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INDUSTRIAL ANALYSIS. “By means of industry and perseverance you will rise higher and higher.” Robert Schumann. Industrial Analysis Bader Alotaibi Instructor: Rodney W. Reynolds BADM 230 March 28, 2015. IDENTIFYING YOUR INDUSTRY.
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INDUSTRIAL ANALYSIS “By means of industry and perseverance you will rise higher and higher.” Robert Schumann
Industrial Analysis Bader Alotaibi Instructor: Rodney W. Reynolds BADM 230 March 28, 2015.
IDENTIFYING YOUR INDUSTRY • How can we anaylize our industry, what are the common factors which hold to the development of the industry? • Identify your own industry , commonly the one which is a part of broder manufacturing company that is: "Tobacco and Cigarette manufacturing industry"
INDUSTRY OVERVIEW Tobacco and cigarette manufacturing industry • History • Tobacco had been smoked by Native Americans since a long time. • The arrival of the Europeans who started heavily trading it was what resulted in it being traded as a commodity and growing as an industry. • Price TAXES levied an important factor ! There is an inverse relation between the price of the cigarettes and its consumption (Nigel Rice). It is a heavily regulated industry, including restrictions on advertisement and promotions in United States and heavy taxation. Leading companies China National tobacco Co; Phillip Morris international inc; Japan tobacco international, British American tobacco and Imperial Tobacco Group (The Top 5 Largest International Tobacco Companies).
INDUSTRY DEVELOPMENTS • Statistics and facts -"The tobacco industry" The global tobacco industry generates a revenue of more than 600 Billion Dollars annually and produces over 7.2 million metric tons of tobacco . • Tobacco sales! Tobacco sales have remained steady over the last years with cigarette sales declining steadily, but this decline was offset by the increase in non-cigarette tobacco products. • Substandard non-cigarette products As non-cigarette tobacco products are priced lower, more people have moved on to consuming these products instead of cigarettes. • Available marketing strategy "Marketing the product through sponsorship" Sponsorship has produced the same effect as advertisements and promotions and has not yet had a significant impact on the industry's ability to generate more revenue and, therefore, maintain its profits (Elinor Devlin, 2003).
INDUSTRY DEVELOPMENTS CONT… • Tobacco-non seasonal industry • The sales of tobacco products is not at all affected by seasonal variations . • Tobacco is produced steadily to ensure a constant supply of related products to meet the consistent demand. • There are no fluctuations in sales and the demand is constant throughout the year (Economic Facts About U.S. Tobacco Production and Use, 2014). • Economic fluctuations The industry is not sensitive to economic fluctuations. imp! : "However, the effects of price on demand is inversely proportional, meaning that demand increases and therefore consumption decreases and prices increases. " This translates into inflation having a negative effect on the consumption of tobacco products.
CONSUMER MARKET DATA • Statistics and analysis of different consumer regions • The African region accounts for 41 million smokers, which is 4% of all smokers in the world. • The region of Americas (which includes north and South America) accounts for 145 million smokers, which is 12% of all smokers. • The eastern Mediterranean region accounts for 60 million smokers, which is 5% of all smokers. • The European region holds 238 million smokers, which is 21% of all smokers. • The South East Asia region accounts for 248 million smokers, which is also roughly 21% of all smokers. • The western pacific region contains the highest number of smokers, 430 million, which accounts for an immense 37% of all the smokers in the world.
CONSUMER MARKET DATA CONT.. • It can be interpreted from the data that developing countries account for 1 billion out of 1.22 billion of the smokers, which is a colossal 81% of the smoking population. (WHO) • The High, Middle and Low-income group account for 215, 830 and 119 million smokers which form 18%, 71% and 10 % respectively. (WHO). The lower middle-income group consists of the highest number of smokers. Most regions are responsible for using cigarettes as the sole medium of nicotine or tobacco related products . These products include products which are part of local customs which include Chewing tobacco and hookah.
COMPETITOR INFORMATION • Biggest tobacco companies • China National Tobacco Co, located in Beijing CHINA Consumes 37.1% of global market share. • Philip Morris International Group Inc headquartered in New York, USA Consumes 20.2% of market share. • Japan Tobacco International headquartered in Geneva, Switzerland Consumes 9.6% of global market share. • British American Tobacco located in London, United Kingdom Consumes 12% of global market share . • Imperial tobacco Group headquartered in Bristol, United Kingdom Consumes 4.9% of the market share. These companies have a global presence and operate worldwide. They have been in business for 114 years, 15 years, 113 years, 33 years and 115 years respectively.