China National Tobacco: Value Chain, PESTLE, and Porter's Analysis

This extended project provides a detailed analysis of China National Tobacco, the world's largest tobacco corporation. The project examines the company's strategic position, value chain, and market dynamics. It employs analytical tools such as Porter's Five Forces and PESTLE analysis to assess the competitive landscape and external factors influencing the business. The project explores China National Tobacco's cost-effective leadership strategy, including its implementation of information technology and supply chain management. The project considers inbound and outbound logistics, as well as the impact of political, economic, social, technological, legal, and environmental factors. The project also references relevant academic sources to support its findings, providing a comprehensive overview of China National Tobacco's operations and strategic challenges.

BUSINESS EXTENDED PROJECT
MAIN BODY
Background information of the China National
Tobacco
China National Tobacco is state owned
manufacture of tobacco products. It is one of the largest
manufacturer in world in term of Tobacco. It is the
corporation manufactures and distributes different
products such as cigarettes, cigar, flue-cured tobacco, etc.
Main objective of China Tobacco is that STMA which is
stand for State Tobacco Monopoly Administration must be
modernised.
PESTLE analysis
In respect to analysis the market, PESTLE is also tool that used for dynamic assessment in the operational business unit.
Political factors: China Tobacco is international company that deals with different areas of the world. Therefore, it influenced through several political factors. For example, high taxation, trading blocks, etc.
Economic factors: Buying pattern of customers directly influenced to economic of the country. It is the biggest concern for China Tobacco.
Social factors: Furthermore, social factors are also considered major impact on the industry due to which Tobacco industry getting affected. In the market, there are more customers of cigarettes and tobacco exist which make more likely benefits to growth of the
industries. Increasing population also indicates that young generation also enhances continuously.
Technological factors: Technological element also create major impact on the business and its outcomes. In this manner, E-cigarettes was invented by different Tobacco companies so that they will able to provide option to smoker to quit smoking. Generally
regular cigarettes includes nicotine with harmful chemical substances such as carbon dioxide and tar.
Legal factors: In addition to above factor, legal factor are also impact on the business results and performance. In this consideration, different law has been made which essentially followed by the tobacco company to produce systematic results at workplace.
Environmental factors: Consumption of tobacco also create negative impact on the environment. In this consideration, cigarettes use leads in the climate change which caused by the human activities because it includes carbon dioxide and methane.
Porter five forces
In respect to deal with the different aspect of market, China Tobacco also impacted by the different players. This is because, in the market there are so many new industries
continuously expanding their functions and operations to perform goals and objectives.
Competitive rivalry (High): China Tobacco is already consolidated with the high level of expected in the particular year.
Threat of substitute (Low): Substitute products could be anything that produced by another business or industry.
Threat of new entrance (Moderate): Threat of new entrance is the important aspect to judge the competition level of industry. In all over the world market, there are different
businesses in Tobacco production continuously increasing which could create major impact on the China Tobacco.
Bargaining power of customers (Low): In different cases, powerful buyers are also exerted the downward pressure to diminish profitability of the company. Bargaining power of
the customers is depends on the factors such as substitute availability, number of the firms present in the market, etc.
Bargaining power of suppliers (Low): Supplier bargaining power is the greatest power which is important parameter to identify the competition. In this way, translate into the
higher cost considered for tobacco producers to diminish overall industry profitability.
INTRODUCTION
Extended project is consists important part in the
business success and outcomes. In this consideration, aims
and objectives of enterprise develop continually with
different activities. Further, it also assists to contact with
multinational enterprise that make successful strategy with
internal and external activities.
Strategic position of China National Tobacco
China National Tobacco produces one third of
the world cigarettes as it is the largest corporation of
Tobacco. Market become more increasingly saturated
with potential competition looms. Therefore, the
company is able to expand their operations and
functions in abroad areas easily.
Value-chain analysis
Value-chain analysis is another important tool that assists to create
systematic results in the business industry. There are several steps has been
taken on which series of activities taken into the consideration.
Inbound logistics
China National Tobacco consist their logistic functions and
operations which could be reflect through overall cost leadership strategic
management. This process help to the chosen business to leading in market
with bargaining power. Continuity also upgrade It system to make accurate
and more systematic results.
Outbound logistics
China national Tobacco is the cost effective leadership strategy that
assists to implement the information technology system at workplace. In this
consideration, several numbers of supply chain considered proper outcomes
and results that invested to make perfect results at workplace.
REFERENCES
Brock, B., Schillo, B.A. and Moilanen, M., 2015. Tobacco industry
marketing: an analysis of direct mail coupons and giveaways.
Tobacco control, 24(5), pp.505-508.
Hiilamo, H. and Glantz, S.A., 2015. Implementation of effective
cigarette health warning labels among low and middle
income countries: state capacity, path-dependency and
tobacco industry activity. Social science & medicine, 124,
pp.241-245.