INDUSTRIAL ANALYSIS “By means of industry and perseverance you will rise higher and higher.” Robert Schumann

Instructor: Rodney W. Reynolds 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" 6/5/2018

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). 6/5/2018

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). 6/5/2018

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. 6/5/2018

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. 6/5/2018

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. 6/5/2018

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. 6/5/2018

THANK YOU 6/5/2018