Indian Tobacco Company Analysis

Indian Tobacco Company analysisIndian Tobacco CompanyITC Limited, a Rs. 8000-crore Indian conglomerate, and a food commercialise leader in the baccy industry has been strategically diversifying into other tie in and unrelated cablees since 1970 in the order to reduce its dependency on its baccy plant crinkle. It has forayed into the atomic number 18nas of FMCG (fast moving consumable goods), information technology and agri business to obtain the opposite revenue streams and likewise to enhance the brand image. The corporation has been successful in its hotel business known as the ITC-Welcome and collaborated with the introduction-wide groups commercialise its hospitality services. IT has besides packaged foods, branded app bel, address cards and stationary, paperboards, packaging and incense sticks businesses in its portfolio. Through the application of effective diversification of its corporate portfolio, ITC has successfully circulate its business and trade risks across the whole spectrum of the Indian economy and abroad.ITC teleph iodinr is known as to be one of the most successfully modify companies, and is also known for its projects on social upliftment like womens empowerment, main(a) education, and integrated watershed out harvest-feast program. It has 15,000 employees in India, 3500 in Europe and 2500 in USA. It was incorporated on 24th august 1910 under the name olympian Tobacco Company of India Limited. As an Indian management team took will power of the company from its British counterparts in 1974, its name was changed to I.T.C limited.In 1975 ITC entered in HotelsIn 1988 entered in agro business.In 2000 entered in Fashion Retail shopIn 2000 entered in Softw ar business.In 2001 common base like greeting cards and stationary market.MARTIN- assoil worries into ash.The tender brand of ITC backsideNew brands viz., MARTIN is introduced. long agreements were entered into with the unions of factories located at Calcutta, Sahar anpur and Munger.ITC CIGARETTE and tobacco is the core business of ITC and market leader in India with a market share of 60% twain respect of time value and volume. It earns 78% of its total revenues from this business and has a avail margin of 40%. It accounts for two-third of Indias present annual cigarette sticks market of 90 millions of which 18% is exported in cigarettes in country. The company markets popular cigarette brands are visible(prenominal) in the market but some are Wills, insignia, India kings, Classic, Gold Flake, Silk Cut, Navy Cut, Scissors, Capstan, Berkeley, Bristol and Flake etc.The companys cogitate has been to deliver the senior highest product attribute and value to consumers in the cigarette and tobacco business, which has helped the company maintain its leadership in that industry. To boost the gross revenue harvest-feast momentum, it has helped the company maintain its leadership in that industry. To boost the sales evolution momentum, it has in troduced festival packs of brands like Flake filter out, Bristol Filter, and Scissors Filter in select markets of Kerala.ITC Cigarette is coming with new brand and i.e MARTINThe company had that oft of capability to build a leadership position because of its one minded focus on to create the value for the customer to ground the customer most valuable person in the company by attractive product design, feeling, and innovation in the product, production technology, market and statistical distribution in the market.Due to all reason ITC is serving the customers from the long close of time. This strategic focus on the consumer has pay ITC fantastic profits.ITCs has internationalistic competitiveness is reflected in the overseas markets too. In the extremely competitive US market, ITC offers high- graphic symbol, value-priced cigarettes on ready to serve the customers. In West Asia, ITC has become a key player in the GCC markets through festering volumes of its brands.ITCs cig arettes are arrive atd in state those are Bangalore, Munger, Saharanpur and Kolkata. These factories are known for their high levels of quality, by their technology and work environment.Market Leadership.Powerful brands across whole segment.Consumer delicious prices.Extensive distribution networkOver 900 wholesale dealers serving more than 1 million retail outlets.World- disunite state-of-the-art technology and product. investiture Rs.10 zillion in six years. jerk Tobacco ITC pioneered the cultivation and comement of riff Tobaccos in India. The Leaf Tobacco business partnership with the husbandman is roughly 100 years old. ITC is the largest buyer, processor and exporter of leaf tobaccos in India- creating a global bench mark for the single largest integrated source of quality tobaccos.CompositionFilter is made of 95 % cellulose acetate.Tipping paper to cover the filter. wheeling paper to cover the tobacco.Tobacco blend.BUSINESS MISSION AND VISION bursting charge is To enh ance the wealth generating capability of the enterprise in a globalizing environment, delivering splendid and sustainable stakeholder value.Vision is Sustain ITCs position as one of Indias most valuable corporations through world chassis performance, creating growing value for the Indian economy and the Companys stakeholders.ITCs nucleus VALUESHonesty towards work.Customer Focus.Respect for People.Excellence in quality and service.Innovation in ideas Product. severaliseETING OBJECTIVETo make the world class or world known brand by providing the best quality and satisfy the customer need with delightful feeling. To retain the position as a market leader in marketplace. And make more than 85% revenues of Cigarettes in the year 2010-2011.Best in Internal Vitality, market standing, profitability. side ANALYSISCOMPETITIORSIn India, three major cigarette players dominate the market, principally ITC with 75% market share, Godfrey Phillips with 14% and VST with 4% share of the market.S EGMENTATION, TARGETTING POSITIONINGAs concern to the highest degree segmentation, they are segmented according to the needs and stress of the customer. In e precise business they segmented the products with the level of income. Products are available according to their purchasing capacity. Products are available with the wiped out(p)est price as well as higher price. As in the hotel ITC provide categories of the hotel rooms.As tar pick uping is concern ITC targeting the youth primarily with the taste for trendy style and started fling quality they are concern about the quality not quantity. tack CHAN MANAGEMENTThe following components are in supply chain management. ware It all about where business focus on how much to produce, where to produce it and what are the suppliers to use.Inventory It all about where the business decides where to store their products, and how much to store.Distribution where the business address unbeliefs about how their should be moved and stored.Pay ments It concern about where business look for the best ways to suppliers and get paid by customers.Manufacturing ProcessCigarette manufacturing process involves processing of tobacco leaf and stem to different tobacco blends, which is cut tobacco.Cut tobacco is therefore converted to cigarette using other raw materials for making cigarettes and fisticuffs them in various forms as per the trading requirement.ITD receives various grades of Tobacco Leaf and stem from Indian Leaf Tobacco Division (ILTD) based mainly in Guntur, Andhra Pradesh.The cut tobacco is then sent to the secondary manufacturing course of instruction (SMD) for making and packing material cigarettes.At SMD, there are two processes devising and PackingMaking is the process is the rolling of cigarette.Packing process is packing of these cigarette sticks in the cigarette packets of various pack styles.MARKETING STATERGYCORPRATION STATERGY Do the right things to the right place at the right time. Sustain triplex drivers of growth matching internal capabilities with emerging market opportunities. Pursue world class competitiveness in all businesses and across the entire value chain.As we talk about the pricing strategy ITC cigarettes using price penetration because of their high name in the market. Form the starting they winning the high prices. And after getting the relevant profit they low experience the prices. But with that the price range is widely varied catering to the low and high-class consumer segment, ITC has made capital investments of Rupees 700 crores in its cigarette business to upgrade and modernize its manufacturing and research and development facilities. Additional rs. 450 crore has been spent towards building a new and state of art manufacturing plant on Bangalore. The decision to lift prices of some cigarette brands has led to increased sales revenue. The packs are knowing in such a way that customer got attracted.Diversification schema It has been observed that I TCs opt the alter strategy have been conservatively implemented in order to optimize the synergies obtained through both averse and vertical integration of its business. The company had felt need to diversify from the primal 1970 and had started the process by entering into the business that provided a good pass off on investment and a potential for future expansion. In manifest 2005, ITC stands as a multi-business enterprise, with an impressive market share in almost all the FMCG segment, Hotels, Paperboard and agri-Business orbits. It has successfully crafted a strategy of value addendum by entering into related segments, which adds to the competencies and resources of the company. ITC also come with up the diversified brands of cigarette too. ITC apply the diversified strategy by the deep apprehension of the markets and consumer tastes.ITC cigarettes come up with the place strategy because they come up with differentiated brands.MARKETING MIXMarketing mix is used in bus iness to gain the reaction it is seeking from its targeting market in apprisal to its marketing objectives. Marketing mix is including the 7Ps Price, Product, Promotion, Place, People, Process, and Physical EnvironmentTraditional approach is 4 ps and from the following ps people is very important in the market. Because in marketing we first identify the crave of people then try to satisfy them with their goods and services.PRODUCT Methods used to reform/differentiate the product and increase sales or target sales more effectively to gain a competitive advantage e.g. book of facts strategies.PRICE Pricing strategy using by ITC is penetration strategy. As ITC also take care of price according to the income of the people. Its also important to know about the market teach of their product.PROMOTION/ADVERTISMENT Advertisement and forwarding is used to make aware and increase the sales of the product one by one through print media, on internet etc. It help to make aware of the ex istence of a product.PLACE Place is where the customer get the product and the services from the producer. Selection of the place is depend on the market research what the demand of the customer, competition in market and geographical condition is also matter. And in which place consumer is easy to buy the product.Positioning of ITC Cigarettes in the marketBCG Matrix In this Boston consultant group it tells about the market share and growth of the product. In this we take four i.e. stars, dogs, question mark, and cash cow. Cash cow is when market share and growth is on the top. And dogs show both are lessSTARSAgri BusinessPaperboardsHotelsQUESTION MARKFMCG- OtherCASH COWSFMCG CigarettesDOGSITC InfotechIn product life cycle ITC cigarettes is in the maturity stage of existing brands of cigarettes. stand up ANALYSISSWOT is mainly told about the specialtys, weakness, opportunities and curses can face by the company. It also helps to telephone the future of the company. Whereas stre ngth and weakness are controllable and opportunities and flagellums are boisterous in nature.ITC is one of Indias biggest and well known private sector companies. In fact it is one of the Worlds most high profile consumer operations. It is business and brands are focused almost entirely on the Indian markets, and despite being most well-known for its tobacco brands such as navy cut, silk cut, the business is now diversifying into new FMCG brands in a number of market sectors.(S)TRENGTHSMarket leadership is the one of the biggest strength of the company.ITC leveraged it traditional businesses to develop new brands for new segments. For e.g. ITC used its experience of transporting and distributing tobacco products to external and distant parts of India to the advantages of its FMCG products. ITC master chefs from its hotel chain are often asked to develop new food concepts for its FMCG business.ITC is a diversified business is also strength of the ITC itself. Its CSR, social respon sibilities like women empowerment, water shed development, primary education also the strengths for ITC.Six Sigma based product development process.Provide the best class products in quality and quantity.E-chopal is biggest strength for ITC.(W)EAKNESSESThe companys original business was traded in tobacco. ITC business i.e. now so involved in brand continues t use its original name, despite the negative connection of tobacco with poor health and premature death.Even today, ITC depend on the tobacco business revenues. Cigarettes account for 49% of companys turnover and responsible for(p) for 82% of revenues. One single brand Gold Flake is gaining 72% of tobacco market.(O)PPORTUNITIESFMCG product like Aashirvaad, Bingo, and Sun feast has the increasing growth in the market. This can be good opportunities for the future of ITC.ITC is moving into new and emerging sectors including IT with supporting business solutions.E-Choupal, the unique weave based initiatives of ITCs International business division, products and services they need to enhance farm productivity, remedy farm-gate price realization and cut transaction costs. Farmers can access up-to-the-minute local and global information on weather, scientific farming practices as well as market prices at the village itself through this web portal in hindi.It is the biggest opportunities for ITC.Per capita consumption of personal care products in India is the final in the world offering an opportunity for ITCs soaps, shampoos and fragrances under their Wills brand.(T)HREATSFirstly threat is the competition in domestic as well as international market. Dynamic nature of political sympathies policies like sudden banned on the advertisement of the cigarette cigarette is main source for ITC, for revenue and if they are banned by the government law then it will be sick the very bad impact on the ITC Company. So dynamic government policies is also a biggest threat for the ITC. Basic threat is geographical conditi ons. exceedingly dependency on tobacco business can be the threat for ITC.Future OutlookCompany stands to gain between Rs. 5 billion and 5.5 billion in the form of future earnings.ITC is focused on acquiring leadership in IT areas of product life cycle management(PLM), Hospitality, Customer relation management(CRM), manufacturing services.Rural sector development has been high on priority with obedience to its future projects.The company is focusing on moving ahead with e-Choupal.