itc case study group discussion

ITC Limited: One of India's Foremost Private Sector Companies

Devashish Shrivastava

ITC Limited is an Indian global aggregate organization headquartered in Kolkata, West Bengal. Established in 1910 as the 'Magnificent Tobacco Company of India Limited' , the organization was renamed as the 'India Tobacco Company Limited' in 1970 and then to 'I.T.C. Constrained' in 1974. The specks in the name were expelled in September 2001 and the organization was renamed as 'ITC Limited'.

The organization completed 100 years in 2010 and during 2012-13, it had a yearly turnover of $8.31 billion and a market capitalization of $52 billion. It employs more than 30,000 individuals in over 60 areas in India and is part of the Forbes 2000 rundown.

History & How ITC Was Started Products & Brands Under ITC Business Model & Marketing Strategy of ITC Growth Of Business Conclusion FAQs

History & How ITC Was Started

Tobacco Business

Since the organization was to a great extent dependent on horticultural assets, it wandered into associations in 1911 with the ranchers of southern India for sourcing leaf tobacco. Under the organization's umbrella, the 'Indian Leaf Tobacco Development Company Limited' was framed in the Guntur area of Andhra Pradesh in 1912. The principal cigarette processing plant of the organization was set up in 1913 in Bangalore .

In 1918, leaf-purchasing focuses were made in southern India. ITC's cigarette manufacturing plant at Munger was outfitted with a printing office in 1925, clearing the path for its first non-tobacco business. Even though the initial six years of the company's presence were essentially committed to the development and union of cigarettes and leaf tobacco organizations, ITC's bundling and printing business were set up in 1925 as a key in the reverse mix for ITC's cigarettes business. It is today India's most complex bundling house. More industrial facilities were set up in the next years for cigarette producing capacity all over India.

In 1928, development started for the organization's central command, the 'Virginia House', at Calcutta. ITC procured Carreras Tobacco Company's plant at Kidderpore in 1935 to further fortify its essence. ITC set up an indigenous cigarette tissue-paper-production plant in 1946 to essentially lessen import costs and an industrial facility for printing and bundling was set up at Madras in 1949. The company obtained the assembling business of Tobacco Manufacturers (India) Limited and the integral lithographic printing business of Printers (India) Limited in 1953.

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Indianization Of Business

The organization was changed into a Public Limited Company on 27 October 1954. The initial move towards Indianization was taken around the same time with 6% of the Indian shareholding of the organization. During the 1960s, innovation was given more concentration with the setting up of cigarette hardware and channel pole fabricating offices planned for accomplishing independence in cigarette production.

Ajit Narain Haskar became ITC's first Indian director in 1969, and this was important for encouraging Indian administration within the organization. As the organization's proprietorship was logically Indianized, under Haskar's authority, the name of the organization was changed from 'Magnificent Tobacco Company of India Limited' to 'India Tobacco Company Limited' in 1970.

ITC likewise turned into the first organization in quite a while to begin staged-Indianization of capital; the Indian shareholding component of ITC developed from 6% to 25%. ITC went into brand sponsorship for different games, beginning from the Scissor's Cup in 1971. Creative market crusades and electronic information handling began during the 1970s.

In 1973, ITC set up its incorporated research focus in Bangalore, went for expansion, and wandering into innovative work. With the unfurling enhancement designs, the name of the organization was changed to 'I.T.C. Limited' in 1974. The Indian shareholding aspect increased to 40% during this time. ITC went into the cordiality part with inn business in 1975 with the ITC Welcomgroup Hotel Chola in Madras.

ITC picked the cordiality segment for its capability to procure elevated amounts of outside trade, create the travel industry framework, and foster a huge scale of immediate and aberrant business. The shareholding went over 60% in 1976 and more lodgings were started by the organization in the next years. In 1979, ITC entered the paperboards business by advancing ITC Bhadrachalam Paperboards Limited. J N Sapru took over as the organization's director in 1983 and universal development began with the obtaining of Surya Nepal Private Limited in 1985.

The year 1986 saw overwhelming moves from the organization with the opening of an Indian eatery in the city of New York , the securing and renaming of Vishvarama Hotels to ITC Hotels Limited, and the setting up of two new pursuits - the ITC Classic Finance Limited and ITC Agro Tech Limited. ITC likewise went into the eatable oils industry with the dispatch of the 'Sundrop' brand of cooking oils in 1988. Tribeni Tissues Limited was gained in 1990. K L Chugh accepted the job of administrator in 1991, and ITC Global Holding Private constrained was launched as a universal exchanging organization ( Singapore ) in 1992.

In 1994, every one of the inns under the organization was moved into the recorded backup organization ITC Hotels Limited. ITC, through the brand 'Wills', supported the 1996 Cricket World Cup.

Y C Deveshwar took over as the organization's administrator in 1996, and the corporate administration structure was re-framed to help the successful administration of various organizations. ITC left the eatable oils business and monetary administrations, sold the ITC Classic Finance Limited to ICICI Limited, and handed the 'Sundrop' business to ConAgra Foods Limited in 1998.

In the year 2000, creative activity for ranchers called 'e-Choupal' began in Madhya Pradesh 2000. That year saw the dispatch of ITC's 'Wills Sport' scope of easygoing wear with the first retail outlet in New Delhi and ITC's entrance into stationery items and gifting business through the 'Articulations' scope of welcome cards and 'Cohort' note pads.

An entirely claimed data innovation auxiliary, ITC Infotech India Limited was launched in 2000 and ITC Bhadrachalam Paperboards Limited was converted into ITC Limited. The name of the organization was changed to 'ITC Limited' precluding the spots and adjusting the system 'No stops for ITC' in 2001. A representative investment opportunity plan was presented, and a web-based interface for the organization was propelled. Backups for ITC Infotech were set up in the United Kingdom and the USA.

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Products & Brands Under ITC

• Cigarettes: Insignia, India Kings, Classic, Gold Flake, Silk Cut, Navy Cut, Scissors, Capstan, Berkeley, Bristol, and Flake.
• Prepared Foods: Kitchens of India, Aashirvaad, Sunfeast, Mint - O, Candyman, and Bingo.
• Way Of Life Retailing: Wills Lifestyle, John Players, and Miss Players.
• Individual Care: Essenza Di Wills, Fiama Di Wills, Vivel Di Wills, Vivel, and Superia.
• Welcome, Gifting, And Stationary: Brands incorporate Classmate, PaperKraft, and Color Crew. Propelled in 2003, Classmate proceeded to turn into India's biggest scratchpad brand in 2007.
• Security Matches: IKno, Mangaldeep, VaxLit, Delite, and Aim.

• Incense Sticks: Ship, I Kno, and Aim brands of security matches and the Mangaldeep brand of agarbattis (incense sticks).
• Nourishments: ITC's real sustenance brands incorporate Kitchens of India; Aashirvaad, B common, Sunfeast, Candyman, Bingo! what's more, and Yippee! ITC is India's biggest vendor of marked nourishment with over Rs. 4,600 crores in 2012-13. It is available crosswise over 6 classifications in the nourishment business that include nibble sustenances, prepared to-eat suppers, organic product juices, dairy items, and dessert shops.
• Individual consideration items incorporate aromas, haircare, and skincare classifications. Significant brands are Fiama Di Wills, Vivel, Savlon Soap, and Handwash, Essenza Di Wills, Superia, and Engage.
• Lodgings: ITC's Hotels division (under brands including WelcomHotel) is India's second-biggest in-network with more than 90 inns throughout India. Brands in the friendliness area possessed and worked by its auxiliaries incorporate Fortune Park Hotels and WelcomHeritage Hotels.
• Paperboard: Products, for example, claim to fame paper, realistic and other paper are sold under the ITC brand by the ITC Paperboards and Specialty Papers Division. Classmate stationery products that are popular for their quality are manufactured by ITC.
• Bundling And Printing: ITC's Packaging and Printing division work producing offices at Haridwar and Chennai.
• Data Technology: ITC works through its completely possessed backup ITC Infotech India Limited.

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Business Model & Marketing Strategy of ITC

Established in 1910 as Imperial Tobacco Company of India, the organization at first managed tobacco items for a considerable length of time before broadening into non-tobacco items during the 1970s. ITC from that point forward has developed as a multi-business combination having business in different enterprises: Hotels, Lifestyle retail stores , prepared to eat division, confectionary segment, Paperboards portion, body care items and so forth.

ITC is one of India's prominent multi-business ventures with a market capitalization of $52 billion and a gross sales value of $10 billion. ITC is crowned among the world's best big Companies, Asia's FAB 50, the World's Most renowned Companies by Forbes magazine, and as 'India's Most Admired Company' in an overview directed by Fortune India magazine and Hay Group. ITC was also included as one of the world's biggest practical worth makers in the buyer merchandise industry in an examination by the Boston Consulting Group. ITC has been recorded among India's Most Valuable Companies by Business Today magazine. The company is among India's '10 Most Valuable (Company) Brands' as indicated by an investigation led by Brand Finance and distributed by the Economic Times. ITC likewise positions itself among Asia's 50 best-performing organizations arranged by Business Week.

ITC's business model and marketing strategies are as follows:

Advantage Of Competition

• Big Conglomerate: Throughout the years, ITC has turned into a huge combination offering a huge scope of items and administrations running from agri-products and nourishment items in the FMCG segment to IT solutions. Involvement in such a differing cluster of items and administrations has helped the organization raise as an unmistakable player in the market: cigarettes, hotels and paperboards, and packaging divisions.
• Vast Experience: With 108 years of involvement in the Indian market, ITC has built a hearty conveyance structure that is parallel to none of its rivals present. This has helped the organization to comprehend the needs of the customers, making it monetarily solid and aggressive.
• The X-Factor: ITC's E-Chaupal activity planned for making the web accessible to Indian ranchers has contacted the lives of a large number of ranchers and their families in the provincial piece of the nation. ITC has expanded brand nearness through this social activity and has brought some brand quintessence focus to the firm.

Use Of BCG Matrix

ITC's business sections are FMCG-Cigarettes, FMCG-Foods, ITC Infotech, Agri-Business, Hotels, Paperboards and Packaging, Branded Apparels, and Packaged Foods. Out of these, FMCG-Cigarettes is its money cow while Agri-Business, Hotels, Paperboards, and Packaging come in the "star" section for ITC. FMCG-Foods still gives off an impression of being a question mark for the firm while Branded attire and Packaged substances are ordered as canines for the firm.

Distribution

The organization works with its business channel; items are made accessible to the discount vendors through Carried and Forward Agents (CFA's) which is then sent to the retailers in towns directly or through Small Wholesale Dealers to reach the customers in the remotest of Indian areas.

Brand Value

ITC has been positioned 772 on Forbes magazine rundown of top 2000 organizations all around. The brand has been esteemed at $51.5 billion as of June 2018. ITC also found a place at 239th position in the universe's best bosses rundown of Forbes Magazine and Asia's 50 greatest performing organizations rundown assembled by Business Week.

Investigation Of Market

Under the GST system , extra cess being charged over the GST of 28% on cigarettes and tobacco-related items, ITC has assessed a steady taxation rate of over 20%. Investigators have assessed that the organization's deals volumes of cigarettes have endured a shot and has declined by over 5% in the last quarter. Remote trade profit over the most recent 10 years remained at $7.1 Billion of which agri fares comprised 56% of the offer. In the social division with direct work to more than 32,000 individuals and through drives like e-chaupal, social and homestead ranger service activity, and 'Mission SunehraKal', ITC has contacted the lives of a huge number of ranchers and their families in provincial India.

On the earth front, ITC has been a Water Positive Enterprise (16 years straight), Carbon Positive Enterprise (13 years straight), and solid waste reusing Positive (11 years straight). This is the main undertaking in the realm of practically identical measurements to have accomplished and supported the 3 key worldwide lists of natural maintainability.

Analysis Of Clients

With its different scope of items and administrations, ITC caters to a diverse scope of clients going from the age group of 5-60 years and even more with its items running from Candyman and Mint-o to Aashirvaad and so on.

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Growth Of Business

Cigarette-to-cleanser producer ITC has revealed 10.69% year-on-year development merged net benefit at Rs 13,162.30 crores for the money related year 2018-19, driven by paperboards, paper and bundling, lodgings and FMCG business.

"The organization had posted a united net benefit of Rs 11,890.78 crore in the budgetary year 2017-18," ITC said in a recording to the Bombay Stock Exchange. United income from tasks expanded possibly by 4.55% to Rs 49,862.11 crore in FY19 when contrasted with Rs 47,688.5 crore in FY18. On the quarterly premise, the FMCG major posted an 18.72% development in net benefit at Rs 3,482 crore in the Jan-Mar period when contrasted with Rs 2,932 crore in a similar quarter of the most recent year. Income expanded to Rs 12,206 crore in Q4FY19 when contrasted with Rs 10,586.80 crore in Q4FY18, helped by exchanging openings oilseeds, wheat, and espresso in agribusiness, higher volumes and improved acknowledgement in paperboards and improvement in RevPar in lodgings. The working benefit (EBITDA) of the organization expanded to Rs 4,572 crore against Rs 4,144 crore in the year-prior period.

"The organization conveyed one more year of strong execution despite a difficult working condition. The Cigarettes Business, affected by soak increment in assessments under the GST system, honed centre around conveying world-class items through nonstop advancement alongside top tier execution consequently solidifying its market standing," ITC said in the trade documenting. A week ago, rival Hindustan Unilever Limited (HUL) revealed a 15.98% y-o-y development in united net benefit at Rs 6,060 crore for the money related the year 2018-19, against income of Rs 39,860 crore. ITC's board has prescribed a profit of Rs 5.75 per customary portion of Re 1 each for the monetary year finished 31st March 2019, subject to the imperative endorsement, which will be paid on July 16, 2019.

In a different advancement, the organization delegated Sanjiv Puri, Managing Director, as the Chairman of the Company with impact from May 13, 2019. Puri's advancement comes after YC Deveshwar, ITC's longest-serving Chairman, passed away on Saturday. Thus, Puri's new assignment is Chairman and Managing Director of the organization. Following profit declaration, portions of ITC declined in negative territory to exchange at Rs 288.50 each, down 3.09% on the BSE.

ITC ltd. is a leading FMCG Company in India and for the last three consecutive years, it has shown accelerated growth in the FMCG portfolio. ITC has placed itself successfully as a market leader in various verticals and will continue to dominate through several brands.

What is ITC Limited?

ITC Limited is an Indian global aggregate organization headquartered in Kolkata, West Bengal. It has a diversified presence across industries such as cigarettes, FMCG, hotels, packaging, paperboards and speciality papers and agribusiness.

What is the 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.

Which brands are under ITC?

• Foods - Aashirvaad, Sunfeast, Candyman, Bingo, Yippee.
• Personal Care - Essenza Di Wills, Fiama Di Wills, Vivel Di Wills, Vivel, and Superia.
• Lifestyle - Wills Lifestyle, John Players, and Miss Players.
• Stationery - Classmate, Paperkraft.
• Matches & Agarbatti - AIM, Mangaldeep, Homelites.

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Did You Know? 

ITC is the only company in the world of comparable dimensions to be carbon, water, and solid waste recycling positive.

Awards and Recognitions

1.      Pulp and Paper International Awards by Fastmarkets RISI.

2.     First Prize in “Best in Industry for CSR Activities” at the National Water Awards 2022. 

3.     The SABRE Award for achievement in Reputation Management in 2021.

4.     “Best Governed Company” at ISCI National Awards for Excellence in Corporate Governance 2020.

5.     “The Corporate Hotelier of the World Award 2019” from Hotels USA.

Did You Know?

Renewable energy makes up about 43% of the total energy used in ITC. 

Market Details

Business model.

The major pillars of ITC’s business model focus on multiple revenue streams, diversification, and customer satisfaction.

1.    Diversification – Their company operates in several industries, such as FMCG, packaging, lodging, etc. They provide affordable products to a diverse range of customers in each business. 

2.    Revenue Streams – Although the sale of cigarettes is their main source of income, they also make money from hotels, FMCG, and paperboard segments. 

3.    Presence – ITC is recognizable nationwide due to its vast corporate presence and reputation, which they have developed over time.

4.    Distribution Network –  Reaching every region of the nation is possible because of ITC’s extensive and dispersed distribution network. 

The operations of ITC can be classified into 4 major segments.

1.      FMCG – ITC has a strong representation in the sector of Fast Moving Consumer Goods (FMCG). They sell a wide range of goods, including branded packaged food products, cigarettes, stationery products, and personal care items.  

2.     Agri Business – The segment of the business sells a variety of goods like unmanufactured tobacco, wheat, rice, and spices. The segment provides brands like Kitchens of India, Aashirvaad, Sunfeast, and Bingo. sdaA

3.     Hotels – They own various hotels around the nation that provide first-rate hospitality services. 

4.    Paperboards, Paper and Packaging – ITC is one of the biggest paper manufacturers in India, and its eco-friendly product line is well-known.

Financial Highlights

Balance sheet.

The graph indicates a substantial increase in major line items. Thus, indicating a slow but consistent growth trajectory without raising non-current debt.

Income Statement

The graph shows a major jump in total income over the past 2 years. A significant jump in profit figures.

Cash Flow Statement

SWOT Analysis

1.      The company offers a wide variety of items , which lowers its business risk and offers it significant room for expansion.

2.     It is regarded as a well-established brand , which helps it win over consumers’ trust and take the lead in the industry. 

3.      Reaching both urban and rural customers nationwide is made possible by ITC’s remarkable nationwide distribution network . 

4.      The company’s finances have shown consistent growth ; they have experienced major improvements in all line items over the years. 

1.     A major source of revenue comes from the tobacco industry , which may be subject to regulatory changes in the future and ultimately result in a reduction in their profitability. 

2.      Despite being a leading player in the Indian market, ITC has not been able to control a significant portion of the global market .

3.      ITC operates in the highly competitive FMCG sector , where they face fierce competition from both local and foreign companies. 

Opportunities

1.     They have a fantastic chance to grow the company globally and make use of their experience and well-known brand to gain market share. 

2.      They could take up fresh ventures in a variety of industries, such as wellness, renewable energy, and healthcare. 

1.      Their income and profitability could be negatively impacted by any economic downturn .

2.      Since the tobacco industry is their main source of income and social activists are a danger to them, any regulation changes implemented by the government could hurt the operations . 

3.    Consumer preferences are subject to frequent changes throughout time. Businesses risk losing the market share if they are unable to adapt to changing customer tastes and preferences. 

ITC leads the FMCG market; over time, its product line has broadened, and in recent years, its revenue has increased significantly. We can conclude from a thorough analysis of all the variables, including risk and strength, that the company has positioned itself as a market leader across several categories and will persist in its dominance of the FMCG sector. If you are looking to invest in this company, then consider your risk profile before making any investment decision. 

Frequently Asked Questions (FAQs)

Q1. Is ITC a profitable company? Ans. Yes ITC is a profitable company as it has been making profits for a long time.

Q2. Who is the chairman of ITC? Ans. Mr. Sanjiv Puri is the chairman and managing director of the company.

Q3. Does ITC operate hotels? Ans. Yes, ITC operates a luxury chain of 115 hotels in 80+ destinations.

Q4.  What are the major popular cigarette brands of ITC? Ans. Insignia, India Kings, Gold Flake, Wills Navy Cut, Capstan, Classic, etc., are popular cigarettes sold by ITC.

Q5. What was ITC’s first product? Ans. ITC started its business in 1910 by manufacturing tobacco products and cigarettes.

Disclaimer: The securities, funds, and strategies mentioned in this blog are purely for informational purposes and are not recommendations.

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ITC Case Study | Business Model (ITC Marketing Strategy)

lapaasindia

July 4, 2019

Recent Blogs

2 Minute Summary

ITC Limited  is an Indian multinational conglomerate company headquartered in Kolkata, West Bengal. ITC was started on 24 August 1910. The name of the company was the Imperial Tobacco Company.ITC business model was to sell cigarettes and tobacco And Expanded in Nepal in 1985. In 1974 they abbreviated their name to I.T.C Limited. ITC is one of the major players in the hotel sectors. The journey of their hotel industry started in 1975. And today they have 100+ hotel chain. Also, They started a couple of business under the ITC Group(Full Detail in Blog). ITC has more than 40 Lakhs farmers associated with them in their E-Choupal concept. The man behind ITC is  YC Deveshwar joined in 1968. Also, He recognized with many awards. Also, there is much more detailed information in the Blog.

Have you ever wondered how the Indian Tobacco Company (ITC) became a leading FMCG Company in the market?

Yes, you got it right ITC was started as a tobacco company.

Here’s an ITC case study to cater to all your doubts!

Now, ITC stands out to be a key player in the FMCG industry.

Be it the sun feast in the biscuits & Ashirvaad aata in the flour category, all have a separate place in our hearts!

Let’s find out the journey of the tobacco company and their transformation into an FMCG company.

This ITC Case Study will help us in learning their business model, history, strategic management & much more.

What’s in it for me?

Let’s take an insight into what this ITC case study is all about

-ITC Analysis: How it became a huge success?

ABOUT THE TOP MANAGEMENT

Sivakumar Surampudi: Divisional Chief Executive of the Agri-Business Division

Sanjiv Puri: President of FMCG Businesses

Rajiv Tandon: CFO

Yogesh Deveshwar: CEO

Anand Nayak: Head of Human Resource Development

Initial Years

ITC Limited  is an Indian multinational conglomerate company headquartered in Kolkata, West Bengal. ~ Wikipedia

Let us start this ITC case study & see how everything started:

ITC was started on 24 August 1910 in Calcutta (now Kolkata).

The name of the company was the Imperial Tobacco Company.

 ITC business model was to sell cigarettes and tobacco. They ran their business in a rented building.

ITC manufactured their products and hired services from outsiders for packaging & printing of their products.

Gradually the demand for their products started rising.

In 1925 they established their own factory in which they started their own printing and packaging of the products.

This can be said Strategic Backward Integration.

It means ITC started producing segments internally of its supply chain.

In 1926 they bought a building in Chowringhee (Now J.L. Road) for Rs.3, 10,000.

The building in Chowringhee is now called ‘Virginia House’- Headquarters of ITC.

In 1970 the name of the company changed from Imperial Tobacco Company to India Tobacco Company.

In 1974 they abbreviated their name to I.T.C Limited.

ITC is one of the major players in the hotel sectors. The journey of their hotel industry started in 1975.

In 1975 ITC acquired a hotel in Chennai which was rechristened ‘ITC- Welcome group Hotel Chola’ (now renamed My Fortune, Chennai).

Today, ITC has more than 100 hotel chains which are further divided into 4 sectors-

Luxury Collection

Welcome Hotels

Fortune Hotels

Welcome Heritage

ITC is also expanding globally. There are various projects of ITC that are running in countries like Sri Lanka, Dubai, etc.

ITC diversification strategy

Now, ITC was a big brand. In 1979 they diversified their business & started with the business of manufacturing paper boards.

They created a separate company for the paperboard business namely ‘Bhadrachalam Paperboards Ltd.’

They were performing well in India and it was now time to expand overseas.

In 1985 they started their cigarette and tobacco business in Nepal.

Later on, in 2002 it became the subsidiary of ITC Limited and was named as Surya Nepal Private Limited.

In 1990 ITC acquired Tribeni Tissues Limited (TTL). It was the same company which manufactured paper for their cigarette business.

Earlier they outsourced paper and now they started in house production of the same.

In 2002 ITC merged Bhadrachalam & TTL and made it a single group.

In 2004 they acquired another paperboard industry BIPCO. It was done to reduce their lead time due to the increased demand for their products.

strategy of itc enhanced its customer service.

They also entered into the business of exporting the garments.

AGRICULTURAL ENTRANCE OF ITC: E-Choupal

E-Choupal business model is of very great significance.

In 1990, ITC stepped into the agricultural sector. They had an advantage of excellent sourcing capacity.

They started with the concept of E-Choupal.

It enabled the farmers to sell their product with the help of internet.

It helped ITC to maintain an inventory with them which helped them in making one of the largest global exporters.

Today, ITC has more than 40 Lakhs farmers associated with them.

E-Choupal started from Madhya Pradesh where ITC partnered with soya bean farmers.

This initiative by ITC totally revolutionised the agricultural sector.

The farmers had easy access to mandi prices, good farming practices, and order placement for agricultural inputs, etc.

There are approx. 6100 e-Choupal that are currently functioning in more than 35000 villages in 10 states.

E-Choupal eliminated the middleman who exploited the farmers with their discriminatory practices.

ITC ENTRANCE INTO STATIONARY: ITC Classmate

Before, entering the stationary sector ITC made some changes in their names.

Indian Tobacco Company (I.T.C) was renamed to ITC.

The dots were removed i.e. the abbreviation was now the name of the company.

This was done to eliminate tobacco from their name as they wanted to enter into the stationary market.

In 2003 ITC started with Classmate.

ITC Classmate grew very rapidly. Many students started purchasing classmate’s notebooks and registers.

Today, the classmate is one of the premium brands in the notebooks.

In 2007-09 classmate came up with Practical Books, Drawing Books, Geometry Boxes, Pens, and pencils.

ITC ENTRANCE INTO CLOTHING: WILLS

In 2002, ITC entered into the clothing world also.

In India, they launched their trial run for the brand during the late ’90s.

Officially, ITC came up with their own brand in 2002. The name of the brand is Wills.

Today, Wills is a very premium brand with a variety of clothing.

ITC started wills which included only the sportswear. But gradually it became a very recognized brand & it offers a variety of clothing.

Wills also sponsors many fashion weeks.

Wills Lifestyle Fashion Week has gained recognition from buyers and retailers as the single largest B-2-B platform for the Fashion Design Industry.

OTHER BUSINESSES

ITC Business Model is not only limited to its cigarette & tobacco industry. There is much more to it:

-Branded Packaged Foods – In 2001 ITC launched their packaged food products. The packed food was launched in the name of Kitchen of India.

-Other foods – In 2002 ITC launched their candies like Candyman and Mentos. They also launched Ashirvaad aata in 2002.

In 2003 ITC also launched Sunfeast which marks a great presence in the FMCG sector.

In 2007 ITC came up with Bingo. We must have had Bingo mad angles once.

In 2010 ITC launched Yippee in competition with its rival Maggie by nestle.

In 2014 ITC came up with chewing gums and juices.

In 2015 ITC also launched their ghee in the name of Ashirvaad Ghee.

In 2016 they launched chocolates, coffee beans, and Master Chef Masalas range.

The master chef masala range were not ordinary spices. They were of premium quality with high essential oils content.

This was all done through E-Choupal. They used e-Choupal very strategically. They exported and manufactured the products from E-Choupal

In November 2017 ITC launched their vegetable stores in the name of farm line potatoes.

ITC started its food division in 2001. Today they have totally transformed this food division sector with their strategic diversification of business.

-Aggarbattis & Safety Matches- In 2002 ITC launched its Aggarbattis and safety matches. Mangaldeep Aggarbattis is of ITC.

-Personal Care Products – In 2005 ITC entered the personal care segment. You must have heard of Fiama Di Wills, Vivel Soaps, Supriya are all part of ITC.

In 2013 ITC came up with Engage Bodysprays

In 2015 ITC acquired the Savlon Company, an alternative of Dettol.

In 2017 they also acquired Charmis Face cream company.

MAN BEHIND THE ITC EMPIRE

By now, a question must have stuck on your mind that who is the person behind such success of ITC.

His name is YC Deveshwar. Mr Deveshwar joined ITC in 1968. He joined ITC straight out of his college.

YC Deveshwar was one of those rare examples who transformed the business of ITC, making it a huge success.

The endless list of rewards is evident in his hard work and mindful thinking-

-Was awarded Padma Bhushan

-Was awarded top India’s CEO by Forbes.

-Ranked 7 th on world’s best CEO’s

-Served for the longest period (23 YEARS) as CEO in India for ITC

Mr Deveshwar who joined ITC in 1968, became the director in 1968.

Later, he became the CEO and Chairman in 1996.

In just sixteen years, he joined the Board of Directors.

These achievements show the role Mr Deveshwar played in nurturing ITC, making it a huge success.

Mr Deveshwar served Air India during 1991-94. This is the reason behind ITC’s slow growth during the above mentioned years.

ITC and YC Deveshwar were very synonymous, indeed he was a legend.

Sadly, Mr Deveshwar died on May 11, 2019. It was under his leadership that the company transformed from a cigarette major to an FMCG giant.

PM Modi also tweeted,” Shri YC Deveshwar made a strong contribution to Indian industry. His efforts helped ITC become a professionally-run Indian company with a global footprint. Saddened by his demise. My thoughts are with his family, friends and the ITC group in this hour of grief.” 

GOLD FLAKE VS GODFREY PHILIPS ISSUE

In the absence of Mr YC Deveshwar, when he was serving for Air India during 1991-94, a new cigarette brand emerged with the name of Godfrey Philips.

It was trying to enter into the territory of Gold Flake which was an already established market.

The prices of Godfrey Philips were strategically kept low, to grab the market share of Gold Flake.

To stop this intruder, ITC launched a similar variant of Gold Flake which was cheaper than the original name.

They divided it into two categories Gold Flake Filter and Gold Flake King.

The former was cheaper than the latter one.

This not only helped ITC in diversifying their product line but also helped in retaining their market share.

ITC TIMELINE

ITC ANALYSIS (HOW ITC BECAME A HUGE SUCCESS)

Let us make a conclusion of this ITC case study.

According to me following are the factors that helped ITC in gaining such market capitalization & immense success.

A) Sourcing Capability – ITC has strong sourcing capabilities. With the help of various sources, ITC was able to extend its business in different sectors.

They entered into FMCG after establishing a strong base in the agricultural sector.

The wheat from the agricultural sector held in establishing a market for the Ashirvaad aata. Similarly, ITC used its various sources very effectively and efficiently.

B) Effective Brand Utilisation -After getting recognized in the agricultural & FMCG sector, ITC used its established brand name for entering into the stationary market.

They introduced classmate by ITC which helped them in grabbing a good market share.

Know how to do effective Business Branding .

C) Related Businesses -ITC had very interrelated businesses. This helped them in the in-house production of their raw materials.

 For example, ITC used its paperboard business for the packaging of its various products. It reduced the costs & need for outsourcing.

D) Role of Management -Management is the heart and soul of a successful business. Having a leader like YC Deveshwar helped ITC in reaching heights.

E) Focus on Sustainability – ITC focuses on sustainability as its goal. Major projects of ITC are focusing on Sustainability.

They have targeted majorly those sectors which are sustainable in the long run, offering more growth.

F) Meeting Corporate Social Responsibility (CSR) – ITC focuses on fulfilling its social responsibility.

This aspect is very important in today’s scenario.

They started serving the society in Sarapaka, an economically backward area in Andhra Pradesh.

ITC contributed to the development in education, environmental protection & community development.

FAQ’s

 ITC business model was to sell cigarettes and tobacco. They ran their business in a rented building. ITC manufactured their products and hired services from outsiders for packaging & printing of their products.

strategic analysis of itc(How it become huge) A) Sourcing Capability B) Effective Brand Utilisation C) Related Businesses D) Role of Management E) Focus on Sustainability F) Meeting Corporate Social Responsibility (CSR)

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1 ‘Managing Business with Respect’: A Case Study on ITC-triple Bottom Line Approach

• Published: June 2022
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The ITC India company was incorporated in 1910. Much has changed in these 100 years. ITC itself has metamorphosed in many ways, the least of which is the multiple changes in nomenclature. What began and stayed for long as only a cigarette maker has turned into a conglomerate offering a dashboard of products and services, ranging from hospitality to toiletry to apparel to food. Of course, cigarettes remain a big but gradually shrinking part of its overall business.

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The Case Study of “ITC Limited” 

By Nishat Manzar Thursday December 7, 2023

ITC Limited stands as a distinguished Indian global conglomerate with its headquarters situated in Kolkata, West Bengal. Originating in 1910 under the name ‘Imperial Tobacco Company of India Limited,’ the company underwent significant transformations, rebranding itself as the ‘India Tobacco Company Limited’ in 1970 and later as ‘I.T.C. Limited’ in 1974. In a strategic move in September 2001, the extraneous elements from its name were eliminated, leading to the adoption of the current nomenclature, ‘ITC Limited.’

Celebrating a century of operations in 2010, the company has consistently demonstrated its prowess in the business landscape. In the fiscal year 2012-13, ITC Limited boasted an impressive annual turnover of $8.31 billion, coupled with a substantial market capitalization of $52 billion. The organization’s expansive footprint spans over 60 locations across India, employing a workforce exceeding 30,000 individuals. Notably, ITC Limited holds a distinguished position in the prestigious Forbes 2000 list, further underscoring its prominence and influence in the corporate realm.

History and Genesis of ITC: Pioneering Excellence in Business

Tobacco business expansion:.

In 1911, ITC, primarily reliant on agricultural resources, embarked on a journey into partnerships with southern Indian farmers for leaf tobacco sourcing. This led to the establishment of the ‘Indian Leaf Tobacco Development Company Limited’ in the Guntur region of Andhra Pradesh in 1912. The inaugural cigarette manufacturing facility emerged in 1913 in Bangalore.

Progressing further, leaf-purchasing centers were established in southern India in 1918. The year 1925 marked a pivotal moment with the integration of a printing facility into ITC’s cigarette factory at Munger, signaling the company’s entry into non-tobacco businesses. While the initial years concentrated on the growth and consolidation of cigarette and leaf tobacco enterprises, 1925 saw the inception of ITC’s packaging and printing business, which has since evolved into India’s most sophisticated packaging house. Additional factories across India were subsequently established to bolster cigarette production capabilities.

In 1928, construction commenced on the company’s headquarters, the illustrious ‘Virginia House,’ situated in Calcutta. Further fortification occurred in 1935 with the acquisition of Carreras Tobacco Company’s plant at Kidderpore. Notably, in 1946, an indigenous cigarette tissue-paper-manufacturing plant was established to reduce import costs significantly. 

The expansion continued with the establishment of a printing and packaging factory in Madras in 1949. In 1953, ITC expanded its footprint by acquiring the manufacturing business of Tobacco Manufacturers (India) Limited and the lithographic printing business of Printers (India) Limited.

Indianization of Business:

The transformation into a Public Limited Company on October 27, 1954, marked a significant milestone for ITC. Simultaneously, the company took its first steps towards Indianization by allocating 6% of its shares to Indian stakeholders. The 1960s witnessed a strategic focus on technology, manifested in the establishment of cigarette machinery and filter rod manufacturing facilities, aiming for self-sufficiency in cigarette production.

A pivotal moment occurred in 1969 with the appointment of Ajit Narain Haskar as ITC’s first Indian director, underscoring the commitment to fostering Indian leadership within the organization. Under Haskar’s stewardship, the company underwent a name change from ‘Imperial Tobacco Company of India Limited’ to ‘India Tobacco Company Limited’ in 1970.

ITC further pioneered the phased Indianization of capital, witnessing an increase in Indian shareholding from 6% to 25%. The early 1970s marked the commencement of ITC’s foray into brand sponsorship for various sports, starting with the Scissor’s Cup in 1971. The era also saw the initiation of innovative marketing campaigns and the adoption of electronic data processing. This period laid the foundation for ITC’s evolution into a multifaceted and dynamic conglomerate that continues to shape India’s corporate landscape.

1973-1975: ITC’s Transformative Leap

In 1973, ITC established its incorporated research center in Bangalore, marking a significant move towards expansion and diversification into research and development. As part of its strategic growth initiatives, the company underwent a transformation in 1974, adopting the name ‘I.T.C. Limited.’ During this period, the Indian shareholding stake increased to 40%. In 1975, ITC ventured into the hospitality sector by inaugurating the ITC Welcomgroup Hotel Chola in Madras.

The selection of the hospitality industry was driven by ITC’s recognition of its potential to generate substantial foreign exchange, contribute to tourism infrastructure, and create a significant scope for both direct and indirect employment. By 1976, the company’s shareholding had risen to over 60%, leading to the commencement of additional hotel projects in the subsequent years. In 1979, ITC diversified into the paperboards business with the establishment of ITC Bhadrachalam Paperboards Limited. The appointment of J N Sapru as the company’s director in 1983 marked a pivotal moment, setting the stage for international expansion through the acquisition of Surya Nepal Private Limited in 1985.

ITC Product Portfolio Overview

In the realm of consumer goods, ITC stands as a prominent conglomerate with a diverse array of brands catering to various needs. 

A snapshot of the meticulously curated product lineup includes:

Brands under ITC

Cigarettes: Insignia, India Kings, Classic, Gold Flake, Silk Cut, Navy Cut, Scissors, Capstan, Berkeley, Bristol, and Flake.

Prepared Foods: Kitchens of India, Aashirvaad, Sunfeast, Mint – O, Candyman, and Bingo.

Way Of Life Retailing: Wills Lifestyle, John Players, and Miss Players.

Individual Care: Essenza Di Wills, Fiama Di Wills, Vivel Di Wills, Vivel, and Superia.

Welcome, Gifting, And Stationary: Brands incorporate Classmate, PaperKraft, and Color Crew. Classmate, launched in 2003, rose to prominence, becoming India’s largest notebook brand in 2007.

Security Matches: IKno, Mangaldeep, VaxLit, Delite, and Aim.

Products under ITC

Incense Sticks: Ship, I Kno, and Aim brands of security matches, along with the Mangaldeep brand of agarbattis (incense sticks).

Foods: ITC’s major food brands include Kitchens of India; Aashirvaad, B natural, Sunfeast, Candyman, Bingo!, and Yippee! As of 2012-13, ITC stands as India’s largest vendor of branded food, generating over Rs. 4,600 crores. The brand’s presence spans six categories in the food industry, covering snack foods, ready-to-eat meals, fruit juices, dairy products, and desserts.

Personal Care: The personal care range encompasses perfumes, haircare, and skincare categories. Key brands in this segment are Fiama Di Wills, Vivel, Savlon Soap and Handwash, Essenza Di Wills, Superia, and Engage.

ITC : Business Model And marketing Strategies 

Founded in 1910 as the Imperial Tobacco Company of India, ITC initially focused on the tobacco industry for several decades before diversifying into non-tobacco sectors during the 1970s. Over the years, ITC has evolved into a multi-business conglomerate, engaging in various industries such as hotels, lifestyle retail stores, the ready-to-eat sector, confectionery, paperboards, body care products, and more.

ITC stands out as one of India’s leading multi-business enterprises, boasting a market capitalization of $52 billion and achieving a gross sales value of $10 billion. The company holds prestigious titles, including being recognized among the world’s best large companies, Asia’s FAB 50, and the World’s Most Renowned Companies by Forbes magazine. Additionally, it has been acknowledged as ‘India’s Most Admired Company’ in a survey conducted by Fortune India magazine and Hay Group.

In a study conducted by the Boston Consulting Group, ITC was identified as one of the world’s largest value creators in the consumer goods industry. Business Today magazine has consistently listed ITC among India’s Most Valuable Companies, and the company has secured a position among the ’10 Most Valuable Company Brands’ in India, according to an analysis conducted by Brand Finance and published by the Economic Times.

Moreover, ITC has earned recognition in Asia, being ranked among Asia’s 50 best-performing companies by Business Week. With a rich history and a diverse portfolio, ITC continues to uphold its position as a key player in India’s corporate landscape.

Utilization of BCG Matrix in ITC’s Business Strategy

ITC strategically manages diverse business sections, including FMCG-Cigarettes, FMCG-Foods, ITC Infotech, Agri-Business, Hotels, Paperboards and Packaging, Branded Apparels, and Packaged Foods. Notably, FMCG-Cigarettes serves as the company’s cash cow, while Agri-Business, Hotels, Paperboards, and Packaging are positioned as “stars” within the ITC portfolio. FMCG-Foods remains a strategic question mark, and Branded Apparel and Packaged Foods are categorized as dogs.

Distribution Strategy

The company employs a well-structured distribution channel where products reach wholesale vendors through Carried and Forward Agents (CFA’s). Subsequently, these products are distributed to retailers in towns directly or through Small Wholesale Dealers, facilitating market penetration into even the remotest areas of India.

Brand Value Recognition

ITC holds a prominent position on Forbes magazine’s list of the top 2000 companies globally, securing the 772nd rank. The brand’s valuation, as of June 2018, stands at an impressive $51.5 billion. Furthermore, ITC is recognized as the 239th best employer worldwide by Forbes Magazine and holds a position in Asia’s 50 biggest performing companies list compiled by Business Week.

Market Analysis and Financial Overview

In light of the GST system and the additional cess imposed on cigarettes and tobacco-related products, ITC maintains a steady taxation rate of over 20%. Analysts indicate a decline of more than 5% in the company’s cigarette sales volumes in the last quarter. Over the past decade, ITC has generated a foreign exchange profit of $7.1 billion, with agri exports contributing 56% to this figure. In the social sector, ITC’s initiatives, such as e-chaupal, social and farm forestry projects, and ‘Mission SunehraKal,’ have positively impacted over 32,000 individuals, reaching and improving the lives of numerous farmers and their families in rural India.

ITC Ltd. stands as a preeminent Fast-Moving Consumer Goods (FMCG) Company within the Indian market. Over the past three consecutive years, the company has demonstrated a remarkable trajectory of growth within its FMCG portfolio, establishing itself as a beacon of success. ITC has adeptly positioned itself as a market leader across diverse verticals, a testament to its strategic prowess. 

The company’s commitment to excellence is underscored by its sustained dominance through a myriad of well-established brands, setting a precedent for continued success in the ever-evolving landscape of the FMCG industry.

• The Case Study of "ITC Limited"

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Group Discussion– Why is it important to a CA?

Introduction

Common group discussion topics for ca, 1. general topics, 2. case study topics.

Group Discussions are nearly ubiquitous for all Interviews that a CA Fresher faces.

One of my seniors advised me once -“Group Discussions are a pretty Organized mass slaughter”. 

Most Group Discussions have much less than a 25% passing rate i.e best 2 applicants out of eight qualify for the next round. GD in CA Interviews commonly focuses on the technical & problem-fixing competencies of the applicants. But you require command over your voice & a character to influence the discussion towards you. 

Most GDs turn out to be a fish market, there will usually be that single man or woman who is getting to dominate the complete discussion and there will usually be instances where the undeserving applicants get selected.

 So cracking a Group Discussion needs proper guidance and a lot of practice. In order to achieve it, first, we need to know what exactly are the topics that can be asked for a group discussion.

In CA Interviews, Group Discussions are often classified into 2 categories: 1. General Topics 2. Case Study Topics

Here the companies give either an easy topic or a Technical Topic to debate 

A) Simple Topics – These aren’t usually asked in the CA Interviews. Sometimes there can be few current affairs that are asked as Group Discussion topics. 

The following are such examples Goldman Sacs – Should Uniforms be made obligatory in Work Places

Olam International (Multiple Rounds of GD) – Are CAs’ better than MBAs’?

Vedanta – Apple is more about Status symbols instead of Innovation.

B) Technical Topics – Most Group Discussion Rounds have a Technical Topic.

Vedanta – Role of Mining & Extraction in India’s GDP (It was given due to the fact Vedanta is engaged in the business of Extraction of Minerals) Vedanta – is that the business version of Reliance Jio sustainable? Other Hot Topics – Internal Financial Control Impact of GST IFRS ICDS Role of CAs in detecting Fraud

Most of the companies recruiting for high-paying positions ( Eg –  Deloitte ,  ITC , BPCL, ABG, Marico, etc.) deliver a Case Study in the Group Discussion round in place of asking a Generic Topic.

For the CA Freshers who have not really mastered a Case Study, this may be pretty overwhelming. 

Once Maruti Co. asked this topic “GST is beneficial for the economy” during their Campus placements. Everyone supported it stating that it is going to be enhancing the GDP, a friend of mine became the only one to oppose it announcing that its impact on the Economy is uncertain as of now. Even though she raised a liability, having taken an opposing view helped her rating better in the discussion.

Think out of the Box The judges sitting out there are not professionals, they are the directors of the company who’re being attentive to equal points. Feed them something different. In the ITC Case Study, we had been requested to pick out the best man or woman to lead a set of stranded passengers on a crashed flight. There was a commando among the passengers. Everyone had haunted the placement that the Pilot became skilled and could lead the institution. But a friend of mine, who was silent for the complete discussion, apart from that one minute where he keeps on argued that Commandos are given guerrilla training and are known for his or her passion, dedication & integrity and hence that commando became the proper man or woman to steer the institution.

Gain the eye of the Judges In the BPCL Interview, we were given a case study on the manner to select ethics over your job security. Everyone was arguing at the same factors on a way to develop Goodwill & how Ethics in valued in CA Profession. During my very personal turn, I raised the practical components of the way that is frequently now no longer viable in the world, and that we have to look for a workaround that’s both ethical & might additionally save my own job. The applicants sitting beside me lauded me after the interview for the points I had raised however when the results were out, I was rejected. The cause being I became the ultimate one to elevate my point & I became not loud enough for the judges to be attentive towards me. So gaining attention is very important irrespective of the amount of knowledge an individual has.

The primary applicants who get rejected are those who do not even speak. Take that braveness and acquire from your shell, and show your views on the matter.

Learning the tips and tricks from professionals or taking up a course can come in very handy. The  Getting Interview Ready  workshop helps you crack the GD and gives you the necessary pointers

• How to utilize the time given for preparation?
• Practice at least 3 GDs and feedback from industry experts
• Do’s and don’ts in a GD
• 5 Pro tips to ace Group Discussions
• Resolve all your doubts
• Trending GD topics and other such interview prep tips.

Give a concise summary of the group discussion. Prepare well and have the right subject knowledge. The group discussion may be a wonderful medium to broaden and enhance leadership and overall communication skills by the side of showcasing your domain knowledge. This is the reason maximum companies have a set discussion session as part of their hiring process. Speak only when relevant. Your overall personality and knowledge-based talent level may be judged by comparing your overall performance in a group discussion. So prepare well and with confidence, get ahead for your profession with all the mentioned group discussion tips.

 All The Best !!

Summer 2016

Summer diaries: itc.

Aman Agasi is a 4th year student in the Department of Mechanical Engineering. Read on as he recounts his experience of working with ITC during the summers of 2016.

What is ITC?

ITC is an Indian conglomerate which was established in 1910 as the Imperial Tobacco Company of India. Today its diversified business includes five segments: Fast-Moving Consumer Goods (FMCG), Hotels, Paperboards & Packaging and Agri Business & Information Technology. ITC is one of India’s foremost multi-business enterprise with a market capitalisation of US $ 40 billion and a turnover of US $ 8 billion.

Nature of the Internship Project

For the summer internship program the projects could be targeted at a specific problem like the removal of air bubbles in the refill of a gel point pen floated this season. Others could be loosely held around optimising of a plant as a whole like the one requiring the increase of efficiency of the chemical recovery plant of the paper factory.

The project could conform to your specialisation or it may lie somewhere outside your sphere of study like the one I dealt with in the paper boards and speciality paper division of ITC. The wood required for the manufacturing of paper is stored in the unsheltered wood yards. Due to large standing time it lost most of its moisture content which negatively affected the pulp yield. The job was to devise a method to retain the moisture in wood. I had to dwell into fields alien to me, like the morphology of wood as I am a student of mechanical engineering.

The biggest challenge was the size of the inventory which held one lac to three lac tonnes of wood. All the wood yards taken together spread over a sprawling 35 acres of land. The rapid rate of moisture loss made all the corrective measures futile. I approached the problem by devising certain proactive and reactive measures. The proactive measures checked the moisture loss from the first day of wood unloading in the yard while the reactive operations aimed at replenishment of the lost moisture at the time of use. The scale, economic feasibility, available resource management were the primary fields of deliberation for each solution put.

The Programme

The best part about an ITC intern is that the process is proficiently organised and impeccably coordinated. The show begins in the month of April with the ‘mind over matter’ induction programme held at Bangalore. Rather lucrative, the first moment of pride was felt when we got a deck of business cards with our names on it. This is around the time we were provided the project brief and the location.

At the time of joining we were first summoned at the headquarters where we got to interact with the senior most members of the division. We were then inducted into the factory and made familiar with all the departments and the technical intricacies of industrial processes.

The reviews were held every two weeks in the eight weeks internship period. The first review was confined to the department and so was the third. The mid review was attended by the senior management at the divisional headquarters.

This review was particularly important as it provided some inquisitive opinion about the approach. The system is such that final review is presided over by the Unit Head and only on his recommendation does the project qualify for a review at the headquarters.

The Experience

Irrespective of the outcome, the project is always enriching in terms of value added. The factories deploy advanced management practices which are inexcusably adhered to. The organisational setup would not fail to escape your notice. Witnessing the colossal industrial setup at Bhadrachalam was most certainly amusing.

We worked along with our ‘project guide’. The system encourages the manager to share the responsibility of the project with the internee. This association plays an important role in deciding the overall outcome of the project.

We were also assigned a mentor who was a person of higher authority in the plant and assisted in pushing things through. The work culture was supreme and the people of factory were cooperative and recognised our cause. As an unspoken rule no one would ever refuse to clarify doubts regarding the technicalities of their field of work. You can reach out to anybody in the factory for assistance.

We were entitled to buy books for expanding the reach in the field of study and visit other factories if need be.

Future with ITC

Without being too optimistic, the PPO conversion rate is somewhere between 45-55%. It is predicted that the figure would at least touch the upper bound owing to the discontinuation of the practice of visiting colleges for placements by ITC. The initial package is 19 lpa. People getting a PPO almost always end up in the division they interned in. In PSPD, the factory locations are very far off from the main cities. However, chances are that you would be relocated to the Divisional Headquarters in Hyderabad after a year or two. After that you will be sent to the factory on requirement. Consequently, the job might require a lot of travelling and hence a compromised work-life balance.

Free ka Gyaaan

The projects given in internships are such that if the solution is found then it could generate millions for the company. Hence, you would be entrusted with major roles and responsibilities. Your credit worthiness would keep your head above water. Scan the depth of the internet for doing the literature survey. Be cautious of your claims and have strong conviction in your findings.

Benchmark your solutions with the other producers in the industry. Try to find references where the technology has been implemented and runs successfully. If assigned with increasing the efficiency of the plant then start by checking whether all the machines are operating at their maximum capacity.

It might take you a while to scale you thinking up to their intimidating level of production. Thus, try to quantify the benefits of the proposed solution because ultimately it’s the crispy green stash that moves things.

How to get an ITC intern

The recruitment is a day long process. The day begins with a presentation by ITC. The first shortlisting is done by evaluation of a Group Discussion. It is followed by two stages of interviews; the latter is taken by the senior management.

A group discussion is conducted among groups of 8 or 9 students. A page long case study is presented where the stance of discussion could be on a logical analysis of the situation, a moral/ethical dilemma or a many other debatable things. The one which I participated in was an account of an air crash incident which had a handful of survivors. 20 items were to be arranged in the order of priority that the survivors must carry in order to get out of the forest safe. For cracking a GD try to read the case study as fast as you can and initiate the dialogue. However, there are no brownie points for speaking more than others. Speak little but reasonable. Explain your constructive in an assertion followed by reason format. Don’t dominate the talk rather try to bring the bench on a common ground while safe guarding your own points.

The interview focuses on technical competence more than anything else. As a rule of thumb you should have at least two subjects (of your own branch) thoroughly prepared for the interview. They would test you only on the subjects that you claim to be proficient in. Guys in Mech could prepare from Thermo, Fluids, Solid Mechanics, etc.

Prepare a precise resume which highlights primarily your technical endeavours and also glides over the extra curriculars. The resume would be discussed head to toe. Try to steer the course of the interview in the direction of earlier internships/ projects that you have done. The longer you stay on those topics the better it fares you.

The HR people may ask their few trick questions testing your willingness to take up a job in the remote cities and give up on the city life. Or whether it would hurt you conscience to produce tobacco which is ‘injurious to health’ at which point ideally you should cross your legs over and light up right in from of him… Okay leave that part out. Or they could ask you a million different questions which suit their fancy but know that originality is the key.

If you have an internship story you’d like to share, get in touch as [email protected]

Watch Out! News Agency

More from Summer2016

Summer diaries: amazon, summer diaries: schlumberger, barmer, summer diaries: adobe research, bangalore, summer diaries: schlumberger, mumbai.

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Case study: How ITC creates economic value for its stakeholders

ITC is one of India’s foremost private sector companies and a diversified conglomerate, with businesses spanning Fast Moving Consumer Goods, Hotels, Paperboards and Packaging, Agri Business and Information Technology. ITC’s diversified portfolio of businesses positions it to contribute meaningfully to India’s growth and development, spanning across all the three sectors of the economy – agriculture, manufacturing and services -, creating value for all its stakeholders.

This case study is based on the 2021 Sustainability Report  by ITC, prepared in accordance with the GRI Standards, that can be found at this link . Through all case studies we aim to demonstrate what CSR/ ESG/ sustainability reporting done responsibly means. Essentially, it means: a) identifying a company’s most important impacts on the environment, economy and society, and b) measuring, managing and changing.

ITC’s innovative business models synergise to create significant value for India and its stakeholders     Tweet This! through superior performance, enhancing the competitiveness of Indian agriculture and industry, generating large-scale employment opportunities and sustainable livelihoods, driving import substitution, and creating brands to maximise value capture in India. In order to create economic value for its stakeholders ITC took action to:

• create value for shareholders
• contribute to the National Exchequer
• support employees

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Please subscribe to the SustainCase Newsletter to keep up to date with the latest sustainability news and gain access to over 2000 case studies. These case studies demonstrate how companies are dealing responsibly with their most important impacts, building trust with their stakeholders (Identify > Measure > Manage > Change).

With this case study you will see:

• Which are the most important impacts (material issues) ITC has identified;
• How ITC proceeded with stakeholder engagement , and
• What actions were taken by ITC to create economic value for its stakeholders

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What are the material issues the company has identified?

In its 2021 Sustainability Report ITC identified a range of material issues, such as consumer experience, ethics and governance, climate-resilient agriculture, sustainable packaging, water security for all. Among these, creating economic value for its stakeholders stands out as a key material issue for ITC.

Stakeholder engagement in accordance with the GRI Standards

The Global Reporting Initiative (GRI) defines the Principle of Stakeholder Inclusiveness when identifying material issues (or a company’s most important impacts) as follows:

“The reporting organization shall identify its stakeholders, and explain how it has responded to their reasonable expectations and interests.”

Stakeholders must be consulted in the process of identifying a company’s most important impacts and their reasonable expectations and interests must be taken into account. This is an important cornerstone for CSR / sustainability reporting done responsibly.

Key stakeholder groups ITC engages with:

To identify and prioritise material topics ITC engaged with its stakeholders through the following channels:  

What actions were taken by ITC to create economic value for its stakeholders ?

In its 2021 Sustainability Report ITC reports that it took the following actions for creating economic value for its stakeholders:

• Creating value for shareholders
• In the last two decades, ITC’s non-cigarettes businesses have grown over 25-fold and presently constitute over 60% of net Segment Revenue. Total Shareholder Returns, measured in terms of increase in market capitalisation and dividends – the total dividend for the financial year ended 31st March 2021, amounts to ` 10.75 per share (previous year: ` 10.15 per share) -, have grown at a compound rate of 16% per annum during this period, placing ITC amongst the foremost in India in terms of efficiency of servicing financial capital.
• Contributing to the National Exchequer
• Over the last 5 years, ITC’s value addition aggregated approximately ` 2390 billion, of which over ` 1670 billion accrued to the Exchequer. Including the share of dividends paid and retained earnings attributable to Government owned institutions, ITC’s contribution to the Central and State Governments represented over 75% of its Value-Added during the year. ITC remains amongst the Top 3 Indian corporates in the private sector in terms of Contribution to Exchequer.
• Supporting employees
• ITC’s employees are entitled to retirement benefit schemes which include employee pension, provident fund and gratuity. All statutory payments, as applicable, e.g., Provident Fund and Family Pension contributions, are deposited with the Government in a timely manner. The pension plans and other applicable employee benefits obligations are determined and funded in accordance with independent actuarial valuation. The assets of the trust funds are well diversified, and investments are made within the prescribed statutory pattern with the objective of protecting capital and optimising returns within acceptable risk parameters.

Which GRI Standards and corresponding Sustainable Development Goals (SDGs) have been addressed?

The GRI Standard addressed in this case is: Disclosure 201-1 Direct economic value generated and distributed

Disclosure 201-1 Direct economic value generated and distributed corresponds to:

• Sustainable Development Goal (SDG) 8 : Decent Work and Economic Growth
• Targets: 8.1, 8.2
• Sustainable Development Goal (SDG) 9 : Industry, Innovation and Infrastructure
• Targets: 9.1, 9.4, 9.5

78% of the world’s 250 largest companies report in accordance with the GRI Standards

SustainCase was primarily created to demonstrate, through case studies, the importance of dealing with a company’s most important impacts in a structured way, with use of the GRI Standards. To show how today’s best-run companies are achieving economic, social and environmental success – and how you can too.

Research by well-recognised institutions is clearly proving that  responsible companies can look to the future with optimism .

7 GRI sustainability disclosures get you started

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• Formulate in group exercises your plan for action. Begin taking solid, focused, all-round sustainability action ASAP. 
• Benchmarking methodology to set you on a path of continuous improvement

See upcoming training dates. References:

This case study is based on published information by ITC, located at the link below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original please revert to the following link:

https://www.itcportal.com/sustainability/sustainability-report-2021/sustainability-report-2021.pdf

Note to ITC: With each case study we send out an email requesting a comment on this case study. If you have not received such an email please contact us .

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A Step-by-Step Guide To Case Discussion

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Are you comfortable in Decision Making in a given situation How aptly you analyze the situation with a logical approach How much time do you take in arriving at a decision How good are you in taking the rightful course of action

Solved Example:

Hari, the only working member of the family has been working an organization for 25 years. His job required long standing hours. One day, while working, he lost his leg in an accident. The company paid for his medical reimbursement.

Since he was a hardworking employee; the company offered him another compensatory job. He refused by saying, ‘Once a Lion, always a Lion’. As an HR, what solution would you suggest?

Identification of the Problem:

Obvious: accident, refusal of job, only earning member, his attitude, and inability to do his current job Hidden: the reputation of the company at stake, the course of action might influence other employees

Action Plan:

As an HR, you are first expected to check the company records and find out how a similar case has been dealt with in the past. Second, you need to take cognizance of the track record of the employee highlighted by the keyword ‘hardworking’.

Given the situation at hand, he is deemed unfit for his current role. However, the problem arises because of his attitude towards the compensatory job. Hence, in such a case, counselling is required.

Here, three levels of Counselling is required: 1.   Ist level is with Hari 2.   IInd level of counselling is required with the Union Leader (if any) to keep the collective interest and the reputation of the company in mind 3.   IIIrd level of counselling is required with his family members as they constitute of the afflicted party

If the counselling does not work, one should also identify a contingency plan or Plan B. In this case, the Contingency Plan would be – hire someone from his family for a compensatory role.

Note that the following options are out of scope and should be avoided: 1.   Increase Hari’s salary so that he gives in and agrees to do the compensatory job 2.   Status Quo – do not bother as long as the Company is making a profit 3.   Replace Hari with someone else

1. Pinpoint the key issues to be solved and identify their cause and effects

2. Start broad and try to work through a range of issues methodically

3. Connect the facts and evidence and focus on the big picture

4. Discuss any trade-offs or implications of your proposed solution

5. Relate your conclusion back to the problem statement and make sure you have answered all the questions

1. Do not be anxious if you are not able to understand the situation well or unable to justify the problem. Read again, a little slowly, it will help you understand better.

2. Do not jump to conclusions; try to move systematically and gradually.

3. Do not panic if you are unable to analyze the situation. Listen carefully to others as the discussion starts, it will help you gauge the problem at hand.

All the best! Ace the GDPI season.

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Group Discussion– Why is it important to a CA?

Most Group Discussions have much less than a 25% passing rate i.e best 2 applicants out of eight qualify for the next round. GD in CA Interviews commonly focuses on the technical & problem-fixing competencies of the applicants.

Group Discussions are nearly ubiquitous for all Interviews that a CA Fresher faces.

One of my seniors advised me once - "Group Discussions are a pretty Organised mass slaughter". 

Most Group Discussions have much less than a 25% passing rate i.e best 2 applicants out of eight qualify for the next round. GD in CA Interviews commonly focuses on the technical & problem-fixing competencies of the applicants. But you require command over your voice & a character to influence the discussion towards you. 

Most GDs turn out to be a fish market, there will usually be that single man or woman who is getting to dominate the complete discussion and there will usually be instances where the undeserving applicants get selected.

 So cracking a Group Discussion needs proper guidance and a lot of practice. In order to achieve it, first, we need to know what exactly are the topics that can be asked for a group discussion.

Common Group Discussion Topics for CA

In CA Interviews, Group Discussions are often classified into 2 categories:

1. General Topics

2. Case Study Topics

1. General topics

Here the companies give either an easy topic or a Technical Topic to debate 

a) Simple Topics - These aren't usually asked in the CA Interviews. Sometimes there can be few current affairs that are asked as Group Discussion topics. 

The following are such examples

* Goldman Sacs - Should Uniforms be made obligatory in Work Places

* Olam International (Multiple Rounds of GD) - Are CAs' better than MBAs'?

* Vedanta - Apple is more about Status symbols instead of Innovation.

b) Technical Topics - Most Group Discussion Rounds have a Technical Topic.

* Vedanta - Role of Mining & Extraction in India's GDP (It was given due to the fact Vedanta is engaged in the business of Extraction of Minerals)

* Vedanta - is that the business version of Reliance Jio sustainable? Other Hot Topics -

• Internal Financial Control
• Impact of GST
• Role of CAs in detecting Fraud

2. Case Study topics

Most of the companies recruiting for high-paying positions ( Eg - Deloitte , ITC , BPCL, ABG, Marico, etc.) deliver a Case Study in the Group Discussion round in place of asking a Generic Topic. 

For the CA Freshers who have not really mastered a Case Study, this may be pretty overwhelming.  

The judges sitting out there are not professionals, they are the directors of the company who're being attentive to equal points. Feed them something different. In the ITC Case Study, we had been requested to pick out the best man or woman to lead a set of stranded passengers on a crashed flight. There was a commando among the passengers. Everyone had haunted the placement that the Pilot became skilled and could lead the institution. But a friend of mine, who was silent for the complete discussion, apart from that one minute where he keeps on argued that Commandos are given guerrilla training and are known for his or her passion, dedication & integrity and hence that commando became the proper man or woman to steer the institution.

Gain the eye of the Judges

In the BPCL Interview, we were given a case study on the manner to select ethics over your job security. Everyone was arguing at the same factors on a way to develop Goodwill & how Ethics in valued in CA Profession. During my very personal turn, I raised the practical components of the way that is frequently now no longer viable in the world, and that we have to look for a workaround that's both ethical & might additionally save my own job. The applicants sitting beside me lauded me after the interview for the points I had raised however when the results were out, I was rejected. The cause being I became the ultimate one to elevate my point & I became not loud enough for the judges to be attentive towards me. So gaining attention is very important irrespective of the amount of knowledge an individual has.

The primary applicants who get rejected are those who do not even speak. Take that braveness and acquire from your shell, and show your views on the matter.

Learning the tips and tricks from professionals or taking up a course can come in very handy. The Getting Interview Ready workshop helps you crack the GD and gives you the necessary pointers

* How to utilize the time given for preparation?

*Practice at least 3 GDs and feedback from industry experts 

*Do's and don'ts in a GD

*5 Pro tips to ace Group Discussions

*Resolve all your doubts

*Trending GD topics

and other such interview prep tips.

 Give a concise summary of the group discussion. Prepare well and have the right subject knowledge. The group discussion may be a wonderful medium to broaden and enhance leadership and overall communication skills by the side of showcasing your domain knowledge. This is the reason maximum companies have a set discussion session as part of their hiring process. Speak only when relevant. Your overall personality and knowledge-based talent level may be judged by comparing your overall performance in a group discussion. So prepare well and with confidence, get ahead for your profession with all the mentioned group discussion tips.

 All The Best !!

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Practice Case Studies: Long

• The Exotic Melons: You are the manager (Worldwide Sales Cock and Bull Melons) in a Dubai-based company that deals in selling exotic fruits. Cock and Bull Melons are a special variety of melons that can be cultivated only on the sandy dunes surrounding the Cock and Bull oasis in the Sahara desert. Worldwide demand and supply have been quite stable so far at 100 melons a year, with the supply being just sufficient to cover the demand. Cock and Bull Melons have traditionally been sold to the sheikhs in the Middle East, and Hollywood and Bollywood actors and actresses. Their exorbitant prices take them out of reach of common people.  In January 2002, the research centre at Punjab Agricultural University (PAU), India discovers that Cock and Bull melons can cure the fatal MarGaya syndrome in pregnant women, which kills both he mother and the child. Also, it can cure the fatal MaraGaya syndrome in diabetic patients. Both these symptoms are very rare. Unfortunately for you, in May 2002, the MaraGaya syndrome strikes 2000 people in America and the MarGaya syndrome strikes 1000 pregnant women in Sweden. 100 Cock and Bull melons are required to cure the 1000 cases in America while 100 are required to cure the Swedish problem. You know that the patients in both the countries cannot afford the high cost of Cock and Bull melon treatment. You also know that the revenues from treating patients would be much lower than selling them to sheikhs and film stars.  You are in a real dilemma. What would you do?
• Confidential Information? Mr. SecretKeeper is a Corporate Head (HR) in a company. He is very nice and gets along well with all people. People often consult him for help and advice. One person (named “Mr. A”) approaches him for a job because he is right now jobless. Mr. SecretKeeper takes the guy's qualifications and asks him to come after a week however, since no job available. He keeps frequently postponing the job offer. Mr. A keeps visiting the HR head, Mr. Secret Keeper, often and becomes his close friend. Then, one day, Mr. A confides with the HR Head “I was in prison for 18 years for a crime that I had not committed. With two years remaining of the sentence, I ran away from jail. Even now, police is in look out for me.” Mr. SecretKeeper tells the person to go home and that he would give him a job. However as soon as he leaves, Mr. SecretKeeper calls up the police and gives the details of Mr. A and asks them to arrest Mr. A. Because of this betrayal of trust by the HR head, people in the organisation have started losing faith in him. A senior person in the office complains to the VP that the Mr. Secret Keeper has “broken faith”, so others could not come to him. Assume that you are the VP of the company. What would you do about the situation?
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• In a fix! You are the young dynamic, blue-eyed boy (girl) in a firm, which is a known leader in the industrial oils business. Under your leadership, the company has done extremely well in a slow, sluggish, mature market and has also effectively warded off competition from the superior industrial oil segment. However, as a young blooded individual, you decide that the company should branch into something more glamorous and contemporary. You manage to convince the top management to get into the film-making business. The film-making business is started as another division, where the systems and processes are kept the same to have uniformity across businesses. You manage to hire top talent in this field Mr. A, Mr. B and Mr. C from different competitors. You have big hopes from the trio as these people have come together as a team for the first time. You grant every freedom to these people to recruit their own subordinates. Barely a month after the film-making business has started, you are in a fix! Mr. B throws his cap, sheds a zillion tears and tells you in a choked voice that he would rather die than continue with your business. A couple of months later Mr. C blames your policies and quits. Your six monthly profit and loss statement shows that film-making business had been a horrific disaster. The only remaining member of the star trio, Mr. A says that the business is slightly out of form and that he might deliver if you grant him complete freedom.  You can now see your own future as dark as the industrial oils your company specializes in. You are wondering what went wrong and what should you do now?

• Tension on the job: Sujit Bhattacharyya (Bhola) had been an exceptionally bright student throughout his studies at IIT-Kharagpur. He devoted four years in pursuit of academic excellence. He had very few friends. Few peers liked him, but he was the darling of all his professors. Bhola joined TELCO from the campus as production supervisor in charge of vehicle assembly. Bhola used to manage shop floor operations consisting of truck assembly and in a shift 30-33 operator used to report to him. The IQ level of a typical operator could be compared to that of a class VIII student, but years of experience had made them confident about their job. GRAB THE OFFER: Kick start Your Preparations with FREE access to 25+ Mocks, 75+ Videos & 100+ Chapterwise Tests. Sign Up Now The operators, by virtue of doing the same job for so many years, had developed a highly robotic style of functioning and were highly resistant to change. The trade union was powerful and exercised a lot of leverage with the management, to secure incentives and overtime payment, which were fixed at a uniform rate across the departments. Nilesh was an operator in charge of front axle assembly. The number of trucks that rolled out of the factory was equal to the number of axles assembled. Thus, Nilesh was looking after a highly sensitive assembly operation. Nilesh, lately, had lost a lot of money in the stock market, had frequent quarrels with his wife and many times used to come drunk to the shop floor. His abrasive behavior had caused a lot of worry to Bhola. Nilesh also started absenting himself from duty and became casual in his approach. Subsequently, Nilesh was transferred to the quality control department to reduce his physical workload. Bhola found it very difficult to find a suitable replacement for Nilesh in the assembly area. He had to frequently interchange workers who were unable to cope with the high pressure work at the axle assembly. They deliberately started going slow, and thereby, affected productivity. Bhola did his best to pinpoint the problem. He was under tremendous pressure from the top to increase productivity to previous levels. The workers started demanding additional incentives and overtime payments. The management, on the other hand, was opposed to any change in the incentive structure. Bhola was helpless. He tried his best and at times did the work himself. The workers, sensing that Bhola had little control over them, became more aggressive and further slowed their work. Bhola suffered an emotional breakdown and had to stay away from work for two months.  Discuss what the main issues in the case are and what would be your approach in this situation.
• Tuna-Tuna Lactuna!: The Minicoy Canning Factory (henceforth MCF) was set up by the Lakshadweep administration in 1969 with an aim to step up fishery production, provide employment and enable fishermen to sell their excess fish for better returns. MCF could produce only up to 150,000 cans per year because of labour constraint. However, due to excess production, by September 2001, MCF had accumulated an unsold inventory of 150,000 cans amounting to Rs. 12,807,700. In 2001, 64,322 cans were sold resulting in a turnover of Rs. 6,302,500 and a profit of Rs. 810,380. Competition for MCF came from Integrated Fisheries Project (henceforth IFP), a government undertaking set up with an aim to introduce and popularize diversified fishery products in rural and urban markets. MCF canned a type of tuna called Skipjack tuna, whose meat was harder and different in taste as compared to Yellow fin tuna canned by IFP. The distributors felt that higher price of Skipjack tuna was the culprit for lower sales vis-à-vis IFP. The higher price was on account of higher overheads for MCF attributed to lower volumes. IFP also had a stronger dealer network and a much larger promotion budget.  The demand for canned tuna is concentrated in upcountry areas. However, the sale of MCF's tuna to these regions has been low. Sales enquiries had also been received from the Middle East, but no action had been taken on them. Markets other than the retail market were also being explored. The management of MCF was pondering over what the problem was and what could be done to resolve it amicably, both in the short term as well as in the longer term.
• Et tu Brutus!: Yahan Gadbad Inc. is a reputed multinational that specialized in organizing beauty pageants. The protagonists of this piece, besides you (of course), are Mr. Bhartus, the HR Manager and Mr. BigMouth, the flamboyant hospitality manager. Mr. BigMouth has been in Yahan Gadbad Inc. for over a decade now, during which he has successfully organized half a dozen pageants at exotic locales around the world. People in Yahan Gadbad swear by his integrity and professionalism and he has been the role model in the company for the last decade. Mr. Bhartus and Mr. BigMouth were good friends. One day after they had had a drink too many, Mr. BigMouth said to Mr. Bhartus, “Bhartu, I have something to confess to you. Bhartu dear, please listen to me as a friend and not as an HR manager”. “Of course Biggie!” said Mr. Bhartus, “I have big stomach. I can digest any secret”. Mr. BigMouth then said, “Do you remember the pageant we had in Polynesian Islands? You know, Bhartu the human heart is frail. I kind of got bowled over by a contestant. We had a week of debauchery. I rigged the contest to help her get the second runners up title”. In spite of the promise made to Mr. BigMouth, Mr. Bhartus comes to you (President, Yahan Gadbad Inc.) with the information. You think aloud, “Damn! What do I do now? The HR department handles confidential information and this fool could not keep a secret. On the other hand… God! Please guide me!”
• Student's BIG problem: In an institute AIM, the students' council is selected by a voting wherein each student is allocated a vote for each position in the council. The council is supposed to undertake activities of students' interests. Each student pays Rs. 50 per year towards council dues. Extending the brief of the council, it decides to add responsibilities and projects. As a first, it introduces a scheme for students wherein it provides them stationary and hosiery at a subsidized price. This is to be done on a no-profit no-loss basis. Initially, it is done only for a select group of students as a pilot exercise.  Extending in the first month, the council has a sale of Rs.3500. They make a profit of Rs. 300. Seeing this, the council decides to expand its store for the complete instituted. They buy goods worth Rs.15000 for the first time and Rs 10000 the second time. In order to buy these goods, it takes loan of Rs.8000 at an interest of 18% per annum. Rumors of bungling of money start floating around the campus. Some council members are alleged to have taken money from the store and the council funds. As a result of these rumors, some students begin to boycott the council and start to doubts its intentions. In addition, they allege that the store was supposed to be on a no profit no-loss basis, but still it aimed at earning profits.  On complaints to the institute authorities, the store is closed for business till further notice, pending an internal investigation into the matter. As a result of the store closure, the council is left with stocks of Rs.13500. In addition, the council also has to repay Rs. 8000 plus interest to the financial institution. In the present scenario, what could be the possible solutions?

• The Video Games Case You are the CEO of a large, diversified entertainment company. A division of your firm manufactures video games. The division is the third largest manufacturer of hardware in the industry and has a 10% market share, with the top two having 40% and 35% respectively. The industry growth has been strong, though over the last few months, the overall industry sales growth has slowed a bit. The division's sales have increased rapidly over the last year from a relatively small base. Current estimate is annual sales of 500,000 units for your division. The selling price of the basic Video Game unit (hardware) is Rs. 1000. The current cost of manufacturing a unit is Rs. 700, excluding the marketing costs. The top two competitors are estimated to have a 10 to 15% cost advantage currently. The division currently exceeds corporate return requirements; however, margins have recently been falling. The product features are constantly developed (e.g., new type of remote joy stick), to appeal to the segments of the market. However, the division estimates much of the initial target market (young families) has now purchased the video game hardware. No large new user segments have been identified .  Recently, a request has come to you, the CEO, for approval of Rs. 20 Cr. for tripling the division's capacity. The requested expansion will also reduce the cost of manufacture by 5 to 7 % from the present value. Should you approve the expansion?
• Bow Bow! You are the General Manager (Procurement) in a large, international trading firm, Idhar Udhar Inc. Your current responsibilities involve procurement of rats, dogs and cats from the dark interiors of Africa and selling them at a profit in developed countries as pets. Of these products, dogs are extremely seasonal, being available only from the middle of May to the end of August. You are expecting a bumper season this time around. Also, the price of dogs in the developed countries being at an all time high, you are expecting record profits which would, in a swift move, also put your career on the fast track.  Bang in the middle of the procurement season, an internal audit reveals that Mr. Ghotala Doggy, your star manager (Procurement Dogs) has siphoned off Rs. 20,000 from company funds. Mr. Doggy has excellent relations with the suppliers and you know that it would be impossible to meet targets without him. On your questioning, Mr. Doggy reveals that he had taken the money for paying the medical bills of his daughter, Ms. Bitchy Doggy, who was seriously ill.  Following this incident, audits were conducted in other divisions and irregularities were found there also. However, since your division was the first where such an incident took place, people are looking at you to set a precedent. Your company lays extreme emphasis on personal integrity and this is the first time in the company's century old history that such an incident has occurred. What would you do?
• The Dilemma! You are the GM (HR) of a small firm involved in manufacturing and selling AM/FM radios. Of late, sales of radios have declined due to emergence of TV, Cable etc. The main departments are the production, marketing and accounting.  Bharat is a clerk in the accounting department. He has been with the company for 15 years now. He knows the job well, but of late, is increasingly coming late for work. He is married with two children and he cites family problems as the cause of late arrival on job. Every time he promises to mend his ways, but has not done so till date.  Om is the production supervisor. He has been with the company since its inception 30 years ago and commands a lot of respect from his workers. But, age is catching up on him fast. Also, the much younger workers are increasingly questioning and resisting his authority. If chucked out of the job, it might be difficult for him to find another job at his age. He is due to retire in another two years. Jai is a young MBA in marketing from a major B-School. He joined the company a year ago and started new advertising and marketing campaigns, at a tremendous cost to the company. His plans met with initial success, but then the sales were back to its initial levels. He handles the company's dealers in the northern region. But, his initial success seems to have gone to his head. He increasingly feels discontented when some of his new ideas are turned down by the higher management.  Jagdish is a marketing executive with the company for the last 6 years. Though not an MBA, he was still hired for the job due to his sharp acumen. In the years to follow, with an increasing mumber of MBA's joining the company, he was denied promotion last year. This caused bouts of deep depression, from which he recovered after two months. After that, he has been complacent in his work and sometimes even rude to the customers.  In a desperate cost-cutting measure, your company decides that it must reduce the workforce as a first measure. These four are the possible candidates for job termination. You, as a group, have to decide how many you will sack, which ones, and why?

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Business school teaching case study: can green hydrogen’s potential be realised?

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Jennifer Howard-Grenville and Ujjwal Pandey

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Hydrogen is often hyped as the “Swiss army knife” of the energy transition because of its potential versatility in decarbonising fossil fuel-intensive energy production and industries. Making use of that versatility, however, will require hydrogen producers and distributors to cut costs, manage technology risks, and obtain support from policymakers.

To cut carbon dioxide emissions, hydrogen production must shift from its current reliance on fossil fuels. The most common method yields “grey hydrogen”, made from natural gas but without emissions capture. “Blue hydrogen,” which is also made from natural gas but with the associated carbon emissions captured and stored, is favourable.

But “green hydrogen” uses renewable energy sources, including wind and solar, to split water into hydrogen and oxygen via electrolysis. And, because there are no carbon emissions during production or combustion, green hydrogen can help to decarbonise energy generation as well as industry sectors — such as steel, chemicals and transport — that rely heavily on fossil fuels.

Ultimately, though, the promise of green hydrogen will hinge on how businesses and policymakers weigh several questions, trade-offs, and potential long-term consequences. We know from previous innovations that progress can be far from straightforward.

Wind power, for example, is a mature renewable energy technology and a key enabler in green hydrogen production, but it suffers vulnerabilities on several fronts. Even Denmark’s Ørsted — the world’s largest developer of offshore wind power and a beacon for renewable energy — recently said it was struggling to deliver new offshore wind projects profitably in the UK.

Generally, the challenge arises from interdependencies between macroeconomic conditions — such as energy costs and interest rates — and business decision-making around investments. In the case of Ørsted, it said the escalating costs of turbines, labour, and financing have exceeded the inflation-linked fixed price for electricity set by regulators.

Business leaders will also need to steer through uncertainties — such as market demand, technological risks, regulatory ambiguity, and investment risks — as they seek to incorporate green hydrogen.

Test yourself

This is the third in a series of monthly business school-style teaching case studies devoted to responsible-business dilemmas faced by organisations. Read the piece and FT articles suggested at the end before considering the questions raised.

About the authors: Jennifer Howard-Grenville is Diageo professor of organisation studies at Cambridge Judge Business School; Ujjwal Pandey is an MBA candidate at Cambridge Judge and a former consultant at McKinsey.

The series forms part of a wide-ranging collection of FT ‘instant teaching case studies ’ that explore business challenges.

Two factors could help business leaders gain more clarity.

The first factor will be where, and how quickly, costs fall and enable the necessary increase to large-scale production. For instance, the cost of the electrolysers needed to split water into hydrogen and oxygen remains high because levels of production are too low. These costs and slow progress in expanding the availability and affordability of renewable energy sources have made green hydrogen much more expensive than grey hydrogen, so far — currently, two to three times the cost.

The FT’s Lex column calculated last year that a net zero energy system would create global demand for hydrogen of 500mn tonnes, annually, by 2050 — which would require an investment of $20tn. However, only $29bn had been committed by potential investors, Lex noted, despite some 1,000 new projects being announced globally and estimated to require total investment of $320bn.

Solar power faced similar challenges a decade ago. Thanks to low-cost manufacturing in China and supportive government policies, the sector has grown and is, within a very few years , expected to surpass gas-fired power plant installed capacity, globally. Green hydrogen requires a similar concerted effort. With the right policies and technological improvements, the cost of green hydrogen could fall below the cost of grey hydrogen in the next decade, enabling widespread adoption of the former.

Countries around the world are introducing new and varied incentives to address this gap between the expected demand and supply of green hydrogen. In Canada, for instance, Belgium’s Tree Energy Solutions plans to build a $4bn plant in Quebec, to produce synthetic natural gas from green hydrogen and captured carbon, attracted partly by a C$17.7bn ($12.8bn) tax credit and the availability of hydropower.

Such moves sound like good news for champions of green hydrogen, but companies still need to manage the short-term risks from potential policy and energy price swings. The US Inflation Reduction Act, which offers tax credits of up to $3 per kilogramme for producing low-carbon hydrogen, has already brought in limits , and may not survive a change of government.

Against such a backdrop, how should companies such as Hystar — a Norwegian maker of electrolysers already looking to expand capacity from 50 megawatts to 4 gigawatts a year in Europe — decide where and when to open a North American production facility?

The second factor that will shape hydrogen’s future is how and where it is adopted across different industries. Will it be central to the energy sector, where it can be used to produce synthetic fuels, or to help store the energy generated by intermittent renewables, such as wind and solar? Or will it find its best use in hard-to-abate sectors — so-called because cutting their fossil fuel use, and their CO₂ emissions, is difficult — such as aviation and steelmaking?

Steel producers are already seeking to pivot to hydrogen, both as an energy source and to replace the use of coal in reducing iron ore. In a bold development in Sweden, H2 Green Steel says it plans to decarbonise by incorporating hydrogen in both these ways, targeting 2.5mn tonnes of green steel production annually .

Meanwhile, the global aviation industry is exploring the use of hydrogen to replace petroleum-based aviation fuels and in fuel cell technologies that transform hydrogen into electricity. In January 2023, for instance, Anglo-US start-up ZeroAvia conducted a successful test flight of a hydrogen fuel cell-powered aircraft.

The path to widespread adoption, and the transformation required for hydrogen’s range of potential applications, will rely heavily on who invests, where and how. Backers have to be willing to pay a higher initial price to secure and build a green hydrogen supply in the early phases of their investment.

It will also depend on how other technologies evolve. No industry is looking only to green hydrogen to achieve their decarbonisation aims. Other, more mature technologies — such as battery storage for renewable energy — may instead dominate, leaving green hydrogen to fulfil niche applications that can bear high costs.

As with any transition, there will be unintended consequences. Natural resources (sun, wind, hydropower) and other assets (storage, distribution, shipping) that support the green hydrogen economy are unevenly distributed around the globe. There will be new exporters — countries with abundant renewables in the form of sun, wind or hydropower, such as Australia or some African countries — and new importers, such as Germany, with existing industry that relies on hydrogen but has relatively low levels of renewable energy sourced domestically.

How will the associated social and environmental costs be borne, and how will the economic and development benefits be shared? Tackling climate change through decarbonisation is urgent and essential, but there are also trade-offs and long-term consequences to the choices made today.

Questions for discussion

Lex in depth: the staggering cost of a green hydrogen economy

How Germany’s steelmakers plan to go green

Hydrogen-electric aircraft start-up secures UK Infrastructure Bank backing

Aviation start-ups test potential of green hydrogen

Consider these questions:

Are the trajectories for cost/scale-up of other renewable energy technologies (eg solar, wind) applicable to green hydrogen? Are there features of the current economic, policy, and business landscape that point to certain directions for green hydrogen’s development and application?

Take the perspective of someone from a key industry that is part of, or will be affected by, the development of green hydrogen. How should you think about the technology and business opportunities and risks in the near term, and longer term? How might you retain flexibility while still participating in these key shifts?

Solving one problem often creates or obscures new ones. For example, many technologies that decarbonise (such as electric vehicles) have other impacts (such as heavy reliance on certain minerals and materials). How should those participating in the emerging green hydrogen economy anticipate, and address, potential environmental and social impacts? Can we learn from energy transitions of the past?

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