Comprehensive Business Analysis Report: Imperial Tobacco Group PLC

This report provides a comprehensive business analysis of Imperial Tobacco Group PLC, a multinational tobacco company. It begins with an introduction to the company's strategic position, evaluating product performance, core competencies, resource allocation, and competitive pressures. The report then delves into a SWOT analysis, highlighting strengths, weaknesses, opportunities, and threats. It also includes a PESTLE analysis, examining political, economic, social, technological, environmental, and legal factors impacting the company. The analysis covers the current strategic position, challenges in operations such as lack of green logistics, legal and environmental concerns, and the impact of these challenges on the company's performance. The report concludes with a discussion of the company's resources and competencies, and how they can be leveraged to create new opportunities and maintain a competitive edge. The analysis also touches on the company's strategic issues and current strategies, including marketing and financial challenges, and its efforts to maximize shareholder return.

Business Analysis for Accountants

Introduction
In this present paper, we will discuss the current strategic position analysis of Imperial tobacco
group plc which are the multinational tobacco company and it headquarter is located in Bristol,
the United Kingdom. The paper also describes the analysis of current strategies, current
challenges faced by the company in operating, an impact of challenges to the organization and
the resources and competencies of the company may provide new opportunities to the
organization. The company has ranked world’s fourth largest international cigarette company by
its market share. The company serves across worldwide, and it is the public limited company that
has approximately 36,400 employees (Imperialbrandsplc.com et al., 2017).
Current strategic position
The strategic position analysis plays an important role in determining the impact of strategies on
the profitability of the business within the particular period of time. There are several areas
which need to be assessed in order to evaluate the strategic position of the company. Following
are the analysis of business areas:
1. Product performance
The current performance of the products is meeting the expectations of the consumers, and
the company is successfully providing the innovative product and services to its target
audience.
2. Core competencies

The core competencies of the company include wide distribution channel, superior brand
building capabilities, acknowledge service skills and effective supply chain management
which help to provide a competitive advantage to the company (Strategy et al.,2013) .
3. Resource allocation
The physical resource is available in abundance in the operating locations of the company.
There are various sources of innovation such as e-choupal which provides intangible benefits
to the company.
4. Competitive and market pressure
There are various external factors which impact on the strategic position of the company such
as a change in the government regulation, change in the need and demands of consumers,
innovative products provided by the consumers.
The Imperial tobacco group was initiated in 1901 by the merger of thirteen British companies in
order to minimize the competition among the competitors within the same industry. The
company is diversified into restaurants, financial services, and electronics (Branston et al., 2014).
Following are the SWOT analysis of the company:
1. Strength
The strength of the company includes existing distribution channel and sales network
which helps to provide a competitive advantage to the company. It helps to increase the
sales volume of the company by reaching to the maximum target consumers. The
company lies in the tobacco industry which has a large number of entry barrier due to
which there is the limited number of competitors within the same industry. The company
has the high quality of products and services in order to satisfy the needs and demands of

the consumers. The company has excellent research and development facilities which
help to provide innovative products to its customers.
2. Weakness
The diversification in the various business segments is risky for the company. The steep
increase in the taxation of cigarette has direct impacts on the revenue of the company.
The hotel industry has not big share in the market.
3. Opportunity
There are various markets which are untapped by the company in the retail garment,
cigarettes, packaging and agricultural products. The company can achieve high growth
potential which helps to generate higher profit within the specific period of time. The
effective marketing and promotional activities can help to generate higher profits through
building the brand image in the eyes of the customers.
4. Threat
The negative publicity regarding the smoking may impact on the revenue generation of
the company. The government policies regarding the banning of tobacco products can
adversely impact on the profitability of the company (Naik et al., 2015).
Following is the PESTLE analysis of the company:
1. Political factors
The political environment of the company is favorable because the government has
removed expenditure tax in the year 2007-08 and the service tax assumption
exemption is budgeted in the year 2008-09. The tax policies have increased the excise
duty in the cigarettes assumption which impacts on the overall sales of the company.

The company has to follow the regulation according to the government policies of the
operating companies.
2. Economic factors
The economic environment of the company is impacted by the same tax levied on the
filet and non-filter cigarettes due to which the sales volume of the company is
declined by 3%. The sales volume of the company is supported by 15% by the filtered
cigarettes. The company has also contributed towards the level of employment. The
company has also considered the inflation rate, monetary policies and exchange rate
in the strategy development of the company.
3. Social factors
The company has developed the marketing strategy in order to upgrade the
knowledge regarding the consumption of tobacco which led the government to ban all
kinds of advertisements such as print media, pamphlets, and commercials. The
company also works towards the illicit reduction trade in order to protect the
children's (Tabassum et al., 2014). The company also contributes towards the GDP of
the nation and it also helps to increase the working population of the nation. The
company has formulated the policies regarding the prevention of discrimination at the
workplace and ensures human resource policies across the supply chain.
4. Technological factors
The technical environment of the company is very strong which includes the
innovative technology and latest trend, and it enables to stand out among the
competitors within the same industry. The company has adopted total quality
management concept in order to manage the quality of products and services. The

supply chain of the company has adopted latest trend in order to improve the working
of the supply chain. The company has excellent distribution channel shows that the
supply chain is working in an efficient and effective manner.
5. Environmental factors
The environmental factors of the company are in favor as the main source of raw
material is found in the operating countries, and there is the large availability of cheap
labor which helps to increase the profit margin of the company (Abbott et al., 2015).
6. Legal factors
There are various factors which impact the legal environment of the company such as
an increase in the taxation policies. The regulations regarding the consumer
protection impact on the legal environment of the company. The tobacco products
regulations impacts on the strategic policies of the company.
Analysis of current strategic position
According to the current news, the profit generation of the company is rising with the excellent
cash flow which helps to pay the regular dividend to its shareholders. The marketing strategies of
the company help to boost the revenue in the specific period of time. According to the reports the
food and drug administration issue warnings to the company regarding the use of language for
promotional and marketing activities which may impact on the legal environment of the
company. In the current strategies of the company, there are various marketing issues which need
to considered by the company in order retain the brand image in the eyes of the customers. The
strategic policies of the company also challenge the balance sheet of the company according to
the reports which impacts on the liquidity of the company and it is one of the issues which

impact on the working capital of the company. The current strategy of the company is effectively
working in order to achieve the mission and vision of the company. The aim of the business
strategy is to maximize the shareholder's return through strengthen the portfolio, developing
footprints, optimize the cost and capital discipline.
The current business model of the company is focusing on four dimensions, namely, strong cash
flow, reinvestment, growth and specialist brands and high margin profits in order to achieve the
goals and objectives of the company. Regulating the tobacco products according to the
government regulations is one of the strategic issues which are faced by the company, and the
illicit trade reduction is considered by the company by applying the specialist team in the global
networks of distribution (Imperialbrandsplc.com et al., 2017). The strategic policies of the
company must consider the tobacco taxation in order to delineate the impact of taxation policies
on the revenue generation of the company which acts as a major barrier in order to achieve the
mission and vision of the company.
Current challenges of operating
The operations system is one of the most important aspects which helps to deliver the products
and services to the end users successfully. The operations of the Imperial tobacco group are

working in an efficient and effective manner which enables to generate higher revenue and stand
the company at the fourth largest tobacco company in the world. Despite successfully handling
the operations of the company there are following issues which are faced by the company:
1. Absence of green logistics and supply chain
The current operations of the company does not considered reading the green logistics such
as implementation of green transport, green packaging, green recovery, green circulating
processing, green packaging and others in order to protect the environment which is one the
current operating challenge faced by the company which shows that the strategy of the
company does not consider reading the eco-environment conservation and sustainable
development (SAS et al., 2015).
2. Legal challenges
There are various legal issues which are faced by the company in the operations of the
company. The legal agreement is used to control the trade in harmful goods. The company
must produce the goods by considering the health of individuals.
3. Environmental challenges
The production of goods and services must consider the environmental health in order to
protect the environment from the emission of harmful gases. It is one of the operational
issues which are faced by the company, and it directly impacts on the brand's image in the
eyes of the customers.
4. Healthy products
The company must consider the health of target audience by providing the healthy product
which helps to attract a large number of consumers within the particular period of time.
5. Quality management

The company is currently providing a high quality of products to its target consumers, so the
company is currently facing the issue of managing the quality in order to retain the brand
image in the eyes of the customers which provides sustainability profit generation in the long
run.
6. Packaging issue
The company is against the plain packaging which is against the government action. So the
packaging issues are faced by the company. Secondly, the company is not using green
packaging which impacts on the brand image among the target audience (Scollo et al., 2015).
7. Social responsibility
It is one of the major challenges which are faced by the company in order to connect the local
community with the business. The social responsibility helps to provide sustainability to the
business. The marketing and promotional activities should be developed under the
government regulations in order to follow the laws and regulations of the country.
8. Competing practices
It is one of the most important issues which are faced by the company in order to provide a
competitive advantage to the company, and it enables to generate high revenue within the
particular period of time. The innovation in the current business operations is a primary issue
which impacts on the financial aspects of the business.
Impact of challenges
Following is the impact of current operational issues:

1. The green logistics is one of the operational issues which impacts on the sustainable
development of the company. It impacts on the contribution of the company towards the
reduction of environmental pollution.
2. The current legal challenges regarding the violation of laws and regulation are faced by
the company which impacts on the legal environment of the company that directly
impacts on the brand image in the eyes of the customers.
3. The environmental challenges are faced in the business operations which impacts on the
succession of the operation in providing a competitive advantage to the company which
affects the profitability of the company.
4. Another operational issue is to provide healthy products to its target audience which
impacts on the long-term sustainability of the company.
5. It is one of the most important issues which impacts on the survival of the company
because the poor quality allows the consumers to move towards the competitors which
affects the revenue of the company within the particular period of time.
6. The packaging issue regarding the violation of law may lead to shut down, and it directly
impacts on the brand image in the eyes if the customers.
7. The social responsibility impacts on the brand recognition and awareness among the
target consumers. It acts as a promotional tool which helps to build the brand image
among the consumers.
8. It is the prime issue which impacts on building the brand image in the eyes of the
consumers and it is the only tool which helps to stand out among the competitors within
the same industry.

Resources to provide new opportunities
The Imperial tobacco group has rich resources which help to provide a competitive advantage to
the company, and it can be explored in order to enhance the revenue of the company.
Following are the resources which provide new opportunities to the company:
1. Skilled human resource
The company has skilled and talented human resource which can be motivated through a
financial and nonfinancial scheme which helps to provide the competitive advantage to the
company. The skilled labor helps to build distinct image among the competitors by providing
a competitive edge which boosts the sales volume of the company. The skilled labor helps to
add new products and services to the existing customers, and it also helps to tap new target
audience which enables to generate higher sales volume of the company (Ahmed et al., 2015).
2. Financial resource
The financial resources of the company can be invested by the company in other business
segments such as financial investment and advisory which helps to explore new business, and
it enables to generate higher revenue.
3. Technology
The company has rich technological trends which help to provide new products and services
in order to increase the sales volume of the company. The technological advancement helps
to developed drive high revenue through providing new products to the existing customers.
4. Research and development

The research and development segment of the company is strong which helps to target new
consumers and new industry through research and development in order to attain higher
profits within the specific time framework.
5. Effective distribution channel
The distribution channel of the company is excellent which helps to provide products and
services to the target consumers, and it can also use to attract the new target audience by
providing similar goods and services to the new target audience.
6. Brand image
The Imperial tobacco group has ranked fourth in the world which shows that the company
has a good brand image in the eyes of the customers, so it helps to provide franchise of the
company across different nations which increase its presence across the world. The new
territories can be expanded which helps to generate higher revenue within the particular time
period.
7. Physical resources
The physical resources of the company include land, equipment’s, machinery and others. The
land can be used to start new business segment in the rotational shifts in order to utilize the
land in an effective manner.
Conclusion
It can be concluded that the company Imperial tobacco group has an effective strategic position
among the consumers within the same industry. The strength of the company includes excellent
distribution channel, high quality of products and services, excellent research and development
which enables to stand out among the competitors within the same industry. The weakness of the

company includes high taxation of cigarette. The opportunities for the company include
untapped businesses which help to generate higher revenue. The threats of the company include
negative publicity regarding consuming of tobacco products and government policies regarding
the banning of tobacco products. The pestle analysis shows that the legal environment of the
company faces various challenges and other environments are in favor. The challenges in
operations include environmental challenges, legal challenges, healthy products, quality
management, competing practices and social responsibility which directly impacts on the brand
image in the eyes of the customers and profitability of the company. The resources of the
company include financial resources, skilled human resources, technological advancement,
effective distribution channel and brand image which helps to explore new business areas such as
adding new products and services, tapping of untapped businesses and others.

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