Business Analysis of British American Tobacco Case Study

Business Analysis of British American Tobacco - Case Study Example Philip Morris leads the market with 18% share, BAT follows with 11%, while Imperial Tobacco and Gallaher hold fourth and fifth position in the global tobacco pie. The missing third spot belongs to Japan Tobacco. In UK, the cigarette and tobacco market is predominantly captivated by Gallaher and Imperial Tobacco; the two firms enjoy an 80% hold in the market. BAT has its manufacturing facilities in UK but exports most of its production. (Action on Smoking and Health Fact sheet No.18) Recently, BAT has strengthened its position in the Tobacco world market with different moves. As per the most recent developments, to expand their reach farther, BAT is in process of acquiring small firms internationally so as to have extended access to the markets, and to have stronger position at the same. The group is also quite close to the completion of purchasing House of Prince (HoP). As per the Citigroup officials, the huge network of supply chain that BAT carries with itself can assist in exceeding HoP's last years 30 billion cigarettes sales figure throughout Europe. This would have a net impact on BAT's sales rather than increasing the existing lines sales. At the same time, in the start of March 2007, BAT declared its results for the ended fiscal year showing an increase in operational profits of 7-8% with Middle East, Latin America, Africa, and Asia-Pacific are the major contributors to this increment. Apart from this, another major cause has been an increment in the sal es volumes of subsidiaries that rose by 2%. It is noticeable that the net tobacco products sales was drove by the 4 major players of the market, giving it a volume increase of 17%. Internal & External Analysis Two of the most effective tools used widely for internal and external analysis of an organization are PEST and SWOT. PEST is the simple analyses of the external environment of an organization, while SWOT matches the internal and external factors to identify critical points for concentration. Following are the same conducted for BAT: SWOT SW presents the internal scenario of the organization, matched against the existing or anticipated external OT provides a plan for the future course of action. Following is a pictorial representation of the same: Strength Independence from single importer-monopoly Brand loyalty and associated good will Tremendous market segmentation Weaknesses Lack of regional market knowledge Unpredictability of Importers Very less presence in the local market Lack of