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British American Tobacco

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on 28 October 2013

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Transcript of British American Tobacco

Porter 5 forces
Problem
Increased government legislative intervention within the developed world
Heavy local restrictions in the form of tax, and marketing restrictions
Consistent competitive oligopoly games
Who is British American Tobacco???
Major Competitor
PESTEL Analysis
Political
public place smoking
retail display
excise
Economical
creates jobs
tax revenues
social benefits & quit smoking
Social
Cessation assistance
Smoking in mass media
Technology
Next-generation product
Auto-manufacturing
Environment
Land clearing and deforestation
Tobacco production and climate change
Legal
Packaging and labeling
Ingredients bans
SWOT
Strengths
Strong market position
Geographically diversified
Weakness
Declining operating profitability
Falling Revenues from Major Operating Segments
Decreasing Operating Cash Flows

Opportunities
Light Cigarettes
Market Potential in China
Rising Popularity of Smokeless Tobacco
Threats
Increasing Health Concerns
Competitor Strategies
Contraband and Counterfeit Cigarettes
Legislative issues

Regional advantages
Recommendations
Political barriers
Oligopoly industry
Economies of scale
High rivalry in nations with no government legislation
Crowding out effect
Large buyer volume
No switching costs
Access to information
High prices
Brand loyalty
No switching costs
Market potential of substitute goods
Cheaper alternatives
Low switching costs
Large volume of tobacco
Factor Conditions
Key manufacturing plants situated in geographically beneficial, low cost nations
Strategic positioning capitalising on trade agreements and labour resources
Demand Conditions
Constant demand
Dominant market share, 43% locally
Extensive and unique product line
Related and Supporting Industries
Eased market entry for global competitors
Increased efficiency in freight transport industry
Government legislative intervention
Firm strategy, Structure & Rivalry
Productivity, Responsibility, 'Winning Organisation'
Growth through efficiency and image
Shared competitor vision
Concentrate marketing efforts/market expansion in developing nations with minimal government intervention
Expand product line to with low-cost/price cigarettes both to 'crowd out' competitors and secure the low-income demographic
Develop an e-cigarette line and lobby for legalisation of nicotine-based e-cigarettes
Offer innovative, yet legal marketing incentives such as 'loosies' and larger cost-efficient packet sizes
Address legal issues through heightened public relations and lobbying efforts
Heightened efforts in targeting consumer preference in a variety of markets
Increasing public relations efforts to address consumer and industry concerns
Full transcript