SUMMER TRAINING PROJECT REPORT

ON
“From Hypothesis to Hire: Navigating Talent Acquisition ”
AT

Submitted in partial fulfillment of the requirement

For the award of degree
of
MASTER OF BUSINESS ADMINISTRATION
SESSION - (2024-2025)
SUBMITTED BY:
Name: RAUSHAN KUMAR
Class: MBA- 2nd year
University Roll No.- 2302720700168

External Guide- Mr. Lalit Choudhary Internal Guide- Prof.

Avinash Chouhan

GREATER NOIDA INSTITUTE OF TECHNOLOGY(MBA Institute)

Greater Noida
(Affiliated to Dr. A.P.J. Abdul Kalam Technical University,
Lucknow
 Director Certificate

This is to certify that the work which is being presented in this Summer Internship

Project report entitled “From Hypothesis to Hire: Navigating Talent Acquisition” is an

authentic record of the RAUSHAN KUMAR carried out under supervision of Dr.

RAJ KUMAR TOMAR. The statements made by the candidate are correct to the best

of my knowledge.

Dr. Anshul Sharma

(Director)
GNIOT MBA Institute
Date:

(Seal of the Department/ College)

 SUPERVISOR CERTIFICATE

This is to certify that the work which is being presented in this Summer Internship

Project Report entitled “From Hypothesis To Hire – Navigating Talent

Acquisition” is an authentic record of the RAUSHAN KUMAR carried out under my

supervision. The statements made by the candidate are correct to the best of my

knowledge.

Dr. RAJ KUMAR TOMAR

(Asst. Professor)
GNIOT MBA Institute
Date:
 DECLARATION

I RAUSHAN KUMAR, student of MBA III Semester, studying at Greater Noida

Institute of Technology (MBA Institute), Greater Noida , hereby declare that the

summer training report on “ From Hypothesis to Hire: Navigating Talent Acquisition ”

submitted to Dr. A.P.J. Abdul Kalam Technical University, Lucknow in partial

fulfillment of Degree of Master of Business Administration is the original work

conducted by me.

The information and data given in the report is authentic to the best of my knowledge.

This summer training report is not being submitted to any other University for

award of any other Degree, Diploma and Fellowship.

(RAUSHAN KUMAR )
 ACKNOWLEDGEMENT

It is my pleasure to be indebted to various people, who directly or indirectly

contributed in the development of this work and who influenced my thinking, behavior,
and acts during the course of study.
I am thankful to RAJ KUMAR TOMAR Sir for his support, cooperation, and
motivation provided to me during the training for constant inspiration, presence and
blessings.
I also extend my sincere appreciation to our respected Deen Sir
Mr. Pankaj Sinha who provided his valuable suggestions and precious time in
accomplishing my project report.
Lastly, I would like to thank the almighty, parents, Director and HOD of the institute
for their moral support and my friends with whom I shared my day-to-day experience
and received lots of suggestions that improved my quality of work.

(RAUSHAN KUMAR)
 TABLE OF CONTENTS

S.No Topic Page No.

1 Introduction of the topic 01-04

2 Objective 05-08

3 Scope of the Study 09-13

4 Company Profile 14-19

5 Research Methodology 20-23

6 Data Interpretations 24-27

7 Results and Findings 28-31

8 Conclusions 32-38

9 Limitations of the Study 39-46

10 Suggestions and Recommendations 47-54

11 Bibliography 55-58
 INTRODUCTION TO ITC

INDIAN TOBACCO COMPANY (ITC) was incorporated on August 24, 1920 under the
name Imperial Tobacco Company of India Limited. In recognition of the ITC’S multi
business portfolio encompassing a wide range of business. Established in 1910, ITC limited
is a diversified conglomerate with business spanning fast moving consumer goods,
comprising foods, personal care, cigarettes and cigar, branded apparel, education &
stationary products, incense sticks and safety matches, hotels, paperboards and packaging,
Agri business and information technology. ITC’s aspiration to be an exemplar in
sustainability practices is manifest in its status as the only in the world, of its size and
diversity, to be
carbon, water and solid waste recycling positive.

ITC’s business and value chains create sustainable livelihoods for more than 6 million
people, a majority of whom represent the poorest in rural India. ITC is the country’s leading
FMCG marketer, the clear market leader in the Indian paperboard and packaging industry, a
globally acknowledged pioneer in farmer empowerment through its wide-reaching Agri
business, a prominent noted chain in India that is trail blazed in “responsible luxury”.
ITC’s wholly- owned subsidiary, ITC infotech, is a specialized global digital solutions
provider. ITC’s new consumer goods business have established a vibrant portfolio of
25- world-class Indian brands that create and retain value in India. ITC’s world class FMCG
brands including Aashirwaad, sunfeast, yippee!, bingo !, B Natural, ITC Master chef, Fabelle,
sunbean, fiama, vivel. Savlon, classmate, paperkraft, mangaldeep, aim and other have
garnered encouraging consumer franchise within a short span of time.

The competitiveness of ITC’s diverse business rest on the strong foundations of

institutional strength derived from in deep consumer insights, cutting-edge Research and
Development, differentiated product development capacity, brand building capacity, world-
class manufacturing infrastructure, extensive rural linkages, efficient trade marketing and
distribution network and dedicated human resources. ITC’s ability to leverage internal
synergies residing across its diverse business lends a unique source of competitive advantage
to its products and services.
ITC’s ‘Nation First: sab saath badhein’ philosophy underlines its core belief in building a
globally competitive and profitable Indian enterprise that marks an exemplary contribution to
creating larger societal value. ITC is the only enterprise in the world of comparable
dimensions to be carbon-positive, water positive and solid waste recycling positive for over
adecade now.
ITC’s ‘Wellbeing Out of Waste Program (WOW)’, that comprehensively address the
problem of solid waste management of which plastic is a significant component, provides an
end to
end sustainable and scalable solution that has reached out to many citizens in the country.

ITC has implemented largescale interventions in climate-smart and sustainable agriculture

that make a meaningful contribution to the hon’ble Prime Minister’s vision of doubling
farmers incomes. ITC has launched an integrated program titled ‘Baraah mahine hariyali’ to
give a new dimension to the complex task of multiplying farmer incomes. ITC is investing
inIndia’s future by building world-class consumer goods and factories and iconic hospitality
and that will contribute to the country’s competitive capacity. These investment projects
underpin the company’s support to the Government’s ‘Make in India’ vision.
 REVIEW OF LITERACY

The chapter of the literature review is considered as the most critical chapter of a study as it directly
contributes to enhancing the knowledge base of the researcher with regards to the subject matter. In
this chapter, the researcher focuses on searching and evaluating differently available literature to gain
a better understanding of the topic selected for investigation. The viewpoints and work carried out by
other researchers and authors are taken into consideration in this chapter. Here, different themes are
developed by the researcher to gain in-depth information about the topic chosen for the study. The
key themes covered in the present section of the literature review are an overview of the distribution
strategy of ITC among FMCG sector and the structure of distribution channel.

1. Channels: This means the way or system by which goods travels form the original producers
to the ultimate consumer. It could be seen as the course in which goods and service move from
one place to another.
2. Distributors: These are organization which have contract to buy a firm's goods and services
and sell them to third parties.
3. Distribution: It is the transfer of goods from the producer to the consumer. It can be said to be
the movement and handling of goods form the point of production to the point of consumption
or use.
4. Agent: These are people who buy or sell on behalf of a firm without selling or buying
anything outside the agreeme
5. nt made by him and the firm. They normally earn their profits from commission payment
made in return to them in negotiating business transaction.
6. Retailer: These are independent traders who sell or operating outlets "selling at retail" to
household consumers.

7. Wholesalers: These are independent traders who sell at wholesale to other business
organization either for the purpose of resale or for business use.

8. Evaluating: This means to assess the effect of the different distribution channels on
manufactured goods.

9. Effective: The word "Effective" mean to bring the desired effect or producing the intended
result thereby making a striking impression on something.
 - Product Profile

Personal Care Products, Agarbatti, Matchsticks:

ITC entered the Personal Care Business in 2005, and the portfolio has
grown under the 'Essenza Di Wills,' 'Fiama,' 'Vivel,' and 'Superia'
brands, all of which have received positive consumer feedback and
have been gradually expanded nationally. With the launch of Engage
deodorants in May 2013, the company expanded its product portfolio.
In 2015, ITC entered the health market with the acquisition of the
Savlon and Shower to Shower brands. Charmis was bought by the
company in 2017 to expand its skincare product. ITC purchased the
Nimyle brand in 2018 to join the floor cleaning market. The company
also created the Dermafique brand in 2018, entering the luxury skincare
product market.
In 2020, the Personal Care Product Business launched multiple
personal and home hygiene products and entered the fruit and vegetable
wash category with the launch of the brand Nimwash. Nimeasy, a
dishwasher gel, was launched in 2021.
In 2003, ITC began marketing Mangaldeep Agarbattis (Incense Sticks)
sourced from small-scale and cottage units as part of its business plan
to create numerous drivers of growth in the FMCG sector.
Popular brands including Aim, and Homelites are among the Safety
Matches available from ITC. These brands effectively satisfy the needs
of various consumer segments through differentiated product features,
formats, and innovative value addition.

The product portfolio of PCP and AGMT products is differentiated

based on the pack size of each product, On each SKU, the Retail margin
on MRP (only retailers), and Schemes (retailers and wholesalers) are
provided, which varies each month.
The product portfolio of PCP and AGMT products is differentiated based on the pack size of each
product, On each SKU, the Retail margin on MRP (only retailers), and Schemes (retailers and
wholesalers) are provided, which varies each month.

● Schemes sheets for March922 and April922 and the PCP and AGMT product catalog have been
uploaded to Google Drive, Download them from here:Google Drive Link
 OBJECTIVES OF ANALYSIS

Industry analysis is a market assessment tool used by business and analysis to understand the
competitive dynamics of an industry. It helps them get a sense of what is happening in an
industry, for example, demand-supply statistics, degree of competition within the industry,
state of competition etc. It helps them to identify both the opportunities and threats coming
their way and gives them a strong idea of the present and future scenario of the industry. It is
crucial because it helps a business understand market conditions. It helps them forecast
demand and supply and consequently, financial returns from the business. It indicates the
competitiveness of the industry and cost associated with entering and existing the industry.
Analysis helps to identify which stage an industry is currently in, whether it is still
growing and there is scope to reap benefits or has it reached in saturation point.
OBJECTIVES OF INDUSTRY ANALYSIS:

□ To understand how industry structure derives competition, which determines the

levelof industry profitability.
□ To assess industry attractiveness.
□ To use evidence on changes in industry structure to forecast future profitability.
□ To formulate strategies to change industry structure to improve industry profitability.
□ To identify key success factors.
TYPES OF INDUSTRY ANALYSIS:

1. COMPETITIVE FORCES MODEL (PORTER’S FORCES):

According to Porter, analysis of the five forces gives an accurate impression of the
industry and makes analysis easier. The five forces are:
□ Intensity of industry rivalry.
□ Threat of potential entrants.
□ Bargaining power of suppliers.
□ Bargaining power of buyer.
□ Threat of substitute goods and services.

2. BROAD FACTORS ANALYSIS (PESTLE ANALYSIS):

It is commonly called the PESTLE analysis stands for Political, Economic, Social and
Technological. PEST analysis is a useful framework for analyzing the external
environment.
3. SWOT ANALYSIS:
SWOT Analysis of ITC Ltd. at Shree Krishna Enterprises .

● This analysis demonstrates the internal attributes of the organization,i.e Shree Krishna Enterprises,
Kumhrar by showing its strengths and weaknesses and external attributes with the help of
opportunities and threats.

● This SWOT analysis is limited to the markets of Mulchand Path, Bhootnath, Kanti Factory
Road, Transport Nagar, Bhagwat Nagar, Bazar Samiti,and Sandalpur for the PCP and
AGMT products.
 BCG Matrix of ITC Ltd at SPAR HYPERMART

● The Boston Consulting Group Matrix (BCG Matrix), also referred to as the product
portfolio
matrix, is a business planning tool used to evaluate the strategic position of a firm9s brand
portfolio.

● This BCG matrix is limited to the markets of Factory, SPAR HYPER MART , and GURUGRAM
for the PCP and AGMT products.
ITC FMCG - Convenience Foods & Snacks products

As consumer needs evolve, so does our portfolio of offerings. With increasing preferences for
convenience foods and snacks, ITC Foods is constantly diversifying our range of ready-to-eat
gourmet foods, instant meals and healthy, tasty, preservative free snacks. From delectable healthy
snacks, biscuits, cookies, cakes and exquisite chocolates to innovative starters, biryani, and gravies
inspired by the rich heritage of authentic Indian cuisine, our packaged convenience food and beverage
lines by well-loved brands, we have it all!

An array of healthy snacks

Under convenience foods and snacking, ITC has a gamut of ready to eats, instant mixes, frozen and
bridge snacks, chocolate and biscuits and much more. The portfolio spans popular brands like
Sunfeast, Kitchens of India, ITC Master Chef, Bingo!, YiPPee!, and Aashirvaad and addresses the
tastes of consumers across geographies. Already, several have made it to leadership positions in their
segments.
ITC is constantly exploring new ways to expand its range of snacks and convenience foods, with
nutrition and health being important factors in developing
 PROFILE OF FMCG INDUSTRY

Business Process of the FMCG Industry Distribution channels can be understood by studying the
elements that form these distribution channels. Distribution channels consist of different independent
businesses which are aligned with the manufacturing companies to distribute the products from the
source to the ultimate customer.

FMCG distribution channels consist of three important entities: agents, merchants and facilitators.
Agents generate sales by promoting a company‘s product but they never stock or buy the product
themselves. An agent can be an independent person or a member of the company itself. Merchants
such as retailers, wholesalers or stockists buy and stock the products in bulk and them supply them to
other retailers or sometimes directly to the consumer.

Merchants are usually independent but sometimes a manufacturing unit has their own wholesale or
retail departments. Facilitators, as the name indicates, facilitates the transportation of goods
manufactured from one place to another. Facilitators include logistic services, warehouse owners,
independent distributors who are just involved in storing and transporting the manufactured product
and not promoting or trading them.

FMCG distribution channels are designed using these three entities depending on the market needs,
type of product and by also considering the competitive strategy. Structure of FMCG Distribution
Channels

The FMCG channel structure varies across countries but all channels can be described using simple
concepts such as directness, levels, density, variety, novelty. Directness refers to the transactions
occurring between the manufacturers and customers without the aid of the intervening member.
Indirect distribution occurs when the manufacturer uses distribution channels to supply products to
the consumer.

The concept of level refers to the number of channels involved in transferring the product from the
manufacturer to the ultimate consumer. In the automobile sector, manufacturers are involved with
franchise dealers who in turn supply the products to the end consumer.
This is one level channel. In the FMCG industry, manufacturers often sell the goods to wholesalers,
who sell it to the retailers, who in turn sell it to the consumers. This is a two level channel.
Density refers to the number of outlets available within a particular area. Depending on the number of
outlets, a distribution channel is considered as exclusive or intensive. The distribution of automobiles
have fewer outlets in a city and is considered ass exclusive while the distribution of soaps with
hundreds of outlets including wholesalers, supermarkets, grocery stores is considered as intensive.

Variety refers to the various type of outlet a product is sold. Biscuit distribution may exhibit high
variety since they are sold at various outlets including paan shops, grocery store, canteens,
supermarket, general stores and even online etc.

While the distribution of sarees may exhibit low varieties since they are sold only at particular stores.
Novelty refers to the new channels utilized by manufacturing companies to distribute their product.
Like online sales and vending machines is relatively new to India and considered as a novelty. The
structure of the distribution channel is very traditional and unique.

The major components in the Indian distribution channel include – retail network, wholesale network
and logistics infrastructure. The consumer majorly interacts with retail outlets. India has over 9
million retail outlets in the distribution channel.

These include grocery stores, paan shops, supermarkets etc. India has only 8% of the organized retail
distribution penetration. Traditional retail in India offers consumers a number of advantages like
convenience, home delivery, credit, and personalised service.

On the other hand, modern retail offers periodic promotional offers, lower prices, wider assortment, a
better ambience, and higher quality brands.

The reason for such widespread existence of the traditional market is due to the availability of lower
rentals, cheap labour cost, credit from suppliers, fewer tax duties and a legal framework which
prevented the Foreign Direct Investment (FDI) until recently. Factors Affecting the Distribution
System Modernization in Indian FMCG has picked up some sectors like apparels, footwear, textile,
watches etc.

The change is been witnessed on both the supply and demand side. Towards Supply end, factors
supporting modernization are the large investments in retail made by brand owners in watches,
textiles, and footwear; development of malls and shopping centers; and the entry of large Indian
business groups into grocery and electronics retailing. Demand.

factors include increased disposable income among consumers, greater brand consciousness, a
greater appreciation of ambiance and air conditioning, and the perception of shopping as a rewarding
leisure activity. The popularity of traditional retail in India could be explained by the presence of a
largely rural and BOP consumer segment which does not have access to modern food retail outlets.
Market Demand and Supply-

Contribution to GDP- Revenue Generation Factors Affecting Demand of FMCG Products

ITC is one of India's foremost multi-business enterprise and is rated among the World's Best Big
Companies, Asia's 'Fab 50', and the World's Most Reputable Companies by Forbes magazine. It is
also rated as 'India's Most Admired Company' in a survey conducted by Fortune India magazine and
Hay Group.

ITC also features as one of the world's largest sustainable value creator in the consumer goods
industry in a study by the Boston Consulting Group. ITC has been listed among India's Most Valuable
Companies by Business Today magazine.

The Company is among India's '10 Most Valuable (Company) Brands' according to a study
conducted by Brand Finance and published by the Economic Times. ITC also ranks among Asia's 50
best performing companies compiled by Business Week. Fast-moving consumer goods (FMCG)
sector is India‘s fourth largest sector with household and personal care accounting for 50% of FMCG
sales in India.

Growing awareness, easier access and changing lifestyles have been the key growth drivers for the
sector. The urban segment (accounts for a revenue share of around 55%) is the largest contributor to
the overall 10 revenue generated by the FMCG sector in India.

However, in the last few years, the FMCG market has grown at a faster pace in rural India compared
to urban India. Semi-urban and rural segments are growing at a rapid pace and FMCG products
account for 50% of the total rural spending.

ITC: Enduring Value 2020 In November 2020, ITC Paperboards announced its plan to focus on
sustainable packaging solutions In November 2020, ITC Fabelle launched La Terre, an earth positive
chocolate; plans an indigenous value chain for expansion In October 2020

ITC partnered with JK Tyre to further strengthen JK's connect with India‘s hinterland customers ITC
Ltd completed the acquisition of spice-manufacturer Sunrise Foods Private Ltd at an upfront cash deal
price of Rs. 2,150 crore (US$ 305.01 million) ITC launched Savlon Germ Protection wipes ITC
launched packaged lassi in Kolkata under its AashirvaadSvasti brand to expand its dairy business.
2019

ITC acquired 33.4% shares in Bengaluru-based start-up, Delectable Technologies Launched the
world‘s most expensive chocolate priced at Rs. 4,30,000 (US$ 6,152) per kilogram under the Fabelle
brand ITC planned to enter dairy beverages market in India with an expectation to get a 5-10%
market share in first year of operation By collaborating with SWACH, ITC launched a first of its kind
multi-layer plastic (MLP) collection programme in Pune 2018 ITC was the most valued FMCG
company in India 2010 Expanding the Tobacco Portfolio 2005 Entered Personal Care Products -
Expert Solutions for Discerning Consumers 11 2002 Education & Stationery Products - Offering the
Greenest products and Agarbattis& Safety Matches - Supporting the Small and Cottage Sector 2001
Branded Packaged Foods - Delighting Millions of Households 1910 Incorporated under the name
Imperial Tobacco Company of India Limited
 MARKET SIZE

Market Size The retail market in India is estimated to reach US$ 1.1 trillion by 2020
from US$ 840 billion in 2017, with modern trade expected to grow at 20 25% per
annum, which is likely to boost revenue of FMCG companies. Revenue of FMCG
sector reached Rs. 3.4 lakh crore (US$ 52.75 billion) in FY18 and is estimated to reach
US$ 103.7 billion in 2020. From October 2020 to December 2020, the FMCG market
rose 7.1%, driven by food items, health, hygiene and rural areas. Rise in rural
consumption will drive the FMCG market. It contributes around 36% to the overall
FMCG spending. In the third quarter of FY20 in rural India, FMCG witnessed a
double-digit growth recovery of 10.6% due to various government initiatives (such as
packaged staples and hygiene categories); high agricultural produce, reverse migration
and a lower unemployment rate.
 Contribution to GDP
The FMCG sector is the fourth largest industry in India contributing nearly 20% to the Gross
Domestic Product. FMCG, or fast-moving customer goods, sector refers to three main categories of
products: Personal care, housing, and food. This sector witnessed growth through leaps and bounds in
its early years of development; however, in the last few years, its growth has flat-lined.

This is mainly due to government policy and changes in the overall marketplace. Surprisingly, these
changes have turned favourable for the sector starting from this year. The FMCG sector is predicted
to undergo the highest level of growth in its history in India. It is expected to grow at higher single-
digit and even lower-double digit levels in the October-December Quarter of FY2018.

FMCG sector is set to grow at a compound annual growth rate of 20.36% up to the year 2020 and set
to grow by as much as $100 billion. Investments/ Developments

The Government has allowed 100% Foreign Direct Investment (FDI) in food processing and single-
brand retail and 51% in multi-brand retail. This would bolster employment, supply chain and high
visibility for FMCG brands across organised retail markets thereby bolstering consumer spending and
encouraging more product launches.

The sector witnessed healthy FDI inflows of US$ 17.8 billion from April 2000 to September 2020.
Some of the recent developments in the FMCG sector are as follows: In February 2021, Food and
snack company, Haldiram's partnered with Africa's Future life to bring its nutritional food product
range to India.

The two companies launched a range of four products—Smart Foods, Smart Oats and Ancient Grains,
Crunchy Granola and High Protein. In January 2021, Tata Consumer Products announced that it is
looking for ways to add more of its beverages‘ portfolio onto a direct-to-consumer platform to capture
the urban online market.

In January 2021, Tata Consumer Products introduced two new products, TATA Tea Tulsi Green and
TATA Tea Gold Care, and reformulated its existing Tetley Green Tea, with added Vitamin C.

In January 2021, Dabur India decided to foray into the ‗cow ghee‘ category. These product will be
prepared from milk sourced from indigenous cows bred in Rajasthan. In January 2021, Dabur India
decided to foray into the ‗cow ghee‘ category.

These products will be prepared from milk sourced from indigenous cows bred in Rajasthan. 13 In
January 2021, Del Monte has launched a special 1 litre pouch pack in India, priced at Rs. 250 (US$
3.42), thereby making olive oil affordable to consumers.

In January 2021, FMCG businesses in India are planning to expand their oral care portfolio by
entering new and niche categories such as mouth sprays, ayurvedic mouth cleansers and mouthwashes
to meet the rising consumer demand for hygiene products. For example, Pulling oil, an ayurvedic
concoction used as a morning oral cleansing ritual based on centuries-old Ayurvedic regimen, was
launched by companies such as Colgate Palmolive (India) Ltd. and Dabur India.

In December 2020, Godrej Consumer Products Limited (GCPL), under its Godrej ProClean brand,
has ventured into home cleaning products to meet the rising demand for cleaning and hygiene
products among Indian consumers.

The home cleaning products segment, which includes branded floor, toilet and bathroom cleaners, is
estimated to be ~ Rs. 2,600 crore (US$ 354.05 million). FMCG companies are focusing on
strengthening their e-commerce engagement. An Ayurveda baby care range has been introduced by
Dabur, which will be sold only on ecommerce platforms.

With its contribution expanding from 1.5% to 5.6%, the e-commerce division of the group has more
than doubled over the previous year. Similarly, in the first quarter of FY21, Marico's e-commerce
sector has grown 37% YoY, while Emami‘s ecommerce business doubled to >100%. Government
Initiatives Some of the major initiatives taken by the Government to promote the FMCG sector in
India are as follows:

On November 11, 2020, Union Cabinet approved the production-linked incentive (PLI) scheme in 10
key sectors (including electronics and white goods) to boost India‘s manufacturing capabilities,
exports and promote the ‗Atmanirbhar Bharat‘ initiative.

Developments in the packaged food sector will contribute to increased prices for farmer and reduce
the high levels of waste. In order to provide support through the PLI scheme, unique product lines—
with high-growth potential and capabilities to generate medium- to large-scale jobs—have been
established.

The Government of India has approved 100% FDI in the cash and carry segment and in single-brand
retail along with 51% FDI in multi-brand retail.

The Government has drafted a new Consumer Protection Bill with special emphasis on setting up an
extensive mechanism to ensure simple, speedy, accessible, affordable and timely delivery of justice to
consumers.

The Goods and Services Tax (GST) is beneficial for the FMCG industry as many of the FMCG
products such as soap, toothpaste and hair oil now come under the 18% tax bracket against the
previous rate of 23-24%. Also, GST on food products and hygiene products have been reduced to 0-
5% and 12-18% respectively.

GST is expected to transform logistics in the FMCG sector into a modern and efficient model as all
major corporations are remodelling their operations into larger logistics and warehousing.

Road Ahead Rural consumption has increased, led by a combination of increasing income and higher
aspiration levels. There is an increased demand for branded products in rural India.

The rural FMCG market in India is expected to grow to US$ 220 billion by 2025 from US$ 23.6
billion in FY18. On the other hand, with the share of unorganised market in the FMCG sector falling,
the organised sector growth is expected to rise with increased level of brand consciousness,
augmented by the growth in modern retail. Another major factor propelling the demand for food
services in India is the growing youth population, primarily in urban regions.

India has a large base of young consumers who form majority of the workforce, and due to time
constraints, barely get time for cooking. Online portals are expected to play a key role for companies
trying to enter the hinterlands. Internet has contributed in a big way, facilitating a cheaper and more
convenient mode to increase a company‘s reach.

The number of internet users in India is likely to reach 1 billion by 2025. It is estimated that 40% of
all FMCG consumption in India will be made online by 2020. The online FMCG market is forecast to
reach US$ 45 billion in 2020 from US$ 20 billion in 2017.

It is estimated that India will gain US$ 15 billion a year by implementing GST. GST and
demonetisation are expected to drive demand, both in the rural and urban areas, and economic growth
in a structured manner in the long term and improved performance of companies within the sector.
Level and Type of Competition- Firms Operating in the FMCG
Industry

India's huge population has always been a significant factor for the growth of FMCG sector in the
country. Between 1950 and 1980, the consumption of FMCG products were relatively low due to the
low per capita income.

The post-liberalization era in India has witnessed a massive growth in the selling of products in the
domestic market. The Indian market also imported loads of products from overseas markets which
made increased the competition between the organized and the unorganized sector. The easing of the
trade barriers encouraged the MNCs to invest in the Indian market to cater to the needs of the
consumers.

The living standards rose in the urban sector due to high disposable income along with the rise in the
purchasing power of the rural families which increased the sales volume of various manufacturers of
the FMCG products in India. The large-scale companies such as HLL, Godrej Consumer, Marico,
Henkel, Reckitt Benckiser and Colgate have targeted the rural consumers and have also expanded
their retail chain in the mid-sized towns and villages.

On the contrary to this, Nestle has always targeted the market of urban India and focuses largely
upon the value added products for the elite class or upper middle class population. Like any other
business, the strong sophisticated growth of consumption and customer demand for FMCGs charge
this industrial sector with fierce rivalry among different competitors. Factors like new firms setting up
and threatening to become potential competition and products being substituted by similar ones
further contribute to market saturation.

Everyone wants to increase their market share while retaining existing customers. Last but not the
least, the bargaining powers of both suppliers as well as buyers are additional forces to reckon with.
The major competitive drivers focused upon in this article are the market, cost, and quality of the
products. Market Strategies Advertising and promoting products is crucial to successfully leading the
industrial market. Companies who forge reliable relationships with their customers and manage
information to date can know exactly the product that‘s profitable to their business.

Market Strategies

Advertising and promoting products is crucial to successfully leading the industrial market.
Companies who forge reliable relationships with their customers and manage information to date can
know exactly the product that‘s profitable to their business. When a new campaign is 16 introduced,
the existing companies in the relative niche can extend their range of products to remove that
competition.
Expenses should be directed to make their marketing techniques impressive, and more importantly,
visible to prospective clients. Moreover, some companies tend to be ready to even forgo revenues
from one of their existing products for a newer one and even scale down to focus on a particular one
if it can help the same brand retain its position in market.

The integration of online collaborative media makes it feasible for FMCG businesses to be
completely customer-centered, expanding their facilities and adapting to the needs and requirements
of new demographics.
Cost Strategies

A majority of the global population currently enjoys a stable and healthy income, which has naturally
led to an increase in consumer demand of FMCG products. Companies are tempted to reduce the cost
price of existing products or sell a greater quantity at the same rate.

The speed factor is responsible for ensuring a reduced competition risk while boosting profitability
and market share. Keeping up with the digital and mobile world of customers, a new strategy that has
come into play is to provide the market with products as quickly as possible.

Working to produce smaller batches so as to enhance shelf life and serve them the freshest products
in the market, the manufacturers are making sure a high production is available round the clock. One
example is of P&G‘s crusade that continuously launched superior products back to back every six
months to remove competition from imitators in US
.

Quality Strategies

The consumer now is also standing up to demand a quality product while rejecting a damaged
product outright. They are fast to switch sides if not satisfied. Even though some companies are not
handling their quality services efficiently, this is a major drive for others to invest a high capital.

New products that come with value-added benefits for different lifestyles fuel positive consumer
attitude and manage their loyalty towards the brand.

Not compromising on their quality, some large-scale companies maintain their status-quo by targeting
people from upper middle class or elite class only. The spirit of competition in FMCG market is a
global phenomenon and those willing to be innovative and proactive will surely hold an advantage
over others.

ITC Ltd Established in 1910

ITC Limited is a diversified conglomerate with businesses spanning Fast Moving Consumer Goods
comprising Foods, Personal Care, Cigarettes and Cigars, Branded Apparel, Education & Stationery
Products, Incense Sticks and Safety Matches; Hotels, Paperboards, and Packaging, Agri-Business and
Information Technology. ITC is among the top FMCG brands in India.  Revenue: Rs 51,321 Cr 
Employees:

 Market Cap: 320,094 Cr.

 ROE: 22.69 %

 Sales Growth (3Yrs): 7.25 %

 Promoter holding: 0.00 %

 Debt to equity: 0.00

 Price to book value: 5.47

Pricing Strategies

FMCG Industry Setting the overall price position against other products in the assortment, or against
competitors, is always a key challenge in FMCG / CPG. If you need to price a product (or service) in
a new market, it makes all the difference in the world if you understand customers' willingness-to-
pay. Demand / WtP curves like the ones above, show the optimal price point where the curve peaks.
In this example, the best price to optimize quantity is 10, whereas the optimal price for optimizing
revenue is 15. In the old days when research was expensive, this could be difficult to get through a
corporate approval if launching in many markets at once. These days, with cost-effective research
options from e.g. PriceBeam, the cost of getting these crucial insights should no longer be an issue.

Prospects And Challenges of the FMCG Industry

With digitization and globalization driving advancements, the possibilities have become endless. The
FMCG industry is characterized by a complex distribution network and intense competition forcing
firms to constantly work on supply chain innovation, which is great for consumers.

Companies with a structured supply chain system are bound to perform well, whereas those with
poorly managed supply chains will find it tough to even survive in this competitive market. There are
however some major challenges in FMCG sales process.

The household-products area, for example, has dropped from the sixth most profit-generating industry
at the start of the century to the tenth, measured by economic profit. Food products fell from 21st
place to 32nd. As a consequence, FMCG companies‘ growth in TRS lagged the S&P 500 by three
percentage points from 2012 to 2017.
Lack of BI support

The curve in technological advances has not been adopted by most FMCG firms, especially in their
sales process. Some of the common concerns include:

 Optimizing inventory and warehouse management

 Utilizing the consumer‘s purchasing preferences to make selling decisions

 Personalizing the consumer experience

 Leveraging automation to drive purchasing at different levels of the consumer‘s journey -

awareness, consideration, decision. 29 Automation in the sales team with the sales force automation
app could allow for players in the FMCG industry to find answers to the above and leverage these to
optimize profits and productivity.
Multi-channel process

The Indian FMCG sector has to work with a very complex distribution system comprising multiple
layers of numerous small retailers between the company and end customer. To increase market
penetration, Indian FMCG companies have realized that they need to reach out to consumers present
at the lower end of the economic pyramid. Consumerism has broadened the spectrum of opportunities
for the Indian FMCG sector. Eventually, companies will have to find innovative ways of balancing
market penetration and logistics cost.

Mismanaged supply chain

The difference in the supply chain functions defines the sales and revenue for the company to some
extent. With the passing years, there have been a number of changes in the supply chain process
which has made the process simpler but at the same time complicated things sometimes. Consumer
goods suppliers have to manage large volumes and fast rotation rates with distributors, so they
demand a transport and logistics chain capable of constant agility, not something every FMCG sales
process can cater to.

Shelf Space Vs ROI

Is your shelf space giving you enough ROI? It‘s important to understand what products to promote.
Shelf space is one of the biggest concerns FMCG firms not just in India, but all around the world
have. More doesn‘t always mean better and it‘s important for companies to have the data to figure out
what is working and what isn‘t.

Functioning in unethical

ways It is a common notion in distribution that only 50% of the promotion actually reaches the final
customer. This is due to the fact that many distributors work unscrupulously. Rather than playing the
role of the facilitator, they try to grab a significant part of the promotion budget for themselves. This
results in FMCG companies wasting a significant portion of their sales. Thus, FMCG companies end
up wasting a significant part of their resources on these issues, which do not really add any value to
their customers
Delivering personalized promotions

Modern retailers in India have been trying to extract higher margins from FMCG companies so as to
offer better deals to their customers. In India, the FMCG sector finds it difficult to offer the kind of
deep discounts that modern retailers have been demanding. On one hand, FMCG companies will have
to bypass their existing stockists and distributors, so there is a likelihood of channel conflict. On the
other hand, they also have to examine the impact of higher discounts to modern retailing on the
overall distribution system. As mentioned above, having a better understanding of the consumer
cannot just allow FMCG companies to provide better discounts, but this can be done at a more
reasonable cost to them.

Moving forward
One of the very first steps in the right direction for FMCG companies in India would be to look into
automation in some way or the other. The efforts towards addressing the above challenges should be
approached with controlled urgency. With ever-increasing digitization, there is no escaping from what
is going to be a complete evolution in the FMCG sales process.

Lack of Efficiency in Reading the Selling Scenario

As consumers are getting empowered by technology, FMCG market is witnessing a persistent change
in consumer behavior. Having a persuasive selling skill is not enough. Leaders in the FMCG
management need to read the existing selling scenario effectively and require the ability to predict the
upcoming pattern so that crucial decisions could be taken well on time. Field sales professionals can
play an important role in increasing the efficiency of FMCG management in reading the selling
scenario if the right tools and technology empower them. To effectively increase their ability to read
the selling scenario, FMCG management is required to invest in software that could help them in
several ways like:

1. Identify lost opportunities

2. Identify new avenues to target
3. Determine the ROI of their field sales strategy
4. Provide real-time visibility into the workflow system
5. Enhance sales forecasting
6. Help analyze the performance of each field sales professional relative to the target
 ANALYSIS

1. PORTER’S MODEL:

□ THREAT OF NEW ENTRANTS:

Threat of new entrants reflects how new market players impose threats to
the existing market players. If the industry will be profitable and barriers
to enter the industry will be low, it will attract more players and hence,
the threat of new entrants will be high.
ITC limited India will be facing high new entrants’ threat if:
- Existing regulations support the entry of new players.
- Consumers can easily switch the brands due to weak or no
brand loyalty.
- Initial capital investment is low.
- Building a distribution network is easy for new players.
- Retaliation from the existing market players is not a
discouraging factor.
Threats for new entrants:

- New product differentiation is very tough

- Access to distribution channels is tough.
- Capital requirements is very high.
- High taxes.

□ THREAT OF SUBSTITUTE PRODUCTS OR SERVICES:

The availability of substitute products or services makes the competitive

environment challenging for ITC ltd., and other existing players. High
substitute threat shows that customers can use alternative products/
services from other industries to meet their need. Various factors
determining the intensity of this threat for ITC limited.
Threats of substitute products or services:
- A cheaper substitute product/service is available from other industry.
 - The psychological switching costs of moving from industry
to substitute products are low.
- Substitute product offer the same or even superior
quality andperformance as offered by ITC ltd India first’s
product.
Although, the threat is substantially low:

- The switching cost of using the substitute product is high.

- Customers cannot derive the same utility from substitute
product asthey derive from the ITC.
Threat of substitute goods:

- Herbal cigarettes have failed.

- Nicotine patch have failed.
- Nicotine gums have also failed.
- Electronic cigarettes are almost failed.

□ RIVALRY AMONG EXISTING FIRMS:

The rivalry among existing firms shows the member of competitors that
give tough competition to the ITC ltd. High rivalry shows ITC ltd., India
can face strong pressure from the rival firms, which can limit each
other’s growth potential.
The rivalry factors which are a major strategic concern for ITC Ltd.:
- The company will face intense rivalry among existing firms if market
players are strategically diverse and target the same market.
- The rivalry will also be intense if customers are not loyal with existing
brands and it is easier to attracts other customers due to low
switching cost.
- Competitors with equal size and offering undifferentiated products
with slow industry growth tend to adopt aggressive strategies
againsteach other.
The rivalry factor will be low if:
- There are only a limited number of players in the market.
- The industry is growing at a fast rate.
- There is a clear market leader.
- The products are highly differentiated and each market
player targetsdifferent sub segments.
- The economic/psychological switching costs for consumers are high.
 - The exit barriers are low, which means firms can easily
leave theindustry without incurring huge losses.
Rivalry among competitors:

- Many competing players.

- Price competition continues
- Banned on advertisements for cigarettes
- Holds major market share.
□ BARGAINING POWER OF SUPPLIERS:

- It reflects the pressure exerted by supplier on business

organizations byadopting different tactics like reducing the product
availability, reducing the quality or increasing the prices.
- High supplier bargaining power can increase the competition in
theindustry and lower the profit and growth potential for ITC
Ltd.
- Weak supplier power can make the industry more attractive due
to highprofitability and growth potential.
Bargaining power of supplier will be high for ITC Ltd.:

- Suppliers have concentrated into a specific region

and theirconcentration is higher than their buyers.
- This force is particularly strong when the cost to switch
from onesupplier to other is high for buyers.
- When suppliers are few and demand for their offered product is
high, itstrengthens the supplier’s position against ITC Ltd.
- Suppliers’ forward integration weakness the ITC Ltd., position as
they also become the competition in that area.
- If ITC Ltd., is not well educated, does not have adequate
market knowledge and lacks the price sensitivity, it
automatically strengthensthe suppliers’ position against the
organization.
- Other factors – high product differentiation offered by suppliers,
inputsrequired but in small amounts, direct access to
distribution channels.
The bargaining power of suppliers will be low for ITC Ltd.:

- Suppliers are not concentrated.

- Switching costs are low.
- Product lacks differentiation.
- Substitute products are available.
 - ITC Ltd., is highly price sensitive and has adequate market knowledge.

□ BARGAINING POWER OF BUYERS:

- Bargaining power of buyers indicates the pressure that customers

exerton the business organization to get high quality products at
affordable prices with excellent customer services. This force
directly influences the ITC Ltd., ability to accomplish the business
objects. Strong bargaining power lowers profitability and makes the
industry more
competitive. Whereas, when buyer power is weak, it makes the industry less competitive
and increase the profitability and growthopportunities for ITC Ltd.
There are some factors that increase the bargaining power of buyer:

- A more concentrated customer base increases their bargaining

poweragainst ITC Ltd.
- Buyer’s power will also be high if there are few in number
whereas anumber of sellers are too many.
- Low switching costs also increases the buyers bargaining power.
- In case of corporate customers, their ability to do backward
integrationstrength their position in the market. Backward
integration shows the buyers ability to produce the
products themselves instead of purchasing them from ITC
Ltd.
- Consumers’ price sensitivity, high market knowledge and
purchasing standardized products in large volumes also increase
the buyers bargaining power.
Factors that decrease the bargaining power of buyers include:
- Lower customer concentration
- Customer’s inability to integrate backwards
- Low price sensitivity
- Lower market knowledge
- Higher switching costs
- Purchasing customized products in smaller

volumesPORTER’S 5 FORCE MODEL

IMPLICATIONS:
 □ The application of Porter five forces model in real world content
allows organizations to make wise strategic decisions. Impact and
importance ofeach of the five forces is context dependent. By using
Five force analysisITC Ltd., can determine the industry attractiveness,
make effective
entry/exist decisions and assess the influence of these forces on their own
business and competitors. Mostly, this model is considered as a starting
point and other frameworks are used in conjunction for a better
understanding of the external environment.
CONCLUSION ANALYSIS:

□ Threat of new entrants – LOW

□ Bargaining power of suppliers – LOW
□ Bargaining power of buyers – LOW
□ Threat of substitute products – LOW
□ Rivalry among competitors – HIGH

2. BROAD FACTORS ANALYSIS (PEST ANALYSIS):

Broad factors analysis, also commonly called the PEST analysis stands for
Political, Economic, Social and Technological. PEST analysis is a useful
framework for analyzing the external environment.
To use PEST as a form of industry analysis, an analyst will analyze each of the
4 components of the model:
1.) POLITICAL: Political factors that impact an industry include specific
policies and regulations related to things like taxes, environmental
regulations, tariffs, trade policies, labor laws, ease of doing business and
overall political stability.
2.) ECONOMIC: The economic forces that have an impact include inflation,
exchange rates, interest rates, GDP growth rates, conditions in the capital
market etc.
3.) SOCIAL: The social impact on an industry refers to trends among people and
includes things such as population growth, demographics (age, gender etc.)
and trends in behavior such as health, fashion and social movements.
4.) TECHNOLOGICAL: The technological aspects of PEST analysis
incorporate factors such as advancements and developments that change the
way a business operates and the ways in which people live their lives.
 ITC PESTLE ANALYSIS:

1.) POLITICAL FACTORS: The organization needs to follow various policies

that apply across the regions of its operations. Keeping a tab on the changing
policies is a mandate that the company needs to undertake, be it local or
national. The better stability of the government, the higher is the ease of
working in that region. There are various opportunities that ITC can utilize
and thus making it a strength rather than just a policy to be followed.
Considering the taxation policy, misuse related to discriminatory taxation
policy were eradicated and a new taxation system, that classifies these
products in a better way was introduced in India. Through GST has
reduced the effect of discriminatory taxation, the products
continue to be taxed. This has increased the expenditure of
the company, to monitor the changing cost of raw materials
and the different tax slabs they fall into. On the bright side,
the FMCG market in India is expected to triple in size by
2020, to Rs. 4,00,000 crores. This provides the company with
an opportunity to seize the opportunity of becoming a market
leader in various segments, by working in close ties with the
local governments as well as the central governments. The
trade wars between countries are expected to affect the
business of the organization, but yet the recent trade
agreements signed by India with various countries may rule

out the intensity of the trade war.

2.) ECONOMIC FACTORS: With India being a developing country, the more

stable the economic policies higher will be the disposable income, and better
will be the standard of living. This will benefit the company since it believes
in the development of all. The company preaches this thought through its
tagline “sab sath me badhein”. With any changes in the policies relating to
income, there will be a sharp change in the consumption of necessity goods. It
may be higher or lower depending upon the new policy. Any event that
causes a currency devaluation or fluctuation in the currency values, especially
in the developing markets. Further a change in the capital controls,
government
currency policies such as demonetization in India, or others, increase the
restrictions to the trade of raw materials or finished products to and from
different countries. ITC has invested over 6000 crores in the last decade and
created employment for over 20,000 employees directly and approximately 5
million people indirectly.
3.) SOCIAL FACTORS: A slight change in the operations of the company
can affect its profitability of a large scale, thus staying updated with the
recent
trends popular among the population is a must. The quality of its products is
of prime concern to ITC. Any deviation from the standard quality that the
society expects, is a major setback for the company. Since these products are
seen as a negative element in the society, the company needs to take due care
that it does not promote such products actively. The ban on advertising
products on
social media platforms keeps a check on the promotional activities of the
company. Since the concern for these products has increased in the
society, and with the need for overall health status improvement of the
society, the company needs to make sure that it clearly states the use of
any sort of
harmful products across its entire product line. The society is concerned with
the growing consumption of these products by minor-aged i.e. people below
the age of 18. The company needs to make sure that it runs proper awareness
programs, and proper information is transmitted through various platforms, to
prevent minor people from consumption of these products. The ability of the
company to success lies in its capability to analyze the changing trends and
grasp the requirements of the consumers. Only through continuous analysis
can the organization maintain its status in the market. Innovation is
something that the consumers expect of the company. The company believes
in effective growth for the country and believes in strengthening the rural
areas in the
country. The company has undertaken various CSR initiatives to empower
the impoverished farmers, with one of its initiatives being the e-Choupal. A
major impact on the development and growth of the company comes from the
level of talent of the workforce employed. With a higher level of skills and
education, the company can employ more people and thus enrich society
as well as increase its profitability.
 4.) TECHNOLOGICAL FACTORS: The company has undertaken various
initiatives on the technological end to stay relevant in the market. It utilizes the
various social media platforms to describe the various changes that are being
brought about by the company for the betterment of society. It also markets
and promotes its various products through the utilization of media to create an
emotional connect with its consumers. The company has recently launched the
first multi-layer plastic collection and recycling unit in Pune. Through this
venture, the company believes in creating a more sustainable environment
through the use of advanced technology. The company has set up established
new systems to constantly monitor all its operations and supply chain related
processes. Artificial Intelligence is another area where the organization can try
its luck. Since the world is moving towards digital, and advancement in
technology will help the organization increase its hold in the fields of
consumer engagement and insight discovery, smart manufacturing, agri-
value chains, supply chain agility, etc. With major changes in the
paperboards and packaging industry, ITC stands out with its latest
innovations of antifungal
coated cartons, micro-perforation for specific laminates, braille features for
labels and cold seal laminates for chocolates.

3. SWOT ANALYSIS:

SWOT (strengths, weaknesses, opportunities, and threats) analysis is a framework

used to evaluate a company's competitive position and to develop strategic

planning. SWOT analysis assesses internal and external factors, as well as current

and future potential. A SWOT analysis is designed to facilitate a realistic,

fact-based, data-driven look at the strengths and weaknesses of an organization,

initiatives, or within its industry. The organization needs to keep the analysis
accurate by avoiding pre-conceived beliefs or grey areas and instead focusing

on real-life contexts. Companies should use it as a guide and not necessarily as a

prescription.
SWOT analysis is a technique for assessing the performance, competition, risk,

and potential of a business, as well as part of a business such as a product line or

division, an industry, or other entity.

Using internal and external data, the technique can guide businesses toward

strategies more likely to be successful, and away from those in which they have

been, or are likely to be, less successful. Independent SWOT analysts,

investors, or competitors can also guide them on whether a company, product

line, or industry might be strong or weak and why.

□ STRENGTH: Strengths describe what an organization

excels at and what separates it from the
competition: a strong brand, loyal customer base, a
strong balance sheet, unique technology, and so on.
For example, a hedge fund may have developed a
proprietary trading strategy that returns
 market-beating results. It must then decide how to use
those

results to attract new investors.

□ WEAKNESS: Weaknesses stop an organization from performing at its

optimum level. They are areas where the business needs to improve
toremain competitive: a weak brand, higher-than-average turnover,
highlevels of debt, an inadequate supply chain, or lack of capital.
□ OPPORTUNITIES: Opportunities refer to favorable external factors
that could give an organization a competitive advantage. For
example, if a
country cuts tariffs, a car manufacturer can export its cars into a new

market, increasing sales and market share.

□ THREATS: Threats refer to factors that have the potential to harm

an organization. For example, a drought is a threat to a wheat-
producingcompany, as it may destroy or reduce the crop yield.
Other common threats include things like rising costs for materials,
increasing
competition, tight labor supply. and so on.

SWOT Table
Strengths
1. What is our Weaknesses
competitive 1. Where can we improve?
advantage? 2. What products are
2. What resources do underperforming?
we have? 3. Where are we lacking
3. What products are resources?
performing well?
Threats Opportunities
1. What new 1. What technology can we
regulations threaten use to improve operations?
operations? 2. Can we expand our core
 2. What do our operations?
competitors do
well? 3. What new market

segments can we explore?

3. What
consumertrends
threaten
business?

INTERNAL:
 What occurs within the company serves as a great source of information for the

strengths and weaknesses categories of the SWOT analysis. Examples of internal

factors include financial and human resources, tangible and intangible (brand

name) assets, and operational efficiencies.

Potential questions to list internal factors are:

● (Strength) What are we doing well?

● (Strength) What is our strongest asset?
● (Weakness) What are our detractors?
● (Weakness) What are our lowest-performing product lines?

EXTERNAL:

What happens outside of the company is equally as important to the success of a

company as internal factors. External influences, such as monetary policies,
market changes, and access to suppliers, are categories to pull from to create a list
of opportunities and weaknesses.1
 Potential questions to list external factors are:

● (Opportunity) What trends are evident in the marketplace?

● (Opportunity) What demographics are we not targeting?
● (Threat) How many competitors exist, and what is their market share?
● (Threat) Are there new regulations that potentially could harm our operations
orproducts?

ITC SWOT ANALYSIS:

● STRENGTHS OF ITC:

- ITC’s cigarette sector contributes a significant proportion of its sales tothe FMCG.
- Portfolio of Companies: under its name, ITC has 6 large and diverse
businesses that boost its total revenue and allow ITC to innovate andpursue other business

opportunities.

- Powerful brand: ITC is a large brand house with most of its

products leading the segments in which it works.
- ITC owns some of the most famous cigarette brands, such as the
GoldFlake and Classic. It also owns Sunfeast, one of India’s highest-
sellingbiscuits. Similarly, the Aashirvaad Chaki Fresh Ata, the Yippee!
, Engage, John Players, and Bingo are all among the industry leaders
in their respective groups.
- ITC’s hotel and property businesses are also doing well. With a
portfolio like this, ITC has become one of India’s most
dominant conglomerates and is revered all over the world.
 - Efficient Social Business Initiatives: The ITC has developed a
three-pronged strategy that focuses on building national
economic,social, and environmental resources.
- ITC has introduced initiatives such as E-Choupal, Choupal
Pradarshan Khet (CPK) that support grass-roots people, i.e. farmers.
Such initiatives have also enabled ITC to boost their brand
reputation as a
conventional tobacco producer.

- Inter and Intra-Divisional Synergy: ITC has effectively used the

strengths of core companies to push into newer products or categories.ITC has leveraged the

powerful distribution network of cigarette brands to build a market for its FMCG products.
 - In addition, ITC has leveraged the experience of food and bakery
itemsfrom its hotel company to become part of the Packaged
Food group.
- ITC has a large and competent management team. Clear brand
image,outstanding promotional goods Diversified range of
products and
services, including FMCG, hotel chains, paper & packaging, andagribusiness.

- Over 6500 E-Choupal CSR programs and sustainability

projects improve the brand identity of ITC to more than 4
million farmers.
- ITC has reduced personnel to more than 25.000
employees Goodservices for research and development.

● WEAKNESS OF ITC:
- High Proportion of Tobacco Product Revenues: ITC has made
continuous efforts to separate the FMCG sector from over-dependenceon tobacco products

and has been successful in doing so to some degree. Nonetheless, tobacco products remain the

biggest source of revenue contributing more than 60 percent to FMCG’s overall revenue.

- Tobacco Products Association has an impact on the brand: ITC has

made a great deal of effort to enhance its corporate image, but the
factthat ITC has many tobacco products in its portfolio has an impact
on its corporate image. The increase in the Tobacco Tax has an
effect onrevenue: due to the rise in the tax on tobacco products,
rates and,
subsequently, profits are affected.

- ITC is still dependent on its tobacco sales, and people

have cheaperalternatives and other brands.
- The hotel industry has not been able to build an
enormous marketshare.
● OPPORTUNITIES OF ITC:
- Acquisitions: ITC will continue to make strategic acquisitions, as it has
done in the past, by purchasing Savlon from Johnson & Johnson and
B Natural from Balan Natural Foods. Keeping in mind that the
product fits into the current distribution network, ITC will try to
increase its product range and broaden its non-tobacco FMCG
business and thus improve its revenue base.
- Growth in purchasing power and changing lifestyles: ITC can tap into
rising buying power and changing customers’ lifestyles in India. It will
help to raise sales for all of its companies.
- Growing Personal Hygiene as well as Food Processing Industry in
India: ITC should use its distribution channel in the Personal
Hygiene and Food Processing Industry to capitalize on the growth of
categoriesand thus increase revenue.
- Tap opportunities created in the rural sector: the rising rural
sector inIndia and other developing nations are generating
enormous opportunities to boost the company’s bottom line.
- Mergers and acquisitions are planned to reinforce the brand.
 - Increased people’s buying power, thus rising
competition. Moreexposure to hotel chains to increase
market share.

● THREATS OF ITC:
- Intensifying rivalry in FMCG companies: ITC is facing intense
competition in its FMCG market from major MNCs such as HUL andP&G and Indian FMCGs

such as Patanjali and Dabur. It limits the market share of the ITC.

- Regulations and Increased Taxation in Cigarette Business: The

Tobacco and Cigarette Industry in India continues to be
regulated by
strict government regulations and the tax system. This poses a threat tothe highly profitable

ITC Cigarette company.

- Increasing health awareness: there has been an increase in health

awareness, which has resulted in a decrease in the demand for tobaccoproducts in India. Anti-

smoking programs throughout the country alsohave an effect on cigarette sales.

- Intense and increasing competition among other FMCG companies

and hotel chains.
- FDI in the retail sector, thereby allowing for international brands.
 SUGGESTIONS

● ITC Limited India First can develop brand loyalty by working on customer
relationship management. It will raise psychological switching costs.
● It can develop long-term contractual relationships with distributors to widen
access to the target market.
● ITC Limited India First can also an investment in research and development
activities, get valuable customer data and introduce innovative
products/services to set strong differentiation basis.

● ITC Limited India First can reduce the Threat of Substitute Products or
services by clearly emphasising how its offered product/service is better than
the available substitutes.
● It should provide convincing reasons to the customers by offering a better
experience and high value for money.
● It can raise switching costs by working on loyalty.
● Lastly, it can improve the quality, maximise value for money and set strong
differentiation basis to discourage customers from using the substitute
product.

● ITC Limited India First should focus on the implicit needs and expectations of its
customers to strengthen the differentiation basis. It should raise switching costs by
developing long-term customer relationships. The organisation should also invest in
research and development activities to identify new customer segments. In some
cases, collaborating with competitors can be mutually beneficial. The organisation
can look for this option as well.
● ITC Limited India First can strengthen its position against suppliers by decreasing the
dependency on one or a few suppliers. It will increase its price sensitivity.
Developing the long-term contractual relationships with suppliers from different
regions not only lowers their bargaining power but also allows ITC Limited India First
to improve its supply chain efficiency. Finally, ITC Limited India First can find the
alternate ways of producing the product if product demand is high enough and the
firm has required competencies and expertise. However, it requires detailed cost-
benefit analysis to determine its feasibility. Product redesign and diversification of
the product lines can also help the organisation reduce the suppliers’ power in the
market.
● ITC Limited India First can manage the bargaining power of buyers by increasing and
diversifying their customer base. It can be done by introducing new products,
targeting new market segments and adopting the product diversification strategies.
Marketing and promotional strategies can also be helpful in this regard. Building
loyalty by embedding innovation and offering excellent customer experience can
raise the switching costs, which will ultimately reduce their bargaining power. ITC
Limited India First can adopt these strategies to strengthen its competitive
positioning in the market.
 CONCLUSION

ITC is one of India's foremost private sector companies and a diversified

conglomerate with businesses spanning Fast Moving Consumer Goods,
Hotels, Paperboards and Packaging, Agri Business and Information

Technology. The Company is acknowledged as one of India's most valuable

business corporations with a Gross sales value of ₹ 76,097.31 crores and Net
Profit of ₹ 15,136.05 crores (as on 31.03.2020). ITC was ranked as India's
most admired company, according to a survey conducted by Fortune India, in
association with Hay Group.

Multiple Drivers of Growth:

ITC is the country's leading FMCG marketer, the clear market leader in the
Indian Paperboard and Packaging industry, a globally acknowledged pioneer
in farmer empowerment through its wide-reaching Agri Business, a
pre-eminent hotel chain in India that is a trailblazer in 'Responsible
Luxury'. ITC's wholly-owned subsidiary, ITC Infotech, is a specialized
global digital solutions provider.
Over the last decade, ITC's new Consumer Goods Businesses have
established a vibrant portfolio of 25 world- class Indian brands that create
and retain value in India. ITC's world class FMCG brands including
Aashirvaad, Sunfeast, Yippee!, Bingo!, B Natural, ITC Master Chef, Fabelle,
Sunbean, Fiama, Engage, Vivel, Savlon, Classmate, Paperkraft, Mangaldeep,
Aim and others have garnered encouraging consumer franchise within a short
span of time. While several of these brands are market leaders in their
segments, others are making appreciable progress.
 BIBLIOGRAPHY
- https://www.itcportal.com
- https://simconblog.wordpress.com
- https://corporatefinanceinstitute.com
- https://www.mbaskool.com
- https://www.investopedia.com
- https://www.projects4mba.com
1. In the context of the International Trade Centre (ITC), an Appendix typically refers to
supplementary material or additional information included at the end of a report, publication, or
document. The appendix can contain various types of supporting data, such as:

2. Data Tables and Statistics; Detailed data sets that are referenced in the main body of the document
but are too extensive to include in the main sections.
3. In the context of the International Trade Centre (ITC), an Appendix typically refers to

4. Methodology: A detailed description of the research methods, data collection procedures, or

analytical techniques used to gather and process the information presented.

5. References and Sources: A list of all the sources cited or referenced in the document, including
books, articles, databases, or interviews.

6. Glossary or Definitions: Explanations of technical terms, acronyms, or concepts used in the

document that may require clarification.

7. Case Studies or Examples: Detailed case studies, examples, or additional instances related to the
main content but not essential for the main narrative.

8. Appendices provide an organized way to offer supplementary content while keeping the main
document focused and concise.