Indian Tobacco Company (ITC) is a multinational conglomerate based in India with its headquarters in Kolkata, West Bengal (India Times, 2020). It was established in 1910 by the name of the Imperial Tobacco Company of India and was renamed as Indian Tobacco Company in 1970 (ITC, 2017). The various products of the company include consumer goods, apparel, cigarettes, education, resort, hotels, packaging, and so on. It sells its products in India and Middle East nations. The company has continued to expand since its establishment in a successful manner and has become a profitable conglomerate. In 2019, the company generated revenue of $7.3 billion and had more than 27000 employees (ITC, 2019).
Following are the four dimensions of the Ansoff Matrix for ITC:
Market Penetration
Market penetration is the concept of selling existing products in existing markets. For ITC, it is accomplished in various ways. The first strategy the company offers is to develop various discount schemes on its products to motivate its consumers to purchase and consume more of the products. Augmented promotions are also offered where one product is given free with another product and both products are of ITC. This helps introduce another product to a consumer already using an ITC product. The growth of ITC as a conglomerate has helped increase its market share for its various products as it continues to dominate the market. This has helped to reduce competition as well. Its diverse product portfolio also allows it to create stronger barriers to entry for newcomers to the industries it operates in. Various products of the company are also improved from time to time to attract consumers. This improvement can be in terms of ingredients, packaging, and taste. The changes are then marketed to gain attention. These strategies help ITC increase sales in the industries it operates in.
Market Development
When an organization promotes its existing products in new markets, the activity is termed as market development. ITC was initially launched in India. However, it developed its market by geographically expanding within the country and into other nations as well. Currently, the company exports its products to various nations in the Middle East. The geographical expansion of ITC still has great potential. It can continue to expand into other nations in Asia, Europe, and even in the Americas. Another strategy the company uses to enter new markets is to offer packaging variants that differ in size. In different markets, consumers vary in purchasing power and not all consumers can purchase large-size packaging. As a result, the company offers packaging in various sizes. This helps target different market segments. The company also targets specific market segments by launching new variants of its consumer goods products demanded by consumers.
Product Development
The promotion of new products in an existing market is called product development. The first strategy ITC uses in this regard is to launch new products. These can include new variants or products not being sold earlier. The new products are then aggressively marketed to gain the attention of consumers. The company also works on improving the products it also offers. These are in terms of performance, efficiency, packaging, and so on. ITC has worked hard to reduce its time to bring new products to the market. Its research and development team is dedicated to working on new products based on consumer needs and market trends. New products pass through various product development phases before they are launched to ensure success. All of these efforts help increase the revenue the company generates.
Diversification
Diversification refers to the introduction of new products in new markets. Since ITC is a conglomerate, it has already diversified into various related and unrelated industries. The wide array of industries the company operates in helps it generate greater revenue. The company still has the potential to diversify further into other industries it has not yet tapped into. These include sports, consumer electronics, heavy machinery, smartphones, information technology, and so on. It can also vertically diversify by establishing its own distribution system, supplier systems, and so on. These strategies will help increase the hold the company has on its supply chain. It can also establish its retail stores in India and other nations. Diversification is a risky but suitable strategy for ITC.
References
India Times, 2020. ITC. [Online] Available at: https://economictimes.indiatimes.com/itc-ltd/infocompanyhistory/companyid-13554.cms [Accessed 18 Jan. 2020].
ITC, 2017. Our History. [Online] Available at: https://www.itcportal.com/about-itc/profile/history-and-evolution.aspx [Accessed 18 Jan. 2020].
ITC, 2019. QUARTERLY RESULTS. [Online] Available at: https://www.itcportal.com/about-itc/shareholder-value/key-financials/quarterly-results.aspx [Accessed 18 Jan. 2020].