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									Identify two firms of your choice.One that is in a single business and one that has
several related businesses.Using the published information available on the firms
identified,explain the advantages and disadvantages of the corporate profile each
company has?


ITC is one of India's foremost private sector companies with a market capitalisation of
nearly US $ 18 billion and a turnover of over US $ 5.1 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, among India's Most Respected Companies by
BusinessWorld and among India's Most Valuable Companies by Business Today. ITC
also ranks among India's top 10 `Most Valuable (Company) Brands', in a study
conducted by Brand Finance and published by the Economic Times.
ITC has a diversified presence in Cigarettes, Hotels, Paperboards & Specialty Papers,
Packaging, Agri-Business, Packaged Foods & Confectionery, Information Technology,
Branded Apparel, Personal Care, Stationery, Safety Matches and other FMCG products.
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.
As one of India's most valuable and respected corporations, ITC is widely perceived to
be dedicatedly nation-oriented. Chairman Y C Deveshwar calls this source of inspiration
"a commitment beyond the market". In his own words: "ITC believes that its aspiration to
create enduring value for the nation provides the motive force to sustain growing
shareholder value. ITC practices this philosophy by not only driving each of its
businesses towards international competitiveness but by also consciously contributing
to enhancing the competitiveness of the larger value chain of which it is a part."

ITC's diversified status originates from its corporate strategy aimed at creating multiple
drivers of growth anchored on its time-tested core competencies: unmatched
distribution reach, superior brand-building capabilities, effective supply chain
management and acknowledged service skills in hoteliering. Over time, the strategic
forays into new businesses are expected to garner a significant share of these emerging
high-growth markets in India.
ITC's Agri-Business is one of India's largest exporters of agricultural products. ITC is
one of the country's biggest foreign exchange earners (US $ 3.2 billion in the last
decade). The Company's 'e-Choupal' initiative is enabling Indian agriculture significantly
enhance its competitiveness by empowering Indian farmers through the power of the
Internet. This transformational strategy, which has already become the subject matter of
a case study at Harvard Business School, is expected to progressively create for ITC a
huge rural distribution infrastructure, significantly enhancing the Company's marketing

ITC's wholly owned Information Technology subsidiary, ITC Infotech India Limited, is
aggressively pursuing emerging opportunities in providing end-to-end IT solutions,
including e-enabled services and business process outsourcing.

ITC's production facilities and hotels have won numerous national and international
awards for quality, productivity, safety and environment management systems. ITC was
the first company in India to voluntarily seek a corporate governance rating.
ITC employs over 24,000 people at more than 60 locations across India. The Company
continuously endeavors to enhance its wealth generating capabilities in a globalising
environment to consistently reward more than 3,79,000 shareholders, fulfill the
aspirations of its stakeholders and meet societal expectations. This over-arching vision
of the company is expressively captured in its corporate positioning statement:
"Enduring Value. For the nation. For the Shareholder."
<\l >

PE ratio 20.23 17/07/08
EPS (Rs) 8.28 Mar, 08
Sales (Rs crore) 3,934.39 Mar, 08
Face Value (Rs) 1
Net profit margin (%) 21.50 Mar, 08
Last bonus 1:2 17/06/05
Last dividend (%) 350 23/05/08
Return on average equity 25.99 Mar, 08
-ITC has product range to cover all seasons.
-ITC has one of the best distribution set up.
-ITC distribution can cover many products.

Tata Tea, the worlds second largest global branded tea operation, today announced its
leadership position in terms of volume share in India in the packet tea segment.
According to the AC Nielsen survey, for the first time ever, in the month of June 2007,
the company outperformed its nearest competitor with a volume share of 19.2 percent,
as compared to the competitors 18.6 percent.

For quite some time, the competitors leadership position in the branded packaged tea
market was being challenged by Tata Tea. From a position 5 years ago of 16.3% volume
Tata Tea has grown to 19.2% share in the month of June.

Year Nearest Competitor Tata Tea
March 2002 26.1 16.3
March 2006 21.5 16.7
March 2007 19.5 18.5
June 2007 18.6 19.2

* In a recent survey by The Economic Times, Tata Tea has been ranked as the most
trusted beverage brand in the country

Speaking on the occasion, Ms. Sangeeta Talwar, Executive Director - Marketing, Tata
Tea Limited, said, This is certainly a defining moment for us and one that will encourage
us to work towards attaining greater heights. At Tata Tea we believe in creating relevant
brand differentiation and building a strong franchise with our consumers and customers.
This focus along with continuous innovation in all aspects of brand marketing and sales
have helped to transform our brands into trust marks and love marks. This year has also
seen excellent growth on Tata Tea Premium and Tata Tea Gold as well as the restage of
the Tata Tea Agni brand. Leveraging changing lifestyles and evolving consumer needs
Tata Tea launched the Tetley Green Tea range which has been a great success. The
Company also made a foray into the wellbeing segment with the launch of Tata Tea Life
a regular every day tea enhanced with natural herbal extracts. For the connoisseur of
tea, Tata Tea launched a range of specialty long leaf single origin teas. With this and
more to come we have certainly created the momentum to continue on our aggressive
growth path and deliver continuing value to our consumers.

About Tata Tea

Tata Tea Limited is a group Company of TATA Group, one of the largest and most
respected business houses of India. Tata Tea was formed in 1983 from the erstwhile
Tata Finlay Company, a joint venture company formed in 1964. The Company has five
major tea brands and holds the second position in market and value share in domestic
branded tea business. With the acquisition of Tetley Group in the year 2000, the
combined entity now represents the second largest global branded tea operation with
product presence in more than 40 countries. The current business interests include
branded tea and tea extract business. Tata Tea Inc., a subsidiary company in US is
involved in the marketing and value addition of tea extracts.

The thrust on globalisation agenda of Tata Tea had earlier resulted in acquisitions of
Good Earth in US, Jemca in Czech, Eight O Clock Coffee in US and recently, of
trademarks Vitax and Flosana in Poland. Tata Tea recently signed a Joint Venture
Agreement with Zhejiang Tea Import & Export (ZTIE) Company of People's Republic of
China. The agreement involves setting up a joint venture Company at Economic
Development Zone of Anji County, Zhejiang, PRC for manufacture and marketing of
Green Tea Polyphenols, other green tea extracts, cold and hot water soluble instant tea,
liquid tea concentrates and other value added tea beverage products. Also the recent
acquisition of management control of Mount Everest Mineral Water Company is in line
with Tata Teas growth plans in many forms in India and the global market place.

Tata Tea has been involved in the tea extract business for last 40 odd years. The
company has been manufacturing Black Tea extract in their factory situated in South
India, exclusively for the export markets. A unique manufacturing process using fresh
green tea leaves has given an exotic taste to their tea extract products and has found
wide acceptability in western markets. Tata Tea black tea extracts has got significant
market presence in the West, which find end use in many beverage brands. As it is
strategically important for Tata Tea to expand the tea extract business and to have
presence in world tea extract market, the group has focused their attention on green tea
extracts, which is gaining popularity for application in food, beverages, personal care
products and food supplements.

Income Statement
(Rs in Cr.)

Mar ' 07
Income :
Operating Income 1,055.96
Material Consumed 419.75
Manufacturing Expenses 119.22
Personnel Expenses 126.94
Selling Expenses 132.22
Adminstrative Expenses 72.59
Expenses Capitalised 0.00
Cost Of Sales 870.72
Operating Profit 185.25
Other Recurring Income 87.92
Adjusted PBDIT 273.17
Financial Expenses 47.09
Depreciation 18.54
Other Write offs 0.00
Adjusted PBT 207.54
Tax Charges 43.20
Adjusted PAT 164.34
Non Recurring Items 137.39
Other Non Cash adjustments 4.84
Reported Net Profit 306.57
Earnigs Before Appropriation 439.14
Equity Dividend 92.76
Preference Dividend 0.00
Dividend Tax 15.76
Retained Earnings 330.62


production facilities across the country. Certain
initiatives of the company such as the ITC eChoupal, ITC Choupal Saagar and the ITC
farm forestry programme have been recognised
through internationally acclaimed awards for their
impact on rural life.
ITC's diversified status originates from its
corporate strategy aimed at creating multiple
drivers of growth, anchored on its core
competencies of strong distribution
reach, superior brand-building
capabilities, effective supply chain
management and service skills in
hoteliering. Its distribution reach is
one of the largest in India – the FMCG
business has a retail network over
2 million retailers in the
country, ranging from premium
outlets in the metros to small
shops in the interiors of
rural India.
Currently British American Tobacco Company (UK)
controls 32 per cent equity stake in ITC. Domestic
financial institutions hold 35 per cent share and
foreign institutions have a 15 per cent share. Indian
public and corporate bodies hold the balance 13
per cent stake.
ITC is one of India's most diversified consumer
goods company having increasingly reduced its
deoendence on its core cigarette business.
ITC was incorporated in 1910 under the name
of Imperial Tobacco Company of India Limited
(later changed to ITC Limited in 1974).
It was initially in the cigarette and
tobacco business and later diversified
into multiple businesses including
hotels, paperboards and speciality
papers, packaging, agri-business,
packaged foods and confectionery,
branded apparel, greeting cards
and other FMCG products.
The company entered the
hospitality business in 1975. In
1979 it entered the paperboards
business by promoting ITC
Bhadrachalam Paperboards Limited, which
was later amalgamated with ITC. In 1992, leveraging
its agri-sourcing competency, ITC set up the
International Business Division for export of agricommodities. More new lines of
businesses have
followed since 2001 in the space of FMCG.The
company’s products are manufactured at multiple
Company Products Established Founder Distribution Production plants
ITC Cigarettes, foods, 1910 British American India,Americas, India
apparel, stationery, Tobacco Europe, Middle East,
hotels, paper Asia Pacific, Africa72
Products and brands
FMCG Products: ITC is the market leader in
cigarettes in India with a wide range of strong
brands. 3 of its brands (Gold Flake,Wills and
Scissors) feature amongst the top 5 FMCG brands
in the country.The Lifestyle Retailing business of
ITC was established in the year 2000 through the
Wills Lifestyle chain of exclusive speciality stores
that sell apparel and accessories under the Wills
trademark . ITC also sells men’s range of apparel
under the brand name John Players through
exclusive brand outlets as well as more than 1500
multi-brand outlets. In 2001, ITC made its entry
into branded packaged foods business and rapidly
expanded the portfolio to include confectionery,
staples and snack foods segments.The company’s
products are rapidly gaining consumer franchise
and have established strong market standing in this
short period of time.
Green Leaf
Threshing Plants
Packaging & Printing
Paper &
Paperboard Mills
Rural ServicesCentre
Lifestyle RetailingDesign & Technology
Location of
Manufacturing facility
Bangalore (Karnataka), Kolkata
(West Bengal), Munger (Bihar),
Saharanpur (Uttar Pradesh)
Anaparti, Chirala
(Andhra Pradesh)
Chennai (Tamil Nadu), Munger
Bollaram (Andhra Pradesh),
Coimbatore (Tamil Nadu),
Sarapaka (Andhra Pradesh),
Tribeni (West Bengal)
10 in Madhya Pradesh,
Uttar Pradesh & Maharashtra
Gurgaon (Haryana)
Source: Company Annual Report73
hotels and approximately. 5200 rooms in India.
These include heritage palaces, havelis and resorts
under the sub-brand WelcomHeritage, full service
budget hotels under the brand name Fortune,
super deluxe ‘ITC Hotels’ and five star hotels
under the brand ‘WelcomHotel’. Currently 10 of
the ITC-Welcomgroup hotels are marketed worldwide by the Sheraton Corporation,
which is part of
Starwood Hotels & Resorts, the well-known global
hospitality chain.
ITC has leveraged its paperboard and packaging
business to market branded stationery and
greeting cards.The company is also into marketing
of safety matches and incense sticks, sourced from
the small-scale and cottage sector.The range of
FMCG products leverage its core strengths in
marketing and distribution, brand building, supply
chain management and paperboard and packaging.
Hotels: ITC has one of India's finest hotel chains
under the brand name ITC-Welcomgroup with 60
FMCG products
Ready to eat foods
Snack foods
Lifestyle retailing
Greeting cards
Safety matches
Incense sticks
• Domestic market - India Kings, Gold Flake, Navy Cut, Scissors, Capstan, Berkeley
and Bristol
• USA - Checkers, Hi-Val, Royale Classic and Gold Crest
• Middle East - Royale Classic, Gold Cut and Scissors Filter King
• Kitchens of India
• Aashirvaad
• Mint-O, Candyman
• Sunfeast
• Relaxed Wear - Wills Sport
• Formal Wear - Wills Classic
• Evening Wear and Designer Accessories - Wills Clublife
• Branded men’s apparel - John Players
• English cards - Expressions
• Vernacular cards - Matrubhasha
• School notebooks - Classmate
• College and office notebooks - Paperkraft
• iKno, Mangal Deep,VaxLit, Delite,Aim
• Mangaldeep
Source: Company website, IMaCS analysis74
Choupal Saagar. It creates a platform for farmers to
sell their produce as well as buy quality products
for their farm and household consumption. It
provides farmers additional services under one
roof like soil testing, banking, insurance, medical
facilities and restaurant. Going forward, these malls
would serve as part of the core infrastructure to
support ITC's rural distribution strategy. 10
‘Choupal Saagars’ are now operational in the 3
states of Madhya Pradesh, Maharashtra and Uttar
Pradesh while 9 more are in an advanced stage of
Financial analysis
ITC has witnessed continued growth momentum
ensured by the sustained leadership in the
cigarettes business and rapid ramp-up of noncigarettes portfolio. Double-digit growth
has been
reported for the company on account of new
product launches and entry into new categories.
Paperboards and packaging: The products
under the paperboards and speciality papers
business include coated and uncoated boards,
writing and printing paper, kraft paper and speciality
paper.The company is the country's largest
converter of paperboard into packaging for a
variety of industries.
Agri-business: The company focuses on exports
of soyameal, rice (basmati and non basmati), ,
pulses, coffee, black pepper, edible nuts, marine
products (shrimps and prawns), processed fruits
etc.Agri exports contributes over 60 per cent of
ITC's total foreign exchange earnings. Seafood
products are exported under well-known brands
Gold Ribbon, Blue Ribbon,Aqua Kings,Aqua Bay,
Aqua Feast and Peninsular.The business also
sources high quality wheat for the Company’s
branded packaged foods business leveraging the echoupal network which currently
comprises around
6300 installations reaching out to over 3.5 million
farmers. ITC pioneered the cultivation of cigarette
leaf tobaccos in India and is currently the largest
buyer, exporter and processor of Indian leaf
Rural hypermarkets: ITC has launched its rural
hypermarkets in the year 2004 under the name75
earnings (more than USD 2 billion in the last
decade).The cigarette business has been expanded
to competitive markets like the US and Middle East
through its own brands. In foods, the company is
building a presence in ready-to-eat Indian cuisine
through a range of exotic recipes branded Kitchens
of India, created by its chefs of the hotel business.
The International Business Division ranks as one of
the largest Indian exporter of agri-products with
exports ofover USD 150 million.Although one of
the relatively younger business divisions of ITC, it
has, in a short span established itself as a firstchoice supply chain partner of several
international customers like Coca Cola,Abudhabi
Flour Mill and Mitsubishi who source agriculture
commodities and food products from India.
ITC’s Paperboards and Packaging division is the
largest exporter of coated boards from India.The
company exports nearly 20 per cent of the coated
boards it produces. Clients for packaging include
well-known companies like British American
Tobacco, Surya Nepal Private Limited,VST
Industries, GTC, UB Group, Shaw Wallace,
Seagrams,Allied Domecq,Whyte & Mackay,
Hindustan Lever,Tata Tetley and Nestle, Reckitt
Benkiser India Limited, JK Helene Curtis.
The paper business, the second largest contributor
to revenues after cigarettes has been scaled up
significantly in the past through organic as well as
inorganic initiatives.The company’s revenues have
clocked a CAGR of 10 per cent while net profits
have grown remarkably by nearly 20 per cent in
the period between 1999 and 2005.The company
has maintained a low gearing and has shown a
healthy return on the capital employed.
The company has taken the lead in voluntarily
reporting progress against its growing contribution
to the Triple Bottom Line. In February 2005, the
company released its first comprehensive
'Sustainability Report', which represents its attempt
to strike a harmonious balance between the needs
of the economy, ecology and society.
ITC's contribution in making
‘Made in India’ global
ITC has leveraged its well-diversified position in its
global initiatives also. Its advent into
internationalisation is led by a balanced initiative by
the various products in the portfolio. Its products,
ranging from FMCG to paper and packaging, have
contributed significantly to India’s foreign exchange
Foods & agri-products
Paper & packaging
Safety matches
Incense sticks
• Has launched its own brands in the US and Middle East
• Largest company in Nepal
• Packaged foods brand ‘Kitchens of India” exported to US, Canada, UK and
• Branded sea foods exported to US, Europe and Japan
• Supply chain partner of several leading international customers for agri products-
Abudhabi Flour Mill, Mitsubishi
• Supplies tobacco to customers in 37 countries
• Exports of coated boards to Malaysia, Sri Lanka, Bangladesh, Iran,Australia, UAE,
Arabia, Singapore, UK, Italy, Netherlands and China
• Exports of cigarette tissues and décor paper for laminates to Iran, Indonesia,
Nepal, Bhutan and Bangladesh
• Supplies packaging for 15 billion cigarette sticks a year for the export market
• Export of premium brands of safety matches to Europe,Africa and the USA
• Exported to US, Europe and south-east Asia
ITC’s globalisation in different businesses76
community has enabled ITC to build a highly cost
effective procurement system. ITC has made
significant investments in web-enabling the Indian
farmer. Christened e-Choupal, ITC's web plan for
the farmer centres around providing Internet
kiosks in villages. Farmers use this technology
infrastructure to access on-line information from
ITC's farmer-friendly websites. Data accessed by
the farmers relate to the weather, crop conditions,
best practices in farming, ruling international prices
and a host of other related information. Currently,
the e-Choupal websites provide information to
farmers in Madhya Pradesh, Maharashtra and
Rajasthan, coffee planters in Karnataka,
aquaculturists in Andhra Pradesh and wheat
farmers in Uttar Pradesh.
In the paper business, ITC’s strong backward
integration in the value chain and its
technologically advanced plants for packaging and
printing and paperboards and speciality papers
enable it to export quality products at
international prices. Its packaging and printing
plants have been awarded the Greentech
Environment award, CAPEXIL export award and
World Star,Asia Star and India Star awards for
excellence in packaging.
ITC is also the largest buyer, processor and
exporter of cigarette tobaccos in India and has
been the country’s single largest integrated source
of quality tobaccos for customers in 37 countries
over the last six decades.
In addition to the above businesses, ITC has a
presence in the IT industry through ITC Infotech
India Limited, a wholly owned subsidiary, based in
Bangalore (Karnataka). ITC Infotech offers in-depth
domain knowledge in the areas of manufacturing,
hospitality services, retail, FMCG, paper and
packaging and commodities to its clients.Through
its wholly owned software subsidiaries in the UK
and US, ITC Infotech services multiple Fortune
Class clients.These include Unilever,Abbey
National, British American Tobacco, ClientLogic,
DHL, etc.
Factors fuelling ITC's global initiatives
Strong backward integration linkages form the
foundation for ITC’s global infrastructure.The
extensive backward linkages it has established with
the farmers for its FMCG business are an example
of this.This networking with the farming77
acquisitions, both in India and abroad. Bulk of the
investments would go towards upgradation of
technology in the tobacco business, creating new
production facilities for the foods and apparel
businesses and expansion of the hotel chain in key
locations. It would also go towards consolidation
of the company’s leadership position in the
paperboards / paper business with the addition
of an integrated pulp and paper facility. Investments
are also planned for expansion of ITC’s pioneering
e-choupal rural sourcing / distribution network and
setting up the rural hypermarket chain under the
Choupal Saagar store brand. Already a ‘water
positive’ corporation, the company became ‘carbon
positive’ in 2005-06 and is making rapid strides
towards achieving ‘zero solid waste disposal’ status.
Strong brands built over the years through heavy
investments have resulted in a high degree of brand
loyalty among consumers, not only in India but also
in global markets.The company’s production
facilities have won numerous national and
international awards for quality, productivity, safety
and environment management systems, making its
products acceptable to the international
ITC has prudently deployed the cash generated
by its businesses to grow its stable of businesses
thereby mitigating business concentration risk.
It has demonstrated willingness to stay invested
in its new businesses for longer duration of time.
As a result, ITC today operates in a broader
spectrum of products.
Future plans
The company intends to invest USD 3.2 billion
over the next five to seven years across its
different businesses.The investment plans aim
at positioning each of the businesses in the ITC
portfolio as a leader in its respective market.Apart
from capital expenditure for organic growth, the
strategic investment plans include outlays towards
Globalisation at a glance
• Contribution of more than US$ 2 billion to India's
exports in the last decade
• ITC's International Business Division is one of the
largest Indian exporters of agri-products and is a
preferred supply chain partner to companies like
Coca Cola, Mitsubishi etc
• Markets its own bran of cigarettes in the US and
Middle East
• Largest exporter of coated boards from India
• Largest exporter of cigarette tobaccos from India

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