Imperial Tobacco Company of India Limite

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Information about Imperial Tobacco Company of India Limite
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Published on April 5, 2010

Author: sweetu2387

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Imperial Tobacco Company of India Limited (ITC). : Imperial Tobacco Company of India Limited (ITC). ITC. Touching your life. Everyday Presented by GROUP NO.10 Sumit Roy Anamika singh Akansha Kashish Arora Tarun Dutt Minaz humdule FLOW OF PRESENTATION : FLOW OF PRESENTATION COMPANY PROFILE VISION & MISSION VALUE POSITIONING OF ITC DISTRIBUTION NETWORK SUPPLY CHAIN ANALYSIS OF FMCG PRODUCT(CIGARATTE) & PEST AND SWOT ANALYSIS OF ITC. SYNERGIES FOR ITC EFFICIENCIES IN E-CHOUPAL NETWORK COMPARISON WITH HARYALI KISAN BAZAR FUTURE OF E-CHOUPAL CONCLUSION ITC. Touching your life. Everyday Introduction : Introduction ITC is one of India's foremost private sector companies Has a diversified presence in Cigarettes, Hotels, Paperboards &Specialty Papers, Packaging, Agri-Business, Packaged Foods &Confectionery, Branded Apparel, Greeting Cards and other FMCG products. ITC is one of the country's biggest foreign exchange earners (US $2 billion in the last decade). Ranks No. 4 among Indian listed Private Sector Companies by market cap. (@ April 09) No. 1 in FMCG Sector Rated as one of India’s Most Respected Companies (IMRB-Business world Survey 2006). Diversified group of companies with operations in various industry segments from cigarettes to apparels. Annual turnover is of the order US$2.4 billion ITC. Touching your life. Everyday VISION & MISSION : VISION & MISSION 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. ITC. Touching your life. Everyday Values : Values ITC. Touching your life. Everyday ITC's Core Values are aimed at developing a customer-focused, high-performance Organisation. Customer Focus we are always customer focused and will deliver what the customer needs in terms of value, quality and satisfaction. ITC. Working for you. Working for India. POSITIONING OF ITC : POSITIONING OF ITC ITC. Touching your life. Everyday TOUCHING YOUR LIFE EVERYDAY. PRODUCT PROFILE : PRODUCT PROFILE ITC. Touching your life. Everyday PRODUCT LINE : PRODUCT LINE ITC. Touching your life. Everyday ITC Distribution network in India : ITC Distribution network in India ITC. Touching your life. Everyday ITC’s Distribution channel : ITC’s Distribution channel ITC’s Distribution channel is as follows:- ITC. Touching your life. Everyday ITC. Working for you. Working for India. COMPANY HUB FACTORY Retailer small Wholesale dealer Wholesale dealer Carried and forward agent consumer HI-TECH SUPPLY SOLUTIONS : HI-TECH SUPPLY SOLUTIONS Thousands of small retailers in India who sell cigarettes and confectionery supplied by ITC Ltd, and who have thus far had to wait for the next arrival of the company’s delivery van. Place orders through mobile phones Vans go without knowing actual demand so after using this they can save cost as well as time. Mobility based applications can bring down the cost of operation by 20-30% from the manual basis of operation ITC. Touching your life. Everyday ITC FMCG Supply chain : ITC FMCG Supply chain Consists of diverse categories with different priorities More than 1000+ SKUs Buying Value $68 MM Warehousing space of more than 3.5m SFT around 55+ Locations Products manufactured at 45+ plants More than 650 trucks moved every day Direct distribution from factories to Distributors. Indirect movement through RDCs Combination of Rail/Road/Sea movement within the country depending on the product type. (Target is Safer, Faster, cost effective ITC. Touching your life. Everyday Indian Tobacco Division (ITD) : Indian Tobacco Division (ITD) Market leaders in Cigarettes and Tobacco business & is among India’s most profitable companies Brands owned by ITC Ltd are Wills Classic, Wills Navy Cut, Gold Flake, Bristol and Scissors ITD also sells two luxury filter brands of its parent company Benson & Hedges and 555 Four manufacturing units for cigarettes at Bangalore, Saharanpur, Kidder pore, Munger ITC. Touching your life. Everyday PEST ANALYSIS : ITC. Touching your life. Everyday PEST ANALYSIS SWOT ANALYSIS : SWOT ANALYSIS ITC. Touching your life. Everyday CONFRONTATION : CONFRONTATION NAVY CUT,CLASSIC,INSIGNIA,INDIA KINGS,CAPSTEN,GOLD FLAKE,SISSORS,SILK CUT,BRISTOL,BERKELEY ITC. Touching your life. Everyday Diversification : Diversification ITC over the years has been investing cash flows from its cigarette business into various lucrative segments like foods, personal care, hotels and paper. With the paperboard division coming out of a major capex cycle and a reduction in losses from FMCG-others division from FY10E, we expect the non-cigarette businesses to become self-sufficient. The agriculture division continues to provide a strong support as an excellent raw material sourcing base. Hotels segment though is likely to register slower growth in FY10E due to economic slowdown and terror attacks. ITC. Touching your life. Everyday Slide 18: ITC. Touching your life. Everyday 18 Source : Based on Cigarette consumption data(2003) from “World Cigarettes”,ERC Group plc. CONT…. : CONT…. It has 3 contract manufacturers (OCMs)Reliable Cigarette and Tobacco IndustriesPrivate Ltd. (RCTI) Asian Tobacco Company (ATC )Hyderabad Deccan Cigarette Industries(HDC) Huge distribution network with 19 marketing branches and 33 Godowns across nation Also caters to the exports mainly in United States and Middle-Eastern countries ITC. Touching your life. Everyday DISTRIBUTION NETWORK(Tobacco Div.) : ITC. Touching your life. Everyday DISTRIBUTION NETWORK(Tobacco Div.) Bangalore Calcutta Saharanpur Munger GODOWNS (19) BRANCHES (19) Factories (4) WHOLESALE DISTRIBUTORS (60 PER BRANCH) RETAILERS SECONDARY WHOLESALERS Information Goods Role of Each Member : Role of Each Member Factories – Supply to 18 godowns Godowns & Branches Manage by C&F agents getting monthly remuneration No rent paid by ITC one branch – 60 WDs , 5 AMs and 20 Area Executives Wholesale Distributors(WDs) Margin – 2% of sales Appoints secondary Wholesalers ITC. Touching your life. Everyday PHYSICAL DISTRIBUTION : PHYSICAL DISTRIBUTION Demand Estimation – collaborative forecasting( Sales force with dealers) Forecast based on last month sales Production plan made according to forecast Delivery to C & F agents within 7 days CFAs deliver goods to dealers on the basis of the branch office route plan Factory CFAs- Trucks CFAs Dealers – Small Vehicles ITC. Touching your life. Everyday Slide 23: ITC. Touching your life. Everyday FLOW FOR E-CHOPAL : FLOW FOR E-CHOPAL Company Logo ITC e-Choupal : An Introduction, Stake holder Analysis 1 Comparison of status of Supply Chain before and after ITC e-Choupal 2 Critical Analysis, and Comparison with HKB 3 Future Scope 4 ITC e-Choupal : An Introduction : ITC e-Choupal : An Introduction Started in the year 2000 Target Area so far 38,000 villages, 6500 kiosks, 9 states Wholly owned by ITC Why it become a success ? Only initiative to attempt to combine Services and an Effective Business Model successfully Designed to address the issues such as: Fragmented farms Weak institutions Involvement of intermediaries Information Asymmetry ITC’S AGRI COMMODITY DIVISON : ITC’S AGRI COMMODITY DIVISON Farm linkages in 14 states covering Soya, Wheat, Marine products, Coffee etc. Focus on value added agri commodities Unique CRM programme in commodity exports Leveraging IT for the transformational ‘e-Choupal’ initiative Rural India’s largest Internet-based intervention Over 40,000 villages linked through 6500 e-Choupals servicing over 4 million farmers Distinctive sourcing capability for ITC’s Foods business Slide 27: Caught in a vicious cycle of underdevelopment THE PREDICAMENT OF INDIAN FARMERS Slide 28: ITC’S SUPPLY CHAIN OF SOYA BEAN BEFORE E-CHOUPAL INITIATIVE Company Logo SUPPLY CHAIN FOR E-CHOPAL : SUPPLY CHAIN FOR E-CHOPAL Company Logo Why ITC thought of e-Choupal : Why ITC thought of e-Choupal Company Logo Slide 31: ITC’s Supply chain of Soya bean after e-Choupal Initiative Supply chain post re-engineering : Supply chain post re-engineering Pricing Previous day’s closing price used as benchmark price for next day Mandi prices communicated to sanchalak through e-Choupal portal Sanchalak inspects the sample, assesses quality and gives farmer a conditional quote and a note (name/village/quality tests/approx. quantity/conditional price), if farmer decides to sell to ITC Company Logo Slide 33: Company Logo Inbound Logistics Farmer proceeds to the nearest ITC procurement hub with the note Some procurement hubs are ITC factories, others are purely warehouse operations ITC’s aim is to have a processing centre within 30-40 km radius of its farmers Slide 34: Company Logo Inspection and Grading At the ITC procurement hub, laboratory tests are conducted on a sample of farmer’s produce To change farmer’s attitude and appreciating produce quality, ITC is developing lab tests to reward farmers with reward points for better quality supply Slide 35: Company Logo Inspection and Grading At the ITC procurement hub, laboratory tests are conducted on a sample of farmer’s produce To change farmer’s attitude and appreciating produce quality, ITC is developing lab tests to reward farmers with reward points for better quality supply Slide 36: Company Logo Weighing and Payment Farmer’s produce is weighed on electronic weighbridge He is then given full cash payment Freight expenses are reimbursed Appropriate documentation at each stage and farmer is given a copy of that Samyojaks handle cash operations Slide 37: Company Logo Hub Logistics Farmer transports his produce to the nearest processing centre or storage hub ITC incurs the transportation cost The farmer bears the risk of transportation until produce is delivered and the sale is completed Slide 38: Company Logo Technological support Nodal platform catering to commodity blending, agricultural trading, e-choupal &rural distribution 24,000 personalized business function points 110,000+ pre-built business function points Integrated Business Systems for Direct Agriculture Procurement, Rural Distribution, e-Choupal Management, Exports, Insurance, Aqua Processing & Commodity blending Support for 8 local languages A win-win Deal : A win-win Deal Company Logo Transaction cost in Mandi Chain (before e-Choupal) : Transaction cost in Mandi Chain (before e-Choupal) Source: Seminar on Bottom of the Pyramid and CSR, IIM-K, Sept. 24, 2008 Transaction cost in Mandi Chain (after e-Choupal) : Transaction cost in Mandi Chain (after e-Choupal) SYNERGIES FOR ITC : SYNERGIES FOR ITC Generation of Goodwill & positive public opinion Better supply chain for ITC’s Food & Agri Businesses Costs, Quality, Traceability Access to the Underserved Rural Markets Through a Virtuous Cycle created by “Larger Incomes”, and founded on “Trust” that is built New ITES Business Opportunities Health, Education, Entertainment, eGovernance Company Logo Slide 43: Company Logo F A R M E R S M A R K E T S Cigarette Trade Marketing capability Branded Foods Expanded FMCG distribution capability e-choupal rural two-way fulfillment capability VPN providing SCM, ERP & CRM capability Lifestyle retailing Education Stationery Matches & Agarbattis A basis for strategic partnerships with other FMCG brand owners OTHER E-CHOUPAL INITIATIVE : OTHER E-CHOUPAL INITIATIVE Company Logo Companies using e-Choupal network : Companies using e-Choupal network Source: Seminar on Bottom of the Pyramid and CSR, IIM-K, Sept. 24, 2008 Slide 46: Critical Analysis of ITC’s Supply Chain Company Logo Stake holder Analysis : Stake holder Analysis Efficiencies in e-Choupal network : Efficiencies in e-Choupal network Last mile low cost solution Full Service approach Demand aggregation Third party seller Extensive use of technology Access to information about customers Pull based strategy Slide 49: Company Logo Hariyali Kisaan Bazaar : Hariyali Kisaan Bazaar Other companies Loan for pass through to farmers Repayment of loan with interest Produce procurement Extension service Slide 51: Comparison with Haryali Kisaan Bazar Slide 52: FUTURE OF E-CHOUPAL Company Logo e-Choupal 3.0. : e-Choupal 3.0. The Deepening NEW BUSINESSES: 1) Rural jobs and employability 2) Personalised agri services. MORE INTERACTION: Through Choupal Saagars and Haats and via mobile phones NEW TECHNOLOGY: Use of especially enabled mobile phones, analytics, new partner ITC. Touching your life. Everyday e-Choupal 2.0 : e-Choupal 2.0 Cmpany Logo ITC e-Choupal Footprint : ITC e-Choupal Footprint CONCLUSION : CONCLUSION ITC promoting their brands through advertisement campaign as well as door to door promotion. ITC is also focusing on Retailers and Wholesalers to promote their brand. The demand of their product in very low, because people don’t know about their brands very well. ITC knows their strength and weakness in the personal care market, so they are applying new concept to overcome their weaknesses. ITC now offering more margins, exiting offers and long credit period to retailers and wholesalers. ITC. Touching your life. Everyday ITC. Working for you. Working for India. :  THINK BEFORE SMOKING……. THANK YOU ?????

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