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Indian Tobacco Company2 | P a g e

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TITLE OF THE RESEARCH:

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A DESCRIPTIVE RESEARCH OF ITC

COMPANY

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1. INTRODUCTION

PROFILE OF THE COMPANY:

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ITC is one of India's foremost multi-business enterprises with a market capitalization of US $ 45

billion and a turnover of US $ 7 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 '10 Most Valuable

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(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.

BACKGROUND OF THE COMPANY:  

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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,

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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 Limited,

where ‘ITC’ is today no longer an acronym or an initialized form.

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LITERATURE REVIEW:

A Modest Beginning:

The Company's beginnings were humble. A leased office on Radha Bazar Lane, Kolkata, was the

centre of the Company's existence. The Company celebrated its 16th birthday on August 24,

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1926, by purchasing the plot of land situated at 37, Chowringhee, (now renamed J.L. Nehru

Road) Kolkata, for the sum of Rs 310,000. This decision of the company was historic in more

ways than one. It was to mark the beginning of a long and eventful journey into India's future.

The company's headquarter building, 'Virginia House', which came up on that plot of land two

years later, would go on to become one of Kolkata's most venerated landmarks.

1964 - ITC begins operations in Villa Le Bocage, Geneva, with a staff of five.

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1970 - ITC’s annual technical cooperation programme hits the US$ 1 million mark for

the first time.

1973 - ITC is designated United Nations focal point for technical assistance and export

promotion.

1978 - ITC’s annual technical cooperation programme hits US$ 10 million for the first

time.

1981 - ITC’s new headquarters in Geneva is officially inaugurated.

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1983 - The United Nations Development Programme grants executive agency status to

ITC.

1988 - ITC shifts focus to training and capacity-building programmes.

1990 -Extra-budgetary funds from donors fuel more than 70% of ITC’s annual

expenditures.

1992 - ITC’s annual technical cooperation programme hits US$ 20 million for the first

time.

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1995 - ITC sets out a strategic ‘road map’ to chart new responses to a changing trade

landscape, including the new World Trade Organization.

1999 - First Executive Forum, later renamed World Export Development Forum, is held

on ‘Redefining Trade Promotion’.

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2004 - ITC launches ‘best practice’ awards for trade promotion organizations.

2008 - Online Market Analysis Tools become free for users in developing countries.

2011 - US$ 87 million in annual expenditure, highest to date.

2014 - Annual expenditure planned at US$ 91.7 million, with 146 active projects and a

staff of 281.

IDENTIFICATION OF PROBLEM:

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ITC ‘s foray into Agribusiness:

Set up in 1910, the Imperial Tobacco Company of India Ltd. was as the name suggests a tobacco

company. In 1971 the organization began to diversify in a big way. Diversification resulted in

the organization being a major player in various sectors including Hotels, Textiles (Tribeni

Handlooms), Paper (Bhadrachalam Paperboards) and Cement (India Cements). In 1974 the

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company name was officially changed to ITC Ltd. ITC's Agri-Business is one of India's largest

exporters of agricultural products focusing on feed ingredients, food grains, edible nuts, marine

products and processed fruits. But it faced many problems in agribusiness:

• Insufficient control over supply chain

• Lack of infrastructure for storage, handling and transportation of produce

• Middlemen and other intermediaries blocking market and price information

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• No direct control over quality of products

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New initiative: e-Choupal:

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To address the above problems and to integrate association with rural suppliers, ITC’s

International Business Division started a unique initiative e-choupal. It was initiated to network

villages and procures Agri products for export purposes. For the first time, illiterate farmers who

lacked basic knowledge of IT were conducting e-commerce transactions. E-choupals work as

trust building activity where farmers get all types of crop related information and they can sell

their produce directly to ITC in ITC collection centers. E- choupal made use of IT tools to

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network villages and internet to provide information to farmers and others. It leveraged physical

transmission capabilities of intermediaries and dis- intermediated them from flow of information

and market signals.

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The e-choupal model worked in the following way. It had processing and collection centers as

hubs and ‘Sanchalaks’ as conveners. These sanchalaks were chosen from among the farmers and

were trained on using the PC. Farmers were provided with information like daily mandi prices,

weather reports, global prices, best farming practices and water, soil, PCR testing etc. The

farmers sold their produce in the collection centers for cash. It helped farmers in getting better

prices, while ITC could directly procure from farmers and remove the intermediaries. It

benefited the company by reducing its sourcing cost and gaining wider reach and networks. It

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helped in creating new markets for own and third party goods. ITC also used this model to sell

FMCG products like packaged vegetable oil, salt, wheat flour and sugar, agri-related goods of

other companies like Monsanto (seeds), BASF etc.

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CHALLENGES:

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There are several problems faced by the E-choupal model, most of which were unique and hence

all the more challenging. ITC faced many problems like Intermediary unrest, lack of awareness,

outdated infrastructure, problem in electricity supply etc. But gradually ITC tried to overcome

these problems. ITC upgraded the telephone lines using RNS kits. The company made use of

specially devised technical solutions to manage data along with new imaging techniques, to deal

with the bandwidth-related problems. To handle the problem of sporadic electricity, ITC made

use of backup batteries, which could be recharged with solar panels.

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FUTURE:

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The key success to the e-choupal model lies in its scalability. E-choupals have been very

successful in states like Madhya Pradesh and Maharashtra. Now ITC has to work further in its

expansion to various states and use of the e-choupals at retail chains for selling different

products.

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OBJECTIVE OF THE RESEARCH:

1. To study the literature review of ITC company

2. To collect secondary data of ITC company

3. To identify the significant variables according to the collected data

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4. To develop hypothesis of ITC company according to the problem

5. To identify the type of research which is suitable for the defined problem

6. To prepare blueprint of the research (Research Design)

7. To find out the challenges that they have faced.

8. The future of the e-choupal on which they are working.

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TYPE OF RESEARCH:

Descriptive research is suitable for this research because as it is a secondary data which is collected from companies website, records, brochures, etc.

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FORMULATE HYPOTHESIS:

A hypothesis is a Statistical propositions formulated in a certain given situation as a part of

research which state what the research is looking for the proposed research hypothesis has been

formulated as:

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1. ITC platforms can provide rural connectivity and e-commerce support. These platforms have

enormous potential provided they are conceptualized for the specific needs of the rural people

and business.

2. the most significant factor affecting farmer’s behavior is the better life style.

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3. Technology interface used in rural areas have to be very simple. Interface has to be tried for

rural settings and only after its validation it has to be used. Firstly, one has to understand the user

pattern and secondly, it has to be tried, tested and validated.

4. Rural markets are both economic and social networks and there is a strong connection between

the operation of social and economic transactions. Understanding the operations is vital before

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the systems are conceptualized. Use of local population, as much as possible helped the network

to get the acceptance closely.

RESEARCH DESIGN:

Descriptive research design:

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It is a type of research design in which the information is based on the previous performances which is conducted. It is the collection, measurement and analysis of data. It is important for finding the managerial problem and converting it into research problem. It helps us in guiding and analyzing the problem and finding out its solutions. From this research we have find out the types of data and purpose of this research.

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CONCLUSION:

The e-Choupal model shows that a large corporation can combine a social mission and an

ambitious commercial venture; that it can play a major role in rationalizing markets and

increasing the efficiency of an agricultural system, and do so in ways that benefit farmers and

rural communities as well as company shareholders. ITC’s example also shows the key role of

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information technology—in this case provided and maintained by a corporation, but used by

local farmers—in helping to bring about transparency, to increase access to information, and to

catalyze rural transformation, while enabling efficiencies and lowcost distribution that make the

system profitable and sustainable. Critical factors in the apparent success of the venture are

ITC’s extensive knowledge of agriculture, the effort ITC has made to retain many aspects of the

existing production system, including retaining the integral importance of local partners, the

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company’s commitment to transparency, and the respect and fairness with which both farmers

and local partners are treated.

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BIBLIOGRAPHY:

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http://www.itcportal.com/about-itc/profile/index.aspx http://www.itcportal.com/about-itc/profile/history-and-evolution.aspx http://www.intracen.org/uploadedFiles/intracenorg/Content/About_ITC/

Corporate_Documents/Annual_Report/AR-2013-EN-FIN-web.pdf http://www.slideshare.net/akhil.gupta/itc-ltd http://www.sibm.edu/FacultyResearch/pdf/itc.pdf http://pdf.wri.org/dd_echoupal.pdf

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http://www.ijmrbs.com/ijmrbsadmin/upload/IJMRBS_53023d8b06ba5.pdf

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