Preview

Porter's 5 Force Model-Cigar Industry

Satisfactory Essays
Open Document
Open Document
258 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Porter's 5 Force Model-Cigar Industry
Porter’s Five Force Model Analysis For Indian Cigarette Industry 1. Threats of New Entrants=LOW
•New Product differentiation Very Tough – already cigarettes at different price points, flavors, brand images • Access to distribution channel is tough – big & established players are present (e.g. ITC)
• Capital requirement is very high for a pan India launching;
• Local launch can not catch up scale – Can’t use Economies of scale • Government policy – high tax, no TV/Radio Ads 2. Bargaining Power of Suppliers=LOW •Many inputs are required but in small amount – paper, tobacco, filter
•There are many small scale, unorganized suppliers
•Cigarette companies are big and have direct access to distribution channel and addicted buyers. Suppliers don’t have much control over smokers. 3. Bargaining Power of Buyers=LOW
•Addicted customers - even after knowing harms – people can’t leave it
•Smoking has lot of symbolic and emotional values attached with it
•Product quality not much important to smokers – Research shows most people cannot differentiate among the brands in a blind taste
•Low switching costs in terms of price 4. Threat of Substitute Product=LOW
•Herbal Cigarettes (e.g. Nirdosh) were launched – but did not become popular (no emotional value) •Nicotine patch is another substitute – but again no comparison with cigarettes in terms of popularity and usage

5. Competitive Rivalry in the Industry=HIGH
•Many competing players: ITC, Godfrey Philips, VST, GTC etc - see chart below •Price competition continues
•Advertisement for cigarettes is now prohibited in India
•Replacement for ads – event sponsorships and sales promotions
•All making new product
Continue Reading
View Writing Issues

You May Also Find These Documents Helpful

  • Satisfactory Essays

    The Pros And Cons Of Electronic Cigarettes
    • 346 Words
    • 2 Pages

    The Pros And Cons Of Electronic Cigarettes

    Electronic cigarettes, also known as e-cigs, which were created in China 10 years ago, are battery powered devices that vaporize liquid nicotine. In the article, “Smoke Signals”, the author Alessandra Potenza addresses the problems of unregulated electronic cigarettes. Although they can help smokers quit cigarettes, they can also cause nicotine addiction. Electronic cigarettes are becoming popular among youth and because they are unregulated, U.S. officials are worried.…

    • 346 Words
    • 2 Pages
    Satisfactory Essays
    Read More
  • Better Essays

    Why Do Tobacco Companies Use Electronic Cigarettes?
    • 1194 Words
    • 5 Pages

    Why Do Tobacco Companies Use Electronic Cigarettes?

    By choosing to do so we are also deciding to deal with the consequences of “normalizing” smoking once again. Introducing and supporting the use of electronic cigarettes in the US may have several consequences that may seem transparent to the public at first. Reynolds American is the second largest tobacco company in the US and a recent merger Lorillard, owner of Blu e-cigarettes. This has raised a lot of suspicion, as we all know cigarette companies first concern is profits, and not the public’s well…

    • 1194 Words
    • 5 Pages
    Better Essays
    Read More
  • Good Essays

    Pros And Cons Of Electronic Cigarettes
    • 1890 Words
    • 8 Pages

    Pros And Cons Of Electronic Cigarettes

    Electronic cigarettes are modern devices that are beginning to make smoking look fashionable again. Companies of the products trick consumers by claiming the products are safe, and offer lower prices as a way to reel in their customers. The consumers do not know that they are falling into a marketing trap. As electronic cigarettes are becoming increasingly popular and acceptable, more individuals are using the devices as a substitute to traditional cigarettes. The devices are used to inhale nicotine, without the smoke byproduct that cigarettes create. Others feel that the dangerous chemicals found inside could be creating serious complications. Additional legislation should be put in place, to decrease the use and availability of electronic cigarettes.…

    • 1890 Words
    • 8 Pages
    Good Essays
    Read More
  • Better Essays

    The Cigarette Century Analysis
    • 1318 Words
    • 6 Pages

    The Cigarette Century Analysis

    From flappers to movie stars, cigarettes became an integral, flexible prop. Cigarettes are a familiar part of the American culture and have been for hundreds of years. Allan M. Brandt author of the book The Cigarette Century, states, “Cigarettes are the product that defined America.” Cigarettes became a popular modern commodity as consumer beliefs developed. The product intertwined and blossomed with the development of American business, advertisement, and consumerism in the modern age. As cigarette consumption skyrocketed, evidence that cigarette smoking, and second hand smoke was dangerous was yet to emerge. Knowledge of the health effects has since had a complex effect on the public and the industry. American policy, industry strategy, and lawsuits concerning cigarettes have all provided windows into governments, industry, and public confrontation with risk, freedom, responsibility, and blame over the course of the last hundred years. Thus is why all Americans have a bias towards cigarette smoke, tobacco companies and products, and because of this, the product oftentimes has an ethical position-somewhat contradictory, as being both a leading cause of cancer and as an appealing product to some.…

    • 1318 Words
    • 6 Pages
    Better Essays
    Read More
  • Good Essays

    Why Is E-Cigs Good Or Bad
    • 548 Words
    • 3 Pages

    Why Is E-Cigs Good Or Bad

    It has been clearly established that smoking cigarettes causes negative health effects. Smoking cigarettes has affected families for centuries. And now, with the progression of technology, electronic cigarettes were created as an alternate to smoking actual cigarettes. However, electronic cigarettes might not have all the advantages the public might imagine. It is argued whether the sale and distribution of electronics cigarettes should be restricted to certain age groups. The restrictions are needed because they have nicotine and because the long-term cause and effects are not yet known.…

    • 548 Words
    • 3 Pages
    Good Essays
    Read More
  • Satisfactory Essays

    Compare And Contrast E Cigarettes Vs Menthol Tobacco Cigarettes
    • 417 Words
    • 2 Pages

    Compare And Contrast E Cigarettes Vs Menthol Tobacco Cigarettes

    This is a comparison and contrast essay about the E Cigarette vs. the Menthol tobacco cigarette and how the differences could suggest that, electronic cigarettes have better health advantages than smoking regular menthol cigarettes. The “e-cig” theoretically can be used as an aid to eventually quit smoking completely. Also a brief description will be given of what vices both are made of and the costs.…

    • 417 Words
    • 2 Pages
    Satisfactory Essays
    Read More
  • Good Essays

    Electronic Cigarettes Is More Harmful Than Cigarettes Essay
    • 620 Words
    • 3 Pages

    Electronic Cigarettes Is More Harmful Than Cigarettes Essay

    Traditional cigarettes contain between 4,000 and 7,000 harmful chemicals, many of which are produced by the tobacco and smoke. Since e-cigarettes use vapor technology, they expose users to fewer carcinogens. Some studies show e-cigarettes can be effective in smoking cessation. In multiple studies and surveys, e-cigarettes have been shown to potentially help smokers to reduce their habit or to quit altogether. One New Zealand study showed e-cigarettes to be as effective as nicotine patches. The second-hand effects are far less harmful than traditional cigarettes. Though second-hand vapor exists, the levels of smoke and secondhand effects of “vaping” are magnitudes lower than traditional smoking. They are more socially acceptable and do not smell. E-cigarettes provide the same experience and sensation for smokers – particularly those with nicotine habits – but can be used in far more places. They do not leave a sticky, unpleasant odor and do not stain teeth or fingernails.…

    • 620 Words
    • 3 Pages
    Good Essays
    Read More
  • Good Essays

    Electronic Cigarette Research
    • 792 Words
    • 4 Pages

    Electronic Cigarette Research

    It is a healthier and wiser decision for smokers who don’t want their bodies, or others’ bodies to be affected (Siegel). With the device’s growing acceptance rate, many will choose to cross over to the e-cigarette route. This is seen as a problem to those who oppose the issue for several reasons. This new fad is making the e-cigarette fashionable which may result in higher nicotine consumption, and even act as a gateway for those who never smoked before (S.C.S.). The ability one has to select different flavors is exciting, and can feel like picking out candy. This can be incredibly attractive to children (S.C.S.), and make smoking as socially acceptable, even as ‘cool’ as it was in the 50’s and 60’s. This could be terrifying to some, and an exciting development to…

    • 792 Words
    • 4 Pages
    Good Essays
    Read More
  • Better Essays

    Thanks for Vaping
    • 1414 Words
    • 4 Pages

    Thanks for Vaping

    The newest fad related to tobacco smoking is vaping. According to Liz Neporent of ABC News, “The electronic cigarette was invented in the 1960s, but it didn 't really take off until a decade ago.” Electronic cigarettes are seen everywhere in the public. “Thanks for Vaping,” posted by Sky Dylan-Robbins of The New Yorker, talks about all the questions that come with this new mysterious fad. The electronic cigarette will become the next tobacco problem, many people do not know what electronic cigarettes are, they are not FDA approved, children have easy access to electronic cigarettes, unknown potential health risk.…

    • 1414 Words
    • 4 Pages
    Better Essays
    Read More
  • Good Essays

    black lungs
    • 1215 Words
    • 5 Pages

    black lungs

    There are several brands of cigarettes and other tobacco related products out there and people may assume some different brands will have a lesser affect upon them. The fact is…

    • 1215 Words
    • 5 Pages
    Good Essays
    Read More
  • Good Essays

    Five Force of Ebay
    • 629 Words
    • 3 Pages

    Five Force of Ebay

    It is also hard to enter a market where safety and brand recognition are this important.…

    • 629 Words
    • 3 Pages
    Good Essays
    Read More
  • Better Essays

    Cigarette Tax
    • 2230 Words
    • 9 Pages

    Cigarette Tax

    The unexpected change posed many impacts on an abundant area of the population. The change impacted the consumers (smokers), the suppliers/producers, retailers/tobacconists, charity workers and the government. The sudden publication of the price increase would lead to a majority of smokers purchasing larger amounts of cigarettes than usual, in an attempt to purchase the product at a cheaper price rather than at its increased price. The retailers/tobacconists face the prospects of higher demands and physical…

    • 2230 Words
    • 9 Pages
    Better Essays
    Read More
  • Good Essays

    Cigarette Ad Essay
    • 1296 Words
    • 6 Pages

    Cigarette Ad Essay

    Puff, puff, puff . . . ummm the cool fresh taste of smoke in your lungs. Doesn't that taste good??? Well, depending to whom you talk to, a variety of answers are possible. It is interesting though, that we, as a society, actually are still deceived into believing the false promises of happiness and bliss from smoking cigarettes. In our society people still deny and forget the fact that smoking causes lung cancer and directly kills over a million people every year, and that is just what tobacco advertisement departments would like to have you forget. Nowadays, advertising has become a major part of American society today. Everywhere you go there is advertising to be seen and absorbed by the consumer population. Nowadays, every company has a specific company inside the big business that's sole purpose it to come up with interesting and new ways to promote its product. One industry that has been under fire for the types of advertising done during the last ten years is the tobacco industry. Major tobacco companies, specifically the R.J. Reynolds and Laramie corporations, spend millions of dollars each and every year, selectively advertising to older audiences in the Camel ad and to people who are socially active like the ones in the Newport ad, by intentionally using popular icons like Joe Camel and American ideals like the red, white, and blue coloring in the Camel ad, and by using human emotions like desire and popularity that everyone can relate to as found in the Newport ad, all in an attempt to sell a specific idea . . . cigarettes are pleasurable and enjoying to smoke.…

    • 1296 Words
    • 6 Pages
    Good Essays
    Read More
  • Powerful Essays

    Use Of Electronic Cigarettes
    • 1356 Words
    • 6 Pages

    Use Of Electronic Cigarettes

    Alternative smoke-free nicotine products, namely electronic cigarettes, have been a crucial step in smoking cessation. While, further research still needs to be done on the use of electronic cigarettes to determine the safety, the research that has been done shows that it is much less harmful than conventional cigarettes. (Farsalinos, 2015) The Food and Drug Administration’s current deeming regulation will remove the vast majority of electronic cigarette products on the market. (Regulating Additional Tobacco Products , 2015) The current Food and Drug Administration’s policy requires that any tobacco products made after 2007 would require a premarket review before it could be sold in stores. The current concern with this date is that very few…

    • 1356 Words
    • 6 Pages
    Powerful Essays
    Read More
  • Good Essays

    Socially Responsible Tobacco Companies
    • 1648 Words
    • 7 Pages

    Socially Responsible Tobacco Companies

    Several ingredients in tobacco cause narrowing of your blood vessels which can lead to high blood pressure. In addition to upping your chances for having a heart attack or stroke, nicotine contained in cigarettes is considered highly addictive. (www.wordig.org) With this in mind how can cigarette companies deny their responsibility and negligence in selling these highly addictive substances to the general public?…

    • 1648 Words
    • 7 Pages
    Good Essays
    Read More

Related Topics