The paper reviews British American Tobacco’s website (www.bat.com). The homepage of the website clearly shows the company’s logo and the website menu that includes ‘About us’, ‘Our industry’, ‘How we work’, ‘Our products’, and ‘Next generation products’, which provides information about various aspects of the company. British American Tobacco (BAT) is a British multinational company with its headquarters in London. It is ranked one of the best five largest tobacco companies globally. It also has leading market share positions in over fifty countries and has operations in 180 countries (Roberts, 2014). The company is proud of its history that has experienced successful growth and expansion globally, it has more than 200 hundred quality brands sold in more than 200 markets. With an approximation of one billion adult smokers globally, the company manufactures cigarettes chosen by one eight of the consumers.
Upon review of the company’s corporate website, it is evident that it has a positive attitude towards the welfare of all its stakeholders, including employees and consumers of its products. It operates both locally and globally, and it is ranked as the best employer in many countries. In the year 2015, the company contributed $30 billion to different governments globally in taxes and exercise duties. Another noticeable fact is that, it has received awards and recognitions from different nations due their acts concerning working responsibly. It was the first tobacco manufacturing company to be incorporated in the Dow Jones Sustainability Index in 2002, and it has been incorporated to present day (Jacobstein, 2014). For the successful growth and expansion of the company, it had to undertake all it operations sustainably. The company also has a rich legacy and believes in a brighter future. This is seen by how it delivers value to its shareholders while at the same time investing in its markets, brands and new products. This is done to promote a sustainable future for the company in very competitive market segments. The other positive impression is that the company is committed to good corporate governance and achievement of the organizations objectives and goals through honest, transparent and accountable ways.
Vision, Mission and Goals Analysis
The British American Tobacco’s vision is delivering value in the present day and advancing in the future. It has a strategy that enables the business to deliver value while at the same time generating funds that can be used to invest in its future. It also emphasizes in leading the Next Generation Products (NGP) globally. Its mission is becoming the best tobacco company that satisfies consumer demands and needs in tobacco and its products. The major goals include satisfying the needs of the all stakeholders while ensuring that profit margins are maximized. In order to accomplish and fulfill the vision, mission and goals, the company had to consider several company guiding principles. The first one is strength from diversity, which is having management team from diverse origins, this comprises of managers from around 140 nations. This provided unique comprehensions into various local market segments and promoted the company’s ability to compete globally (Benson, 2011). The other principle is developing an enterprising spirit. The company values enterprises from its employees which promote its confidence in pursuing growth and innovative opportunities while considering the entrepreneurial risks that might accompany the innovations. The other one is freedom through responsibility, the company gives its stakeholders the freedom to operate locally. It also uses its freedom to act in the best interests of its customers by conducting all business activities responsibly. Being an open minded organization, it has promoted the achievement of its desired goals and visions.
In order to promote the global sale and use of its products, the company maximizes the positive impacts of its products and reduces the negative impacts. The positive impacts include its contribution towards better economies of different nations, which impact both directly and indirectly the livelihoods of the people in the different nations. The other one is encouraging sound regulations which are developed with the involvement of all the stakeholders, and not government officials only. This helps in ensuring that a favorable marketplace is created that serves the interests of both the manufacturers, consumers and the various governments. The negative impacts that need to be reduced include excessive regulations on the manufacture, sale and use of tobacco and its products, youth smoking, and illegal trade of tobacco (Tilley, 2012). So as to remain competitive, the company has to ensure that it delivers quality products to its consumers. The other aspect is introduction of new products with varying flavors according to the demands of the users. It also has to generate from products that are less harmful since many people are becoming more health conscious and opt for products that do not endanger their health.
In order to maintain its sustainability, the company used materiality process, which includes dialogue with stakeholders and research, to come up with key areas that are of great significance to the company’s growth and expansion. The first one is harm reduction, the company strives to research, develop and commercialize less harmful cigarettes to replace regular cigarettes. The other one is provision of sustainable agricultural activities and improving the livelihoods of all tobacco farmers (Munafo, 2014). This ensures that quality tobacco leafs are obtained from the farmers while at the same time ensuring that they are well paid for their services. Finally, the company ensures that it operates with the highest standards of corporate behaviors and transparency. With regard to corporate social responsibility, the company is committed to comply with all the set regulations in state or nations in which its businesses are conducted. It also strives to eliminate all forms of child labor, illegal trade of tobacco, and the sale and use of cigarettes among the youth.
In order to improve its market share, the company has to market its products responsibly. It sternly believes that the tobacco industry needs to be regulated, but on the other hand they have a right to communicate responsibly to its adult consumers about the existence of different kinds of tobacco and nicotine products. The company therefore takes the active role of informing its consumers about the different risks and harm caused by the use of their products so as to help them make informed choices. It also helps in averting any litigation that might arise in the event that consumers are harmed by the products. The marketing protocols are governed by its International Marketing Principles (IMP), which comprise of four core doctrines. The first one is that the company will not give any misleading information about the risks of smoking. The second is that, it shall only market its products to adult consumers (Roberts, 2014). The next one is that it shall not influence the decision of the consumers regarding whether they should smoke or not, or how much of the product they can use. Finally, the company shall be clear to all the consumers that the source of the advertisement or marketing is directly from the manufacturer and for the purpose of improving the sale of cigarettes.
With regard to internal analysis, the company monitors all forms of adherence to the company’s constitution, which included compliance to the provided rules and regulations. Immediate actions are taken to correct any form of noncompliance. External analysis showed that the company has received a lot of external recognition especially on matters concerning sustainability. It has been included in Dow Jones Sustainability Indices (DJSI), for fourteen consecutive years (Jacobstein, 2014). With regard to the industry, it is seen as the leading company in tobacco industry. It has attained industry governance in nine out of the twenty categories listed, including 100% rating for fighting smuggling, sourcing of raw materials and responsible advertising rules. Concerning cross border issues the company ensures the excessive regulations in one nation or state do not in any way contribute to the increase of illegal trade of tobacco in the neighboring nations.
Financial Report 2015
As at 31st December 2015, the total materiality for the company was $245 million; the total profit was 663 billion. According to the company CEO, the company made exceptional results in 2015, despite the many challenges it encountered like tough external environments. The increased profitability was due to increased market share which rose to over 40 basis points. It was enhanced by the exceptional results from its global brands which increased in volume by 8.5% and market share by 120 basis points (Roberts, 2014). From the financial statements, it is evident that with increased market share, the company is capable of making more profits despite of tough environmental and socioeconomic factors.
Corporate Ethics and Social Responsibility Policy
The company agrees with the fact that consumption of tobacco and its products have legitimate public health impact. However, it also believes that the products are legal, and that they are needed by a specific group in the society, mainly adult smokers. Therefore informed adult consumers have a right to choose what brands they need, and the company strives to fulfill their demands. It has the role of preserving and protecting the rights of its consumers. By so doing, they have to act responsibly by practicing transparency in all its proceedings (Jacobstein, 2014). Its responsibility is to compete dynamically and lawfully for its market share amongst the adult smokers.
For it to compete effectively it has to understand the preferences of its consumers and the market characteristics in places they need to establish their business. The next step is providing different quality products and brands that meet the consumer preferences. And finally, within the provided laws, the company shall communicate responsibly with the adult consumers about the provided brands. The company shall also work with other relevant investors in the market to preserve the available opportunities for informed adults to continue using tobacco and its products and choose their preferred brands (Roberts, 2014). It is the sole responsibility for various governments to ensure that the rights of all consumers are protected and that they have freedom of choice. So as to support the role of the governments, the company shall advocate for fairness and uniformity when enforcing regulations in the industry. The expectation presented in the policy is that of transparency, equality and fairness when conducting any business undertakings. The policies are all tangible in the sense they all concern protection and preservation of rights for both the manufacturers and consumers of the products.
One of the organizational strengths is the presence of diverse workforce that promotes innovation and sharing of new ideas from different local markets. One of its weaknesses is the production of products that are harmful to its consumers. Without proper marketing and legal sale of the products, it can lead to possible litigations which will affect its profitability. One of its opportunities is the existence of ready market for its products; approximately one billion adult smokers are in dire need of their products (Roberts, 2014). Regarding threats, the company has been taken back by the excessive regulations imposed in the tobacco industry, including excess taxation, which has led to increased prices. This on the other hand has promoted illegal tobacco trading, which has affected its market shares. The company is able to fulfill its strategic missions while at the same time increasing its profit margins because of its diverse workforce that is working towards a common goal. It is owned by shareholders whose main expectation is growing its profitability, which is enhanced by the Group members competing efficiently for the market share among the adult consumers.
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