards international competitiveness but by also consciously contributing to enhancing the competitiveness of the larger value chain of which it is a part.“ – Shri. Y C Deveshwar Prepared By: Manohar M. M. Iyer XMBA Batch 19 , ITM Vashi, 2012.
- 9. Corporate Strategy Strategic Management Case Study • Create multiple drivers of growth by developing a portfolio of world class businesses that best matches organizational capability with opportunities in domestic and export markets. • Continue to focus on the chosen portfolio of FMCG, Hotels, Paper, Paperboards & Packaging, Agri Business and Information Technology. • Benchmark the health of each business comprehensively across the criteria of Market Standing, Profitability and Internal Vitality. • Ensure that each of its businesses is world class and internationally competitive. • Enhance the competitive power of the portfolio through synergies derived by blending the diverse skills and capabilities residing in ITC’s various businesses. • Create distributed leadership within the organization by nurturing talented and focused management teams for each of the businesses. • Continuously strengthen and refine Corporate Governance processes and systems to catalyze the entrepreneurial energies of management by striking the golden balance between executive freedom and the need for effective control and accountability. Prepared By: Manohar M. M. Iyer XMBA Batch 19 , ITM Vashi, 2012.
- 10. Strategic Management Case Study Diversifications Prepared By: Manohar M. M. Iyer XMBA Batch 19 , ITM Vashi, 2012.
- 11. The ITC Journey StrategicManagement Case Study • Initial years primarily devoted to growth of Cigarettes and Leaf Tobacco businesses. • Packaging & Printing Business set up in 1925 as a strategic backward integration • In 1975, the Company launched its Hotels business with the acquisition of a hotel in Chennai which was rechristened 'ITC- Welcomgroup Hotel Chola‘ • In 1979, ITC entered the Paperboards business by promoting ITC Bhadrachalam Paperboards Limited. • In 1990, ITC acquired Tribeni Tissues Limited, a major supplier of tissue paper to the cigarette industry. Prepared By: Manohar M. M. Iyer XMBA Batch 19 , ITM Vashi, 2012.
- 12. The ITC Journey…………………….(contd.) StrategicManagement Case Study • In 1990, set up the Agri Business Division for export of agri- commodities. • Entered the Lifestyle Retailing business with the Wills Sport range of international quality relaxed wear in 2000 • In 2000, ITC spun off “ITC Infotech India Limited” • 2002’s Safety Matches initiative; brands like iKno, Mangaldeep and Aim. • In 2003 forayed into the marketing of Agarbatti; Mangaldeep. • Launched range of notebooks under brand Paperkraft in 2002 & Classmate in 2003. 2007- 2009 saw the launch of Practical Books, Drawing Books, Geometry Boxes, Pens and Pencils under the 'Classmate' brand. • ITC entered the Personal Care Business in 2005; 'Essenza Di Wills', 'Fiama Di Wills', 'Vivel' and 'Superia' brands.Prepared By: Manohar M. M. Iyer XMBA Batch 19 , ITM Vashi, 2012.
- 13. The ITC Journey…………………………….. ITC's foray into the Foods business Strategic Management Case Study • In August 2001 with the introduction of 'Kitchens of India' ready-to-eat Indian gourmet dishes. • In 2002, ITC entered confectionery and staples segments : launched “mint-o” , “Candyman” and “Aashirvaad “ • 2003 witnessed introduction of Sunfeast (biscuits segment). • Entered branded snacks category with Bingo! in 2007 • In 2010, ITC launched Sunfeast Yippee! to enter the Indian instant noodles market Prepared By: Manohar M. M. Iyer XMBA Batch 19 , ITM Vashi, 2012.
- 14. Strategic Management Case Study Contribution of products towards the Group Prepared By: Manohar M. M. Iyer XMBA Batch 19 , ITM Vashi, 2012.
- 15. Facts - NetProfit up 20.2% Strategic Management Food Business Case Study • Non - Cigarette FMCG segment registers robust revenue growth of 23% • 'Aashirvaad' atta strengthened its leadership position across markets & with value-added offerings like 'Multi-grain' and 'Select' brands, the Staples category improved margins. • 'Sunfeast Yippee!' noodles continued to garner consumer franchise • 'Sunfeast' biscuits sustained its robust growth trajectory, launched 'Kaju Badam Cookies’ response been encouraging. • The Bingo! range of potato chips and finger snacks grew at a rapid pace. 'Tangles’ and 'Mad Angles Masti Chaat' were well received by target consumers Prepared By: Manohar M. M. Iyer XMBA Batch 19 , ITM Vashi, 2012.
- 16. Facts - NetProfit up 20.2% Strategic Management Personal Care Case Study • The Personal Care Products business made significant strides during the quarter with its carefully crafted portfolio of product offerings under the 'Essenza Di Wills', 'Fiama Di Wills', 'Vivel' and 'Superia' brands, further gaining consumer franchise. • The skin care category was fortified with the launch of 'Vivel Summer Fair', a differentiated summer specific offering with Triple Filter SPF 15 and Aloe Vera for fresh, fair skin. • Together with 'Vivel Active Fair' and 'Superia Super Fair', the augmented portfolio of fairness creams continues to receive encouraging consumer response and is being rolled out to target markets. Prepared By: Manohar M. M. Iyer XMBA Batch 19 , ITM Vashi, 2012.
- 17. Facts - NetProfit up 20.2% Strategic Management Education & Stationery Products Case Study • The Education & Stationery Products business registered impressive growth powered by the 'Classmate' brand which continued to consolidate its leadership position in the student notebooks category. • In the writing instruments and scholastic products categories, the business introduced a number of new products and variants in pens, pencils and scholastic products under the 'Classmate and 'Paperkraft' brands. Prepared By: Manohar M. M. Iyer XMBA Batch 19 , ITM Vashi, 2012.
- 18. Facts - NetProfit up 20.2% Strategic Management Cigarettes Case Study • Several initiatives across the portfolio in terms of pack modernization and introduction of variants and limited edition packs under the Classic', 'Flake', 'Gold Flake Premium Filter' brands further bolstering market standing • Also test marketing filter cigarettes of length not exceeding 65 mm. • On the manufacturing front, investments continued to be made towards enhancement of quality, productivity and variety. Prepared By: Manohar M. M. Iyer XMBA Batch 19 , ITM Vashi, 2012.
- 19. Facts - NetProfit up 20.2% Strategic Management Hotels Case Study • In line with its investment led growth strategy, given the compelling longer term potential of this sector, the Company, through a newly formed subsidiary, acquired a prime plot of land in Colombo, Sri Lanka on a 99-year lease from the Government of Sri Lanka, for developing a 5- star luxury property. • The super luxury property, ITC Grand Chola at Chennai, is complete and awaiting statutory clearances prior to commercial launch. • The construction activity of the new luxury properties at Kolkata and at Classic Golf Resort near Gurgaon are progressing satisfactorily. Prepared By: Manohar M. M. Iyer XMBA Batch 19 , ITM Vashi, 2012.
- 20. Facts - NetProfit up 20.2% Strategic Management Paperboards, Paper & Packaging Case Study • Segment Revenues recorded a growth of 9% • Segment Results grew faster at 17% driven primarily by continuous enhancement in the product mix. • The business continues to leverage its state-of- the-art facilities to provide strategic sourcing support to the FMCG businesses, enabling product differentiation and faster speed-to-market. Prepared By: Manohar M. M. Iyer XMBA Batch 19 , ITM Vashi, 2012.
- 21. Facts - NetProfit up 20.2% Strategic Management Agri Business Case Study • The business continues to provide strategic sourcing support to the Company's Cigarettes and Branded Packaged Foods business by ensuring high quality supplies at optimal costs. • The new green leaf tobacco threshing facility in Karnataka is fully operationalized and will further enhance quality and improve supply chain efficiencies. Prepared By: Manohar M. M. Iyer XMBA Batch 19 , ITM Vashi, 2012.
- 22. Strategic Management Case Study Performance over the years Prepared By: Manohar M. M. Iyer XMBA Batch 19 , ITM Vashi, 2012.
- 23. Results 2012 Strategic Management Case Study • Net Revenue : +15.3% • Profit from Operations : +21.3% • Profit Before Tax : +20.6% • Net Profit : +20.2% • Gross Income for the year grew by 14.9% to over Rs. 36,000 crores. • Profit before tax increased by 22.4% to over Rs. 8,800 crores • Net Profits grew by 23.6% to over Rs. 6,100 crores. Prepared By: Manohar M. M. Iyer XMBA Batch 19 , ITM Vashi, 2012.
- 24. Over the years StrategicManagement Case Study • Non-cigarette segment net revenue growing 12-fold from about Rs. 1,360 crores in 1996 to Rs. 16,150 crores today. • 57% of net segment revenue from businesses other than cigarettes • Market capitalization, which stood at Rs. 5,570 crores in 1996, has multiplied over 35 times to touch Rs. 2 lakh crores. • Total Shareholder Returns, measured in terms of increase in market capitalization and dividends, have grown at a compound rate of 25.7% per annum during this period. Prepared By: Manohar M. M. Iyer XMBA Batch 19 , ITM Vashi, 2012.
- 25. Strategic Management Case Study Attempt to suggest future strategy Prepared By: Manohar M. M. Iyer XMBA Batch 19 , ITM Vashi, 2012.
- 26. SWOT Strategic Management Case Study • STRENGTHS – Brand Image – Distribution Network – Management • WEAKNESS – Unrelated diversification • OPPORTUNITY – Rural Market – E – choupal • THREATS – Increasing tax in Cigarettes & Health hazard – Competition From Domestic & International players Prepared By: Manohar M. M. Iyer XMBA Batch 19 , ITM Vashi, 2012.
- 27. Competitors of ITCLtd Strategic Management Case Study • Parle, Britannia, etc. • Godrej, Unilever Ltd, etc. • TCS, Wipro, infosys, etc. • TAJ hotels, Sherton, etc. • Etc., etc., since ITC is diversified in to various areas Prepared By: Manohar M. M. Iyer XMBA Batch 19 , ITM Vashi, 2012.
- 28. Suggested Strategies Strategic Management Case Study • Gradually divest from Tobacco business • Invest in Non-Tobacco Agri producton (Aid ITC foods) • Increase M & A to boost ITC infotech business • May enter into other FMCG sectors like soaps & detergents or soft drinks • Use & increase distribution network to penetrate Rural Mkts Prepared By: Manohar M. M. Iyer XMBA Batch 19 , ITM Vashi, 2012.
- 29. Strategic Management Case Study I thank one and all who have provided me with the opportunity to handle this responsibility and the knowledge & support to prepare this Presentation. Please feel free to forward your valuable feedback, comments, queries and suggestions related to this presentation to mumbai_man1977@yahoo.com Thank you, Warm regards, Manohar M. M. Iyer XMBA Batch 19 , ITM Vashi, 2012 Prepared By: Manohar M. M. Iyer XMBA Batch 19 , ITM Vashi, 2012.