BAT Ltd's Strategic Response to Brexit: An In-depth Business Analysis

This report analyzes BAT Ltd's strategic response to Brexit, detailing the new policies implemented to address challenges arising from political changes. It includes a thorough analysis of macro environmental factors using PEST and STEEPLE frameworks, alongside an internal environment evaluation via SWOT and VRIO models. Porter's Five Forces model is applied to assess the competitive landscape, leading to the development of a strategic management plan based on the SOSTAC model. The plan focuses on improving BAT Ltd's competitive edge and market position through strategies and tactics, including digital marketing, to enhance customer reach and sales. The report concludes with a strategic management plan designed to ensure BAT Ltd's continued success in a post-Brexit environment.

UNIT 32 ASSESSMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
ANALYSIS OF THE MACRO ENVIRONMENT-.......................................................................3
PEST ANALYSIS-......................................................................................................................3
STEEPLE ANALYSIS-...............................................................................................................4
INTERNAL ENVIRONMENT EVALUATION-.......................................................................5
PORTER FIVE FORCES ANALYSIS-......................................................................................7
SOSTAC Model...........................................................................................................................8
CONCLUSION..............................................................................................................................10
REFERENCES................................................................................................................................1

INTRODUCTION
The report will be presenting that how as a result of Brexit the BAT Ltd of UK has
introduced new policies in attempt to encounter the perils which got introduced due to the
political shuffle (Hernández and Garcia, 2018.) In the report analysis will be carried out to
deeply observe the macro environmental factors and their impact on the business of the
company. Along with it the internal environment of the organization would also be taken into
consideration. On the basis of the analysis made above considering Porter's five forces model an
appropriate strategy would also be drafted to improve competitive edge and market position of
the company and by using a range of theories, concepts a strategic management plan will be
made.
ANALYSIS OF THE MACRO ENVIRONMENT-
BAT is a UK based company which is engaged in production of tobacco based products
and also getting operated worldwide with its superb brands and well prestigious products. With
this regard the analysis of the macro factors which are impacting the business are analysed as
follows-
PEST ANALYSIS-
Elements Particulars
Political factors It is operating the business in number of countries which is also making it
being affected by so many different-different political forces. In last couple
of years the government turned more serious about such toxic producing
companies. Taxation, wage regulation, work regulation, IPR issues are
impacting a lot (Riwayadi, 2021)
Economic factors Macro factors like saving rate, inflation rate, interest rate and foreign
exchange rate etc. are getting changes drastically. Domestic growth rate is
also quite fluctuating which may be a threat for it.
Social factors Social norms are the most horrendous factor for BAT Ltd. Specially after
pandemics people became more likely to avoid such products and their

perspective is also getting changed.
Technological
factors
Over the last five years the industry has been transforming really fast. Other
competitors are using new and more intensive technology for operations and
even for marketing purpose as well (HIREMATH, 2021.)
STEEPLE ANALYSIS-
Elements
Social The society is getting changed and their view points against such industries
getting more adverse.
Technological The new technology is placing more competition in the market.
Economic As it has been shared that the company is being operated in so many
countries which gives more need to abide such laws.
Environmental A lot of European countries give healthy tax breaks to companies that
operate in the renewable sector but on the other hand there is a rigorous need
to meed the environmental requirement across the world.
Political Political moves like in 2004 Food Retailing Commission also gave
requirement of higher efficiency.
Legislative Government policies and specially after stepping out or Brexit the global
legislature won't be that much healthy. Over fluctuate rates of exchange is
another issue.
Ethical Such business who are selling intoxicating products are facing ethical issues
as well.

INTERNAL ENVIRONMENT EVALUATION-
SWOT analysis for BAT Ltd.- Here SWOT analysis for BAT Ltd is carried out which broadly
discuss strengths, weaknesses, threats and opportunities of the organization.
Components
Strengths  The track record of the entity is quite good.
 Strong portfolio is already there to attract customers.
 Superb performance in new market.
 Distribution network is also impressive.
weaknesses  Not highly successful at integrating firms with different work
culture (Elavarasan, 2020.)
 R&D research is very low compares to the core competitors in
the market.
 Financial planning is not as much sound as that should be.
 Gaps in the product range sold be company.
Opportunities  Decreasing cost of transportation because of lower shipping
prices.
 Policy of government may go in favour for procurement of row
material.
 Lower inflation rate may be expected since the government is
taking actions with this regard to stabilize the economy of the
nation (Agyekum, 2020.)
 New environmental policies may give a little relaxation.
Threats  Rising row material prices.
 Shortage of skilled workforces in global market.
 Changing consumer buying behaviour.
 New technologies may bring danger to it.

VRIO model-
Resources/
capabilities
Valuable Rare Imitable Organization
Positive
market
reputation
Leadership
team
Awareness
of brand
High
customer
rating
Product
innovation
The market reputation of the company is good in all the way and even imitable too, which will
be giving it long term competitive advantage. The leadership is strong yet may go for a bit
betterment so can make it imitable for itself, (Chatzoglou, 2018.) the brand awareness is good
which may drive Sustainable advantage to the organization. Customer rating realized sustainable
competitive which is very satisfactory. The product innovation can be called above normal but
for taking more advantage company may go for further innovations.
PORTER FIVE FORCES ANALYSIS-

Five forces
Threat of new
entrants
In the market there are a few such organization who can make entry in
the same product line which would be a severe threat to BAT Ltd. It is
already having competitors like Japan tobacco, Altria etc.
Bargaining power of
suppliers
After failure of global Supply Chain Management the bargaining power
went in the favour of suppliers (Arifianti, 2019). Due to pandemic there
was restriction on trade and due to that BTA was not able to connect
with suppliers and it has lead in delay of raw material. Although
company has limited suppliers and it should maintain healthy relation
with them to reduce their bargaining power and increase profitability.
Bargaining power of
buyers
Now the mood of customers got changed after hit of pandemics they are
ready to pay more for the products which can bring better to them. The
company has limited customer range and due to that bargaining power
of customer is increasing. Thus to deal with it need to increase the
customer range by using digital marketing strategy.
Threat from substitute
products
In the market post pandemic session is going on here substitute products
may get introduced (Vorozhbit, Kuzmicheva and Shnaider, 2018). Thus,
in order to deal with the threat company need to introduce new product
in the market. Although it should also lower down the price of
product as it will help in increasing the sale of company. Although
innovative idea will contribute in attracting targeted audience.
Rivalry among the
existing players
Japan Tobacco, Altria, Philip Morris, Imperial etc. are already placing
tough competition. In order to deal with the competitor company will
be making use of digital marketing so that it can expand its market
area. That will result in attracting customer as well as increasing sales.

SOSTAC Model
It is known as marketing tool that help the organization in making business planning so that it
can get success of firm. Along with this, it is one of the widely use model that allow company
in making strategies and tactics so that it can deal with future threat. Moreover, this model
basically offer a logical order for dealing with the plan (Ergashxodjaeva and et.al., 2018).
Although it is very easy to understand and use as well as it helps in finding perfect approach.
It stands for situation, objectives, strategy, tactics, action and control.
Situation analysis: It is one of the most important step in the business as it helps in
identifying the need of the market. Although it is an overview of business that contributes in
understanding where the company is standing in the market and on the basis of that it draft
the strategy for future. It basically a set of method which is use to understand company
capabilities , customer by analysing external and internal factor of market.
SWOT:
 Strength: The BTA have good brand image in the market and it has helped the
company in attracting large customer. Although the quality of product and services are
also good thus it helps in maintaining the market position of firm.
 Weakness: The major weakness is that company is not making use of advance
technology in order to make product. It also need to focus on product line in order to
sustain in the market area.
 Opportunity: The organization can make use of growth strategy such as expanding
their business in new market area in order to build performance of company.
 Threat: High competition and pandemic is major threat for the organization as it can
lead in decreasing growth of company.
Objectives: The BTA aims at to increase the sales of firm by using digital channels as well as
to improve the profit of company. It also want to increase the customer satisfaction.
Strategy: The organization will making use of online marketing strategy in order to improve
the situation as well as to enhance profit (Khaymovich and Kravtsov, 2021). Along with this, it
will be promoting product and services through online channels like social media sites that will
help in reaching large audience. Although the company aims at targeting young and middle
adults so social sites will help in promoting product to them.

Tactic: The BTA will making use of social site such as Facebook and Instagrame in order to
meet the target of sales (Arifianti, 2019). Along with this, it will help the organization
increasing their brand name in the market. Moreover, the company for increasing their
promotion will make use of affiliating marketing in which it will share the product on third
person online channel. In addition to this, this sites will also help in communicating with
customer and allow company to identify the details about their taste and preference.
Action Plan: The company have skill full human resource department that ahs contributed
in dealing and managing employees (Riihihuhta and Henriksson, 2019). Along with this, it also
conduct training and development programme for their subordinates so that it can learn about
technological skill. In addition to this, organization in order to meet up with the goal will hire
digital marketing team so that it can deal with future changes. The team will contribute in
solving technical issue related with system or process. Moreover, it has been made by the
company to deal with future threat have high probability of occurring while conducting
operation in market.
Control: In order to analyse about the market performance of the company it will be making
use of KPI tool so that it can measure the success (Pranata and Amaranti, 2021). Along with
this, it will also be taking feedback from the customer so that it identify any issue faced by
them and find appropriate solution for that. Moreover, the survey will be conducted on weekly
and monthly basis so that it can know their performance and know about customer
satisfaction rate. There will be team made by the company that will report that will make sure
that controlling of company is done accurately.

CONCLUSION
From the report above report it can be concluded that after the move of Brexit the
business environment for the organization got shuffled. The report had broadly discussed internal
and external environmental factors which are impacting the organization. On the basis of the
analysis made above strategies are fabricated to improve competitive edge. At the end of the
report by using a constellation of theories and concepts strategic management plan is formed for
BAT ltd.

REFERENCES
Books and journals-
Agyekum, E. B., 2020. Nuclear energy for sustainable development: SWOT analysis on
Ghana’s nuclear agenda. Energy Reports. 6. pp.107-115.
Arifianti, A., 2019. Pendekatan Model Public Relation PR Smith’s SOSTAC Untuk
Menganalisis Sistem Perencanaan Digital Marketing PT Valbury Asia Futures. Jurnal
Komunikasi, 10(2), pp.132-138.
Elavarasan, R. M., 2020. SWOT analysis: A framework for comprehensive evaluation of drivers
and barriers for renewable energy development in significant countries. Energy Reports.
6. pp.1838-1864.
Ergashxodjaeva, S. J. and et.al., 2018. Evaluation of textile and clothing industry clustering
capabilities in Uzbekistan: based on model of M. Porter. Int J Econ Manag Sci, 7(439), p.2.
HIREMATH, S., 2021. PESTLE ANALYSIS OF ORGANIZED RETAILING IN INDIA.
Khaymovich, I. and Kravtsov, V., 2021. Dynamical phases in a``multifractal''Rosenzweig-Porter
model. SciPost Physics, 11(2), p.045.
Pranata, Y. A. and Amaranti, R., 2021. Rancangan Strategi Pemasaran Media Sosial
Menggunakan Model SOSTAC. Jurnal Riset Teknik Industri, 1(2), pp.110-120.
Riihihuhta, J. and Henriksson, K., 2019. How to Reach Customers and Navigate in
Networks. VISIT Case Studies–On Innovative Business Plans and Service Logic Business Model
Canvases for SMEs, p.61.
Riwayadi, E., 2021, August. PESTLE ANALYSIS OF FINANCIAL TECHNOLOGY IN
INDONESIA. In International Conference on Innovations in Social Sciences Education
and Engineering (ICOISSEE) (Vol. 1, No. 1).
Vorozhbit, O. Y., Kuzmicheva, I.A. and Shnaider, O.V., 2018. Quantitative assessment of
Primorsky Krai fishery cluster competitiveness factors on the basis of the Porter model
transformation. The Journal of Social Sciences Research, pp.350-357.
Chatzoglou, P., 2018. The role of firm-specific factors in the strategy-performance relationship:
Revisiting the resource-based view of the firm and the VRIO framework. Management
Research Review.
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Hernández, J. G. V. and Garcia, F. C., 2018. The link between a firm s internal characteristics
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