Business Model Of ITC Limited: How Does ITC Make Money?

Sushree Sangeeta Behera Sushree Sangeeta Behera
Sep 6, 2021 7 min read
Business Model Of ITC Limited: How Does ITC Make Money?


The height to which a business can be taken is sometimes hard for the eyes to meet. Some turn out to be pro at this, whereas sum ends up with nothing on this earth.  Several factors together build up to make a successful business stand; it becomes tough and competitive to keep all the elements simultaneously. Some minds prefer sticking to one type of business. On the other hand, some reasons go a step ahead creating various branches on which their business runs.

Likewise, ITC limited is one that comes under the second category. With utter determination, it has become a well-renowned brand that pops up in nearly every advertisement that we come across. Not just stopping at one-way success, ITC made sure that it ends up ruling its domain. So here in the lines which follow, we will be sailing through the functioning and execution of the ITC limited.

About ITC limited
Business Model of ITC
What is unique in the business model of ITC
How does ITC make money?
Conclusion
FAQs

ITC Limited Business model analysis

About ITC limited

1910 being the birth year of this highly established company, Kolkata in West Bengal houses its headquarters. Generally, ITC can be simply understood as a multi-industry company with its working hands in more than one business field. And that too is confined to single geographical coordinates, instead of growing with many locations in hand. However, the source of these hands is familiar with Sanjiv Puri as the chairman and managing director of this company breaths.

Areas of operation

The Indian subcontinents being the central arena to work on. Which further have countries like India, Nepal, Bhutan, Sri Lanka, Bangladesh. Besides that, the Gulf countries also get a taste of their business.

Essential products and services

ITC Products
ITC Products

As stated earlier, ITC is no one business company. Hence there's a wide range of products this company houses. Because of this wide range of variety, it attracts the masses and meets the needs at large. If we go on having a quick look over the list would start from ;

1. FMCG products: The light hectic free products from packaged food, household items, cosmetics, items we need daily, etc. Its fast-moving products include brands related to personal care products such as Fiama, Vivel, and Superia, stationery products such as Classmate, packaged food products such as Aashirvaad, Lychee Flavour, Bingo!, Sunfeast Dream Cream biscuits. Matchsticks and incense sticks such as Mangaldeep are also included under ITC's products.

2. Apparel: With fashion being a significant component in our lives, it was a good move on the part of ITC to have a competition in this too. John Players, ITC's apparel brand, serves its customers with quality formals, casuals, denim, and accessories.

3. Cigarettes: Named the tobacco company in its early days, cigarettes and tobacco were ITC's initial products. Wills, the globally renowned cigarette brand by ITC, also serves its broad audience with designer wear, formal wear, casual wear, evening wear apart from cigarettes. Other popular cigarette brands include Scissors, Classic, Gold Flake, Flake, Insignia, Navy Cut, Briston, etc.

4. Hotels and resorts: It's one of the best investments, no doubt. ITC also holds its name under the list of premium hotels. Welcomhotel, ITC Hotels, Fortune Hotels, and Welcomheritage Hotels are the premium brands of hotels. These hotels have over 100 hotels spread across 70 destinations.

5. Agribusiness: ITC ranks second in providing agri-products which include feed ingredients such as soya meal, marine products such as prawns and shrimps, food grains such as wheat, barley, maize, processed foods, and coffee.

6. Paperboards & Packaging: ITC's paperboard products include paperboard, specialty paper, graphic paper, and others. Apart from this, ITC provides printing services for both Indian and international clients.

7. ITC Info Tech: ITC also provides business-friendly technical solutions related to manufacturing, banking, finance, travel, and healthcare.


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Target audience of ITC

Fixing a confined group to such a massive range of products and services is somewhat nearly impossible. With its diverse ability to produce constantly keeping the variety in front, it draws every pair of eyes and ears irrespective of the age group. That too from every field possible.

Day by day, ITC is extending its services and targeting audiences from every age group. ITC has to go hand in hand with the people’s choice, which varies with every square kilometre. Thus, to suit every individual’s need, the company is always in a constant state of polishing itself. It makes sure that it takes people of all ages under its production umbrella in a way that makes room for everybody’s needs.


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Business Model of ITC

ITC Limited Logo
ITC Limited Logo

Hence, to build its revenue without any hindrance, the company has a beneficial business model on its table. ITC makes sure that it produces something new to attract the audience. This way, they would be drawn like magnets, end up investing in the latest products in the market.

To get people to know about the new launches, it also never lags in displaying those. Along with that, back in the company’s production house, there’s always constant research about the mass. It helps in designing their upcoming innovation according to the audience’s feedback.

To carry on the smooth functioning of the company, the resources have to be rigid. The infrastructures, physical inputs of the employees, transportation, and storage are valuable resources. These also include a set of experienced workers who know the mass from a closer perspective. And thus, insist on producing what should be the following product. These resources are like the pawns of the company. As a group, they contribute a significant amount to the revenue bar of the company.

The customer gets a symbol of the wise company not to remain put with the profit from a particular segment. Likewise, ITC, by being an all-friendly company thinks about, the needs of every age group. Also, people of every geographical region. Every human should feel the essence of its products. Be it an urban or rural,  a small town or big city, ITC makes sure that the products reach every hand that searches for them. Hence, getting inputs from all directions helps the company with better motivation and finance as well.

ITC being such a vast organization has the best value services for its customers. As it is confined to a single sector of producing, the customers are provided with a variety of offers and reasons to visit the company’s doorstep. The central bullet point is that all these services root from a single branch.

To sell its products, ITC never falls short of platforms. It is evident that for such a vast project, several stations would be required to enter the market. Thus, the online distribution network is a convenient way. Apart from that, all sorts of apps designed by or for ITC do the job. It attracts, gives ideas, and makes aware people of the existence, efforts, and production of ITC. All these factors shape the business model of ITC.

What is unique in the business model of ITC

Starting from consumables to household items and paperboards, ITC does its best to satisfy its audience. A hard-to-count bunch of products brings ITC its title of being the most renowned producer. Apart from a small loophole of producing tobacco, the rest of its products are high on demand always.

There's no doubt that ITC has a robust network when it comes to the delivery of products. Production, storage, and delivery of such large quantities would sit on a vast expanse of land. That, too, ITC has well-taken care of. It is making sure that its products reach the assigned location in the minimum time possible.

In the initial days, ITC diversified its resources and extended its business across many different sectors. It helped it create its brand presence which ITC utilized while entering into the FMCG sector. Moreover, ITC's diversified business has led to reduced costs of outsourcing. The interrelation between its businesses has helped it grow and establish itself.

How does ITC make money?

Breaking down the streams of revenue, cigarettes contribute to about 77% of its revenue generation. On the other hand, paperboard & packaging contribute about 7.3% to the payment. Looking at other products, their agri-business contributes about 7.0%, hotels contribute about 4.3%, and FMCG products contribute about 4.0% to their total revenue.

Conclusion

Starting from scratch as a tobacco-producing company to being the ITC limited, this company has come a long way. Striding past innumerable competitors, it has gained what many dreams. Nevertheless, ups and downs are a combo pack that comes with every business. But with the amount of build-up ITC has already created, it would be a sweat-drenching process for any company to snatch the market from ITC. We, as consumers, with great delight, pick up the products of ITC without any second glance, which makes it even more invincible.

FAQs

What is main business of ITC?

ITC Limited is an Indian conglomerate with diversified businesses in Fast Moving Consumer Goods comprising Foods, Personal Care, Cigarettes, Apparel, Stationery Products, Incense Sticks, Safety Matches, Hotels, Packaging, and others.

What is the revenue of ITC?

According to the 2020 update, 52,001 crores is what the present revenue of ITC stands for.

Who is the CEO of ITC?

Sanjiv Puri was appointed as the CEO in February 2017 and continues with his post to date.

How much debt does ITC have?

329.35 crores are the debt amount ITC has, as recorded in March of 2021.

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