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Bat - Strong Market Position Driven by Gdbs

Autor:   •  December 1, 2015  •  Case Study  •  2,092 Words (9 Pages)  •  873 Views

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Strengths

Strong market position driven by GDBs

BAT has built a strong market position over the years. The company's strong market position is built

on a diversified GDB portfolio comprising the Dunhill, Kent, Rothmans, Lucky Strike and Pall Mall

brands, which together accounted for 42% of the company's sales volumes in 2014. The company

sold 55 billion Dunhill branded cigarettes, 64 billion Kent branded cigarettes, 31 billion Lucky Strike

branded cigarettes, 36 billion Rothmans branded cigarettes and 92 billion Pall Mall branded cigarettes

in 2014.

The GDB volume grew by 5.8% in 2014, driven by Rothmans and continued strong performance of

the company’s other GDBs. Dunhill, the company's premium brand, delivered volume growth of

2.9% in 2014 across majority of the company's key markets, including Indonesia and Brazil.

Furthermore, Pall Mall volumes increased 5.6% in 2014 as a result of significant growth in Pakistan,

South Africa, Mexico and Chile. Similarly, Lucky Strike and Rothmans volumes increased 0.8% and

British American Tobacco p.l.c. Page 4

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British American Tobacco p.l.c.

SWOT Analysis

39.8%, respectively, in 2014. GDBs increased their market share by 90 basis points in 2014. These

brands drove the company’s share growth of 10 basis points in key markets. BAT is focusing on

increasing its GDB share faster than the rest of its portfolio.

Strong brands help the company to launch new products to market in a faster way. More importantly,

strong brands covering the premium and value for money segments enable the company to capture

market share as shifts in consumer preferences occur.

Strong global footprint reduces business risk

BAT is geographically diverse, with a footprint in more than 200 countries across the Americas,

Western Europe, Asia-Pacific, and EEMEA regions.The company has 44 cigarette factories located

in 41 countries. The company has a strong presence in relatively high growth developing markets

like EEMEA and Asia-Pacific. Additionally, the company's revenues across these key regions are

evenly spread. In FY2014, BAT generated 27.7% of the total revenues from Asia-Pacific, 26.8%

from EEMEA, 24% from Western Europe and 21.4% from the Americas.

The company's GDB are marketed in several countries. Dunhill is sold in more than 110 markets

and Pall Mall is sold in more than 100 markets. Kent and Lucky Strike are marketed in more than

80 and 70 markets, respectively. In addition, Rothmans is sold in more than 60 countries. BAT's

presence in several geographical regions ensures a diversified revenue stream and reduces

business-related risks. It also makes the company less vulnerable to volatility of a single economy

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