ITC's e-Choupal: Taking E-Business to Farmers
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ICMR HOME | Case Studies Collection
Case Details:
Case Code : ITSY023
Case Length : 15 Pages
Period : 2000-2002
Pub Date : 2003
Teaching Note :Not Available
Organization : ITC
Industry : Varied
Countries : India
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A Quiet Digital Revolution Contd...
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ITC's success in this endeavor becomes all the more
commendable, considering the fact that many similar initiatives undertaken by
leading Indian companies including Tata Chemicals, Mahindra & Mahindra, Rallis
and EID Parry had failed badly (Refer Exhibit I). Commenting on the
revolutionary concept, Mohanbir Sawhney of the Kellogg School of Management
said, "ITC's long-term vision for e-choupals is grand. But the company started
with a modest and focused value proposition - helping farmers gets a better
price for their crops. This phased approach allows ITC to gain credibility
through early successes and learn from its mistakes." What set ITC apart from
other similar initiatives was the manner in which it implemented this project. |
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Prof Krishna Palepu, Professor of Business Administration, Harvard Business
School said, "It is a brilliant idea. If this experiment works, you will
have for the first time, enough communication capacity to connect with a
market segment that is currently underserved, but clearly had the purchasing
power. On this backbone, one can imagine other FMCG services and products
being offered. But, like everything else, it depends on execution."
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Background Note
ITC was incorporated in August 1910 as the Imperial
Tobacco Company of India Ltd (Imperial) by the UK based tobacco company
BAT. During the next six decades, the company primarily concentrated on
growing and consolidating its cigarette and leaf tobacco businesses and
soon emerged as a leader in the cigarette industry. However, Imperial
realized that operating only in the cigarette business would become
risky in the long run, as the product was considered injurious to the
health of consumers. Moreover, the constant increase in the excise duty
on cigarette was beginning to affect the company's profitability. |
Thus, the company took a conscious decision to diversify into
other businesses and entered the marine products export business in 1971. In
1974, the company's name was changed to I.T.C. Ltd and soon after the company
diversified into several businesses. The company entered the hotel business in
1975, the textile business (with Tribeni Handlooms) in 1977 and the paper
business (with Bhadrachalam Paperboards) in 1979. In 1981, the company
diversified into the cement business by buying a 33% stake in India cements from
IDBI.
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