Five Forces Analysis
The industry being analyzed is the tobacco industry. The tobacco industry manufacturer cigarettes, snuff, chewing tobacco, etc.
Customers
a. The customers are the wholesalers and retailers of tobacco products. There are a large amount of customers in this industry, which makes the customers not very powerful.
b. I believe the customers do make high-volume purchases, which would make them powerful.
c. The purchases customers make from the industry are the same relative to the amount expended for items from other industries. This causes the customer to have moderate power.
d. The products customers are buying are differentiated because the
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d. The tobacco industry definitely needs the tobacco growers service to survive, making the suppliers powerful.
e. The tobacco growers (suppliers) do not have differentiation in their product. This weakens their power because the tobacco industry does not have to pay more for the tobacco because it is basically all the same.
f. It is not costly to switch suppliers. Some companies choose to switch to a less expensive supplier in order to lower the cost of their products. This weakens the power of the suppliers.
g. The suppliers can not easily vertically integrate forward and become their own customer because of the many costs in manufacturing tobacco.
h. Overall, I believe the suppliers are highly powerful in the tobacco industry.
Existing Industry Competitors
a. Overall, the growth rate of the industry is moderate. Tobacco consumption is rising rapidly in developing countries. However, in the U.S. cigarette consumption has been slipping by about two percent per year. This means that there is a moderate level of competition for the existing tobacco industry competitors.
b. There is a mixture of fixed costs and variable costs associated with this industry. This keeps competition at a moderate level because the companies want to increase sales possibly by lowering costs and still earn a profit.
c. There is a high
Tobacco companies advertise in magazines, promote their products in convenience stores and market their brands through websites and social networks. Many of these tobacco industries get publicity and attract more young customers when using the newly in media to promote their products. Many of these tobacco companies don’t understand that tobacco advertising is a huge public health issue that increases smoking. Tobacco company advertising and promoting is the start of the use of tobacco among teenagers. Now, these media and magazine advertisements about cigars have caused teenagers to be exposed to cigarette advertising. Not only that but also these teenagers find ads appealing and also increase their desire to smoke. Cigarette companies spent about $8.37 billion on advertising and promotional expenses in the United States in 2011.
P6- follows guidelines to interpret collected data for heart rate, breathing rate and temperature before and after a standard period of exercise
The petitioner raises multiple issues regarding the IRS' final rule and interpretation of the provision regarding tax credits for taxpayers payers signed up in "an exchange established by the state." The IRS' final rule stated that the provision pertained to both state and federal exchanges. Petitioner argues that the phrase "established by the state," refers to just the states that have their own exchanges, and not the federal exchange. Therefore, the petitioners would not be eligible for the tax credits, and would not be required to maintain insurance coverage since the cost would exceed eight percent of their income.
For both the pro and con sides these facts are presented in order to support each paper's opinions. One opinion of the pro side is that the market of cigarettes is a market for disease and death. At one point the paper states, "Outrage at an industry that has made billions selling sickness and death" the paper enforces this opinion later by saying, "For decades, Big Tobacco has made a profit by selling the instruments of disease and death." Another opinion is that tobacco industries are the only companies that manufacture a product which causes serious illness and kills. The pro side quotes Edward L. Kaven, author of Smoking: The Story Behind the Maze as saying, "the only industry which produces a consumer product that is likely to kill and render human beings seriously ill when used as intended." I believe that these opinions are exaggerated ones. First of all, the tobacco companies are not the only companies that sell a product that is unhealthy and even has devastating affects on people.
When information was released to the public in 1939, tobacco companies found ways to discredit, and silence the public concern. In fact, previous to this tobacco manufacturers claimed an increase in health and medicinal properties for tobacco products. With the formation of the Council for Tobacco Research, in 1954, a direct link was sought between smoking and health related problems. Upon the finding of such evidence major cigarette manufacturers unite.
Tobacco, Smokes, Cancer Sticks, Chew, Dip, whatever you want to call it, has been poisoning the innards of individuals since the days of the prehistoric Mayas of Mexico at around 600 to 900 A.D. This tobacco craze would resume in the society of the American Indians and later to the European settlers. In the early seventeenth century, tobacco was the chief cash crop of America’s first colony, Jamestown Virginia. This crop would continue to flourish in throughout history. By the early 1900’s, The American Tobacco Company was the leading and most influential tobacco corporation. The game completely changed at the time of the two World Wars however. Soldiers began receiving free cigarettes and the industry began targeting women as potential costumers as they were gaining new rights and liberties in society at this time. In 1964, the cigarette empire began to see its decline when the Surgeon General of the U.S. wrote a report about the dangers of cigarette smoking. After this statement by “America’s doctor”, legislation did everything in their power to detour people form purchasing these harmful products. They have gone as far as to make tobacco companies label “caution” on their products. Tobacco companies have recently been having trouble selling their
Tobacco consumption is the number one cause of preventable deaths in the United States. In the United States, cigarette smoking is responsible for more than 480,000 deaths per year. That is around one in five deaths annually only because of smoking. On an average, the person who smokes dies ten years earlier than a non-smoker. These statistics are not mere numbers but speak about the gravity of the situation. The United States government should portray a more negative view on Tabaco to save the lives of many people worldwide (Centre for Disease and Prevention, second paragraph).
New Tobacco Atlas Estimates U.S. $35 Billion Tobacco Industry Profits and Almost 6 Million Annual Deaths. (2012) Retrieved August 2, 2015, from
Now, more than ever, more and more people are beginning to look at tobacco use as a major public health concern. It is nineteen ninety nine, and the number of smokers is rising while the average age of smoking initiation decreases. There are those that believe using tobacco of any type should be illegal, or at least restricted. Others believe it is up to the person to choose whether to use tobacco products or not, however most of these people believe tobacco companies should warn their customers of their products harmful affects.
Large tobacco companies are losing money by losing smokers. According to the Center for Disease Control (CDC), in 1965 42 percent of men and women above the age of 18 smoked and in 2010 that number is reduced to 19 percent. Altria, the nation’s largest tobacco company and Reynolds American, the second largest tobacco company are turning to the electronic cigarette market to make up for this drop. Electric cigarettes convert liquid nicotine into vaper which is then inhaled (Montopoli, 2013).
Cigarettes are the most important substance to address in the United States because they are not only extremely addictive, but they have the potential to cause a variety of serious health conditions and affect individuals who are close to and care for the user. Tobacco use poses a serious health threat especially among the young population of America and has significant implications for the nation’s public and economic health in the future. According to the Centers for Disease Control and Prevention (CDC), the impact of cigarette smoking on the economy is huge. Seventy-five percent of American health care money spent is due to the effects of tobacco causing various chronic diseases. Such diseases include, diabetes, heart disease, cancers, congenital defects, asthma, chronic obstructive pulmonary disease (COPD), stroke, birth defects, etc. “Cigarette smoking harms nearly every organ of the body, causes many diseases, and reduced the health of smokers in general” (CDC, 2015).
First off, in terms of global impact the author lists the number of deaths pertaining to tobacco use, which is a nice starting point. Although, if possible I would have liked to
The use of tobacco is a very controversial topic here in the United States. The harmful side effects of tobacco are well known and consequently, many believe that it should be outlawed. Though this has not yet occurred, constant regulations on the industry and
Cigarettes is produced to satisfy the growing population of smokers. Smokers are hooked to a substance called nicotine that is in a cigarette along with other harmful substances. Cigarette is a great product to be selling for the firm. As the customers(smokers) are addicted to nicotine , these firms can rely on them for continuous demand and they can easily increase supply. Therefore, the firms can easily monopoly the market and fix their own price.
The tobacco industry is important to the economy. In 1991, worldwide tobacco sales exceeded $59.8 billion and in 1992 the industry was rated as one of the top one hundred advertisers (Pechmann and Ratneshwar, 1994). However, there are high prices to pay - socially, economically, and personally - as a result of this industry. Annual mortality figures indicate that cigarette smoking is the number one cause of preventable death in the United States. An estimated 390,000 people die each year of smoke related illnesses, which is greater than the combined mortality for cocaine, crack, AIDS, homicide, suicide, and alcohol abuse (Botvin, G., Baker, Botvin, E., Dusenbury, Cardwell, and Diaz, 1993).