Challenges and Solutions for PT. HM Sampoerna in the Indonesian Tobacco Market

Business
Environment
PT. HM Sampoerna
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Business Environment 1
Contents
A solution of challenges..................................................................................................................2
Policy changes.............................................................................................................................2
Changes in government regulation..............................................................................................3
Changes in national and global macroeconomic indicators........................................................4
Microeconomics factors...................................................................................................................4
Supply and demand of Tobacco..................................................................................................4
Labour economics of Tobacco.....................................................................................................5
Social factors...................................................................................................................................6
References........................................................................................................................................8

Business Environment 2
Solution of challenges
In the Indonesia market, the company conducted the external market analysis in which the
analysis of the major factors has been done that affects the working of the PT. HM Sampoerna.
The company is known as the largest company in Indonesia who deals in tobacco. The company
manufacture kretek type clove cigarettes and with the typical brand name in Indonesia that is
Sampoerna 'A' Mild. The factors that majorly affect include policy changes, changes in
regulations of government and changes in national and global macroeconomic indicators
(Amuna, Al Shobaki & Naser, 2017). In Indonesia, this has been found that there is very tough
competition among the companies who are dealing in the market. It is essential for the company
to find out the solutions so that they can easily survive in the market of Indonesia. The solutions
related to the issues are discussed below: -
Policy changes
The changes in the policy of the tobacco industry are generally brought by the WHO (World
health organisation) in Indonesia. The decision which affected the company is taken by the
WHO and the National Agency for Food and Drug organization. They decided to enforce bans
on tobacco advertising, promotion, and sponsorship, raise taxes on tobacco and started protecting
people from the use of tobacco (Indonesia-investments, 2018). The decisions were taken to warn
the people about the use. Solutions of this effect are: -
 The launch of Nicotine gum: - PT. HM Sampoerna should launch the gum which helps
the users of cigarettes in reducing the consumption of tobacco. This gum offers a range of
nicotine gums and patches that allows the users to quit the cigarettes. This will help the