ITC Limited: Diversification Strategy

Present-day ITC Limited (ITC) is a well-diversified company with a presence in various businesses, including fast-moving consumer goods (FMCG), hotels, agribusiness, paperboards and paper, and packaging. The 113-year-old India-based company has de-risked its portfolio and also remained relevant and competitive. This case chronicles the transition of ITC from a cigarette major to a conglomerate, aspiring to become the number one FMCG player. The creation of a strong brand portfolio coupled with an adept brand extension strategy spelled rapid growth for the company’s FMCG business. ITC’s successful diversification, led by the FMCG business, can be attributed to its corporate parenting advantage that accrued to the various businesses housed as divisions or strategic business units under a single listed company. Fiscal year 2023 had drawn to a close. ITC faced numerous questions. Was the millet-based business a good fit in the company’s parenting matrix? Would the food business benefit from the structural advantages that ITC had created as a corporate parent? What strategic initiatives could ITC take to gain further traction in the FMCG market?