British American Tobacco Implementation of SWOT Analysis

According to the economic theory (firm theory), a firms utmost objective is to maximize its profit. Hence during the initial stages of the enterprise growth, managers drug abuse monetary metrics such as cash flows, revenue, and pre-tax profit to adjudicate performance of their firm.However, these metrics only tell of past events and therefore bath non be used for strategic counselling, with time the market conditions change. As a result, a firm will tend to invest much to develop capabilities and customer relationships on a long-term basis.Customer relationship is sightly critical for the firm and therefore as the firm embarks on the financial metrics it must also add consumer satisfaction metrics for it to persevere successful. Hence in this new environment everyplace reliance on the financial metric is not enough in evaluating the path to be followed by companies to increase repute through investing in employees, consumer, technology and innovation. In order to address the insufficiency of these metrics, chore information consultants throw put forward several strategic management tools and models.Some of these models and tools include the wonk analytic thinking, Balanced Scorecard (BSC) compend etc. The BSC has four aspects namely, the customer perspective, native business enterprise perspective, innovation and learning perspective and financial perspective.The SWOT analysis evaluates the weakness, strength, opportunities and affrights involved in fraternitys operations. Strengths and weaknesses are inner(a) to the firm and evaluate the internal capability while Opportunities and threats are out-offing business control and refer to how the business is affected by the external environment.Strengths refer to areas where the business can outmatch in, for example businesss competence and resource utilization. Weaknesses is what the corporation cannot do and managers should consider areas which need improvements, areas which the club do poorly and what should be avoided.Opportunities refer to the market draw and threats are the potential challenges which hinder business operation. British American baccy plants ( work) goal is to build a long-term shareholder value through outgrowth of new brands and products.The company has used the SWOT analysis to implement strategic management and performance evaluation to achieve this goal. BAT is multinational company that manufactures baccy products and it has many branches around the world.The performance of business management tools is aimed at shifting management from quality performance to incorporated performance. Strengths The company manufactures markets and sells cigarettes and other tobacco products. By the end of year 2007 the company had more than than 300 brands and a work force of about 53,907 employees both in UK and internationally.Its revenue base for the period stood at $ 20,054 million. It offers adult consumers products of high gear quality and als o assists them to make sure that they choose their product over those of competitors.Continued improvements in productivity ache helped the company develop more brands wherefore increase earnings for instance it has introduced forage little cigarettes aimed at reducing smoke related diseases. To re important competitive in the market, the British American tobacco has embarked on be reducing strategies and complexities in its supply chain.In 2004 the company make the commitment to reduce overheads cost and other indirect costs by $ 200 million annually by the end of 2007 through implementation of a single procurement processes within its area of operation.The company also offers from time to time training to its workers so as to make them vary to the changing business environment. Threats The companys operations have been affected by the tobacco regulation policies crossways the world. One of them is the suggestion by the World wellness Organization to have all products packagi ng be kvetch or unbranded.Removing colors and trademarks familiar to consumers is a critical challenge because consumers will not able to differentiate cigarettes from BAT and those of its competitors or the genuine products and fake ones.The company has strongly opposed the idea of plain packages claiming that there is no demo that suggest that plain packs would have effect on smoking by children. In addition restriction of corporate trademarks by any government activity is a breach of intellectual property rights in international trade.The issues of invent product harm the companys revenue and there have been cases of trade in illicit tobacco globally. In order to reduce the cases of cigarette smuggling, the company has supported various governments, world custom formations and world trade organization in seeking ways to eliminate illicit tobacco trade. WeaknessesThe main internal challenge that has faced the company is the inability to produce less harmful products. However , for some years now the company has embarked in look for for less harmful products.High overhead costs have been another threat to the market competitiveness of the companys product. Before the implementation of single procurement system in 2003, the indirect costs had been too high which resulted to high cost of its tobacco products.Opportunities British American tobacco has more that 30 branches across the world and about 180 markets and has opening new factories in more countries. The demand for tobacco products has been rising as more and more youths have started smoking.The company has utilized this opportunity provided by the market through development of more products to satisfy the market demand. The company has decentralized its factories across the land to increase it market share and position their product for the consumer who have obdurate to buy tobacco products.Bibliography BAT, consumer and trade, retrieved on 13 December 2008, from http//www. bat. com/group/sites /uk__3mnfen. nsf/vwPagesWebLive/DO6ZXMRV opendocument&SKN=1BAT, plain packaging, retrieved on 13 December, 2008, from http//www. bat. com/group/sites/uk3mnfen. nsf/vwPagesWebLive/DO7J7DCZ?Opendocument&SKN=1 Capgemini, 5-year procurement target at British American Tobacco, 2003, retrieved on 13 December 2008, from www. at. capgemini. com/m/at/cs/ss_British_American_Tobacco. pdf.Dickson Vicky, Balance Score Card as strategic management tool, 2005, retrieved on 13 December 2008 from http//www. betterlocalization. com/index. php? itemid=44.