Diversification Strategies Case Study

ITC: Adding Shareholder Value through Diversifications

OR

Abstract:
The case "ITC: Adding Shareholder Value through Diversifications" offers a detailed account of the challenges faced by ITC in its core business of cigarettes and its diversification into non-tobacco business is also traced. The case presents an overview of the Indian tobacco industry, various players in the industry and the challenges confronting them. The case study provides a useful setting for teaching diversification strategy of conglomerates being employed by a large firm (ITC) in a fast developing economy (India). The focus of the case study is on the challenge of transformation of ITC from a concentric firm (tobacco and cigarette major) to a highly diversified corporate enterprise.

Pedagogical Objectives:

• To identify the motivations for ITC to diversify
• To analyse the mode of diversification employed by ITC to increase its shareholders value and discuss its appropriateness
• To debate on the challenges that ITC would face in the new businesses that it has diversified into· To chart the future of ITC.

Keywords : ITC (Indian Tobacco Company); Global tobacco companies; Cigarette companies in India; Diversification Strategies Case Study; Tobacco companies in South-East Asia; Anti-tobacco regulations in India; BAT (British American Tobacco); Diversification strategies; Shareholder value; Indian tobacco industry; Indian fast moving consumer goods (FMCG) sector; Indian hospitality industry; Indian ready-to-eat market; Indian confectionery market; Indian branded atta market; Indian apparel industry