2. About the Company
• The Company was founded in year 1790 by Henry Overton Wills.
• It’s current headquarter is in Kolkata.
• It is the largest producer of Cigarettes in India with maximum brands of all range.
• It provides employment to near about 27,000 people.
• Apart from Cigarettes the company is diversified into many other businesses also
like Hotels, papers, packaged foods, apparels, etc.
• They have a very successful CRS activity called ‘e-choupal’.
• In the list of world most reputable companies ITC position at 95.
• Only Indian FMCG company on Forbes Global 2000 ranking.
3. Indian Tobacco Industry
• Cigarettes – so many challenges.
• Graphic pack warnings.
• Despite regulatory controls, underlying factors for
cigarette growth are strong
• Cigar culture grows
• Segmented Market Share
8. Threats of New Entrants = LOW
• New product differentiation very tough- already cigarettes at different
price points, flavors, brand image
• Access to distribution channel is tough – big & established players are
present
• Capital requirement is very high for a pan India launching.
• Government policy –high tax, No Ads allowed
9. Bargaining Power of Supplier = LOW
• Many inputs are required but in small amount – paper tobacco filter
• There are many small scale , unorganized suppliers
• Cigarette companies are big and have direct access to distribution channel
and addicted buyers. Suppliers don’t have much control over smokers.
11. Competitive Rivalry in the Industry =
HIGH
• Presence of many players like: Godfrey Philips, VST, GTC, etc.
• Price Competition
• Ban on Advertisements
• Replacements for ads – event promotions and sponsorship
• Introduction of international brands in India like Davidoff, Dunhill, Camel,
etc.
12. PESTEL Analysis
• Political Analysis
The cigarette industry in India continues to operate in a challenging economic
environment, particularly with respect to taxation and regulations relating to
communication and consumption.
• Economical Analysis
India is a major grower and exporter of tobacco in the world. Presently India is
among top three producers of tobacco in the world.
• Social Analysis
There is a growing public concern regarding increasing consumption of
tobacco, its health implications and the need to prevent access to minors
and non-users.
13. PESTEL Analysis (cont.)
• Technological Analysis
• ITC cigarettes have came a long way and that can be concluded by the fact
that the supply chain management that the ITC employs now is of the
latest trends- they have a great inventory control, logistics support etc.
• Environmental Analysis
• The gap between urban and rural households in cigarette consumption is
the highest in low and lower-middle income households.
• Legal Analysis
• Ban on Smoking in Public Places with effect from last quarter of 2008
resulting in a dip in sales and profit.
14. SWOT Analysis
• Strength
• The main strength of the company is the brand Image
• Gold Flake brand is the largest selling Tobacco brand in India (70 % Mark
Cap)
• Weakness
• Low popularity of most of its products
• After the ban on advertisement it is not able to promote their new
product
15. SWOT Analysis (cont.)
• Opportunity
• Even expanding market share in the Indian tobacco market is an
opportunity
• Threats
• The threats of the company are competition from international
companies. The main competitors are Marlboro
• The next threat may also be the changing habits of the consumer; they
may quit smoking due to its ill effects and hazards.
16. New Factors for Consideration
• Introduction of New Brands.
• Impact of taxes on ITC cigarettes sales.
• Environmental practices at ITC factories
• The burgeoning illegal trade in cigarettes and its impact on the ITC
cigarettes sales.
Tax Revenue Share
0% From Cigarettes 0%
from other tobacco products
25%
75%
17. Cigarettes: Future Growth potential
• Cigarettes account for only 15% of tobacco consumed in India unlike world pattern of 85%
due to prolonged punitive taxation
– Cigarettes (15% of tobacco consumption) contribute nearly 85% of Revenue to the
Exchequer from tobacco sector
• Of the 58% of adult Indian males who consume tobacco, barely 15% can afford cigarettes
• Bidi : Cigarettes ratio = 10 : 1
• Annual per capita adult cigarette consumption in India is approximately one tenth world
average : 141
• Future growth depends on relative rates of growth of per capita income and moderation in
taxes
18. CORE COMPETENCIES
• Powerful brands across segments
• Concentrate on Leadership in all segments which is focussed on
geographic & price having a extensive FMCG distribution network.
• It has a world class state of art technology and products.
• ITC's pursuit of international competitiveness is reflected in its initiatives
in the overseas markets. In extremely competitive markets.
• ITC offers high-quality, value-priced cigarettes and Roll-your-own
solutions.
• ITC's cigarettes are produced in its state-of-the-art factories at Bengaluru,
Haridwar, Saharanpur and Kolkata.
19. STRATEGY ANALYSIS OF ITC
CIGARETTES
• Sustain multiple drivers of growth, matching internal
capabilities with emerging market opportunities
• Pursue World class competitiveness in the entire
value chain
• Best-in-class in terms of:
• Internal Vitality
• Market Standing
• Profitability
20. PAST AND PRESENT STRATEGY OF
ITC CIGARETTES
• To be filled by andy bhai
21. THE STRATEGIC OPTIONS FOR
DRIVING GROWTH
• Expertise in a particular type of product is the anchor. New
growth is created by expanding sales of that product to new
customer segments.
• A particular target customer is the anchor. Growth is created
by selling new products or services to the same customer
base.
• A particular technology is the anchor. Finding any new
“home” for that technology creates growth.
23. Our Learning
• This assignment gave us the inside out view of the cigarette industry.
• The different types of strategies that a company can use in the FMCG
sector.
• The practical implementation of different strategy in cigarette industry.
• The kind of promotional strategies are used by the company especially
when they are in a industry which cannot advertise.
• The pull back strategy they used while raising the prices of cigarette.
