Manthan - The Case Analysis

A CASE STUDY ANALYSIS ON

ITC LTD.: TOWARD A TRIPLE BOTTOM LINE PERFORMANCE

Manthan: - Rest your Case 2019

Team Members Yogendra Rathore

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7043134244 (MBA Oil and Gas)

Rohit Yadav

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9910827336 (MBA Oil and Gas)

Prateek Mathur

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7737028929 (MBA Oil and Gas)

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Q1 The whole case revolves around -The triple bottom line which is thru “social, economic and environmental “impacts. The “people, planet, profit” is a phrase which can be coined for Sustainability. As the case states, the Core objective is to maximize the value of products form tobacco and service offerings within the shareholders and other stakeholders, including employees, suppliers and farmers, associated with the business. ITC Cigarette can have three complementary qualities -- a compelling tagline, focus, and divergence. The actions points of ITC Cigarette strategy can be guided toward enforcing these critical qualities. Without these critical qualities, Itc Cigarette strategy is most likely to be muddled, undifferentiated, and hard to communicate with a relatively high cost structure. ITC in order to blend diverse core competencies residing in various business to enhance the competitive power of the portfolio while levering it market share of tobacco to established itself in new domain by leveraging the goodwill of the trademark. Factors, which would decide the implications of winding down or improving the current stoop of cigarette branches should be taken care likewise it would mould the shape of industry in any form.    

Cost of Underemployment Establishment churn Establishment sizes Revenue by sector contributing to gross state product

Segment - wise Revenues FMCG 2009 - 10 Total profit = 6015 Cr.

Hotels

12%

7% 4%

Agri business

77% Paperboard , papare & pack

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Segment - wise Revenues 2008 - 09 FMCG

Total Profit = 4826 Cr.

11% 5% 7%

Hotels

Agri - business

77% Paperboard, papare & pack

Q2 Sanjiv Puri who had just taken over the tobacco division as the chief executive with a variety of experience in ITC, should work towards more in research and development of its creamy and premium product which has made ITC a captain in this industry. This would drive them to be ahead of their market competition and reduce health factor for the consumers (example double- triple filters used in order to minimize health risk) and at the same time, he must strive to improve the price performance within the functional-emotional orientation under prevailing norms to keep their stakeholders trust. He can look around in order to have complementary product to strike a balance between health and profit as data from Table 1 suggest there has been steep increasing exponential curve in the trade of cigarette and employment generated which is catering the economic development for both industry and consumer. From Table 2 per capita consumption of cigarette is lowest in India and being a developing nation it should thrive on the growing demand from Indian youth population. He could Rethinks or repurpose the functional-emotional orientation of the Leadership & Managing People industry by a TAGLINE, which can turn around the odds in favour with respect to health concerns. “Cigarette is not the only cause of your health, we want to keep the fire alive in you “ With increase in disposable income in India and around the world and contributing over 65% of its gross revenues, A flathead watershed program creating value for the Indian economy and growing customs for company’s stakeholders would evaluate ITC performance Index.

Q3 With the government pleasing numerous initiatives for influencing the adverse outcome of tobacco by printing the memorandum that it grounds cancer and increase the tax on tobacco products, government is giving an attempt to discourage the consumption of tobacco 3 Monday, 08 April 2019

products owed to increase in opposition to consumption of tobacco products, it has provided a number of subsidies to the tobacco industry which in turn provided significant employment opportunities to people and income to farmers in the rural areas. The tobacco industry provided employment to over 10 million people who were directly involved with the various stages of farming, manufacturing and distributions processes and contributed over Rs. 70 Billion to government earnings. Despite facts, this case gives an observation that the overall revenue which the ITC Ltd. is earning from the cigarettes industry (77%) despite the government has imposed high taxes on tobacco but the consumption is at higher proportion , with this we propose ITC Ltd. That they should not put any efforts to counter the negative publicity. Government has increased taxes multiple times on bidis and other products but the increase in the price shift vs the consumption of less tax cigarettes has effected the consumption of tobacco and cigarettes whereas the overall revenue of the industry has increased because of the rise in price. Q4 As India is amongst the eight largest exporters of the tobacco products in the world, Import of cigarettes and tobacco has varied but the growth is experiential to self-effacingly, but on the other hand, the exports of tobacco and tobacco products has increased exponentially in the period 1970-2000. According to the Tobacco Board data, exports of tobacco and tobacco products rose by about 67% in rupee terms to Rs. 3,383 crores in the year 2008-2009 on a year-on-year basis. In dollar terms, exports increased by a record 47% to US$ 737 million. Cigarettes accounted for 85% of the country's total tobacco exports. ITC was already involved with cigarette manufacturing, tobacco leaf procurement and processing, as well as investments in the manufacture and export of cigarette packaging materials. In addition to serving the growing domestic market, the company also exported cigarettes and unmanufactured tobacco, which will attract the stakeholders, as there is huge potential in the market and ITC is diversified company, which is performing for the good will and takes decision in the interest of stakeholders.

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