Description
PRESENTATION ON STRATEGIC MANAGEMENT IN ITC
Strategic Management in ITC Ltd.
Ganesh Naik Nand Kumar Aradhye Raj Kumar Ranjan Varma
The Corporate Mission
? ? ?
? ?
Governance structure Strategic supervision Strategic management Executive management Core values Nation Orientation; Trusteeship; Excellence; Customer focus; respect for people; Innovation
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.
Business Mix of ITC Ltd.
FMCG • Cigarettes
• Foods • Lifestyle Retailing • Greeting, Gifting & • Safety Matches • Agarbattis
Stationery
Paperboards & Packaging • Paperboards & Specialty Papers • Packaging
Business Mix (Cont’d)
Agri - Business •
Agri-Exports • e-Choupal • Leaf Tobacco
Hotels
Group Companies • ITC Infotech; etc.
SWOT Analysis
Strength ?Brand ?Management
Opportunity ?Rural market ?E-choupal
Weakness ?Unrelated diversification
Threats ?Increasing tax in Cigarettes ?Health hazard
Business wise Sales data
Business/ Year Growth Value (Rs in Crore) % 2005 2004 10002.54 9230.27 563.39 304.16
FMCG-Cigarettes 8.4 FMCG-Others 85.2
Hotels
Agribusiness Paper & pkg. Net revenue
Source: Annual Accounts
124.1
4.2 24.9 12.99
577.25
1780.07 1565.31
257.53
1708.77 1253.29
13349.58 11815.04
CAGR during FY 2005-2008
Category CAGR Growth parameters Pricing power Inward traffic, occupancy Cigarettes 10.9 % Hotels 22.7%
Paper
Agri business FMCGOthers
17.2 %
34.3 % 60.2 %
Capacity utilization, value added products E-choupal, choupal sagar,
Fast track, decent share.
Source: Equity research reports
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.
Source: Annual Accounts/Equity research
Segment Cigarettes Paper & Packg. Agri business Hotels FMCG (Others)
Dominance 70% share Packaging board – No. 1 in Asia 1of the largest xporters from India ITC Group ranks No.2 20% share of greeting cards market, 'Aashirvaad' atta is No.1 in branded segment
Contribution % Revenue PBIT 77.0% 7.3% 7.0% 4.3% 4.4% 87.7% 10.7% 3.7% 5.4% -7.5%
Source: Equity research reports
A c t 2
Market attractiveness & Competitive strength is also important.
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.
The BCG Matrix for ITC Ltd.
Stars ?Hotels ?Paperboards/ Packaging. ?Agri business. Cows ?FMCG-Cigarettes ? ?FMCG- Others
Dogs
Act III - Action?
Learning points and conclusions
?
? ?
Question Marks (? ) 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.
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.
doc_767733085.ppt
PRESENTATION ON STRATEGIC MANAGEMENT IN ITC
Strategic Management in ITC Ltd.
Ganesh Naik Nand Kumar Aradhye Raj Kumar Ranjan Varma
The Corporate Mission
? ? ?
? ?
Governance structure Strategic supervision Strategic management Executive management Core values Nation Orientation; Trusteeship; Excellence; Customer focus; respect for people; Innovation
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.
Business Mix of ITC Ltd.
FMCG • Cigarettes
• Foods • Lifestyle Retailing • Greeting, Gifting & • Safety Matches • Agarbattis
Stationery
Paperboards & Packaging • Paperboards & Specialty Papers • Packaging
Business Mix (Cont’d)
Agri - Business •
Agri-Exports • e-Choupal • Leaf Tobacco
Hotels
Group Companies • ITC Infotech; etc.
SWOT Analysis
Strength ?Brand ?Management
Opportunity ?Rural market ?E-choupal
Weakness ?Unrelated diversification
Threats ?Increasing tax in Cigarettes ?Health hazard
Business wise Sales data
Business/ Year Growth Value (Rs in Crore) % 2005 2004 10002.54 9230.27 563.39 304.16
FMCG-Cigarettes 8.4 FMCG-Others 85.2
Hotels
Agribusiness Paper & pkg. Net revenue
Source: Annual Accounts
124.1
4.2 24.9 12.99
577.25
1780.07 1565.31
257.53
1708.77 1253.29
13349.58 11815.04
CAGR during FY 2005-2008
Category CAGR Growth parameters Pricing power Inward traffic, occupancy Cigarettes 10.9 % Hotels 22.7%
Paper
Agri business FMCGOthers
17.2 %
34.3 % 60.2 %
Capacity utilization, value added products E-choupal, choupal sagar,
Fast track, decent share.
Source: Equity research reports
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.
Source: Annual Accounts/Equity research
Segment Cigarettes Paper & Packg. Agri business Hotels FMCG (Others)
Dominance 70% share Packaging board – No. 1 in Asia 1of the largest xporters from India ITC Group ranks No.2 20% share of greeting cards market, 'Aashirvaad' atta is No.1 in branded segment
Contribution % Revenue PBIT 77.0% 7.3% 7.0% 4.3% 4.4% 87.7% 10.7% 3.7% 5.4% -7.5%
Source: Equity research reports
A c t 2
Market attractiveness & Competitive strength is also important.
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.
The BCG Matrix for ITC Ltd.
Stars ?Hotels ?Paperboards/ Packaging. ?Agri business. Cows ?FMCG-Cigarettes ? ?FMCG- Others
Dogs
Act III - Action?
Learning points and conclusions
?
? ?
Question Marks (? ) 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.
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.
doc_767733085.ppt