A Case-Study: ITC E-Choupal

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A Case-Study : ITC e-Choupal

About ITC-IBD
‡ ITC is one of India's foremost private sector
companies with a market capitalisation of over US
$14 billion and a turnover of US $3 billion

‡ ITC has a diversied presence in Cigarettes, Hotels,


Paperboards & Specialty Papers,Packaging, Agri-
Business, Packaged Foods & Confectionery
CASE
‡ Initially, the agricultural commodity trading
business was small compared to international
players.
‡ By 1996, the opening up of the Indian market had
brought in international competition.
‡ Large international companies had better margin-to-
risk ratios because of wider options for risk
management and arbitrage.
‡ For an Indian company to replicate the operating
model of such multinational corporations would
have required a massive horizontal and vertical
expansion.
STEPS TAKEN
‡ In 1998, after competition forced ITC to explore the
options of sale, merger, and closure of IBD, ITC
ultimately decided to retain the business.
‡ The ITC-IBD taken the challenges to use
information technology to change the rules of the
game and create a competitive business that did not
need a large asset base.
Idea Generation
‡ The idea of creating and leveraging an electronic
market place came from the brainstorming session
done by senior executives of ITC-IBD.
‡ To reach across a wide range in rural India, the
leaders have to understand and unleash the power of
the small-scale entrepreneur in village communities.
ITC e-Choupal and the Strategy
‡ ITC followed a different media/communication
strategy which is more elaborate and extensive in
rural marketing so far, which benefits both the
farmers and the organization
‡ The strategy is use the Information Technology and
bridge the information and service gap in rural
INDIA which gives an edge to market its products
like seeds, fertilizers and pesticides and other
products like consumer goods.
‡ With this strategy it can also enhance its
competitiveness in global market for agri
exports.
equirements e-Choupal
‡ equired ITC to make significant investments to
create and maintain its own IT network in rural India
and to identify and train a local farmer to manage
each e-Choupal.
‡ The computer, typically housed in the farmers
house, is linked to the Internet via phone lines or,
increasingly, by a VSAT connection.
‡ It serves an average of 600 farmers in 10
surrounding villages within about a five
kilometer radius.
Uses
‡ The company has initiated an e-Choupal
effort that places computers with Internet
access in rural farming villages
‡ The e-Choupals serve as both a social
gathering place for exchange of information
(choupal means gathering place in Hindi)
and an e-commerce hub.
Benefits
‡ Using the system costs farmers nothing.
‡ The farmers can use the computer to access
daily closing prices on local mandis
(government mandated markets)
‡ Helps to track global price trends or find
information about new farming techniques
either directly or, because many farmers are
illiterate, via the sanchalak (the village
farmer who runs the e-Choupal and acts as
ITCs representative in the village).
‡ In addition they can also know about
weather forecast (local).
‡ They also use the e-Choupal to order seed,
fertilizer, and other products such as
consumer good from ITC or its partners, at
prices lower than those available from
village traders
How e-Choupal Works
‡ Sanchalak: a lead farmer, who acts as the interface
between computer and the farmer.
‡ ITC accumulates information regarding weather,
modern farming practices, and market prices
fromsources like Meteorological Department, Agri-
universities, mandis (regional market) etc.
‡ All information is customized according to local
farmers requirements and provided into the local
language through computer set up by ITC in
Sanchalak¶s house.
‡ Then uploads all information on to e-Choupal web
site.
‡ Information regarding weather and scientific
farming helps farmers to select the right crop and
improve the productivity of their farms.
‡ Availability of market information helps farmers to
become market oriented.
‡ They know what price ITC is quoting and the price
prevalent in the local market, there by helping better
price realization for farmers.
‡ Power of information is working as the catalyst of
transformation of the life of farmers by helping them
to get improved yields from their farms and better
price realization
Facilitation of flow of information and
knowledge

‡ It transmits ?  (weather, prices, news),


‡ It transfers 
 (farm management, risk
management)
‡ It facilitates sales of ? (screened for
quality) and
Facilitation of flow of information
and knowledge

‡ It offers the choice of an alternative O-


marketing channel (convenience, lower transaction
costs) to the farmer right at his doorstep
‡ It is an interlocking network of partnerships (ITC +
Met Dept + Universities + Sanyojaks, the erstwhile
Commission Agents) bringing the ³best-in class´ in
information, knowledge and inputs
This is model with a number of
non-conventional characteristics
‡ customer centric
‡ capable of being used for many commodities and
multiple transactions
‡ uses local talent and local people and develops local
leaders
‡ can be extended to local as well as global procurers
This is model with a number of
non-conventional characteristics
‡ stimulates local entrepreneurs to extend their
innovativeness
‡ uses all the existing institutions and legal
frameworks and
G WTH
‡ Launched in June 2000, 'e-Choupal', has
already become the largest initiative among
all Internet-based interventions in rural
India.
‡ 'e-Choupal¶ services today reach out to
more than 3.5 million farmers growing a
range of crops.
Conclusion
‡ ITC e-Choupal, an innovative strategy which is
elaborative and extensive in rural markets so far.
‡ Critical factors in the apparent success of the
venture are ITCs extensive knowledge of agriculture
, retaining the integral importance of local partners.
Conclusion
‡ ITC has been successful in making the farmer feel
the sense of ownership and enthuse him to generate
additional revenue by eliminating middleman.
‡ E-choupal has provided economic benefits even for
the small farmers. Every beneficiary gets benefit and
the equitable benefits makes the adoption very rapid.
EFENCES
‡ http://www.itccorporate.com/agri_exports/e
-choupal.html#top
‡ http://agricoop.nic.in/stats.htm
‡ http://library.thinkquest.org
THANK
Y U

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