BCG matrix ITC ltd

Business strategy for ITC Ltd. Marketing Management Assignment

SUBMITTED TO: Dr. S.K. Pandey

SUBMITTED BY Group 1 ( Section A) Amir Khan  – PGP05001 Abhishek Anand – PGP05002 Abidulla Shariff  – PGP05003 Akul Minocha  – PGP05004 Anjali Singh  – PGP0005

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About the Company ITC Limited or ITC is an Indian conglomerate headquartered in Kolkata, West Bengal. Its diversified business includes five segments: Fast Moving Consumer Goods (FMCG), Hotels, Paperboards & Packaging, Agri Business & Information Technology. ITC is one of India's foremost private sector companies with a market capitalization of US $ 45 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 Co mpanies  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.

Business Mix of ITC Ltd. 1.

FMCG –  Cigarette Cigarettes 

2.

FMCG –  Others Foods Lifestyle Retailing Greeting, Gifting and Stationery Safety Matches Agarbattis     

3.

Paperboards and Packaging Paperboards and specialty papers Packaging  

4.

Agri-Business Agri exports e-Choupal Leaf Tobacco Hotels ITC Infotech   

5. 6.

SBUs of ITC and its data for 2013-14 Sector

Market Growth

Market Share

Relative market share

Sales 201314

72

Market Share of largest competitor 12

FMCG Cigrate

6.6

6

27136.12

FMCG Others

7.3

3.6

15

0.24

7037.71

ITC Hotels

7.8

13.61

23.08

0.589688042

1138.89

Agribusiness

10

14.9

18.86

0.790031813

7200.73

Paperboards & Specialty Papers ITC InfoTech

15

17.44

12.62

1.381933439

4504.37

8.4

0.3481

10.7

0.03253271

706.65

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The BCG Matrix of ITC Ltd. BCG Matrix is created considering growth target of 8%.

Relative market share is converted taking logarithmic value of relative market share.



STARS 

Paperboards and Packaging

QUESTION MARKS Agri Business ITC Infotech  

COWS 

DOGS FMCG-Cigarettes

 

ITC Hotels FMCG Others

BCG Matrix Analysis and Recommendation Businesses must keep their product offerings relevant and profitable to stay in operation. The BCG matrix is a tool used for categorizing a firm’s products in relation to the overall product life cycle.  The BCG matrix places each  product a company offers according to the growth rate of the business and the relative market share the product controls. Identifying which quadrant of the BCG matrix a product offering falls into provides valuable guidance to management about the future of that product. STARS

Paperboards and Packaging enjoy a high relative position in terms of market share in a growing market. ITC should make it a top priority to maintain the market share of products in the star quadrant of the BCG matrix to increase sales. As the product enters maturity, and growth rates decline below 8 percent, maintaining market share will require less investment, yet produce similar revenue, and become cash co ws. ITC Ltd. should invest more money in its paperboards & packaging businesses. The goal of the co mpany should be to manage and nurture this business through the market growth to maintain their market position.

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COWS

FMCG- cigarettes business enjoys a large market share within a market which is experiencing low market growth. This means that the market has already matured, and that the business is well established and positioned within the market. Little capital investment is turned into the business since it would be wasted on such a mature market (nothing more could be gained). DOGS

ITC Hotels and FMCG-others have a low market share but both ITC Hotels and FMCG-others are growing rapidl y. FMCG-others is one of the highest revenue generators for ITC . In both the sector ITC has grown rapidly in previous years and gained the market share rapidly so they should keep investing in them and should target for high market share to make these as star products. QUESTION MARKS

ITC’s Agribusiness is growing at the rate of 10% and it has market share, which is very near to market leader. So ITC should focus to grow market share to make it a star. ITC InfoTech the other SBU in this quadrant constitute a small part of the companies’ total sales and has very small market share and growth rate just about 8%. So ITC should try to differentiate its product from its competitors to sustain in this sector or disinvest form this sector before this become dog.

References:       

http://www.itcportal.com/ http://www.moneycontrol.com/ http://www.indianmirror.com/indian-industries/industries-home.html https://insight.dionglobal.in/Index.aspx http://www.indiastat.com/default.aspx Wikipedia ITC Annual Report

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