ITC LTD.: TOWARD A TRIPLE BOTTOM LINE PERFORMANCE Case Study: Analysis Harvard Case Solution & Analysis



India is considered as the major market for all kinds of products and services particularly for tobacco products. However, the government in India has taken some serious initiatives to restrict the consumption of tobacco products as India has been an attractive market for the tobacco producing companies. Moreover, decline can been seen in the consumption of smoking in the developed world due to the government laws and changing attitude of people towards the use of tobacco and smoking which has left India with few opportunities for growth in the cigarette industry. Furthermore, according to some estimates available in the given case study, almost 11,000 people die per day globally due to the use of tobacco. Therefore, the problem for this industry has been to decide the future growth and directions of the firms that could address the interest of all the stakeholders including society as whole.

ITC Ltd was established in India by a UK based Tobacco Company in 1910 as Imperial Tobacco Company of India.ITC has been the leading private sector of India with a market capitalization of almost US $14 billion. The company is also rated as the best organization in the world by Forbes magazines. In 2011, the company acquired significant market share of about 75% and become a dominant player primarily in the cigarette business. Furthermore, it realized that by producing only one product which was also injurious to health could create a problem therefore, it diversified its business in to another markets.

ITC Ltd has been a market leader in India in the cigarette industry and due to being a dominant player it has interest in hotels, agri-business, packaged food, lifestyle products, education and stationery products, lifestyle products and more. ITC had subsidiaries in other business such as information technology. Although, together with the cigarette industry, the company also performed well in its other business in which it had diversified,however, the company has been involved in making efforts to de-emphasize its tobacco business.

Moreover, there were 14 major cigarette manufacturer companies in India and the major competitors were Godfrey Philips, Vazir Sultan Tobacco Ltd, and Dolden Tobacco Ltd. However, ITC has the greater market share than its competitors.

The management of the company also focused on the corporate social responsibility and intended to follow a responsible path in order to take care of the society. However, the company has to decide its future directions and the utilization of the available opportunities for the growth in the cigarette industry. Moreover, the company also needs to develop its strategies to address the social issues, health risks for primary and secondary smokers.


Growth Opportunity:

Studies have revealed that the people of low income and lower-middle income in urban areas of India consumed more cigarettes as compared to the similar income groups in the rural areas. Therefore, growing disposable income and increased media revelation of this segment has provided a great opportunity for the company to target them. As wealth increased, the possibility of the cigarette smoking as many people had moved from tobacco consumption to cigarette. The population in India below the age of 35 years has higher disposable incomes which provided a great opportunity for the cigarette industry...........

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