8/3/2019 ITC Case Presentation
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4/27/12
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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4/27/12 Year 2000 - LRBD
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/Confectionery8/3/2019 ITC Case Presentation
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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