ITC Case Presentation

8/3/2019 ITC Case Presentation

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ITC case presentation

Submitted byV TamilvelanD SrikanthNisanth


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facts

Not a safety product.

Excise duty.

85% vs. 15% 2001.

70% Vs 30% 2010.

Diversification streamlined in 1994


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History

Three major players.

1910 to 1960

Diversifcation form 1970

No of non core competenices bussiness

Divested in agrotech and cementbussiness


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Diversification strategies.

Core competiences.

Distrubution channdels

Brand builings.

Quality service

Global entity


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BCG ANALYSIS


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`


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ITC future

In FMCG 3,55,000crores by 2018.

Paper boards investment upto 6000

crores.

Investment opportunity of 9000 crores innext 7- 10 years.


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LRBD launched in Dec 2000 to retail WILLSSPORT Brand in New Delhi

Tied up with a San Francisco basedconsultancy,American Design IntelligenceGroup for Store Design and Mechandizing.

Set up new Design & Technology center and itfollowed a Dual branding strategy,

First brand as Wills Sport Apparel Brand

Second one as Wills Lifestyle Retail BrandLaunched Wills Classic for the formal segment


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In 2002, there were 50 Lifestyle Stores Planned to double its number to 100 Stores IN July 2003

Competitors

Indigo Nation

Scullers

Color PLUS

Wills Lifestyle - planned to launch in Foreign countries


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Wills Lifestyle Milestone

The brand has created a distinctive identityin the premium western wear market.

In the past it has been declared The MostAdmired Women's wear Brand of the Year"and the "Most Admired Exclusive RetailChain of the Year" at the Images FashionAwards.

This year, it has been declared the "MostAdmired Fashion Brand of the Year -

Y 2000 G ti C d &


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Year 2000-Greeting Card &Gifts Launched in 2000 as Expressions under Printing &

Packaging Division

Offered International Quality Greeting Cards

Leveraged its Distribution Network

Launched in 600 Cities & Towns and Over 11000 multi brand

retail outletsOver 10000 designs launched

E-Commerce model was Implemented Online ordering forCustomized products

Gifting & Corporate Stationary added to its Portfolio

Launched Premium Bond Paper range under WHITE GOLD Leveraged its expertise in manufacture of Paper

In 2002, associated with SOS Childrens Village of India

(Welfare Organization) Launched 195 designs across 1500


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Year 2001- Foods Division Under the name Kitchens of India Brand

Entered into 4 Catagories,

1. Ready to Serve

2. Confectionary & Chocolates

3. Biscuits & Cookies

4. Branded Staples

ITC acquired the Minto from Candico

Candico, based in Delhi, started their operations in1997, and now they are the Largest confectionery companiesin India. Candico is a confectionery multinationalheadquartered in India with operations in 19 countries and

annual turnover of US$ 2 billion.
http://en.wikipedia.org/wiki/Confectioneryhttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Confectionery


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1. Launched Minto & Candyman (2 Variants Wild Banana &Mango Delight)

2. Idea is to Leverage ITCs Distribution Network

. Competiors in Confectionary Business are

.

Perfetti Van Melle

. Nestle India

. Hindustan Lever

.

Joyco

But it is Large Volume,Low profit Margin Business.


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Under Kitchens of India Brand, ITC launched Veg. & Non-veg Dishes

Growth of this Industry - estimated to be higher as it maygrow from Rs.500 600 Million to touch Rs. 2.5 Billion by2006

In 2002, They entered Into Highly fragmented segment ofStaples Introduction of Aashirwad - atta

Competitors like HLL, Cargil, Godrej Pillsbury & Agro Techwere making loss in this segment at that point of time

In Nov 2002, They entered into Rs. 30 Billion snack foodsmarket with Bischips under the Brand I

I denotes Youth Individual

Y 2002 B d d S f t


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Year 2002 - Branded SafetyMatches

Diversified into Branded Safety Matches with five BrandsMangaldeep targeting Housewives &Aim, Dlite, Vaxlite &

iKno targeting Smokers

Analysts considered as an excellent Diversification of ITC

although it is a low profit item and Limited growth Business Leveraged Distribution Network and also PaperBoards and

Printing & Packaging Businesses

ITC Bhardrachalam exported Matches to African countries

E t ti & Ch ll


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Expectations & ChallengesAhead Invested Rs. 5 billion in Non-Tobacco Businesses & it was

expected to reach around Rs. 20 Billion in 5 years

Gross Turnover was over Rs. 200 Million but still not gainfuldue to start up cost

Expressions were not generating Revenues

Incurred losses of 5% of PBT in Branded Garments,Greeting Cards, & Package Food Venture in the Year 2002

Growth & Overall Profits would get diminished if thiscontinues

In 2005 ITC hoped to generate Rs. 2.5 Billion revenuesfrom Greeting Cards & Foods

Hoped Food Division would contribute Rs. 5 Billion to ITCsrevenue in 2007

In the Long run, ITC expects 40 % revenue from NonTobacco Industries


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ITCs Core Competencies:Superior Brand Building Capabilities

Extensive Distribution Network

Excellent Supply Chain Management

Acknowledged Service Skills

How they used these core competencies forcreating Growth Avenues?

Test Marketed Wills Sport apparels at Golf

Pro Shop in Royal Calcutta Golf CourseThen launched in 8 other Golf courses in the

country due to good response in 1997 andeventually launched the full fledged WILLS

LIFESTYLE in 2000 at Delhi along with the

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