Corporate Strategy

 ITC is a board-managed professional company, committed to creating enduring value for the nation and the shareholder. It has a rich organisational culture rooted in its core values of respect for people and belief in empowerment. Its philosophy of all-round value creation is backed by strong corporate governance policies and systems.

 Create multiple drivers of growth by developing a portfolio of world class businesses that best matches organisational capability with opportunities in domestic and export markets  Continue to focus on the chosen portfolio of FMCG, Hotels, Paper, Paperboards & Packaging, Agri Business and Information Technology  Benchmark the health of each business comprehensively across the criteria of Market Standing, Profitability and Internal Vitality

 Ensure that each of its businesses is world class and internationally competitive  Enhance the competitive power of the portfolio through synergies derived by blending the diverse skills and capabilities residing in ITC’s various businesses  Create distributed leadership within the organisation by nurturing talented and focused top management teams for each of the businesses

 Continuously strengthen and refine Corporate Governance processes and systems to catalyse the entrepreneurial energies of management by striking the golden balance between executive freedom and the need for effective control and accountability.

Analysis

 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  Over 6500 E-Choupal CSR activities and sustainability initiatives enhance ITC’s brand image reaching over 4 million farmers  ITC limited employees over 25,000 people  Excellent research and development facilities

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

 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

 Strict government regulations and policies regarding cigarettes  Intense and increasing competition amongst other FMCG companies and hotel chains  FDI in retail thereby allowing international brands

 VRIO approach to human resources was given by Jay Barney in 1991  VRIO framework is resource-based view or an economic tool used to determine the strategic resources available to a firm  The fundamental principle of this approach is that competitive advantage of a firm lies primarily in the application of the bundle of valuable resources at the firm s disposal

 Must employ talented and skilled work pool who will be experienced enough to implement the business level strategies by controlling the operations  This is looked after by the Human Resources department, which is able to create VALUE  Only value-adding resources can lead to competitive advantage, whereas non-value-adding capabilities may lead to competitive disadvantage  To separate the value adding employees from the others companies like ITC have a excellence performance monitoring system in place paired with a reward for performance policy

 ITC in itself offers the kind of experience which makes all its employees rare in the industry  The company also visits the best management schools every year to pick up the rarest resource in the country Talent  It trains and develops it s staff at all hierarchical levels to foster competent leaders who will be able to take on more responsibility in the future, this makes it s HR a distinctive resource

 Due to the support of a strong Training and Development module it becomes difficult to imitate the talent at ITC  Due to In-House Training and OJT’s, Roleplay’s at the T&D department, it becomes difficult to imitate

 For people to provide competitive advantage, organizations systems and practices must be exploited to the maximum  This involves a complex task of creating synergies between different departments and units in order to exploit the resources available to the company  The organizational structure of ITC is not the simplest, as it has multiple units across industries and regions

 This does lead to confusion and wastage of resources  It is an area where there is room for improvisation as more synergies and harmonies between different business units can create more wealth for the company and its stakeholders

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