Since its inception, the tobacco industry appears to be one of the most successful and lucrative businesses. More than five billion billion billion cigarettes are generated annually. Approximately 300 billion US dollars are earned by the industry's businesses. In the following paper, the current state of this industry will be investigated.
The items supplied
The industry's products include cigarettes, smokeballs, snuff tobacco, and other related items.
Five leaders in the industry
China National Tobacco Co., Philip Morris International Inc (Altria Group Inc), British American Tobacco, Japan Tobacco International, and Imperial Tobacco Group are the top five corporations in the sector.
China National Cigarette Co.
China National Tobacco Co. is the industry monopolist. More than 33 percent of the world's tobacco products are produced by this corporation (China National Statistics Bureau Yearbook 2010). The corporation is controlled by the Chinese government and is headquartered in Beijing, one of the largest industrial centers in the world and the country. The company's sales are approximately 32 billion dollars (China National Statistics Bureau Yearbook 2010). This company employs approximately 500,000 individuals, which accounts for 0.4% of total employment in China (China National Statistics Bureau Yearbook 2010). Approximately 4.18 billion U.S. dollars have been invested in capital (China National Statistics Bureau Yearbook 2010).
Philip Morris International Corporation (Altria Group Inc)
Philip Morris International Inc (Altria Group Inc) is the industry's second-largest corporation. It is in New York City, United States. The business controls 17.6% of the global market (Masina 2010). Its annual revenue is 89.8 billion US dollars. The number of employed persons is two hundred thousand. The amount of invested capital is 2,7 billion U.S. dollars (Masina 2010).
British American Cigarette
British American Tobacco, based in London, is the third largest firm in the industry with annual sales of $43.0 billion USD, representing 15.1% of the global market. The number of employed individuals is 100,000. The amount of investment capital is 2,2 billion U.S. dollars.
Japan International Tobacco
Japan Tobacco International, headquartered in Geneva, Switzerland, is the fourth largest corporation in its industry, with 6.4% of the global market share. The annual sales value surpasses 39.6 billion US dollars (Masina 2010). The number of employed individuals is sixty thousand. The amount of investment capital is 1,4 billion U.S. dollars (Masina 2010).
Imperial Tobacco Group
Imperial Tobacco Group, headquartered in Bristol, England, is the fifth-largest firm in its industry with annual revenues of $25,2 billion USD (Masina 2010). The business controls 3.7% of the global market. The number of persons engaged is twenty-five thousand. The amount of capital invested is 1,1 billion U.S. dollars (Masina 2010).
The issues within the industry
As a result of the business's products being in constant demand among the world's population, the industry faces few challenges. The World Health Organization (WHO) and the United Nations Organization (UNO) continue to represent the industry's greatest challenge.
alterations in government control
With the advancement of medicine in the 20th century, the question of forbidding the manufacture of cigarettes appeared to be on fire (Lee 1998). However, it was evident that it would be difficult to convince them to abandon their favorite habit. Despite this, numerous global governments have implemented programs to reduce tobacco usage among their citizens. Currently, both the state of government programs aimed at reducing smoking and the functioning of the tobacco industry appear to be problematic. The government's policies aim to reduce cigarette manufacturers' advertising time, prohibit smoking in public places, and prohibit the sale of cigarettes to those under the age of 18. In addition, cigarette producers are required to inform their customers about the potential health risks associated with smoking. All of this has a significant impact on the industry's operation.
The law mandating a price increase for tobacco goods is the industry's second and most serious concern, both of which are a result of government regulation. In addition, the manufacturing of tobacco products is subject to extremely high taxes. As a result, buyers are unable to purchase the industry's products with the same vigor as before. This is the most major issue that has arisen in the sector during the past few decades.
The Strategies of Industry Firms Intended to Solve the Emerging Problems
The global tobacco industry is aware of the peculiarities of its business, particularly the damage it causes to people's health. They recognize that their products are detrimental to the environment. Therefore, their efforts are focused on limiting the harm their business causes. In particular, they attempt to implement novel industrial methods in order to reduce hazardous environmental emissions. Additionally, they shift their productions to isolated places. These companies collaborate to prohibit the selling of cigarettes to minors. The tobacco business also focuses on technological advancements intended to make cigarettes less hazardous to the public's health. Breed (2012), under Section 78, states:
The industry viewed the introduction of new filtered cigarette brands as the optimum option. Asbestos was used in the Kent micronite filter as the industry scrambled to create newer and better filters. In addition, it appears that some of the flavoring chemicals now used in cigarettes with minimal tar content may be dangerous.
As their strongest argument in the debate, businesses emphasize their role in employing people while negotiating with governments. They also seek to promote their business through sponsorship. Tobacco firms are frequently cited as the primary sponsors of a number of sporting events and aid efforts for people in developing nations.
However, not all of the tobacco corporations' strategies are honest and fair. Specifically,'massive magnitude and scope of this business campaign highlight how, when threatened by global public health initiatives, corporate interests ignore competitive considerations in order to coordinate their activities' (McDanel, P, Intinarelli, G & Malone, R 2012, par. 45). Depending on Breed (2012, par. 3),
The tobacco industry has offered research professionals millions of dollars to investigate numerous topics. The specified range of topics for these studies is intriguing: genetic differences between smokers and nonsmokers, personality traits of smokers, immunologic factor in cancer, general studies on cardiovascular diseases, lung defense mechanisms, and smoking and other behavioral factors in cardiovascular diseases. This list of themes is unclear and insufficient, but it does highlight a number of their primary interests… A significant portion of this study could lead to conclusions that remove tobacco from the forefront of public and legislative debate.
In order to maintain high levels of profitability, cigarette businesses employ a range of unfair business tactics. Among such unfair practices are television advertising that portray smokers as happy and healthy. Tobacco company officials exert considerable effort to have indirect advertising in popular television programs, films, and shows.
The outlook for the industry
Regarding the industry's future, it appears that it will continue to be wealthy and wildly popular, despite the efforts of groups to encourage a healthy lifestyle without smoking. It is true that representatives of such organizations have had some success, particularly after the 1980s (Lee 1998). Numerous individuals will respond to the efforts of organizations like WHO to discourage smoking. However, the majority of individuals are accustomed to accommodating their desires, even if they are associated with dangerous behaviors (Bardsley, & Olekalns1999). According to Lee (1998, p. 17), 'despite the assertions of groups that receive funds from tobacco tax revenues, punishment and preaching have not been, nor are they likely to be, significant factors in affecting smoking rates, particularly among adolescents.' Thus, it may be concluded that the tobacco industry will continue to grow despite the efforts of global governments to promote healthy lifestyles.
In conclusion, the tobacco sector environment appears steady and conducive to profit maximization. Despite major challenges posed by groups promoting a healthy lifestyle for this industry, this market segment will continue to expand steadily. This is because the buyers are committed to purchase the industry's products regardless of the circumstances. Even the deployment of new tax tactics and the requirement that cigarette manufacturers continually boost prices do not pose substantial challenges for the sector. The tobacco industry's titans, notably China National Tobacco Co., Philip Morris International Inc (Altria Group Inc), British American Tobacco, Japan Tobacco International, and Imperial Tobacco Group, report sustained earnings growth and expansion in a number of their sales areas.
References
Bardsley, P, & Olekalns, N 1999. Economic Record, vol. 75, no. 23, pp. 225-228, "Cigarette and Tobacco Consumption: Have Anti-Smoking Policies Made a Difference?"
Strategies of the Tobacco Industry, L. Breed, 2012, Web.
China National Statistics Bureau Yearbook 2010, Beijing: Statistics Press, China.
The Government's Crusade Against Tobacco: Can It Eventually Succeed?, D. Lee, USA Today (Society for the Advancement of Education), pp. 16-78, 1998.
Boom Time for Tobacco Sales?, The World Health Organization Annual Report, pp. 56-89, 2010. Masina, L.
McDanel, P, Intinarelli, G & Malone, R 2012, Tobacco industry issues management organizations: Creating a global corporate network to undermine public health, Web.
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