SWOT Analysis ITC

ITC is one of India's biggest and best-known private sector companies. In fact it is one of the
World's most high profile consumer operations. This SWOT analysis is about ITC. Its
businesses and brands are focused almost entirely on the Indian markets, and despite being
most well-known for its tobacco brands such as Gold Flake, the business is now diversifying
into new FMCG (Fast Moving Consumer Goods) brands in a number of market sectors -
including cigarettes, hotels, paper, agriculture, packaged foods and confectionary, branded
apparel, personal care, greetings cards, Information Technology, safety matches, incense
sticks and stationery. Examples of its successful new FMCG products include:
 Aashirvaad - India's most popular atta brand with over 50% market share. It is also
present in spices and instant mixes.
 Mint-o - Mint-0 Fresh is the largest cough lozenge brand in India.
 Bingo! - a new introduction of finger snacks.
 Kitchens of India - pre-prepared foods designed by ITC's master chefs.
 Sunfeast - is ITC's biscuit brand (and the sub-brand is also used on some pasta
products).

Strengths
ITC leveraged it traditional businesses to develop new brands for new segments. For
example, ITC used its experience of transporting and distributing tobacco products to remote
and distant parts of India to the advantage of its FMCG products. ITC master chefs from its
hotel chain are often asked to develop new food concepts for its FMCG business.
ITC is a diversified company trading in a number of business sectors including cigarettes,
hotels, paper, agriculture, packaged foods and confectionary, branded apparel, personal care,
greetings cards, Information Technology, safety matches, incense sticks and stationery.

Weaknesses
The company's original business was traded in tobacco. ITC stands for Imperial Tobacco
Company of India Limited. It is interesting that a business that is now so involved in
branding continues to use its original name, despite the negative connection of tobacco with
poor health and premature death.

To fund its cash guzzling FMCG start-up, the company is still dependant upon its tobacco
revenues. Cigarettes account for 47 per cent of the company's turnover, and that in itself is
responsible for 80% of its profits. So there is an argument that ITC's move into FMCG (Fast
Moving Consumer Goods) is being subsidised by its tobacco operations. Its Gold Flake
tobacco brand is the largest FMCG brand in India - and this single brand alone hold 70% of
the tobacco market.

Opportunities
Core brands such as Aashirvaad, Mint-o, Bingo! And Sun Feast (and others) can be
developed using strategies of market development, product development and marketing
penetration.

ITC is moving into new and emerging sectors including Information Technology, supporting
business solutions.
e-Choupal is a community of practice that links rural Indian farmers using the Internet. This
is an original and well thought of initiative that could be used in other sectors in many other
parts of the world. It is also an ambitious project that has a goal of reaching 10 million
farmers in 100,000 villages. Take a look at eChoupal here
http://www.itcportal.com/agri_exports/e-choupal_new.htm

ITC leverages e-Choupal in a novel way. The company researched the tastes of consumers in
the North, West and East of India of atta (a popular type of wheat flour), then used the
network to source and create the raw materials from farmers and then blend them for
consumers under purposeful brand names such as Aashirvaad Select in the Northern market,
Aashirvaad MP Chakki in the Western market and Aashirvaad in the Eastern market. This
concept is tremendously difficult for competitors to emulate.

Chairman Yogi Deveshwar's strategic vision is to turn his Indian conglomerate into the
country's premier FMCG business.

Per capita consumption of personal care products in India is the lowest in the world offering
an opportunity for ITC's soaps, shampoos and fragrances under their Wills brand.

Threats
The obvious threat is from competition, both domestic and international. The laws of
economics dictate that if competitors see that there is a solid profit to be made in an emerging
consumer society that ultimately new products and services will be made available. Western
companies will see India as an exciting opportunity for themselves to find new market
segments for their own offerings.

ITC's opportunities are likely to be opportunities for other companies as well. Therefore the
dynamic of competition will alter in the medium-term. Then ITC will need to decide whether
being a diversified conglomerate is the most competitive strategic formation for a secure
future.

TC was incorporated on August 24, 1910 under the name of 'Imperial Tobacco Company of
India Limited'. Its beginnings were humble. A leased office on Radha Bazar Lane, Kolkata,
was the centre of the Company's existence. The Company celebrated its 16th birthday on
August 24, 1926, by purchasing the plot of land situated at 37, Chowringhee, (now renamed
J.L. Nehru Road) Kolkata, for the sum of Rs 310,000