Itc Cigarettes Strategy

Topics: Tobacco, Cigarette, Nicotine Pages: 9 (2727 words) Published: March 18, 2013
A cigarette is a product consumed via smoking and manufactured out of cured and finely cut tobacco leaves and reconstituted tobacco, combined with other additives, then rolled or stuffed into a paper-wrapped cylinder (generally less than 120 mm in length and 10 mm in diameter). Approximately 6 trillion cigarettes are produced globally each year by the tobacco industry, smoked by over 1.1 billion people, which is more than one-sixth of the world’s total population.

Top 10 countries by cigarette consumption per capita

Country| Number of Cigarettes Per Adult per Year|
Greece| 3,017|
 Slovenia| 2,537|
Ukraine| 2,526|
 Bulgaria| 2,437|
Czech Republic| 2,368|
Macedonia| 2,336|
Russia| 2,319|
Moldova| 2,239|
 Spain| 2,225|
Bosnia and Herzegovina| 2,145|

Cigarette consumption in India in 2010-11 reached 102 billion sticks, down from a peak of 109 billion sticks in 2006-07.Fewer than 6% of the adult population smoke cigarettes, representing a very small constituent of tobacco users in the country. Despite accounting for just 15% of tobacco consumption, cigarettes contribute 75% of total tobacco tax revenues, a situation that continues to create difficulties for the growth of the segment.

Three major cigarette companies account for around 98% of legitimate domestic cigarette sales. The unique tobacco consumption pattern is the combination of tradition and more essentially the tax imposed on cigarettes. Cigarette smokers pay almost 85% of the total tax revenues generated from tobacco. ITC is the leading companies in the Indian tobacco market, holding a 72% share of the market's volume. Godfrey Philips accounts for a further 12% of the market's volume. Indian consumption of tobacco does not follow western trends with 38% of tobacco being consumed as bidi’s, 48% as chewing tobacco, and only 14% as cigarettes. That is, bidis, snuff and chewing tobacco such as gutka, khaini and zarda form the bulk (86%) of India’s total tobacco production. This low percentage of consumption in cigarettes of 14% compares to 90% in the rest of the world. In fact the per capita consumption of cigarettes in India is merely 1/10th of the world average.

TC is one of India's foremost private sector companies with a market capitalisation of US $ 35 billion and a turnover of US $ 7 billion. ITC is rated among the World's Best Big Companies, Asia's 'Fab 50' and the World's Most Reputable Companies by Forbes magazine and among India's Most Valuable Companies by Business Today. ITC ranks among India's '10 Most Valuable (Company) Brands', in 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. ITC has a diversified presence in FMCG, Hotels, Paperboards & Specialty Papers, Packaging, Agri-Business, and Information Technology. While ITC is an outstanding market leader in its traditional businesses of Cigarettes, Hotels, Paperboards, Packaging and Agri-Exports, it is rapidly gaining market share even in its nascent businesses of Packaged Foods & Confectionery, Branded Apparel, Personal Care and Stationery.

ITC is the market leader in cigarettes in India. With its wide range of invaluable brands, ITC has a leadership position in every segment of the market. ITC's highly popular portfolio of brands includes Insignia, India Kings, Lucky Strike, Classic, Gold Flake, Navy Cut, Players, Scissors, Capstan, Berkeley, Bristol, Flake, Silk Cut, Duke & Royal.

ITC cigarettes Supply Chain

Sourcing is the set of business processes required to purchase goods and services Sourcing processes include:
* Supplier scoring and assessment
* Supplier selection and contract negotiation
* Design collaboration
* Procurement
* Sourcing planning and analysis

Agri -Business Division (ABD) - ILTD is the Leaf Tobacco arm of ITC Limited. A century old refinement in systems...
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