Indian Tobacco Company: a Strategic Analysis Essay

24301 Words Dec 4th, 2012 98 Pages
Indian Institute of Management, Lucknow

ITC Ltd: A Strategic Analysis
Submitted to: Prof. Arun K Jain

In partial fulfillment of the requirements of the course
Strategic Management I

Submitted by
Saurav Goswami (ABM08012)
Anuj Saraf (PGP27204)
Kaushal Mathur (PGP27219)
Sudhanshu Chawla (PGP27255)
Section “D” Group 1

Letter of Transmission

TO: Prof. Arun K. Jain, Strategy Group
Indian Institute of Management, Lucknow
FROM: Group 1, Section D
Strategic Management Class

DATE: March 23, 2012

SUBJECT: Strategic Analysis of ITC Ltd.

Dear Sir, You had entrusted us with a project to analyze the strategy of any company of our choice using the frameworks given in the prescribed textbook. We chose
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In the past 100 years of its existence ITC has diversified into a variety of business segments, including paperboards, paper and packaging, hotels, lifestyle retailing, safety matches, agarbatti, branded stationery, agricultural commodities, and FMCG; however, cigarette manufacturing and sales remains its largest economic activity in revenue terms.
The strategic direction to the company is given by its vision and mission statements which focus on India centric growth and sustainability. It is core values are governed by six guiding principles with customer focus being amongst the most prominent of them. Its corporate governance policy is governed by the principles of executive freedom and corporate accountability which results in a three tier corporate governance structure.
ITC’s main business is in cigarettes which is a highly regulated industry. This industry has tremendous growth opportunities but also faces a lot of political and legal risk. A five force analysis of the industry showed that the industry is competitive due to low product differentiation and price sensitive consumers. ITC’s nearest rivals are GPI Ltd and VST Industries Ltd, which lag behind it considerably. The key success factor for ITC in this industry have a diverse product portfolio, a strong distribution network, a very strong brand recognizance and effective pricing strategies.
Through a SWOT analysis led to the conclusion that ITC is

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