FINAL PROJECT

Creating Enduring Value - Building World-Class Brands for India

SUBMITTED BY-
MAYANK LALWANI
PGDM-6
Contents
SECTOR INFORMATION: ......................................................................................................................... 4
Sector Size: ............................................................................................................................................... 4
Growth of Sector: ...................................................................................................................................... 4
Top 10 Companies India: .......................................................................................................................... 5
Porters Five Forces Model: ....................................................................................................................... 5
COMPANY INFORMATION: .................................................................................................................... 7
Company Snapshot: .................................................................................................................................. 7
SWOT Analysis: ....................................................................................................................................... 7
Current CEO: ............................................................................................................................................ 8
Product and Service Portfolio: .................................................................................................................. 8
Competitors Analysis: ............................................................................................................................. 8
News Including Corporate Announcement: .............................................................................................. 9
Marketing: ................................................................................................................................................... 10
SWOT Analysis of VIVEL: .................................................................................................................... 10
Marketing Mix: ....................................................................................................................................... 11
Segmenting, Targeting, Positioning ........................................................................................................ 11
Finance: ....................................................................................................................................................... 12
Gross Profit and Net Profit Margin of the Company: ............................................................................. 13
Working capital for the year: .................................................................................................................. 13
Debt-Equity ratio of the company:.......................................................................................................... 14
Direct and indirect costs of the company: ............................................................................................... 14
Fixed assets added during the year: ........................................................................................................ 15
Human Resource Management: .................................................................................................................. 16
ORGANIZATIONAL STRUCTURE..................................................................................................... 16
SKILL SETS REQUIRED IN THE COMPANY ................................................................................... 17
JOD DESCROPTION AND JOB SPECIFICATION ............................................................................ 17
SOURCES OF RECRUITMENT ........................................................................................................... 18
SELECTION PROCESS ........................................................................................................................ 19
INDUCTION PROCESS: ....................................................................................................................... 20
TYPES OF TRAINING PROVIDED: .................................................................................................... 20
PERFORMANCE APPRAISAL MODEL OF THE COMPANY: ........................................................ 21
EMPLOYEE BENEFITS PROVIDED: ................................................................................................. 21
 CAREER PLANNING IN THE COMPANY: ....................................................................................... 22
ORGANIZATION CULTURE: .............................................................................................................. 22
REFERENCES ........................................................................................................................................... 23
SECTOR INFORMATION:i
Sector Size:
The Retail market in India is estimated to reach US$ 1.1 trillion by 2020 from US$ 672 billion in 2016,
with modern trade expected to grow at 20 per cent - 25 per cent per annum, which is likely to boost
revenues of FMCG companies. In 2016-17, revenue for FMCG sector have reached US$ 49 billion and is
expected to grow at 9-9.5 per cent in FY18 supported by expectations of the total consumption
expenditure reaching nearly US$ 3,600 billion by 2020 from US$ 1,469 billion in 2015. In the long run,
with the system becoming more transparent and easily compliable, demonetization is expected to benefit
organized players in the FMCG industry.
FMCG is the 4th largest sector in the Indian economy and is valued at about US$ 49 billion as of 2016 (as
per IBEF). Household & Personal Care is the leading segment accounting for 50% of the overall market.
This is followed by Healthcare at 31% and Food & Beverages comes next in terms of market share at
19%. Under Household & Personal Care, Hair care accounts for about 23% followed by Oral care at 15%,
Home care at 6% and Skin care at 5%.
In 2016, urban area was the largest contributor to the overall revenue generated by the FMCG sector in
India with about 60% share while the rest came from semi-urban and rural areas.

Growth of Sector:
Historically, growth in private final consumption expenditure (PFCE) relates well with growth on non-
CAGR
durable goods with a ratio of 0.8 times on an average. The market size of FMCG in India is estimated to
grow from US$ 30 billion in 2011 to US$ 74 billion in 2018. Therefore, going forward, with the nominal
GDP expected to be at 11.5%, CARE expects the FMCG industry to grow by about 9-9.5% in FY18.
Also, with Indian retail market being estimated to reach USD 1.15 trillion by 2020 from USD 672 billion
in 2016 by CARE and modern trade projected to grow at about 20% per annum, it is expected to give an
impetus to revenues of FMCG companies going forward.
 Revenue Share of India (FY20E)

23%
27%

19%
15%

16%

Haircare Foods Health Supplements Oral Care Others

Top 10 Companies Indiaii:

According to the study conducted by AC Nielsen, 62 of the top 100 brands are owned by MNCs, and the
balance by Indian companies.
The top ten India FMCG brands are:
1. Hindustan Unilever Ltd.
2. ITC (Indian Tobacco Company)
3. Nestl India
4. GCMMF (AMUL)
5. Dabur India
6. Asian Paints (India)
7. Cadbury India
8. Britannia Industries
9. Procter & Gamble Hygiene and Health Care
10. Marico Industries

Porters Five Forces Model:

Rivalry among Existing Players:

Very high in FMCG sector

Price Competition
Advertisement and Promotional Stuff
 Distribution
New Product
Storage
Exit Barrier are Low
Warranty and Guarantee

Potential Entrants:

Strong Distribution Network Required

High Capital Requirement
Already Existing Brand Names

Buyer Power:

Information about substitutes

Concentration
Relative Purchase
Information Available
Product Importance

Supplier Power:

Switching Cost
Employee Solidarity
Employee Solidarity
Concentration
Relative Supply
Importance of unit
Information about substitutes

Threat of Substitutes:
Limited Number of Substitutes
Substantial Product Differentiation
COMPANY INFORMATIONiii:
ITC Limited or ITCs headquarter in Kolkata, Bengal. Its diversified business includes five
segments: Fast-Moving Consumer Goods (FMCG), Hotels, Paperboards & Packaging, Agri Business &
Information Technology.
Established in 1910 as the Imperial Tobacco Company of India Limited, the company was renamed as
the Indian Tobacco Company Limited in 1970 and further to I.T.C. Limited in 1974.
The periods in the name were removed in September 2001 for the company to be renamed as ITC
Ltd. The company completed 100 years in 2010.It employs over 25,000 people at more than 60 locations
across India.

Company Snapshot:
The Company's beginnings were humble. A leased office on RadhaBazar Lane, Kolkata, was the center of
the Company's existence.
The Company celebrated its 16th birthday on August 24, 1926, by purchasing the plot of land situated at
37, Chowringhee, for the sum of Rs 310,000.
The Company's headquarter building, 'Virginia House', which came up on that plot of land two years
later.

SWOT Analysisiv:
Strengths:

ITC has a strong and experienced management.

Strong brand presence, excellent products advertising.
Diversified product and services portfolio which includes FMCG, Hotel chains, paper &
packaging and agri-business.
Excellent research and development facilities.

Weakness:

Hotel industry has not been able to create a huge market share.
ITC is still dependent on its tobacco revenues and people have cheaper substitutes and other
brands.

Opportunities:

Tap rural markets and increase penetration in urban areas.

Mergers and acquisitions to strengthen the brand.
Increasing purchasing power of people thereby increasing demand.
More publicity of hotel chains to increase market share.

Threats:

Strict government regulations and policies regarding cigarettes.

Intense and increasing competition amongst other FMCG companies and hotel chains.
Current CEO:

SANJIV PURI
Sanjiv Puri (54), was appointed as a Director on the Board of ITC from December 6, 2015 and Chief
Executive Officer (CEO) from February 5, 2017 heading the Corporate Management Committee. He was
the Chief Operating Officer (COO) of ITC since July 22, 2016 carrying full responsibility for the day-to-
day functioning of the Company. Before taking over as the COO, he was responsible for overseeing the
FMCG, Paperboards, Paper & Packaging and Agri Businesses of ITC. Puri is an alumnus of the Indian
Institute of Technology, Kanpur and Wharton School of Business. He joined ITC in 1986.

Product and Service Portfoliov:

Cigarettes and cigar

Foods
Personal Care
Education and stationery
Lifestyle
INSENCE STICKS
Hotels
Packaging and Printing
Information Technology

Competitors Analysisvi:
Name Market Cap. Sales Net Profit
Rs. cr.) Turnover

HUL 272,756.77 31,890.00 4,490.00

Godrej Consumer 63,152.43 4,748.10 848.03

Dabur India 56,888.30 5,369.84 998.33

Marico 40,149.44 4,850.75 842.70

Colgate 28,763.84 3,981.82 577.43

 Emami 28,231.37 2,340.75 346.37

P and G 27,990.24 2,320.40 432.73

-
Godrej Ind 19,663.35 1,500.09 145.24

Gillette India 19,082.07 1,733.60 253.08

Bajaj Corp 6,824.09 792.54 220.96

Jyothy Labs 6,809.71 1,631.97 202.05

JHS Svendgaard 456.17 105.48 21.98

GKB Ophthalmics 34.91 38.32 0.63

News Including Corporate Announcement:

2 November 2017 - Diversified company ITC Ltd on Thursday launched packaged potatoes under
a new brand called Farmland in its first step into the fresh fruit and vegetables segment which is
largely unorganized.
29 October 2017 - Company reported lower volumes on account of increase in tax incidence in
the GST regime. ITCs business was also impacted due to non-availability of additional duty
surcharge credit on the transition stocks.
6 September 2017 - ITC shares fell 2.5 percent to close at Rs 275.55, After Macquarie
downgraded the cigarette major to neutral and preferred to switch to Hindustan Unilever, citing
fall in cigarette volumes.
8 August 2017 - The insurance regulator Insurance Regulatory and Development Authority has
reiterated that insurance behemoth Life Insurance Corporation (LIC) has to bring down its stakes
in ITC and L&T to below 15 per cent by December 2018.These two are considered as non-
strategic investments for LIC. While LIC holds 16.29 per cent stake in ITC, it holds 17.97 per
cent stake in L&T as of end June. However, LIC is free to continue with its strategic investments
in companies like Corporation Bank (18.9 per cent), LIC Housing Finance (40.3 per cent) and
Simplex Realty (22.9 per cent).
Marketing:

SWOT Analysis of VIVEL:

Strengths
Etensive Distributon Network
Providing a wide range of Biscuits
Innovative Advertisment

Weakness
Dependence on Stores and Retailers
Low Penetration in rural areas
Not an extensive overseas Market

Oppotunity
Increasing demand for diet and sugar free biscuit
Retaining loyal retailers and whole salers
Targeting interior area of India

Threats
Local bakery Products
New Entrants
Margin war among the major brands
Marketing Mix:

Product Price Place Promotion

Variety of The price of Vivel has a They adopt a unique
Products. Vivel friendly kind of promotional
Attracts all type product is too relationship with activities in order to
of Consumer. affordable so their distributor, attract the mass
Targets the that each class wholesalers , world.
consumer right of people can salesmen , etc. They have actor
from upper afford it. Today Vivel kareena kapoor as
level to lower The price of product has their brand
level income Vivel soap is reached all the ambassador for the
group. affordable corner of India. Vivel.
Provides High Vivel has replaced
Quality in the place of
Product with a many of its
nominal price. competitors.

Segmenting, Targeting, Positioning

STP
Segment People who care for skin

Target All age groups Lower, middle class people

Group

Positioning Extra energy to start your day help in cleaning your body
Finance:
BALANCE SHEET

Common Common
Comparitive
Size Size
Particulars FY 17 FY 16 Analysis
Analysis Analysis
2017
2017 2016

Incomes
Revenue From Operations 58731.52 55061.08 100.00% 100.00% 6.67%
Other Income 1761.53 1530.8 3.00% 2.78% 15.07%
Total Income (I+II) 60493.05 56591.88 103.00% 102.78% 6.89%

EXPENSES
Cost of materials consumed 11979.03 11168.68 20.40% 20.28% 7.26%
Purchases of Stock-in-Trade 3477.56 2595.2 5.92% 4.71% 34.00%
Changes in inventories of
finished goods, Stock-in-
592.57 -195.38 1.01% -0.35% -403.29%
Trade, work-in-progress and
intermediates
Excise duty 15927.91 15868.98 27.12% 28.82% 0.37%
Employee benefits expense 3631.73 3440.97 6.18% 6.25% 5.54%
Other expenses 7686.81 7731.78 13.09% 14.04% -0.58%
Total expenses 43295.61 40610.23 73.72% 73.75% 6.61%

EBITDA 17197.44 15981.65 29.28% 29.03% 7.61%

Depreciation and
1152.79 1077.4 1.96% 1.96% 7.00%
amortization expense
EBIT 16044.65 14904.25 27.32% 27.07% 7.65%

Finance costs 24.3 53.6 0.04% 0.10% -54.66%

Share of profit of associates
5.97 8.42 0.01% 0.02% -29.10%
and joint venture
PBT 16026.32 14859.07 27.29% 26.99% 7.86%

Current Tax 5546.16 5150.37 9.44% 9.35% 7.68%

Deferred Tax 2.93 207.84 0.00% 0.38% -98.59%
Net Tax 5549.09 5358.21 9.45% 9.73% 3.56%
 PAT 10477.23 9500.86 17.84% 17.26% 10.28%

Gross Profit and Net Profit Margin of the Company:

= 100

10477.23
2017 = 100
58731.52
= 17.839

9500.86
2016 = 100
55061.08
= 17.255

= 100

16026.32
2017 = 100
58731.52
= 27.287

14859.07
2016 = 100
58731.52
= 25.299

Working capital for the year:

=
2017 = 26269.10 7121.01
= 19148.09

2016 = 24862.50 6658.46

= 18204.04
Debt-Equity ratio of the company:

=

55943.27
2017 =
46412.93
= 1.205

51691.88
2016 =
42679.52
= 1.211

Direct and indirect costs of the company:

As at March 31, 2017

Direct Cost
Raw Materials Consumed 11979.03
Purchase of stock in trade 3477.56
Finished Goods & Work in Progress 592.57
Total 16049.16

Indirect Cost
Depreciation and Amortization expenses 1152.79
Finance costs 24.3
Other Expenses 7686.81
Employee benefits expenses 3631.73
Total 12495.63
Fixed assets added during the year:
Formula= Current year- Previous year

PARTICLURS , , Difference (in Cr.)

i. Tangible Assets
Land: Leasehold 13.26 13.41 -0.15
Land: Freehold 43.03 43.05 -0.02
Building 275.94 275.39 0.55
Plant & Equipment 299.83 291.68 -8.15
Furniture & Fixtures 22.95 20.94 2.01
Vehicles 12.40 11.08 -1.32
Office Equipment 6.08 6.88 -0.80
Total 673.49 662.43 -11.06
ii. Intangible Assets
Brands/Trademarks 1.22 1.34 -0.12
Computer Software 15.82 18.75 2.93
Total 17.04 20.09 3.05
iii. Capital Work-in 24.96 12.22 12.74
progress
Grand Total 715.49 694.74 20.75
(i+ii+iii)
Previous Year 694.74 670.38 24.36
Human Resource Managementvii:
ORGANIZATIONAL STRUCTURE

District Manager

Regional Branch Manager

Branch Manager

Assistant Branch Manager

3 Circle In charge (City, Metro & Up

Countries)

Area Executive

Supervisor

Sales Man
SKILL SETS REQUIRED IN THE COMPANY

They do not believe in stereotypes. We believe diversity is essential for building a wholesome work
environment. But there are certain basic attributes they look for:

Integrity
Positive attitude
Team Skills
Ability to think strategically
High Energy
Creativity
Leadership

JOD DESCROPTION AND JOB SPECIFICATION

For Marketing:

Job Description:
- Generate the business leads for the banquets
- Handle the in-bound as well as out-bound queries
- Must have handled a team
- Must know the basic metrics of working in a banquet sale of a five-star Hotel
- Must have excellent written and spoken skills, strong negotiation power and a reliable business
acumen
- Excellent analytical skills with a proficiency in MS Office
Keyskills: banquet sales, banquet, banquet sales executives, catering sales, hotel sales, m.i.c.e

For Human Resource:

Job Description:
1-5 years of experience in UK Recruiting/UK Staffing
One who can communicate effectively through the written word and verbally
A strong negotiator
One who has a solid understanding of technical recruiting and an ability to convince the
candidates

Keyskills:
Sourcing, staffing, linkedin, uk recruitment, us recruitment
For Finance:

Job Description:
Ensure vendors records are current, accurate, complete, and verified
Discuss discount opportunities, payment terms, and accounts statement with vendors either in
writing or verbally
Ensure accurate and efficient daily processing of employee expense reports and vendor invoices,
as well as monthly processing of corporate credit card charges
Seek the head of departments approval for invoices to be sent to vendors
Avail employees information regarding timelines for financial reporting
Assemble document and review system information in processing employee expense reports and
vendor invoices for payments
Obtain details about invoicing from operational staff and upload into the organizations billing
system

SOURCES OF RECRUITMENT

Promotion and transfers

INTERNAL METHOD Job Position
Employee Referrals

DIRECT METHOD Campus Recruitment

Advertisement
INDIRECT METHOD Professional Journals
Technical Magazines
SELECTION PROCESS

Screening of Final Selection and

Application Test Interview appointment

Joining Formalities

1. Screening of Application: All applications received from various sources will be screened by the
concerned department and HR based on the job description and specification and the applicant
profile. The ratio between the number of vacancy and the number of candidate to be called for
test/interview shall be prepared.

2. Test: Depending upon the requirement of the job if required management may conduct written/
aptitude/ psychometric/ physical or any other test as deem fit. Shortlisted application will be send
formal letter for appearing test at least 15 days in advance. Qualifying criteria for the test will be
determined by the management depending on the nature and requirement of the job.

3. Interview: All the candidates short listed for interview will be informed through a formal call
letter for attending interview at least 15 days in advance. The candidate will be interview by the
interview panel.

4. Final Selection and Appointment: Recommendation of the interview panel will be put up
before the MD by the HR department for his approval. Selection of candidates will be strictly on
the basis of merit. Appointment letter will be issued to the finally selected candidates after duly
approved by MD.Before letter of appointment is issued to candidates HR department will ensure
the following:

Check and verify all the personal details furnished by the candidates.
Verify the certificates and other credentials.
Make necessary reference/antecedents verifications whenever required.
 5. Joining Formalities:

Employees joining shall first report in the HR department will facilitate in completing the joining
formalities such as filling of joining report necessary forms.

HR department will ensure that the candidates will be allowed to join subject to their being found
medically.

INDUCTION PROCESS:
An induction programme is an important process for bringing staff into an organisation. It provides an
introduction to the working environment and the set-up of the employee within the organisation. The
process will cover the employer and employee rights and the terms and conditions of employment.
Assistants Under Training, commonly known as AUTs are students of premier engineering and
management institutes who choose to pursue their careers with ITC, straight after they graduate from their
institution. AUTs, after they join ITC, are taken through a one-week corporate induction programme
wherein various Business Heads introduce them to their businesses. The induction programme is also
aimed at facilitating a smooth transition from campus to the corporate world as well as to provide an
opportunity to interact with business leaders. On the whole the programme aims at giving an AUT an
understanding of what defines ITC, how ITC works and the lives ITC touches!!!
Once AUTs join their respective businesses, they go through a division and function specific detailed
induction programme which provides them a thorough overview of the business model of the division,
introduces them to various functions within the business and gives them an extensively detailed insight
into their own function. The induction programme is supported by projects and stints which help grasp the
various nuances of the business and at the same time contribute to the growth of the Company.

TYPES OF TRAINING PROVIDED:

ON- THE-JOB TRAINING METHODS:

This type of training, the individual is placed on a regular job and taught the skills necessary to perform
the job. On-the job training has the advantage of giving firsthand knowledge and experience udder the
actual working conditions.

Job instruction
Coaching
OFF-THE-JOB TRAINING METHODS:
During this type of training, the trainee is separated from the job situation and his attention his focused
upon learning the material to his future job performance. Since the trainee distracted by job requirement,
he can place his entire concentration on learning the job rather than spending his time in performing.

Vestibule Training method

Role Playing Method
Movies/videos/computer-based training
Discussion

PERFORMANCE APPRAISAL MODEL OF THE COMPANY:

Balanced Score Card: ITC successfully uses Balanced Score Card method for its appraisal. Balanced
scorecard was prepared on FIVE parameters, which are as follows:
Customer perspective
Financial perspective
Internal perspective
Employees perspective
Social perspective.

EMPLOYEE BENEFITS PROVIDED:

List based on reports from current and former employees:

Insurance, Health & Wellness: Health Care & Insurance, Life Insurance, Disability Insurance,
Dental Insurance, Vision Insurance.
Financial & Retirement: Pension Plan, Stock Options or Equity Retirement Plan, Performance
Bonus.
Family & Parenting: Work from Home, Maternity & Paternity Leave, Childcare, Reduced or
Flexible Hours, Unpaid Extended Leave.
Vacation & Time Off: Vacation & Paid Time Off, Sick Leave, Bereavement Leave.
Perks & Benefits: Employee Discount, Free Lunch or Snacks, Employee Assistance Program,
Gym Membership, Company Car.
Professional Support: Diversity Program, Job Training & Tuition, Apprenticeship Program.
CAREER PLANNING IN THE COMPANY:

ITC believes the responsibility for career development that rests both with the individual and the
organization. While the organization provides opportunities for learning and growth, it is the individual's
responsibility to ensure he/she enhances his/her competencies to shoulder higher responsibilities. Career
development therefore is a two-way process. Above all, the key factor determining career growth is
meritocracy and performance. The Company believes that as the competitive scenario gets more intense,
specialism will increasingly become a source of unique competitive advantage. Certain specialisms are
enhanced by extended and in-depth application and 'longevity' in a position. This requires a unique
approach to career management of such 'specialists.' Some of the specialist positions are Company
Solicitor, Scientist, Leaf Blender, Product Development Specialist, Process Specialist, Instrumentation
Specialist, Agronomist, Commodity Trader, Forex Manager, Corporate Communications Specialist etc.

ORGANIZATION CULTURE:
As per employee reviews it seems that most of the ITC limited employee thinks they have a good work
culture with great learning opportunity and great ethics. Employees respect and take care of each other.
However, the work life balance is not good due to long working hours, extensive touring and facilities are
in remote areas, also there are too many layers of hierarchy leading to slow decision making.
THANKYOU
REFERENCES
i
www.ibef.org
ii
www.wikipedia.org
iii
www.itcportal.com