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BCG Matrix for ITC Ltd.

Dileep pandey
Structure

Act I Lights! ITC- A Background

Act II Camera! The BCG matrix

Act III Action! Learning points and


conclusions
Act –I [Lights!]
Governance structure
 Strategic supervision
 Strategic management
 Executive management
Core values
 Nation Orientation; Trusteeship; Excellence;
 Customer focus; respect for people; Innovation
Vision & Mission statements
 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.
Business Mix of ITC Ltd.
FMCG
• Cigarettes
• Foods
• Lifestyle Retailing
• Greeting, Gifting & Stationery
• Safety Matches
• Agarbattis

Paperboards & Packaging


• Paperboards & Specialty Papers
• Packaging
Business Mix (Cont’d)
Agri - Business
• Agri-Exports
• e-Choupal
• Leaf Tobacco
Hotels

Group Companies
• ITC Infotech; etc.
Business wise Sales data
Business/ Year Growth Value (Rs in Crore)
% 2005 2004

FMCG-Cigarettes 8.4 10002.54 9230.27


FMCG-Others 85.2 563.39 304.16
Hotels 124.1 577.25 257.53

Agribusiness 4.2 1780.07 1708.77


Paper & pkg. 24.9 1565.31 1253.29
Net revenue 12.99 13349.58 11815.04
CAGR during FY 2005-2008
Category CAGR Growth parameters
Cigarettes 10.9 % Pricing power
Hotels 22.7% Inward traffic, occupancy
Paper 17.2 % Capacity utilization, value
added products
Agri 34.3 % E-choupal, choupal sagar,
business
FMCG- 60.2 % Fast track, decent share.
Others
Market share of ITC Ltd.
Outstanding market leader
 Cigarettes, Hotels, Paperboards, Packaging and
Agri-Exports.
Gaining market share
 Nascent businesses of Packaged Foods &
Confectionery, Branded Apparel and Greeting
Cards.
Segment Dominance Contribution %
Revenue PBIT
Cigarettes 70% share 77.0% 87.7%

Paper & Packaging board – No. 1 7.3% 10.7%


Packg. in Asia
Agri 1of the largest xporters 7.0% 3.7%
business from India
Hotels ITC Group ranks No.2 4.3% 5.4%

FMCG 20% share of greeting 4.4% -7.5%


(Others) cards market,
'Aashirvaad' atta is
No.1 in branded
segment
A
c
t
2

Market attractiveness & Competitive


strength is also important.
Limitations
 Assumes market growth rate. A firm may
grow the market.
 A “Dog” may be helping other products.

 High market share/Growth is not the only


success factor.
 Linkage between market share and
profitability is questionable.
The BCG Matrix for ITC
Ltd.
Stars ?
•Hotels •FMCG- Others
•Paperboards/
Packaging.
•Agri business.
Cows Dogs
•FMCG-Cigarettes •May be ITC
Infotech.
Act III - Action- Learning points and
conclusions

? - To be handled with care.


 Strategic forays into emerging high growth
markets.
 E-Choupal is a transformational strategy.
 Strong brand building capability will be
tested.
Learning points (Cont’d)

 Corporate strategy of creating multiple drivers of


growth anchored on its core competencies and
distribution reach.
 Embracing difficult and challenging corporate
strategy. (Ex: Paperboards).
 EHS philosophy: Contribution to the triple bottom
line- Economic, Environment and social capital.