ITC BUSINESS MODEL: How Does ITC Make Money?

ITC Limited company is one of the biggest conglomerates in India. With time ITC has established itself as a prominent player in the FMCG sector, along with that it operates in other domains too.

ITC Company Ltd: Overview

ITC is India’s foremost and one of the  biggest multinational conglomerates. It has become a prominent and dominant player in the FMCG (fast moving consumer goods) sector, but along with that it also has a strong presence in other sectors too, like hotels, paperboard, packaging, etc.

This Kolkata based company, was originally named as Imperial Tobacco Company of India Ltd. in 1910. However, in 1970, it was renamed as India Tobacco Company, and was recognized as the acronym ITC Ltd., in 1974. 

Key Features

• ITC is currently the second FMCG company in India and is the market leader in cigarette manufacturing with a 78% of market share. 
• Along with that it is a globally acknowledged pioneer in farmer empowerment through its wide-reaching Agri Business.
• It operates in more than 50 countries, plus in gulf countries too. 
• ITC ltd has surpassed the British American Tobacco Plc company to become the third most valuable tobacco company in the world. 
• It has over 25 brands under its FMCG umbrella.

• The company owns 100+ hotels in various lavish locations.
• ITC’s Packaging & Printing Business is the largest value-added converter of paperboard packaging in South Asia. 
• It converts around 1,00,000 tones of paper, paperboard and laminates per annum into a variety of value-added packaging solutions like for the food & beverage, personal & home care products, cigarette, quick service restaurants, consumer goods industries, etc.
• Operates in the information technology sector with the name ITC Infotech, which is a leading global technology services and solutions provider, led by Business and Technology Consulting.

The following table shows the brands operating under ITC Ltd.

ITC operates in other domains too – 

Stationary brands – Owns brands  like Classmate and Paperkraft. 

Safety matches – It has safety matches brands like Homelites, and Aim. 

Paperboat and Packaging Materials –  ITC also has its working hands in Paperboat and Packaging materials sectors and provides a range of products like bio-based barrier coated boards, decorative laminate bases, writing and printing papers, and much more. 

It has its paperboard products line in range of Virgin Boards, Recyclable Barriers Boards, Recycled Boards, Barrier Boards, and Graphic Boards.

Agribusiness sector, it provides a farmer empowerment plan named e-choupal, to help farmers to build a strong community. Currently, e-choupal is serving as the world’s largest rural digital infrastructure plan. Its agribusiness provides products like, food grains, processed foods, coffee, feed ingredients, etc. 

IT Sector – The ITC Info Tech company operated by ITC ltd company, provides service in business and technology operations and consulting. It provides services like Consumer goods, Banking & Financial Services, Travel, Healthcare, etc. 

ITC ltd. also operates in the Apparels sector, has marketing and media centers, also has its own research and development centers.

Business Model of ITC Ltd. 

ITC Ltd. company business model includes various aspects and works differently in different industries, because ITC has a diverse portfolio of its products and services across various segments. Primarily operates across all B2B & B2C segments. 

Its key activities include innovative product development, CSR activities, R&D activities, etc. 

ITC ltd. also has a strong social media presence, that knows how to keep its audience engaged, interactive, and updated with its latest brand awareness strategies and ways.

Key Factors that Contribute to the Working of ITC Ltd. Business Model 

Customer Segments – Due to its diverse portfolio of products and services, ITC has a diverse range of its customer segments, that may range from 5-60 years. Caters to rural, semi-urban, and urban class. 

New launches – ITC displays its new products and services in a unique and well designed and innovative manner, that works a magnet in drawing peoples and investors attention towards itself. 

Channels – ITC works through a range of diverse channels to cater to its wide base of customers. It works through channels like retail outlets, direct sales, institutional sales, e-commerce sites, convenience stores, etc.

Value Assets – ITC believes in having strong value propositions, from delivering superior quality products, commitment of high quality products, an array of product range, etc. 

Cost Effectiveness – Its efficient supply chain management and integrated logistics  has helped the company to deliver the best and cost effective products to its customers across various sectors. 

Innovation & Technology – By implementing and embracing new technologies and innovation, ITC repeatedly enhances its array of services and products, and various processes and updates, that helps them to stay at the forefront and ahead of their competitors. 

Additional Perks – ITC includes additional perks like key activities that includes research & development, marketing & sales, production & manufacturing, also includes its key  resources like skilled workforce, manufacturing facilities, strong varied portfolio, distribution network, etc. 

How Does ITC Ltd. make money? 

ITC ltd. company operates business in various sectors and has different ways that are being implemented to make money. The different ways can be its varied revenue streams, advertising, license fees, etc. 

Revenue Streams – ITC varied portfolio of businesses generates its revenue through different streams. It includes its services i.e. in ITC hotel businesses, it generates its revenue by providing services like event management, accommodation, food and beverages, etc.

Product Sales – Different businesses and companies under ITC make their revenue from the sales of their products and services in various categories like, food and beverages, personal care products, cigarettes, etc.

Advertisements – ITC, a renowned and one of the oldest players in the business sector, very well knows how to draw audience attention towards themselves. Companies and businesses under the ITC umbrella, employ various marketing strategies and campaigns that appeal to an emotional as well as a true connection with the audience. 

Licensing fees – The companies and businesses with ITC earn their licensing fees and royalties from their valuable assets like trademarks, brand name, tagline, technology, etc.

Note: Also, visit the article Jar Business Model.

Summing Up: ITC Business Model 

ITC is one of oldest and biggest conglomerates in India, under which there are many companies and businesses operating.

ITC business model represents a fusion of ways which are being used by the companies and businesses that helps them to sustain in the market and in the competitive race. The ways can include the use of latest technologies, innovation with its array of products and services and along with it uses different marketing strategies and appeals that would help them to reach a wider base of customers. 

Its commitment to affordable product and service rates, maintenance costs, revenue streams, sales, etc. have helped them to be one of the leading players in the market.