Itc Ltd

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Information about Itc Ltd

Published on February 13, 2008

Author: akhil.gupta

Source: slideshare.net

ITC Ltd. One of India’s Most Valuable Corporations

The ITC Profile ITC is one of India's foremost private sector companies with a market capitalisation of nearly US $ 18 billion and a turnover of over US $ 4.75 billion. ITC has a diversified presence in Cigarettes, Hotels, Paperboards & Specialty Papers, Packaging, Agri-Business, Packaged Foods & Confectionery, Information Technology, Branded Apparel, Personal Care, Greeting Cards, Safety Matches and other FMCG products. [email_address]

ITC is one of India's foremost private sector companies with a market capitalisation of nearly US $ 18 billion and a turnover of over US $ 4.75 billion.

ITC has a diversified presence in

Cigarettes,

Hotels,

Paperboards & Specialty Papers,

Packaging,

Agri-Business,

Packaged Foods & Confectionery,

Information Technology,

Branded Apparel,

Personal Care,

Greeting Cards,

Safety Matches and other FMCG products.

The ITC Profile ITC is an outstanding market leader in its traditional businesses of Cigarettes, Hotels, Paperboards, Packaging and Agri-Exports. It is rapidly gaining market share even in its nascent businesses of Packaged Foods & Confectionery, Branded Apparel and Greeting Cards. [email_address]

ITC is an outstanding market leader in its traditional businesses of Cigarettes, Hotels, Paperboards, Packaging and Agri-Exports.

It is rapidly gaining market share even in its nascent businesses of Packaged Foods & Confectionery, Branded Apparel and Greeting Cards.

Company’s Strategy ITC's diversified status originates from its corporate strategy aimed at creating multiple drivers of growth anchored on its time-tested core competencies: unmatched distribution reach, superior brand-building capabilities, effective supply chain management and acknowledged service skills [email_address]

ITC's diversified status originates from its corporate strategy aimed at creating multiple drivers of growth anchored on its time-tested core competencies:

unmatched distribution reach,

superior brand-building capabilities,

effective supply chain management and

acknowledged service skills

ITCs Rural Development Philosophy at Work LET'S PUT INDIA FIRST ITC believes that the inter-dependence between its Agri-based businesses and the farm sector constitutes a sustainable platform to enlarge its contribution to the Indian rural sector.

e-Choupal

About e-Choupal [email_address] Launched In June 2000 Reaches to 3.5 million farmers Covers 38,500 villages 6500 kiosks around nine states

Business Model The e-Chaupal model has been specifically designed to tackle: The challenges posed by the unique features of Indian agriculture, Characterised by fragmented farms, Weak infrastructure and The involvement of numerous intermediaries, among others. [email_address]

The e-Chaupal model has been specifically designed to tackle:

The challenges posed by the unique features of Indian agriculture,

Characterised by fragmented farms,

Weak infrastructure and

The involvement of numerous intermediaries, among others.

[email_address] The Value Chain – Farm to Factory Gate:

The e-Choupal Services Relevant & Real-time Information Commodity prices, Local Weather, News Customized Knowledge Farm Management, Risk Management Supply Chain for Farm Inputs Screened for Quality, Demand Aggregation for Competitive Prices & Efficient Logistics Direct Marketing Channel for Farm Producers Lower Transaction Costs, Better Value through Traceability [email_address]

Relevant & Real-time Information

Commodity prices, Local Weather, News

Customized Knowledge

Farm Management, Risk Management

Supply Chain for Farm Inputs

Screened for Quality, Demand Aggregation for Competitive Prices & Efficient Logistics

Direct Marketing Channel for Farm Producers

Lower Transaction Costs, Better Value through Traceability

Other Services through E-Choupal Distribution of Products and Services to Rural Markets Micro marketing Product/Services Demos Marketing and Brand Building activities Pilots Bhoomi E-Health with Private Health Service Providers E-Education Rural BPO [email_address]

Distribution of Products and Services to Rural Markets

Micro marketing

Product/Services Demos

Marketing and Brand Building activities

Pilots

Bhoomi

E-Health with Private Health Service Providers

E-Education

Rural BPO

Problems Encountered The problems encountered while setting up and managing these ‘e-Choupal’ are primarily of Infrastructural inadequacies, Including power supply, Telecom connectivity and bandwidth, Apart from the challenge of imparting skills to the first time internet users in remote and inaccessible areas of rural India. [email_address]

The problems encountered while setting up and managing these ‘e-Choupal’ are primarily of

Infrastructural inadequacies,

Including power supply,

Telecom connectivity and bandwidth,

Apart from the challenge of imparting skills to the first time internet users in remote and inaccessible areas of rural India.

Alternative & Innovative Solutions Some of the expensive solutions are being deployed to overcome these challenges. These are: - Power back-up through batteries charged by Solar panels, Upgrading BSNL exchanges with RNS kits, Installation of VSAT equipment, Mobile Choupals, Local caching of static content on website to stream in the dynamic content more efficiently, 24x7 helpdesk etc. [email_address]

Some of the expensive solutions are being deployed to overcome these challenges. These are: -

Power back-up through batteries charged by Solar panels,

Upgrading BSNL exchanges with RNS kits,

Installation of VSAT equipment,

Mobile Choupals,

Local caching of static content on website to stream in the dynamic content more efficiently,

24x7 helpdesk etc.

Future Plans Going forward, the roadmap includes plans to integrate bulk storage, handling & transportation facilities to improve logistics efficiencies. Establish ‘e-Choupal’ as the new age cooperative for all practical purposes. ITC plans for the extension of the ‘e-Choupal’ initiative to altogether 15 states across India over the next few years. Planning to launch some other services with their e-Choupal program like: - Micro-Credit Health Education [email_address]

Going forward, the roadmap includes plans to integrate bulk storage, handling & transportation facilities to improve logistics efficiencies.

Establish ‘e-Choupal’ as the new age cooperative for all practical purposes.

ITC plans for the extension of the ‘e-Choupal’ initiative to altogether 15 states across India over the next few years.

Planning to launch some other services with their e-Choupal program like: -

Micro-Credit

Health

Education

Deployment Principles

#1 Co Creation End-to-end solution is designed collaboratively Identify major problems and solve them with efficiency and transparency When they started, it was with a FMCG approach, with reliance on Market Research Focus Groups … and then the approach quickly changed to ‘Prototypes’ to enable experience and obtain feedback An iterative approach to build models to solve the real world problems of the Individual and of the Community [email_address]

End-to-end solution is designed collaboratively

Identify major problems and

solve them with efficiency and transparency

When they started, it was with a FMCG approach, with reliance on

Market Research

Focus Groups

… and then the approach quickly changed to ‘Prototypes’ to enable experience and obtain feedback

An iterative approach to build models to solve the real world problems of the Individual and of the Community

Solution : Access to Price Information – Anytime & In the Village [email_address]

[email_address] Solution : Transparency and Accuracy in Weighment

[email_address] Solution : Modern Methods for Quality Assessment

#2 Must have a well thought out Business Model Who Pays ? Who Runs ? Who Monitors Quality? What are the Value Propositions to the Stake Holders ? [email_address]

Who Pays ?

Who Runs ?

Who Monitors Quality?

What are the Value Propositions to the Stake Holders ?

The ITC e-Choupal Proposition Step 1: Leveraging ITCs for empowered access to markets (inputs & outputs) Step 2: Economic viability of IT infrastructure investments is justified through Win-Win business models, hence also scaleable Step 3: Customer responsive IT infrastructure in the villages facilitates access to supplementary Education, Health, Employment, e-Governance services [email_address]

Step 1: Leveraging ITCs for empowered access to markets (inputs & outputs)

Step 2: Economic viability of IT infrastructure investments is justified through Win-Win business models, hence also scaleable

Step 3: Customer responsive IT infrastructure in the villages facilitates access to supplementary Education, Health, Employment, e-Governance services

ITCs make it possible ! The e-Choupal Price Discovery : Farmer @ Receiving End Vs Empowered Value through Unbundling what was bundled together earlier (Information & Transaction) Unbundled Price information is now available at the door step without a necessity to go to mandi Has an option to fix price at the village itself. However, at the time of selling, still retains the freedom to go to mandi if he believes he gets better offer there. The Input Transaction Value through Bundling (Information, Knowledge, Transaction) what was available unbundled earlier Bundles Information on Weather and Best Practices from the website Knowledge of ‘what to do’ from the Experts Efficient supply platform for inputs purchase that enables aggregation and scale efficiencies [email_address]

The e-Choupal Price Discovery : Farmer @ Receiving End Vs Empowered

Value through Unbundling what was bundled together earlier (Information & Transaction)

Unbundled

Price information is now available at the door step without a necessity to go to mandi

Has an option to fix price at the village itself. However, at the time of selling, still retains the freedom to go to mandi if he believes he gets better offer there.

The Input Transaction

Value through Bundling (Information, Knowledge, Transaction) what was available unbundled earlier

Bundles

Information on Weather and Best Practices from the website

Knowledge of ‘what to do’ from the Experts

Efficient supply platform for inputs purchase that enables aggregation and scale efficiencies

#3 The Orchestrator Who Orchestrates the multiple entities? The scale and complexity inherent makes it a high maintenance network The Orchestrator has to ensure There is a ‘Big Picture’ to what is initiated ‘ Changing Needs’ are tracked and are efficiently responded ‘ Continuous Innovation’ of the business model is ensured for its long term relevance [email_address]

Who Orchestrates the multiple entities?

The scale and complexity inherent makes it a high maintenance network

The Orchestrator has to ensure

There is a ‘Big Picture’ to what is initiated

‘ Changing Needs’ are tracked and are efficiently responded

‘ Continuous Innovation’ of the business model is ensured for its long term relevance

#4 The Infrastructure Must have Three Tiers Local part for Responsiveness Regional level for Controlling Apex element for Resources Allocation [email_address]

Must have Three Tiers

Local part for Responsiveness

Regional level for Controlling

Apex element for Resources Allocation

3 X 3 e-Choupal Infrastructure ITC Kiosk with Internet Access In the house of one trained farmer, Sanchalak Within walking distance of target farmers Warehousing Hub / Store Managed by the erstwhile middleman, Samyojak Within tractorable distance of target farmers Collaborative Network of Companies Orchestrated by ITC With a Pan-Indian presence [email_address]

ITC Kiosk with Internet Access

In the house of one trained farmer, Sanchalak

Within walking distance of target farmers

Warehousing Hub / Store

Managed by the erstwhile middleman, Samyojak

Within tractorable distance of target farmers

Collaborative Network of Companies

Orchestrated by ITC

With a Pan-Indian presence

#5 Capability Building Build Customer Orientation right across the Chain “ Customer is the reason” … and also the necessary Functional and Process skills Working Capital Demand Creation / assessment … along with the Soft Skills Feedback Quality / Customer Service [email_address]

Build Customer Orientation right across the Chain

“ Customer is the reason”

… and also the necessary Functional and Process skills

Working Capital

Demand Creation / assessment

… along with the Soft Skills

Feedback

Quality / Customer Service

[email_address] Taking ITCs & Biz Models to Rural India Training

[email_address] Taking ITCs & Biz Models to Rural India Power Connectivity Website

[email_address] e-Choupal Sagar ITC Limited

[email_address]

Choupal Sagar Unlocking the Rural Markets

Business Thought "It is a place where the farmer does both selling and buying. On an average a farmer can receive up to Rs 50,000 for the Soya he brings in and we give him the money in cash... farmers still prefer getting their money in cash. Since he has already hired a vehicle, it makes sense for him to take all his requirement of fertiliser, pesticide, etc, as well as diesel worth Rs 3,000 to Rs 4,000 back to his village. A BPCL outlet will open soon to facilitate his diesel purchase and a nationalised bank will also open a branch here. As we also sell life insurance through the choupal network, an insurance counter will be put up at the mall." [email_address]

"It is a place where the farmer does both selling and buying. On an average a farmer can receive up to Rs 50,000 for the Soya he brings in and we give him the money in cash... farmers still prefer getting their money in cash. Since he has already hired a vehicle, it makes sense for him to take all his requirement of fertiliser, pesticide, etc, as well as diesel worth Rs 3,000 to Rs 4,000 back to his village. A BPCL outlet will open soon to facilitate his diesel purchase and a nationalised bank will also open a branch here. As we also sell life insurance through the choupal network, an insurance counter will be put up at the mall."

About Choupal Sagar Choupal Sagar is the culmination of all farming activities in one place. Seven thousand sq ft stacked with brand names... a place where Sonata watches and Usha, Prestige and Hawkins home appliances jostle for space with Italio, Cosmo, Springwood and John Players shirts, jeans, and Philips and LG products. TVS Victor motorcycle and, a few rows down the hall, you can buy fertilisers and pesticides or motor pumps. [email_address]

Choupal Sagar is the culmination of all farming activities in one place.

Seven thousand sq ft stacked with brand names... a place where

Sonata watches and Usha,

Prestige and Hawkins home appliances jostle for space with

Italio, Cosmo, Springwood and John Players shirts, jeans, and Philips and LG products.

TVS Victor motorcycle and, a few rows down the hall, you can buy fertilisers and pesticides or motor pumps.

[email_address]

[email_address]

ITC

Product Portfolio (Rural Market) [email_address] Rural & Urban Based Products Cigarettes Food Capstan Flake Gold Flake Scissors Sunfeast Bingo Mint-o fresh Retail Commodity Ex. Choupal Sagar E-Choupal

Sunfeast ITC launched delicious biscuits of international quality under the Sunfeast range on 28th July 2003. The biscuits were launched after a great deal of market research. Sunfeast Glucose, Sunfeast Marie and Dream Cream biscuits were the first to make an appearance in the market. In a short span of 3 years Sunfeast has launched many new varieties and has its presence in almost all types of biscuit categories. [email_address]

ITC launched delicious biscuits of international quality under the Sunfeast range on 28th July 2003.

The biscuits were launched after a great deal of market research. Sunfeast Glucose, Sunfeast Marie and Dream Cream biscuits were the first to make an appearance in the market.

In a short span of 3 years Sunfeast has launched many new varieties and has its presence in almost all types of biscuit categories.

Product Range Sunfeast Glucose Sunfeast Marie Light Sunfeast Orange Marie Sunfeast Dream Cream Orange Mango Pine-apple Elaichi Chocolate Strawberry Milk [email_address]

Sunfeast Glucose

Sunfeast Marie Light

Sunfeast Orange Marie

Sunfeast Dream Cream

Orange

Mango

Pine-apple

Elaichi

Chocolate

Strawberry

Milk

Competition Sunfeast is majorily facing competition by the two, namely: - Britannia Parle By Priyagold in Northern India. [email_address]

Sunfeast is majorily facing competition by the two, namely: -

Britannia

Parle

By Priyagold in Northern India.

Market Share [email_address]

Reason to enter into Food Segment [email_address] Rs. 5,50,000 crores market in India Only 6% is packaged Rs. 4,000 crores biscuit market in India 12-14% yearly growth in the biscuit segment

Distribution Channel The company used its existing network of convenience stores – The company's name for the hole-in-the-wall pan-beedi shops -- for sunfeast. The company also looked at grocery stores and other retail formats. The brand  is now available in nearly 1.8 million outlets. Britannia claims it has a superior distribution clout with its presence in nearly 3.3 million outlets. Parle, the seasoned player itself, says it is  available in 1.5 million outlets. [email_address] Sunfeast is now available in 1.8million shops of India as compared to Britannia and Parle. They are available in 3.3 and 1.5 million shops respectively

The company used its existing network of convenience stores –

The company's name for the hole-in-the-wall pan-beedi shops -- for sunfeast.

The company also looked at grocery stores and other retail formats.

The brand  is now available in nearly 1.8 million outlets. Britannia claims it has a superior distribution clout with its presence in nearly 3.3 million outlets. Parle, the seasoned player itself, says it is  available in 1.5 million outlets.

Advertising Advertisement TVC Newspaper Advertisements behind the buses. Outdoor Advertising [email_address] Annual Advertising budget of ITC biscuit segment is 115-120 crore.

Advertisement

TVC

Newspaper

Advertisements behind the buses.

Outdoor Advertising

Pricing Models The biscuit industry is basically based on two models: - Low price models. Two-pronged strategy Sunfeast has adopted this strategy. They are playing with the volumes and low margin in their glucose and Marie segment. While in their cream variant they are playing with high margins. [email_address]

The biscuit industry is basically based on two models: -

Low price models.

Two-pronged strategy

Sunfeast has adopted this strategy. They are playing with the volumes and low margin in their glucose and Marie segment. While in their cream variant they are playing with high margins.

Thank You! [email_address]

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