...for a high level of ambiguity and both greed and self interest took precedence over the well being of farmers. The system was corrupted and the true beneficiaries were the mandis employees. The lack of resources namely technology and information made it impossible for farmers to know the true market value of their produce and therefore accepted any price set by the mandis. In many cases they received prices way below the going market price. Many unethical practices were portrayed by the mandis employees. These practices exploited farmers and the lack of education and information of the farmers furthered the abusive behavior of the mandis. The ITC group which was one of India's foremost private sectors saw the need to address these inefficiencies and therefore gave birth to a system called the E-choupal. The ITC, on implementing the E-choupal sought to improve the supply distribution chain by payment method and all in all, eliminate the inefficiencies that the mandis system posed. For example the organizational structure had to be reconstructed to lessen the number of intermediaries in the distribution chain. Payment methods were made more efficient and farmers were equipped with current information as to the price of there produce as a result of access to a computer. The case illustrates the role of globalization as it relates to the democratization of technology, finance and information and how it aids in the reduction of poverty in a third...
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...ITC E-Choupal Review 1. What was ITC's motivation for creating the eChoupal? ITC's main motivation behind creating eChoupal was to generate more sales in agriculture. The International Business Division (IBD), which was the agricultural division of ITC, was lagging behind other divisions (tobacco, retail, etc.) of the company. IBD had grossed Rs. 450 crore, while other ITC's other divisions had a total of Rs. 7701 crores in sales. ITC also wanted to increase efficiency in various aspects of the agricultural business. For example, farmers did not have access to appropriate tools that may help them achieve the maximum financial benefits. Farmers did not have access to quality inputs (pesticides, herbicides, etc.), or information on weather reports that may help improve their crop quality as well as the process of bringing it into the market. Because of this, farmers lost 60-70% of the potential value of their crop and the yield was only about a third to a quarter when compared to the global standards. ITC wanted to address the entire issue by helping the farmers earn their fair share, and improving the trading service. ITC wanted the farmers to have access to all the information, and have them make decisions on how they wanted to sell their crop. ITC enabled this by creating a Hub is each village which enabled them to attain information relating to weather, crops, best practices, and all their questions could be answered by an expert in the field. 2. What are the old and...
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...| E-VOLUTION: TECHNOLOGY AS A DRIVER OF RURAL RETAIL IN INDIA – A CASE OF ITC’S FORAY INTO THE RURAL MARKET. | Ms Smita Singh, Research Scholar, Department of Business Administration, University of Lucknow, Lucknow(M) 098395-01035e-mail: smita_saggi@rediffmail.com | Ms. Smita Singh Ms. Singh is a visiting faculty at Institute of Management Sciences, University of Lucknow and Distance Learning Centre for Punjab Technical University. She has been associated with academics for the past 2½ years and is enrolled for PhD research at the Department of Business Administration, University of Lucknow. She has worked with Wigan and Leigh College, Lucknow as Programme Manager and Academic Head, Management. A NTSE (NCERT) and HRD Ministry scholarship holder, she has qualified SLET in Anthropology. With over 8 years of industry experience, her current affiliation as Human Resource Consultant is with the Lucknow based project centre of Johns Hopkins University of Public Health and Hygiene, which she earlier served for 4 years as Manager HR and Research Associate. DECLARATION I hereby declare that the paper/case is original and is authored by me. The paper/case has not been published elsewhere ABSTRACT E-VOLUTION: TECHNOLOGY AS A DRIVER OF RURAL RETAIL IN INDIA – A CASE OF ITC’S FORAY INTO THE RURAL MARKET. 70 % of India's population lives in rural areas in its 627000 villages...
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...Developing a Rural Market e-hub The case study of e-Choupal experience of ITC B. Bowonder, Vinay Gupta and Amit Singh Abstract ICT has potential to make significant inroads in a traditional agrarian economy like India. Indian agro-sector has been exploiting the benefits to ICT. Innovative ICT application platforms are being created by private sector players in conjunction with local farmers. One such private initiative has been by ITC Ltd in the state of Madhya Pradesh. It has helped the farmers in many ways, such as developing of local leadership, shared ownership of the assets created in this initiative, access to the latest knowledge for the agro-sector, sustainable income levels and skill development for productivity improvement. This initiative from ITC[1] has become a benchmark today in the ICT initiatives in agro-sector. Several best practices can be learned from this initiative, namely: § ease of replicability and scalability § customization to meet the specific local needs and § organizational commitment. The success of e-choupal has heralded a new era in the Indian agro-sector. The work needs to be carried forward and replicated in the other untapped areas. Creating business channels that can create a win-win situation both business and farming community has enormous economies of scope. Once a channel is created it could be used for many products and services as shown in this case study. The main reasons for the success of the platform have been the involvement of...
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...Developing a Rural Market e-hub The case study of e-Choupal experience of ITC B. Bowonder, Vinay Gupta and Amit Singh Abstract ICT has potential to make significant inroads in a traditional agrarian economy like India. Indian agro-sector has been exploiting the benefits to ICT. Innovative ICT application platforms are being created by private sector players in conjunction with local farmers. One such private initiative has been by ITC Ltd in the state of Madhya Pradesh. It has helped the farmers in many ways, such as developing of local leadership, shared ownership of the assets created in this initiative, access to the latest knowledge for the agro-sector, sustainable income levels and skill development for productivity improvement. This initiative from ITC[1] has become a benchmark today in the ICT initiatives in agro-sector. Several best practices can be learned from this initiative, namely: § ease of replicability and scalability § customization to meet the specific local needs and § organizational commitment. The success of e-choupal has heralded a new era in the Indian agro-sector. The work needs to be carried forward and replicated in the other untapped areas. Creating business channels that can create a win-win situation both business and farming community has enormous economies of scope. Once a channel is created it could be used for many products and services as shown in this case study. The main reasons for the success of the platform have been the involvement of...
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...IT for Change Case Study e-Choupal – An Initiative of ITC IT for Change 2008 This case study is part of a research project that sought to analyse how different telecentre models approach development on the ground, proceeding to elaborate a typology based on the cornerstones of participation and equity. To conduct this assessment, four telecentre projects were examined: the Gujarat government’s E-gram project, the corporate-led venture by ITC called e-Choupal, the private enterprise model of Drishtee, and the community-owned telecentres of the M.S. Swaminathan Research Foundation (MSSRF). Two main criteria were used in selecting the case studies – the diversity of ownership models, and the requirement of a sufficient scale of the intervention. In addition to the field research conducted in 2008 using qualitative methods, the research also built on secondary sources. A review of the literature in the field of Information and Communication Technology for Development (ICTD) showed that while telecentres are viewed as contributing positively to development in general, they are largely not really seen as a space for catalysing transformative social change. Instead, there remains in the notion of telecentres for development a perpetuation of market-led approaches, wherein telecentres are viewed as a strategic means for expanding markets in rural areas, especially for corporates. In this approach, poor communities are repositioned as an opportunity for business, with ICTs as the most...
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...| | | ITC is the market leader in cigarettes in India. With its wide range of invaluable brands, it has a leadership position in every segment of the market. It's highly popular portfolio of brands includesInsignia, India Kings, Lucky Strike, Classic, Gold Flake, Navy Cut, Players, Scissors, Capstan, Berkeley, Bristol and Flake, Silk Cut and Duke. The Company has been able to build on its leadership position because of its single minded focus on value creation for the consumer through significant investments in product design, innovation, manufacturing technology, quality, marketing and distribution. All initiatives are therefore worked upon with the intent to fortify market standing in the long term. This in turns aids in designing products which are contemporary and relevant to the changing attitudes and evolving socio economic profile of the country. This strategic focus on the consumer has paid ITC handsome dividends. ITC's pursuit of international competitiveness is reflected in its initiatives in the overseas markets. In the extremely competitive US market, ITC offers high-quality, value-priced cigarettes and Roll-your-own solutions. In West Asia, ITC has become a key player in the GCC markets through growing volumes of its brands. ITC's cigarettes are produced in its state-of-the-art factories at Bengaluru, Munger, Saharanpur, Kolkata and Pune. These factories are known for their high levels of quality, contemporary technology and work environment. ITC Limited...
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...ITC eChoupal case Farmers in rural communities of India relied on Department of Agriculture, government, universities, insurance companies etc. for various inputs such as weather, new and scientific farming practices and insurance coverage. There was an indirect link between farmers and manufacturer via input retailers who source from wholesalers. During harvest, farmers bring these produce to Mandis bearing their own transportation cost; where beans are auctioned to the traders and agents of the processing companies in an open outcry method. This system was flawed and always leaves the farmers in a disadvantageous position. ITC, one of India’s leading private company saw the opportunity to develop the concept of eChoupal. Its main objective is to re-engineer the procurement process of the sale of the farmer’s produce. ITC motivation to crating e Choupal is to revolutionize the agricultural sector and make it more technology driven. eChoupal (virtual market place) was introduced as an initiative to improve the supply chain by linking directly with farmers for procurement. It was also designed to play the role of a social gathering place, for the exchange of information as well as a place for e-commerce transactions. The eChoupals are operated by a sanchalak (operator), who also act as an ITC salesman. The process was simple as the farmer can take a sample to the kiosk, show the sanchalak who gives a quote. If the quote is deemed attractive by the farmer, he will accept and...
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...eChoupal concept [C.K. Prahalad and MBA students] • 2nd phase (Mar-Apr, `04): Rural retail [myself w/ MBA students] Ø Client site: • Mr. S. Sivakumar, CEO (International Business Division) • Several others … employees, farmers Ø Presentation material • S. Sivakumar (talk at Michigan at the Asia Business Conference, Feb. `04) • Report of the 1st phase MBA project • Dave Upton (HBS case / draft teaching note) 1 Anupindi / MBS SCTL, July 2004 ITC's eChoupal Initiative The New Indian Economy Ø Forex Reserves : $ 100 Bn Ø GDP Growth : 7% Ø Emergence of Indian MNCs Ø India as a Destination of Choice • For Outsourcing • Billion People Market Rural India: The Real India Ø 720 Million Consumers • Potentially a Huge Market è Greater than 70% of population; less than 30% GDP • Small Wallets Ø 156 Million Hectares of arable land in 36 rich & diverse agroecological zones • Potentially Food Factory to the World Ø Government(s) spend a lot of money in developmental activities • Results not consistent with the resources Indian Farmer as a producer & consumer … 2 Anupindi / MBS SCTL, July 2004 ITC's eChoupal Initiative Bottom of the Pyramid Is there a Fortune here? Or just some Minor Change? Source: Prahalad and Hammond, “Serving the World’s Poor Profitably”, HBR, September 2002. Typical Character of Rural India u Plight of a rural Indian farmer Ø Fragmented (avg. 1.5 hectares) Ø Geographically Dispersed Ø Heterogeneous and Ø Weak...
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...growth. Companies around the world have seen the importance of reaching Low Income Consumers as the main source of expansion, knowing that in the long term, by improving their lives they would eventually turn into consumers with higher economic power that will be able to buy more products. One of the BRIC countries that are expected to account for almost a half of the GDP increase in the next years is India, and agriculture is a major contributor to this country’s GDP and accounts for more than have of the work force. However, these commodities markets and specifically the soybean was still very isolated and managed in the same traditional way as the farmers’ ancestors did. This led to a clear opportunity for ITC, to help improve the supply chain model where both the farmers and ITC where loosing profits, this adding up to the fact that the agricultural commodities division was behind in sales compared to other divisions of the company. Among the inefficiencies found through the supply chain were: 1)The presence of an intermediary called the Commission Agent who performed an unfair practice by purchasing the soybean at a lower market price to then resell it at a higher price to the processors reducing its profit margin, 2) Farmers were losing money throughout the supply chain, around 60-70% of potential crop value, as they had to pay for bagging, weighting and transport even if they didn’t close the sell and they used to lose 0.5% of his original lot because of inaccurate weighting...
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...CASE ANALYSIS: ITC IN RURAL INDIA * GROUP K2 INDIAN CONTEXT: India is a secular state, majority being Hindus. A large chunk of the Indian population still continues to live in the rural areas, their major occupation being agriculture. After independence, Indian economic strategy favoured production of capital goods which lead to development of industrial base. Private sector had to obtain manufacturing licenses for other industries With changing times and conditions, various economic reforms were introduced. Tracing back to 1973, Government asked all the multinationals to dilute foreign equity to 40% except under special circumstances. Many multinationals left the country, yet a few others continued by using the benefits available. The advantages with respect to the demographics were low cost labour, abundance of technically trained staff. By eighties, India had a good industrial environment with respect to the standards of the developing countries. The government control and restrictions was still very high. With the use of new seeds, fertilizers, pesticide and irrigation methods, India became self sufficient in food. India had a very strong Informal or Unorganized sector mainly cottage industries as they were exempted from many restrictions as compared to large or organized firms. Organized sector Labour unions were very strong in India and were politically active. By 1990, GDP was 3.5%, which was largely limited because of the stringent policies of the Indian...
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...estos agricultores y, en concreto, examina un nuevo sistema llamado eChoupal, desarrollado por la empresa india ITC. La iniciativa eChoupal, comenzó en el estado central de Madhya Pradesh, Dahod, que estaba dedicado al cultivo del frijol de soya, los agricultores tenían generaciones realizando este tipo de cultivos. La población era de aproximadamente 3000 personas que vivían de manera humilde. Una práctica ancestral de los agricultores era reunirse durante la tarde-noche, para revisar como iban a organizarse para la siembra, la venta de los productos, etc., y a éstas reuniones se les llama Choupal. En las oficinas corporativas de ITC Limited´s “International Business Division (IBD) en Hyderabad, se analizaba el concepto de Choupal para su negocio de exportaciones, ya que el frijol de soya y sus derivados eran dos tercios del negocio de exportaciones de ITC. Actores Principales • Agricultores • ITC • Mandi • eChoupal • Sanchalack • Agentes comerciales Especificar la situación de la empresa En 1999 Sivakumar fue retado por el CI de ITC, Y.C. Deveshwar, para generar un nuevo plan de negocio para la división internacional. Sivakumar, analizó la situación y se percató de que los problemas eran precisamente en la cadena de suministro, tanto de la empresa ITS como de los agricultores. Por lo que estudió el estilo de vida de las comunidades e identificó piezas clave...
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...ITC In Rural India: Case Study By Group X2 Indian context- * 88 % of rural population lived on less than $2/day * NGO’s provided assistance to the poor & voiceless * Foreign investment was discouraged * Great effort was devoted to improve agriculture * Organized sector labour was privileged compared to the poorest people * Government announced rural jobs program to lift 60 million people out of poverty * The IT sector grew rapidly as foreign companies aggressively outsourced services to India * Indian companies rarely competed abroad because of government restrictions * To increase rural presence, HUL started “Project Shakti” which was very successful * ITC launched “e-choupal” to enter into agri-business division & interact directly with the farmers * Retail sales in India was around $250 billion in 2006, which was estimated to rise by 15-18 % by 2016 * Despite widespread poverty, the poor provided significant markets for products like tea, oil, bulb, footwear, bicycles & radios * FMCG accounted for 80% of all Indian consumer spending Opportunities and challenges presented by the India’s rural market Opportunities:- 1. Majority of the Indian population is from rural areas. So in rural market the consumer base is very large. 2. In the category of consumable and durable products, there are lot of products whose rural share is more than that of urban share. This provides a great opportunity for the companies to focus on...
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...3/17/2016 3/17/2016 ITC LIMITED: INDIA FIRST Case analysis ITC LIMITED: INDIA FIRST Case analysis Kabita khanal Roll no. 14206 MBA 4th term South Asian Institute of Management Kabita khanal Roll no. 14206 MBA 4th term South Asian Institute of Management ITC LIMITED: INDIA FIRST Introduction: ITC Ltd (ITC) was incorporated on August 24, 1910, under the name Imperial Tobacco Company of India Ltd. to make cigarettes and tobacco. It was started as the consolidation of British Americal Tobacco (BAT) which was an umbrella organization. The manufacturing in India started in 1907 but later in 1912, local sourcing and processing of tobacco was started. Followed by manufacturing of tobacco, packaging and printing requirements were met by setting up a packaging and printing facility in 1925. Gradually, ITC has diversified its presence in Cigarettes, Hotels, Paperboards & Specialty Papers, Packaging, Agri-Business, Packaged Foods & Confectionery, Information Technology, Branded Apparel, Personal Care, Stationery, Safety Matches and other FMCG products. The company is rapidly gaining market share even in its nascent businesses of Packaged Foods & Confectionery, Branded Apparel, Personal Care and Stationery. ITC is largest Agri products exporter from India. Latest initiatives taken by company has paid well for its growth, Company diversified into clothes retailing, agri products, Body and Hair care...
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...Indian Institute of Management, Lucknow ITC Ltd: A Strategic Analysis Submitted to: Prof. Arun K Jain In partial fulfillment of the requirements of the course Strategic Management I Submitted by Saurav Goswami (ABM08012) Anuj Saraf (PGP27204) Kaushal Mathur (PGP27219) Sudhanshu Chawla (PGP27255) Section “D” Group 1 Letter of Transmission TO: Prof. Arun K. Jain, Strategy Group Indian Institute of Management, Lucknow FROM: Group 1, Section D Strategic Management Class DATE: March 23, 2012 SUBJECT: Strategic Analysis of ITC Ltd. Dear Sir, You had entrusted us with a project to analyze the strategy of any company of our choice using the frameworks given in the prescribed textbook. We chose ITC Ltd. for this project as it is one of India’s oldest and most diversified companies. This report begins with analyzing the strategic direction of the company which emanates from its vision & mission statements. It then looks at the decisions that the company has taken to achieve its vision by analyzing the environment it operates, the value chain and the core competencies that it has developed over the years and the key factors instrumental in its success. We end by commenting on its future prospects based on our analysis. We are grateful to you for providing us this opportunity to learn the strategic issues in contemporary businesses and giving us the necessary guidance in completing the project. We would also like to thank the entire...
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