ITC – Aashirvaad Atta
Contents Topics Executive Summary Introduction ♦ Preamble ♦ History and Evolution ♦ Corporate Strategies ♦ Board of Governors ♦ Operating Units in India Market Analysis ♦ SWOT Analysis ♦ Understanding the four P’s of ITC Food Division ♦ Financial Analysis of ITC ♦ Competitors Analysis ♦ Financial Analysis of Competitors ♦ Price, Place, Product, Promotion Strategies in Orissa ♦ Decision Making Process ♦ Inferences from the Survey Future Strategies Suggestion and Recommendations Annexure References Page No. 3 4 5 9 9 9 10 10 18 25 33 38 39 45 46 47 55
In ITC’s branded packaged foods business, the company has created a new epicenter of rapid growth by blending its time tested key competencies and organizational strengths. ITC’s portfolio, currently consisting of 45 value added products, appeals to changing consumer preferences in virtually all categories – staple, confectionery, snack foods and biscuits, and ready to eat meals. ITC’s ‘Aashirvaad’ atta has already established leadership as the number one branded atta among national branded players within barely two years of launch. The ‘Aashirvaad’ assurance of quality now extends to ready-to-eat foods, ready –to- cook pastes, atta and salt. ITC pioneered the launch of butterscotch cream and Orange Marie biscuits under the sunfeast brand – example of product innovation widely accepted by the consumer. ITC has achieved a significant market presence in the confectionery segment with the rapid growth of the ‘Mint-o’ and Candyman brands, which between them now have 11 variants. ITC’s ‘Kitchens of India’ ranged of gourmet products showcases India’s traditional cuisine. The company is engaged in scaling up the supply chain through distributed and outsourced manufacturing capacity to service market requirement in the cost effective manner. Significant investment in brand building activities is also envisaged in the light of heighten competition. Despite sluggish performance and pressure on margins in recent times the micro trends in FMCG sector shows compelling opportunities. Per capita consumption and penetration lines of most FMCG categories in India are relatively low as compared to other south Asian countries. Branded atta consumption in India is only 5%. Disposable incomes are projected to grow rapidly and drive up the demand for consumer and FMCG Goods. Gross turnover of the company for the year 2004-05 grew by 13% to Rs. 13350. Pretax Profit increased by 15.3%. The financial for the year include Rs. 692 crores representing net income from exceptional items. ITC has planned to invest around Rs.3500 crores in the Atta, confectionery businesses and greeting cards over the next five years with its prime focus on the food business. Some of the recommendation that can be incorporated for Aashirvaad aata like collaborating with government for the supply of atta in military canteen, and also with fast food retail joints in India by giving them some discount, they company can also try to export its atta to the countries where wheat is currently being exported. Also an aggressive advertisement is required. 3
Preamble Over the years, ITC has evolved from a single product company to a multi-business corporation. Its businesses are spread over a wide spectrum, ranging from cigarettes and tobacco to hotels, packaging, paper and paperboards and international commodities trading. Each of these businesses is vastly different from the others in its type, the state of its evolution and the basic nature of its activity, all of which influence the choice of the form of governance. The challenge of governance for ITC therefore lies in fashioning a model that addresses the uniqueness of each of its businesses and yet strengthens the unity of purpose of the Company as a whole. Globalization will not only significantly heighten business risks, but will also compel Indian companies to adopt international...