SWOT Analysis of ITC. ITC Limited is a conglomerate Indian multinational company. W.D. & H.O. Wills laid the foundation of ITC as a British-owned company on August 24, 1910. The headquarters of the company are in West Bengal; Virginia House, Kolkata, India.
Some of the main products and services of ITC are as follows;
- Information Technology
- Paperboards & Specialty Papers
- Hotels & Resorts
- Apparel Education
- Consumer Goods
Key statistical facts and figures about ITC are as follows;
- The annual revenue of ITC in 2023 was 9.8 billion dollars
- Out of which, the net income of the company was 2.4 billion US dollars
- Approximately 36,500 employees are working for the company to manage its operations
Some of the main business divisions of ITC are as follows;
- Sunrise Food
- ITC Infotech
- Specialty Paper Division & ITC Paperboard
- ITC Hotels
Some of the top competitors of ITC are as follows;
- Godrej Consumer
- First Ascent
- GOJO Industries
- Hindustan Unilever
Today, we’ll discuss the swot analysis of ITC. It is going to focus on the internal strengths and weaknesses; external opportunities and threats to the leading Indian conglomerate company. Here’s the swot analysis of ITC as follows;
Strengths of ITC
Some of the main strengths in the swot analysis of ITC are as follows;
ITC has successfully diversified its business into various categories, rather than relying on one source of earnings. For instance, the revenue contributions of various business areas of the company are as follows;
- 2% revenue of the company comes from Hotel and Resort business;
- 11% of the total revenue comes from paper and packaging;
- 21% of the revenue comes from the agri-business division;
- 67% of the total revenue comes from the FMCG and cigarettes area
ITC is the largest cigarette-producing company in India. According to an estimate, ITC has got approximately 75% of the market share in the Indian cigarette industry. It shows the market leadership position of the company in the Indian market.
ITC is operating its business in more than 60 countries across the world. The conglomerate has got more than 200 production units across India; 7 million retail outlets in various cities and villages to approach customers. The company has the ownership of 113 hotel properties and 25 brands in various categories.
ITC is a well-recognized Indian brand with a vast reputation across the country. In fact, the company ranks the 2nd position in the top 10 FMCG Indian brands. The flagship and luxury hotels of the company have earned the global reputation; some of them are as follows;
- Dum Pukht
ITC has made some of the most successful acquisitions and they have allowed the company to diversify its earning and market. Some of the top acquisitions of the company are as follows;
- Blupin Technologies for 390 million Indian Rupees and earned a 10% stake in 2022
- Sunrise Food for 2150 Crores in 2020
- Tecnico Agri Sciences for 121 crores in 2016
ITC runs various types of innovative marketing and promotional campaigns to attract retailers, businesses, and customers. For instance, the B2B app of ITC “Unnati” attracted more than 220,000 retailers on boards; the e-store of the company has given access to customers to more than 700 products in more than 25 categories.
Weaknesses of ITC
Some of the main weaknesses in the swot analysis of ITC are as follows;
Depending On Tobacco
Statistical analysis of the company shows that approximately more than 40% of the total revenue of the company comes from the sale of cigarettes. It shows that the company is heavily relying on the cigarettes and tobacco industry; it is not good for the company’s growth in the long term.
Unhealthy Public Perception
Cigarettes and tobacco are injurious to a person, and it is absolutely right. Accordingly to an estimate, approximately more than 1 million die in India due to smoking cigarettes. That’s why the modern consumer market perceives cigarettes negatively.
Conflict with Nestle
Nestle and ITC have had a long legal battle on the patent issues of two relevant products like “Magic Masala” and “Magical Masala” for the noodle brand. The high court allowed both companies to promote their products because they both are common English and Indian phrases.
Opportunities for ITC
Some of the main available opportunities in the swot analysis of ITC are as follows;
ITC has recently shifted its focus from cigarettes and Tobacco to FMCG (fast-moving consumer goods) and they help the company to amplify its growth. In fact, the company has made several acquisitions in recent years to diversify its product portfolio and attract the attention of customers.
Consumer Market Growth
Studies have shown that FMCG is a highly growing and the 4th largest business sector in India. Its annual growth rate is 16%, and it would reach approximately 220 million US dollars by the end of 2025. The Indian packed food market would reach 70 billion US dollars by the end of 2025, and it presents a remarkable growth opportunity for the company.
Data Analytics & AI
Various businesses and companies are investing in AI and data analytics technology to understand consumer market trends and customer behavior. In fact, ITC has also invested in AI technology and launched NextGen Data architecture to exploit the latest technology for business growth and development.
Threats to ITC
Some of the main potential threats in the swot analysis of ITC are as follows;
High Production Cost
The production cost has increased significantly in recent years due to the oil crisis, disrupted supply chain, and other international political conflicts. Higher production cost means that the company has to incur a lot of capital resources to keep up with supply and demand, and it decreases the revenue and profitability of the company.
The consumer market and social welfare organizations are putting pressure on governments and legal institutions to ban and restrict the production and distribution of tobacco and cigarettes. If it happens, then it would very badly disturb the growth and profitability of the company.
The tobacco, cigarette, and consumer goods market is highly competitive. There are various world’s leading brands and companies running their business in this area, and they have got a very loyal database of consumers.
Conclusion: ITC SWOT Analysis
After an in-depth study of the swot analysis of ITC; we have realized that ITC is a leading Indian consumer goods manufacturing Conglomerate Company. If you are learning about the business of ITC, then you should keep in mind the abovementioned internal and external factors.
Ahsan Ali Shaw is an accomplished Business Writer, Analyst, and Public Speaker. Other than that, he’s a fun loving person.