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it includes business environment of indian tobacco company. it include company's product range , PESTEL analysis, SWOT analysis, porter's five forces whic drive business environment of a company. the project analysis all the business environment related aspects of indian tobacco company.
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The Project on “Business Environment” is do hereby submitted to the Law faculty of United World School of Law, Karnavati University. And it is purposely consecrated to the Respected Professor Nityanand Jha and honorable Dean of the faculty Mr. Nachiketa Mittal. I have tried out best not to fall into lapses of the subject matter and the language but errors the habit of creeping in inadvertently. I hope that you and my fellow classmates, friends will help me in making the project more useful.
ITC was incorporated on August 24, 1910 under the name Imperial Tobacco Company of India Limited. As the Company's ownership progressively Indianised, the name of the Company was changed from Imperial Tobacco Company of India Limited to India Tobacco Company Limited in 1970 and then to I.T.C. Limited in 1974. In recognition of the Company's multi-business portfolio encompassing a wide range of businesses - Fast Moving Consumer Goods comprising Foods, Personal Care, Cigarettes and Cigars, Branded Apparel, Education and Stationery Products, Incense Sticks and Safety Matches, Hotels, Paperboards & Specialty Papers, Packaging, Agri-Business and Information Technology - the full stops in the Company's name were removed effective September 18, 2001. The Company now stands rechristened 'ITC Limited,'where ‘ITC’ is today no longer an acronym or an initialised form. ITC is one of India's foremost multi-business enterprises with a market capitalisation of US $ 50 billion and Gross Sales Value^ of US $ 10 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 as 'India's Most Admired Company' in a survey conducted by Fortune India magazine and Hay Group. ITC also features as one of world's largest sustainable value creator in the consumer goods industry in a study by the Boston Consulting Group. ITC has been listed among India's Most Valuable Companies by Business Today magazine. The Company is among India's ' Most Valuable (Company) Brands', according to 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. MULTIPLE DRIVERS OF GROWTH ITC’s aspiration to create enduring value for the nation and its stakeholders is manifest in its robust portfolio of traditional and greenfield businesses encompassing Fast Moving Consumer Goods (FMCG), Hotels, Paperboards & Specialty Papers, Packaging, Agri-Business, and Information Technology. This diversified presence in the businesses of tomorrow is powered
by a strategy to pursue multiple drivers of growth based on its proven competencies, enterprise strengths and strong synergies between its businesses. The competitiveness of ITC’s diverse businesses rest on the strong foundations of institutional strengths derived from its deep consumer insights, cutting-edge Research & Development, differentiated product development capacity, brand-building capability, world-class manufacturing infrastructure, extensive rural linkages, efficient trade marketing and distribution network and dedicated human resources. ITC’s ability to leverage internal synergies residing across its diverse businesses lends a unique source of competitive advantage to its products and services. Within a relatively short span of time, ITC has established vital brands like Aashirvaad, Sunfeast, Fabelle, Sunbean, Dark Fantasy, Mom's Magic Bingo!, Yippee!, Candyman, mint-o, KITChens of India, Farmland, B Natural, ITC MasterChef in the Branded Foods space; Essenza Di Wills, Fiama, Vivel, Engage, Savlon, Charmis, Shower to Shower and Superia in the Personal Care products segment; Classmate and Paperkraft in Education & Stationery products; Wills Lifestyle and John Players in the Lifestyle Apparel business; Mangaldeep in Agarbattis and Aim in the Safety Matches segment. This growth has been rated by a Nielsen Report to be the fastest among the consumer goods companies operating in India. CREATING ENDURING VALUE Today, ITC is India's leading Fast Moving Consumer Goods company, the clear market leader in the Indian Paperboard and Packaging industry, a globally acknowledged pioneer in farmer empowerment through its wide-reaching Agri Business and a trailblazer in green hoteliering. ITC Infotech, a wholly-owned subsidiary, is one of India's fast-growing IT companies in the mid-tier segment. This portfolio of rapidly growing businesses considerably enhances ITC's capacity to generate growing value for the Indian economy.ITC's Agri-Business is one of India's largest exporters of agricultural products. The ITC Group’s contribution to foreign exchange earnings over the last ten years amounted to nearly US$ 6.8 billion, of which agri exports constituted 57%. The Company's 'e-Choupal' initiative has enabled Indian agriculture significantly enhance its competitiveness by empowering Indian farmers through the power of the Internet. This transformational strategy has already become the subject matter of a case study at Harvard Business School apart from receiving widespread global acclaim.
To enhance the wealth generating capability of the enterprise in a globalising environment, delivering superior and sustainable stakeholder value CORE VALUES
What are Political Factors in PESTEL Analysis? The political factors play a huge role in not only investment decision by transnational corporations but also by companies such as – ITC. Political environment and other factors not only impact the cost of doing business but also long term sustainability. Some of the political factors are – governance system, democracy & institutions, military coup chances, probability of armed conflict, law and order in market etc. Political Factors that Impact ITC Limited:
party has adhered to the treaties done by previous governments, so there is a consistency in both rule of law and regulations.
What are Social Factors in PESTEL / PEST Analysis Social factors such as demography trends, power structure in the society, women participation in workforce etc have immense impact over not only the country's economy but also on workforce talent availability and level of consumer demand. Social Factors that Impact- ITC Limited:
Association with Tobacco Products affects the image: ITC has made a lot of efforts to improve its corporate image but the fact that ITC has many tobacco products in its portfolio impacts its corporate image An increase in Tax on Tobacco affects revenue: Due to the increase in taxation on tobacco products, the prices and hence revenues get affected. OPPORTUNITY Strategic Acquisitions: ITC should continue making the strategic acquisition like they have done in the past by acquiring Savlon from Johnson & Johnson and B Natural from Balan natural Foods. Keeping in mind that the product fits into the existing distribution network, ITC can look to increase its portfolio of products and expand its Non-Tobacco FMCG business and thereby strengthening the base of revenue. Growth in Purchasing power and improving lifestyle: ITC should tap on the increasing purchasing power and improving the lifestyle of customers in India. This could help in increasing revenue for all its businesses. Growing Personal Hygiene as well as Food processing Industry in India: ITC should utilise its distribution channel in Personal Hygiene and Food Processing Industry to capitalise on the growth in the categories and hence increase revenue. Tap opportunities created in the Rural Market: The growing rural market in India and other emerging nations create huge opportunities to improve the bottom-line of the company. THREAT Intensifying Competition in FMCG businesses: ITC faces intense competition in its FMCG business from large MNCs like HUL and P&G and Indian FMCGs like Patanjali and Dabur. This limits the market share for ITC. Strict Regulations and Increasing Taxation in Cigarette Business: The Tobacco and Cigarette Industry in India continue to be targeted by strict government regulations and taxation system. This possesses a threat to the highly profitable Cigarette business of ITC. Increasing awareness on health: There has been an increase in the health consciousness which has resulted in the decrease in demand for tobacco products in India. Also, anti-smoking campaigns throughout the country affect the sales of cigarettes.
To determine industry attractiveness and long-run industry profitability of the Indian FMCG Industry, we chose to apply the Porter’s five forces in our analysis. Porter’s five forces are: (1) Barriers to Entry and exit, (2) Threat of substitutes, (3) Buyer bargaining power, (4) Supplier bargaining power, and (5) Industry Competition. 1. Barriers to Entry and exit : The Indian FMCG Industry is characterized with modest entry and exit barriers. Integrated business model and increasing capital requirement in the industry restrict new entrants. Huge investments in setting up distribution networks and promoting brands and competition from established companies.
2. Threat of substitutes : Being an essential commodity the demand for consumer products is elastic. Multiple brands positioned with narrow product differentiation. Companies entering a category /trying to gain market share compete on pricing which increases products substitution. Hence, threat of substitute is high in the industry.