Itc E Choupal Case Analysis
The ITC e-Choupal Initiative
Q1) What was ITC’s motivation for creating the eChoupal? Ans: ITC’s International Business Division lagging behind the other divisions of the company and it was imperative that it got a fillip. The e-choupal project was launched to do exactly that.ITC had been successful in selling soybean oil domestically and processed soymeal internationally, but both the input and output sides of the agricultural supply chain in India were still far from efficient. In fact, farmers were losing 60-70% of the potential value of their crop, with agricultural yields only a third to a quarter of global standards. Similarly, on the output side, middlemen clogged the supply chain, reducing profit margins for both farmers and buyers such as ITC. ITC recognized that to increase its profits and to help farmers improve their margins they need to iron out the flaws in the existing inefficient supply chain system. The e-Choupal project ensured that farmers were equipped with weather forecasts, best practices, crop information, market and price information and could interact with specialists for Q&A. They also had a choice of selling in the ‘mandi’ or directly to ITC. This would ensure that the farmers got a better margin on their produce, middlemen and unscrupulous practices are eliminated, farmers could leverage better margins to improve the quality of the soyabean to match world standards and ITC could thereby strengthen the position of its International Business Division.
Q2) What were the old and new physical flows and information flows in the channel? Ans: Old information flow MANDI
New information flow through eChoupal:
1)Relevent and real time information: Commodity prices and weather news 2)Customised knowledge: Frame management and risk management 3)Supply chain for form inputs: Screened demand quality and demand aggregation for competitive prices. 4)Direct marketing channels for farm products: Low transaction cost and better news
Q3) How was
Q1) What was ITC’s motivation for creating the eChoupal? Ans: ITC’s International Business Division lagging behind the other divisions of the company and it was imperative that it got a fillip. The e-choupal project was launched to do exactly that.ITC had been successful in selling soybean oil domestically and processed soymeal internationally, but both the input and output sides of the agricultural supply chain in India were still far from efficient. In fact, farmers were losing 60-70% of the potential value of their crop, with agricultural yields only a third to a quarter of global standards. Similarly, on the output side, middlemen clogged the supply chain, reducing profit margins for both farmers and buyers such as ITC. ITC recognized that to increase its profits and to help farmers improve their margins they need to iron out the flaws in the existing inefficient supply chain system. The e-Choupal project ensured that farmers were equipped with weather forecasts, best practices, crop information, market and price information and could interact with specialists for Q&A. They also had a choice of selling in the ‘mandi’ or directly to ITC. This would ensure that the farmers got a better margin on their produce, middlemen and unscrupulous practices are eliminated, farmers could leverage better margins to improve the quality of the soyabean to match world standards and ITC could thereby strengthen the position of its International Business Division.
Q2) What were the old and new physical flows and information flows in the channel? Ans: Old information flow MANDI
New information flow through eChoupal:
1)Relevent and real time information: Commodity prices and weather news 2)Customised knowledge: Frame management and risk management 3)Supply chain for form inputs: Screened demand quality and demand aggregation for competitive prices. 4)Direct marketing channels for farm products: Low transaction cost and better news
Q3) How was