ITC Limited, earlier known as Imperial Tobacco Company and India Tobacco Company, is a multinational conglomerate that is based in India. Its products are sold in India and Gulf nations. The company was found in 1910 as a tobacco company and later on expanded into numerous other products (India Times, 2014). The headquarters of the company are in Kolkata, West Bengal. Today, the company deals with tobacco products, consumer goods, education, apparel, information technology, hotels and resorts, packaging, and various other products. The company has more than 60 production locations across India. In 2019, the company reported revenue of $7.5 billion and had more than 27,000 employees in the country (ITC, 2019). The company has appeared in the Forbes 2000 list as well.
Following are the four dimensions of the Ansoff Matrix for ITC:
Market Penetration
Market penetration refers to selling existing products of the company in its existing markets. There are various strategies that the company applies to manage this. The first strategy is that the company aggressively markets its products through various advertising sources such as television, print media, and social media. The company also has developed strategic alliances with various brands to promote its products and motivate consumers. ITC has also acquired various smaller competitors in order to reduce competition and increase its market share. Another strategy that is applied is augmented promotion to motivate consumers to purchase more of the products. This can include bundled pricing and discounts over the original price to promote sales. The company also regularly improves its products over time by changing their formulas to improve their performance. The changes are then marketed to help consumers understand the change and enhance sales. All of these strategies help the company stay in business by promoting existing products.
Market Development
ITC has various opportunities to launch its existing products in new markets. The company currently operates in only a few nations in Asia. There are numerous other geographical markets the company can expand into even in Asia and outside of Asia to Europe and the Americas. The company holds the resources to gradually expand into various other markets. The company can vary its product packaging and size to match the needs of these markets. These markets hold great potential for the company to take advantage of. ITC can also start selling its products through different distribution channels such as online sales, affiliate marketing, and others in its existing markets to expand its markets. The main market the company serves is India. It can create different packaging sizes to attract a new market segment inside India as well to promote its market.
Product Development
ITC often introduces new products in its existing markets as a part of its product development strategy. Since the company produces a variety of products, it has great potential for product development. ITC regularly creates new products in its domains to expand its product portfolio. These products, such as a new brand of cigarettes or new consumer goods products, are launched in existing markets in various sizes and at promotional prices to gain attention and market share. The company does research and development in various domains to launch new products based on consumer feedback and market trends. The products are also adjusted to match market requirements once they are launched. The diverse industries the company operates in allows it to innovate over a broad product spectrum and lead the market in product development. Also, the successful brand names the company has, create ease in the success of new products launched.
Diversification
The company has taken on the risky strategy of diversification since its inception by expanding from tobacco into numerous other markets. The company has used horizontal, concentric, and conglomerate diversification. The company expands into related industries and unrelated industries to diversify its product portfolio. The company has a strong financial background with excellent cash flows that allow it to take risks when diversifying. The company has done conglomerate diversification by diversifying into numerous other industries that are entirely unrelated such as tobacco, hotels, apparel, education, and various others. In each case, the company has been successful and holds the further potential to diversify to increase its sales and profits.
References
India Times, 2014. ITC Ltd. [Online] Available at: https://economictimes.indiatimes.com/itc-ltd/infocompanyhistory/companyid-13554.cms [Accessed 27 Dec. 2019].
ITC, 2019. QUARTERLY RESULTS. [Online] Available at: https://www.itcportal.com/about-itc/shareholder-value/key-financials/quarterly-results.aspx [Accessed 27 Dec. 2019].