One monopoly player diversifying into another monopoly’s territory always intrigues me. The analogy being – if you think you are really good at singing and everyone else on earth agreed with you, why in God’s name would you chose to be an astrophysicist? Are you dreaming big? Are you missing that thin line between dreams and fantasies? Or are you just sleeping!
The company which fits beautifully into the frame of this question is ITC Ltd which has for almost a century been the favorite debate topic for business ethics class.
From a company that used to be an acronym for Indian Tobacco Company (I.T.C), it has metamorphosed into ITC without the dots; standing for A Company with No Stops (smart brand team I must say). And this change goes far beyond that consultation with a numerologist; it goes from paper to soap to potato chips to almost everything you might consume fast.
But with a monopoly of cigarettes in the Indian market you would wonder why this two hundred billion rupees company wants to enter into flattened-aloo-fries segment. Why potato chips when Frito-Lays already has a monopoly in it with almost 50% market share after nearly twenty years of struggle on the Indian land. A question that can be extended to the entire FMCG (Fast Moving Consumer Goods) sector it has entered. Why not just focus and build on the strong brand value already created for tobacco? Why?