bcg
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TRANSCRIPT
BCG Matrix for ITC Ltd.
Group 4
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 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
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.
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 & 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%
Market attractiveness & Competitive strength is also important.
Act 2
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•Paperboards/ Packaging.•Agri business.
?•FMCG- Others
Cows•FMCG-Cigarettes
Dogs •Maybe 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.