Business overview of British American Tobacco

Business overview of British American Tobacco British American Tobacco (BAT) is the world’s second largest tobacco group by global market share. BAT produces cigarettes demanded by one-eighth of the world’s one billion adult smokers and this particular company is holding robust market position in each of their regions. Besides that, BAT has leadership in more than 50 markets. Based on last year’s performances (2009), BAT’s subsidiaries enabled the worldwide government to gather more than  £26 billion a year in taxes, including excise duty on their products which total up to almost nine times the Group’s profit after tax. BAT, which was founded in 1902, has existed as a significant global presence for over 100 years. By 1912, the company had become one of the world’s top dozen companies by market capitalization. This company works with thousands of tobacco farmers worldwide, producing some 724 billion cigarettes through 50 cigarette factories over 41 countries. The company employs more than 600,000 people worldwide. BAT’s workforce is of multi-cultural and they have devolved structure, with each local company having wide freedom of action and responsibility for their own operations. Within a framework of principles, standards, policies, strategies and delegated authorities, decisions are made as close as possible to the local stakeholders of each business. BAT operates according to responsibility seeing that their products pose risks to health. The business stresses on managed responsibility as it is integral to their strategy and through dialogue with their stakeholders, they are working towards commercial objectives in ways consistent with changing expectations of a modern tobacco business. This international tobacco group is the only group with a significant interest in tobacco leaf growing. Their companies run leaf programmes providing direct agronomy support to farmers, covering all aspects of crop production and environmental best practice. In 2009, the group purchased about 400,000 tonnes of tobacco leaves, grown by more than 250,000 farmers. BAT ensures the employees’ welfare. The company has specially carried out a global employee opinion survey also known as â€Å"Your Voice† to give them a secure and confidential way to voice their opinion about working at British American Tobacco. BAT’s business starts with their consumers and brands. The company focuses more on meeting preferences of adults who have chosen to consume tobacco and differentiating their brands from their competitors rather than encouraging people to start smoking or to smoke more. The business’ portfolio of more than 250 brands is based on distinct ‘must-win’ consumer segments which are: international, premium, lights and adult smokers aged below 30. ‘Dunhill’, ‘Kent’, ‘Lucky Strike’ and ‘Pall Mall’ are the four Global Drive Brands which cover the premium and value for money price segments. They grew by 4 per cent in 2009 (8 billion more cigarettes). The business is also increasing the profile of Vogue in the super premium segment and Viceroy, a leading low price international brand besides developing their Global Drive Brands. The growth of their brands is driven by innovation ranging from filters to flavours and packaging to cigarette formats. The business provides a mix of brand balanced between premium, mid-price and low-price. Besides that, the business applies the four managerial functions in its organization management; planning, organizing, leading and controlling. We have also interviewed a manager of British American Tobacco Singapore for further understanding.