itc term paper review
TRANSCRIPT
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INDUSTRIAL AND PRODUCTION ENGINEERING
SRI JAYACHAMARAJENDRA COLLEGE OF
ENGINEERING
MYSORE 570 006
TOPIC: USM AND ECM TOOLS
SUBMITTED TO: G.K. SWAPNA MAM
BYNAME:ASHWIN B.G
USN NO: 4JC09IP008
DEPARTMENT: INDUSTRIAL AND PRODUCTION
ENGINEERING
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Contents
AbstractINDEX................................................................................................................................................................ 4
1. INTRODUCTION .............................................................................................................................. 4
2. OBJECTIVE ....................................................................................................................................... 4
3. METHOLOGY-................................................................................................................................ 10
Vision ................................................................................................................................................ 10
Mission.............................................................................................................................................. 10
................................................................................................................................................................ 4
4. VISION ............................................................................................................................................... 4
5. MISSION ............................................................................................................................................ 4
6. ITC BUSSINES MODEL ................................................................................................................... 4
7. STRATEG OF ITC ............................................................................................................................. 4
8. PRODUCT AND GROWTH.............................................................................................................. 4
9. MARKET SHARE.............................................................................................................................. 4
10. REVIEW OF LITERATURE ........................................................................................................... 4
11. REFERANCE ................................................................................................................................... 4
Introduction:- .......................................................................................................................................... 6
OBJECTIVE:- ....................................................................................................................................... 10
To enhance the wealth generating capability of the enterprise in a globalizing environment,
delivering superior and sustainable stakeholder value ...................................................................... 10
ITC Business Model ............................................................................................................................. 10
World ITC 2009 Market Share And ForecastEMEA Weak, Double Dip Coming ....................... 14
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INDEX:-
1. INTRODUCTION
2. OBJECTIVE
3. METHOLOGY
4. VISION
5. MISSION
6. ITC BUSSINES MODEL
7. STRATEG OF ITC
8. PRODUCT AND GROWTH
9. MARKET SHARE
10. REVIEW OF LITERATURE11. REFERANCE
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Abstract
Key words: Organized Retailing and Kirana Shops
India's retail sector is going to transform and with a three-year compounded annual growth
rate of46.64 per cent, retail sector is the fastest growing sector in the Indian economy.
Traditional markets are transforming themselves in new formats such as departmental stores,
hypermarkets, supermarkets and specialty stores. Western-style malls have begun appearing
in metros and near metro cities, introducing the Indian consumer to a new shopping
experience.KSA-Technopak, a retail consulting and research agency, predicts that by
2010,organized retailingin India will cross the US$ 21.5-billion mark from the current size of
US$ 7.5 billion.The Indian retail market is of enormous size about US$ 350 billion. But
organized retail is not so huge and it is at only US$ 8 billion. However, the opportunity forgrowth is hugeby 2010,organized retail is expected to grow to US$ 22 billion. With the
growth of organized retailing estimated at 40 per cent over the next few years, Indian
retailing is clearly at a tipping point.This article is an attempt to analyse the areas where retail
sector is growing and will grow, what willbe the target market segment for the retailers and
how will they try to serve this segment.
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Introduction:-1ITC was incorporated on August 24, 1910 under the name Imperial Tobacco Company of
India Limited. The name of the Company was changed from Imperial Tobacco Company of
India Limited to India Tobacco Company Limited in 1970 and then to I.T.C. Limited in
1974.ITC was incorporated on August 24, 1910 under the name Imperial Tobacco Company
of India Limited. As the Company's ownership progressively Indianite, the name of the
Company was changed from Imperial Tobacco Company of India Limited to India Tobacco
Company Limited in 1970 and then toI.T.C. Limited in 1974.Though the first six decades of
the Company's existence were primarily devoted to the growth and consolidation of
the Cigarettes and Leaf Tobacco businesses, the Seventies witnessed the beginnings of a
corporate transformation that would usher in momentous changes in the life of the Company.
ITC is one of India's foremost private sector companies with a market capitalization
of nearly US $ 8 billion and a turnover of over US $ 4.75 billion. ITC also ranks among
India's top 10 `Most Valuable (Company) Brands', in a study conducted by Brand Finance
and published by the Economic Times.
ITC employs over 22,000 people at more than 60 locations across India. The
Company continuously endeavors to enhance its wealth generating capabilities in a
globalizing environment to consistently reward more than 3, 74,000 shareholders, fulfill the
aspirations of its stakeholders and meet societal expectations. This over-arching vision of the
company is expressively captured in its corporate positioning statement: "Enduring Value for
the nation and for the Shareholder."
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History and Evolution:-
ITC was incorporated on August 24, 1910 under the name Imperial Tobacco Company of
IndiaLimited. As the Company's ownership progressively Indianised, the name of the
Company waschangedfrom Imperial Tobacco Company of India Limited to India Tobacco
CompanyLimited in 1970and then toI.T.C. Limited in 1974. In recognition of the Company's multi-
business portfolio encompassing a wide range of businesses - Cigarettes & Tobacco,
Hotels,Information Technology, Packaging, Paperboards & Specialty Papers, Agri-business,
Foods,Lifestyle Retailing, Education & Stationery and Personal Care - the full stops in the
Companys name were removed effective September 18, 2001.The Company now stands
rechristened'ITC Limited'.
The Companys beginnings were humble. A leased office on Radha Bazar Lane, Kolkata,
wasthe centre of the Company's existence. The Company celebrated its 16th birthday on
August 24,1926, by purchasing the plot of land situated at 37, Chowringhee, (now renamed
J.L. NehruRoad) Kolkata, for the sum of Rs 310,000. This decision of the Company was
historic in moreways than one. It was to mark the beginning of a long and eventful journey
into India's future.The Company's headquarter building, 'Virginia House', which came up on
that plot of land twoyears later, would go on to become one of Kolkata's most venerated
landmarks.Though the first six decades of the Company's existence were primarily devoted to
the growthand consolidation of theCigarettes and Leaf Tobacco businesses, the Seventies witnessed
thebeginnings of a corporate transformation that would usher in momentous changes in
the life of the Company.ITC'sPackaging & Printing Businesswas set up in 1925 as a strategic
backward integration for ITC's Cigarettes business. It is today India's most sophisticated
packaging house.In 1975 the Company launched itsHotels businesswith the acquisition of a
hotel in Chennaiwhich was rechristened'ITC-Welcomegroup Hotel Chola'.
The objective of ITC's entry into thehotels business was rooted in the concept of creating
value for the nation. ITC chose the hotelsbusiness for its potential to earn high levels of
foreign exchange, create tourism infrastructureand generate large scale direct and indirect
employment. Since then ITC's Hotels business hasgrown to occupy a position of leadership,
with over 100 owned and managed properties spreadacross India.In 1979, ITC entered
thePaperboards businessby promoting ITC Bhadrachalam Paperboards Limited, which today has
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become the market leader in India. Bhadrachalam Paperboard small gemmated with the
Company effective March 13, 2002 and became a Division of theCompany, Bhadrachalam
Paperboards Division. In November 2002, this division merged withthe Company's Tribeni
Tissues Division to form the Paperboards & Specialty Papers Division.ITC's paperboards'technology, productivity, quality and manufacturing processes arecomparable to the best in
the world. It has also made an immense contribution to thedevelopment of Sarapaka, an
economically backward area in the state of Andhra Pradesh. It isdirectly involved in
education, environmental protection and community development. In 2004,ITC acquired the
paperboard manufacturing facility of BILT Industrial Packaging Co. Ltd(BIPCO), near
Coimbatore, Tamil Nadu. The Kovai Unit allows ITC to improve customer service with
reduced lead time and a wider product range.In 1985, ITC set up Surya Tobacco Co. in Nepal
as an Indo-Nepal and British joint venture.Since inception, its shares have been held by ITC,
British American Tobacco and variousindependent shareholders in Nepal. In August 2002,
Surya Tobacco became a subsidiary of ITCLimited and its name was changed toSurya Nepal
Private Limited(Surya Nepal).In 1990, ITC acquired Tribeni Tissues Limited, a Specialty paper
manufacturing company and amajor supplier of tissue paper to the cigarette industry. The
merged entity was named the TribeniTissues Division (TTD). To harness strategic and
operational synergies, TTD was merged withthe Bhadrachalam Paperboards Division to form
thePaperboards &Specialty Papers Divisionin November 2002.Also in 1990, leveraging its agri-
sourcing competency, ITC set up theAgri Business Division for export of agri-commodities. The
Division is today one of India's largest exporters. ITC'sunique and now widely acknowledged
e-Choupal initiative began in 2000 with soya farmers inMadhya Pradesh. Now it extends to
10 states covering over 4 million farmers. ITC's first ruralmall, christened 'Choupal Saagar'
was inaugurated in August 2004 at Sehore. On the rural retailfront, 24 'Choupal Saagars' are
now operational in the 3 states of Madhya Pradesh, Maharashtraand Uttar Pradesh.In 2000,
ITC forayed into the Greeting, Gifting and Stationery products business with the launchof
Expressions range of greeting cards. A line of premium range of notebooks under
brandPaperkraftwas launched in 2002. To augment its offering and to reach a wider
studentpopulation, the popular range of notebooks was launched under brandClassmate in
2003.
Classmateover the years has grown to becomeIndias largest notebook brandand has alsoincreased
its portfolio to occupy a greater share of the school bag. Years 2007- 2009 saw thelaunch of
Children Books, Slam Books, Geometry Boxes, Pens and Pencils under the Classmatebrand.
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In 2008, ITC repositioned the business as the Education and StationeryProducts Business and
launchedIndia's first environment friendly premium business paperunder
thePaperkraft Brand.Paperkraft offers a diverse portfolio in the premiumexecutive stationery
and office consumables segment. Paperkraft entered new categories in theoffice consumablesegment with the launch of Textliners, Permanent Ink Markers and WhiteBoard Markers in
2009.ITC also entered the Lifestyle Retailing business with theWillsSportrange of
internationalquality relaxed wear for men and women in 2000. The Wills Lifestyle chain of
exclusive storeslater expanded its range to includeWills Classic formal wear(2002)
andWillsClublifeevening wear(2003). ITC also initiated a foray into the popular segment with its
men's wear brand,John Playersin 2002. In 2006, Wills Lifestyle became title partner of the
country's mostpremier fashion event -Wills Lifestyle India Fashion Week - that has gained
recognition frombuyers and retailers as the single largest B-2-B platform for the Fashion
Design industry. Tomark the occasion, ITC launched a special 'Celebration Series', taking the
event forward toconsumers.
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OBJECTIVE:-
The objective of the paper is to analyze the various strategies of ITC and understand how
these strategies are offering the company a competitive, sustainable development even on
account of intense competition.
METHODOLOGY:-
The research is done using secondary data. The secondary sources include Internet, Magazines, and
Books.
Vision
Sustain ITC's position as one ofIndias most valuable corporationsthrough world class
performance,creating growing value for the Indian economy and the Companysstakeholders.
Mission
To enhance the wealth generating capability of the enterprise in a globalizing
environment,delivering superior and sustainablestakeholder value
ITC Business Model
2 ITC crossed significant milestones both in the range of FMCG products launched as
well as the breadth of distribution. Investment in people systems, trade marketing expertise
and product development enabled the launch and national rollout of several FMCG products
spanning Apparel, Packaged Foods, Greeting Cards and Stationery, Safety Matches and
Incense Sticks (Agarbatti). The business model in each of these product categories envisages
retaining core competency-based elements of each value chain in-house. Manufacturing is
outsourced largely to small and medium enterprises (SMEs). Such a model enables ITC to
participate effectively in strengthening the capability of these SMEs, thereby enhancing the
competitiveness of the entire value chain. ITC is engaged in further expanding its distribution
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and delivery bandwidth to serve as a springboard to cater to a much wider range of FMCG
products.
ITC is developing its internationally competitive agricultural business by
empowering, not eliminating, the independent small farmer. Its business model centers
around the deployment of a network of Internet-connected kiosks, known as e-Chou pals,
throughout agricultural areas in India. The premise of ITC's expanded business model is
backward integration, a form of virtual vertical integration that involves the direct purchase
of produce from farmers, thereby reducing ITC's dependence on middlemen.
ITCs Corporate Strategies
Create multiple drivers of growth by developing a portfolio of world classbusinesses that best matches organizational capability with opportunities indomestic
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 MarketStanding, 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 are various
businesses.
Create distributed leadership within the organization by nurturing talented andfocused top 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 balancebetween executive freedom and the need for effective control and accountability.
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PRODUCT OF ITC:-
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ITC introduces each product with a strategy. The following gives details of
the strategy that ITC had kept in mind, while launching the product.
1.Though the first six decades of the Company's existence were primarily devoted to the growthand consolidation of the Cigarettes and Leaf Tobacco businesses, the Seventies witnessed the
beginnings of a corporate transformation that would usher in momentous changes in the life of
the Company.
2.ITC's Packaging & Printing Business was set up in 1925 as a strategic backward integration forITC's Cigarettes business. It is today India's most sophisticated packaging house.
3.In 1975 the Company launched its Hotels business with the acquisition of a hotel in Chennaiwhich was rechristened 'ITC-Welcomgroup Hotel Chola'. The objective of ITC's entry into the
hotels business was rooted in the concept of creating value for the nation. ITC chose the hotels
business for its potential to:
earn high levels of foreign exchange, create tourism infrastructure and Generate large scale direct and indirect employment.
Since then ITC's Hotels business has grown to occupy a position of leadership, with over 90 owned
and managed properties spread across India.
4.In 1979, ITC entered the Paperboards business by promoting ITC Bhadrachalam PaperboardsLimited, which today has become the market leader in India. Bhadrachalam Paperboards
amalgamated with the Company effective March 13, 2002 and became a Division of the
Company, Bhadrachalam Paperboards Division. In November 2002, this division merged with
the Company's Tribune Tissues Division to form the Paperboards & Specialty Papers Division.
ITC's paperboards' technology, productivity, quality and manufacturing processes are comparable
to the best in the world. It has also made an immense contribution to the development of
Sarapaka, an economically backward area in the state of Andhra Pradesh. In 2004, ITC acquired
the paperboard manufacturing facility of BILT Industrial Packaging Co. Ltd (BIPCO), near
Coimbatore, Tamil Nadu. The Kovai Unit allows ITC to improve customer service with reduced
lead time and a wider product range.
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5.Also in 1990, leveraging its agri-sourcing competency, ITC set up the Agri Business Division forexport of agri-commodities. The Division is today one of India's largest exporters. ITC's unique
and now widely acknowledged e-Chou pal initiative began in 2000 with soya farmers in Madhya
Pradesh. Now it extends to 10 states covering over 4 million farmers. ITC's first rural mall,
christened 'Chou pal Sager' was inaugurated in August 2004 at Shore. On the rural retail front.
6.24 'Chou pal Sagas' are now operational in the 3 states of Madhya Pradesh, Maharashtra andUttar Pradesh.
World ITC 2009 Market Share And ForecastEMEA Weak, DoubleDip Coming
IT Candor 2009 Market Share And Forecast Highlights
The Credit Crunch led to an unprecedented fall in ITC spending beginning in Q4 2008 A fall in microprocessor sales preceded the overall market declinesomething important to
remember for next time Many vendors experienced their strongest ever quarterly revenues in Q4 2009
A number of vendors grow their revenues by more than 30% in Q4 2009 Asia Pacific has performed worst of the regions during the recession EMEA business, although shallower in 2009, has shown no real signs of improvement in Q3
or Q4 2009 ITCandor predicts a double dip, or W-shaped forecast for ITC revenues in 2010 Samsung led the $1.1T ITC hardware market in 2009 with a 8.3% share IBM led the $1.4T IT Service market in 2009 with a 4.1% share
DISTRIBUTION NETWORK IN INDIA
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REVIEW OF LITERATURE
ITC in talks to buy RDB's cigarette biz
Jump to full article: The Economic Times (India), 2010-08-12
Intro:
Cigarette-to-hospitality major ITC may buy the de-merged cigarette division of Kolkata-based RDBIndustries in a deal worth Rs 300-350 crore, according to sources close to the development.
"ITC is in talks with RDB for buying the recently de-merged cigarette division. This is the second
attempt made by ITC to buy the loss-making division of RDB. Earlier in 2006-07, ITC quoted Rs
http://www.tobacco.org/news/306410.htmlhttp://economictimes.indiatimes.com/Tobacco/articleshow/6298764.cmshttp://economictimes.indiatimes.com/Tobacco/articleshow/6298764.cmshttp://www.tobacco.org/news/306410.html -
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250 crore for the brands and plant which was rejected by RDB management," a source close to thedevelopment told media.
"This time ITC has hiked the offer to Rs 300-350 crore and the talks are in advanced stage," the
source said
2.ITC: It's tobacco smoke all the way
Going at full tilt
Jump to full article: equitymaster.com (in), 2010-08-06Author: Luke Verghese
Intro:
Admirably enough, the shareholders of ITC Ltd. have prospered under Yogi Deveshwar's
stewardship as the great helmsman of the company for the last 14 years. In 1996 the company hadclocked a gross turnover of Rs 52 bn, an after tax profit of Rs 2.6 bn and a market capitalization ofRs 55.7 bn. In FY10, it had ratcheted up figures of Rs 260 bn, Rs 40 bn, and a market capitalizationin excess of Rs 1 trillion. That is no mean achievement. And the company is ringing in its centenaryyear in style - a record percentage dividend payment, and a record dividend payout, and a 1:1 bonusto boot. The dividend outflow will however more than eat away every dime that it earned as bookprofits during the year and then some more. Coming to think of it, ITC must be the only publiclylisted MNC (in a manner of speaking) of such vintage, which is getting more and more vibrant by theyear.
Tobacco is its savior . . .
The company's bellwether tobacco business will continue to be its mainstay biz in the foreseeablefuture. There is simply no magic wand which will help it get out of the quagmire. It should alsothank its stars that the tobacco industry's bte noir, Dr. AmbumaniRamadoss, is in limbo, and cantherefore do little harm, at least till the next general elections, that is.
3.Foods farm lift ITC net 22% to Rs 1,070 cr
Jump to full article: The Economic Times (India), 2010-07-23
Intro:
Tobacco-to-hotels major ITC on Thursday reported a 21.8% year-on-year growth in net profit for thefirst-quarter (Q1) ended June 30, 2010, to Rs 1,070.3 crore against Rs 878.7 crore in the year-agoperiod. Net sales during the period under review, however, reported a 16.1% y-o-y growth at Rs4,816.6 crore against Rs 4,147.6 crore in the corresponding period previous year, driven by robustperformance of its foods, personal care, agri and cigarette businesses.
In a statement issued after the board meeting, ITC said pre-tax profits during the said period was up19.2% to Rs 1,570.1 crore, operating profits from non-cigarette businesses was up 38% to Rs 265
http://www.tobacco.org/news/306226.htmlhttp://www.equitymaster.com/outsideview/detail.asp?date=8/6/2010&story=1http://www.tobacco.org/news/305145.htmlhttp://www.tobacco.org/news/305145.htmlhttp://economictimes.indiatimes.com/news/news-by-company/earnings/earnings-news/Foods-farm-lift-ITC-net-22-to-Rs-1070-cr/articleshow/6203120.cmshttp://economictimes.indiatimes.com/news/news-by-company/earnings/earnings-news/Foods-farm-lift-ITC-net-22-to-Rs-1070-cr/articleshow/6203120.cmshttp://economictimes.indiatimes.com/news/news-by-company/earnings/earnings-news/Foods-farm-lift-ITC-net-22-to-Rs-1070-cr/articleshow/6203120.cmshttp://www.tobacco.org/news/305145.htmlhttp://www.equitymaster.com/outsideview/detail.asp?date=8/6/2010&story=1http://www.tobacco.org/news/306226.html -
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crore in the quarter under review compared with Rs 192 crore in the earlier corresponding period.Earnings per share for the quarter stood at Rs 2.80. Though, severe taxation and regulatoryenvironment for cigarettes in India continues to be a cause for concern, innovation and consumercentricity enabled the business to deliver superior value through its brand portfolio of well-craftedblends, contemporary packaging styles and use of state-of-the-art manufacturing technology .
4.Catch-22 situation for ITC
Jump to full article: DNA India (in), 2010-07-23Author: Vivek Kaul
Intro:
Not many companies have the luxury of being a monopoly in a sector in which most direct forms ofadvertising are banned. ITC is one such company. It has a near monopoly when it comes to sellingcigarettes in India. And, that to an extent, it has the pricing power that has over the years ensured thatit keeps growing at a steady pace quarter on quarter
For the quarter ending June 30, 2010, the net profit of ITC went up by 21.8% to Rs 1,070.3 crore.This increase in profit was on the back of the operating profits (or the earnings before interest andtaxes) of the cigarette business going up by 16% to Rs 1,305 crore. The operating profits of otherdivisions like hotels, paper
BIBELOGRAPHY:-
http://www.itcportal.com
http://www.tobacco.org/news/305144.htmlhttp://www.tobacco.org/news/305144.htmlhttp://www.tobacco.org/news/305144.htmlhttp://www.dnaindia.com/money/column_catch-22-situation-for-itc_1413336http://www.dnaindia.com/money/column_catch-22-situation-for-itc_1413336http://www.dnaindia.com/money/column_catch-22-situation-for-itc_1413336http://www.tobacco.org/news/305144.html -
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http://www.itc .com
http://www.times of india .com
http://www.wikepedia.com
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http;//www.itc.india.com
http://www.itc/http://www.times/http://www.wikepedia.com/http://www.economic/http://www.economic/http://www.wikepedia.com/http://www.times/http://www.itc/