bcg
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BCG Matrix for ITC Ltd.
Group 4
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Structure
Act I Lights! ITC- A Background
Act II Camera! The BCG matrix
Act III Action! Learning points and conclusions
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Act –I [Lights!]Governance structure
Strategic supervision Strategic management Executive management
Core values Nation Orientation; Trusteeship; Excellence; Customer focus; respect for people; Innovation
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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.
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Business Mix of ITC Ltd.FMCG
• Cigarettes • Foods • Lifestyle Retailing • Greeting, Gifting & Stationery • Safety Matches • Agarbattis
Paperboards & Packaging • Paperboards & Specialty Papers • Packaging
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Business Mix (Cont’d)Agri - Business
• Agri-Exports• e-Choupal• Leaf Tobacco
Hotels
Group Companies • ITC Infotech; etc.
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Business wise Sales dataBusiness/ 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
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CAGR during FY 2005-2008Category CAGR Growth parameters
Cigarettes 10.9 % Pricing power
Hotels 22.7% Inward traffic, occupancy
Paper 17.2 % Capacity utilization, value added products
Agri business
34.3 % E-choupal, choupal sagar,
FMCG-Others
60.2 % Fast track, decent share.
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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.
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Segment Dominance Contribution %Revenue PBIT
Cigarettes 70% share 77.0% 87.7%
Paper & Packg.
Packaging board – No. 1 in Asia
7.3% 10.7%
Agri business
1of the largest xporters from India
7.0% 3.7%
Hotels ITC Group ranks No.2 4.3% 5.4%
FMCG(Others)
20% share of greeting cards market, 'Aashirvaad' atta is No.1 in branded segment
4.4% -7.5%
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Market attractiveness & Competitive strength is also important.
Act 2
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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.
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The BCG Matrix for ITC Ltd.Stars•Hotels•Paperboards/ Packaging.•Agri business.
?•FMCG- Others
Cows•FMCG-Cigarettes
Dogs •Maybe ITC Infotech.
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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.
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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.
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