TOBACCO

Managing business in Europe tobacco Industry

Managing business in Europe tobacco Industry

Making reference to two enterprises within an industry or two industries, identify, compare and explain the major challenges these organisations have faced (such as environmental, financial, market, workforce, technological, regulatory and political) in the past decade and how these influences are likely to change in the future. Evaluate management theories in terms of explaining these influences and responses to them in the enterprise/industries you have examined.

The tobacco industry in the context of the Australian landscape has faced significant challenges over the last decade. The main challenges encountered by these industries have been of a regulatory nature, in the sphere of government and advertising regulations, as well dealing with the social and financial burdens of operations. The organisations operating in the respective industries look to remain vigilant and use innovative management strategies to be dynamic at times of adversity. Both the tobacco industries have carved dexterous positions of self-regulation and will need to continue to do so due to the inevitability of future challenges. This essay looks to compare the two industries, taking particular note of similarities and differences; with a focus on addressing how organisations manage themselves in their industries.

The tobacco industry operates in one of the most dynamic, controversial and heavily regulated markets in the world with the Australian government facing increasing pressure to continually regulate the tobacco giants. The federal government has befitted a firm stance to reduce the rate of smoking, especially among young people, and this clearly has implications for the tobacco industry in terms of management theories. Regulation has been increased with the launch of the National Tobacco Strategy which is a joint Commonwealth and State effort that 'aims to improve the health of all Australians by eliminating or reducing their exposure to tobacco in all its forms' (National Tobacco Strategy 2004-2009) with the backing of the Ministerial Council on Drug Strategy. There are now stricter guidelines for health warnings on cigarette packets, which were upgraded in March 2006 with graphic warnings to cover a larger area on all tobacco products. The 2005/06 Budget allocated over $25 million for anti-smoking campaigns targeted at young people and a further $4.3 million for women, particularly Indigenous and pregnant women which demonstrate that governments are very serious about tobacco regulation.

Financial commitments towards increased regulation of the industry restrict the capacity of tobacco companies to broaden their consumer segments as well as negatively affecting their prerogative in the marketplace. These campaigns encourage smokers to make quitting a priority and this multi-tiered communication has been witnessed around Australia on television and radio, in newspapers, on buses, posters, and on Doctor's Television. The ubiquity of these regulated messages has meant that the tobacco industry has to work harder and smarter to reach a declining consumer base. In 2007, NSW introduced a ban on smoking in pubs and clubs with Balmain MP Verity Firth, the Government's spokeswoman on cancer claiming 'removing second-hand smoke from enclosed public places is an ...