Itc’s Diverse Portfolio: Smelling Sweeter

ITC’s diverse portfolio: smelling sweeter

Question 1

How well does ITC’s portfolio fit in terms of the BCG matrix?

Cigarettes

• High market share- 2/3 of the Indian market
• Low sales growth- Indian Government not favor of cigarettes  

Hotels

• High market share – become the second largest operator in India
• High sales growth – 100 hotels

Agri-business

• High market share – leaf tobacco business developed into range of agricultural businesses.
• High sales growth -sales and profits increased  from 2009 to 2011

Paperboard, paper and packaging

• High market share - largest packaging solution provider in India
• High market share – India’s largest paperboard industry
• High sales growth - sales and profits increased  from 2009 to 2011

Others FMCG

• High market share- 50 % of Indian market share- Aashirvaad

• Low market share - Sunfeast and bingo 12 and 11 % market share
• Low sales growth - Loss from 2009 to 2011

MARKET SHARE

Question 2

 Identify and evaluate the various synergies in ITC’s business.

Synergies refer to the benefits gained where activities or assets complement each other so that their combined effect is greater than the sum of the parts. At a glance, synergies are all about increasing the capacity and workflow in the company.

ITC expanded its business by merging and acquiring other companies. Initially the company focus in tobacco product but afterwards they expanded to other Fast-Moving Consumer Goods (FMCG) sector, Hotel business, Agri-business, and paperboard, paper and packaging.

ITC enter to other Fast-Moving Consumer Goods (FMCG) sector in early twenty-first century making its depute in the food market. The advantages of doing so was the alteration of the company’s image to a friendlier image since the Indian government is not favorable on tobacco product. It also increased the selling of cigarettes in parallel with the sale of FMCG product. However the target market is completely different resulting on a negative synergy. They had to start over building a customer’s database.  .