EPIB of British American Tobacco Case Study Example | Topics and Well Written Essays - 2500 words

EPIB of British American Tobacco - Case Study Example BAT Company was founded in 1902, the company acquired different companies in America and the UK to form the current multinational corporation it has evolved to be. Currently BAT is the second biggest procedure of cigarettes in world with an estimated 10.5% of the total global share. PESTEL analysis is used to investigates the vital factors which affects an industry and the influence they have on a particular company or companies operating in that particular industry. PESTEL is means political, Economic, Social, Technological and Legal factors. Political factors entail government policies which are related to the industry, this includes tax policies, regulations and laws, tariffs and restrictions and other factors. The economic factors include the wider economic performance for example economic growth, exchange rates, interest rates and inflation. Social factors on the other hand relates to cultural issues which includes health, population growth, demographics, changes in consumer behaviours and other aspects. Technology factors include the adaptation of new available technology and new ideas such as automation, information technology and rate of technology change. Legal factors comprises of legal procedures, licensing, product legal descriptions and other legal factors. (Hollensen, 2004) Political factors whereby the company have to deal with the political interferences that may be practiced by the UK government. According to research political systems of nations affect the conduct of businesses, for example some countries practice collectivism while others practice capitalism political systems. The UK government practices capitalism in that it allows factors of production to be privately owned and the government performs only limited duties that the private sector cannot perform unlike in collectivism and communism that stresses collective goals. So BAT Company has no restrictions and hence we can conclude that it enjoys good external political environment. (London and Hart, 2004) Economical factors which mainly deals with financial forces in the economic environment. Such factors include foreign exchange rates, currencies and global monetary systems like the use of Euro currency, inflation, counter trade, balance of payments, monetary policies, and fiscal policies among others. After carrying out careful analysis of these factors BAT Company did not face a lot of these challenges with but only was subjected to few of them like inflation and the balance of payments. (Buckley, 2005) Social factors are other factors that the company has to consider before going international. Forces within the society such as religion, family, social structure and education may impact positively or negatively the way BAT Company will market its products. Social factors affect our attitude, opinions and interests on the way we view products from certain companies. (Buckley, 2005) Technological factors are another key factor to be put in consideration before going global. Advanced technologies are now being experienced by many companies as