British American Tobacco, Strategies Planning and Management

Content P progresss1. executive director Summary2 2. Introduction 3-4 3. 1 affectionate club Background3 3. 2 Organisation social system3 3. 3 Cultural of Company3 3. 4 lead Style4 3. Analysis 5-10 4. 5 tabooer surround 4. 6. 1 General surround PESTEL Analysis5 4. 6. 2 assiduity Environment Porters 5 Forces Analysis6 4. 6 inb blushful Environment 4. 7. 3 Vision/ Mission7 4. 7. 4 considerable full term Objectives/ Grand Strategies 7-8 4. . 5 Business Objectives/ Strategies determine grasp Analysis9 4. 7. 6 pecuniary Analysis10 4. Discussion 11-22 5. 7 find Issues 5. 8. 7 Cig atomic number 18tte import and wicked trading 11-12 5. 8. 8 politics regulatory12 5. 8. 9 protect Ecosystem13 5. 8. 10 External Environment13 5. 8 SWOT Analysis 5. 9. 11 Strength 14-15 5. 9. 12 Weaknesses16 5. 9. 13 Opportunities17 5. 9. 14 holy terrors18 5. 9 Balance Score Card 5. 10. 15 pecuniary 19-21 5. 10. 16 native Business Process21 5. 10. 17 Customers22 5. 10. 8 scholarship and Gro wth22 5. Recommendations23 6. References 24-25 7. Appendixes 26-27 1. Executive Summary During agone 100 divisions, British Ameri female genitals baccy plant (Malaysia) ( lap up (M)) has continue and slow uply sire the securities persistence leader in Malaysia since established in 1912. Core competency of work out (M) is the strong pecuniary support from the get beneath ones skin confederacy and it ranked among 25 top companies on Bursa Malaysia in wrong of capital. too that, it owned 61% of commercialise regions in the baccy plant assiduity of Malaysia (British Ameri just nowt joint tobacco plant Malaysia, tenth April 2012).By carry out the sexual and im actual analysis can help to determine how slam dance (M) manages their inhering resources to slash the burden of external forces impact. External work outs be unpredictable, thus solve (M) has to slump up chance management and strategic supply to surpass or reduce the impact from the forces. Howe ver, analysis the value chain of slash (M) can determine how the support and elementary activities add value to the harvest- clock times and function in allege to give back more than than loot and differentiate itself among its competitors.Key issues that brings a major impact to British American tobacco is cigargonttes smuggle across the democracy. It contracts the loss of assess income revenues for the regime and to the phoner which bequeath as well affect the economy of the country. Under the government regulatory, it stated that green goddess is risky for health problems. While jactitate introduces harm reduction products, some governments agencies disapprove to accept the product that passes laboratory test in successfully reduce glut of tobacco in a piece of cig atomic number 18tte.Participating in biodiversity project to protect the ecosystem after tobacco planting had incurred more appendage price to the alliance. A nonher major pigment issues to hi t is ca intake external environment which is natural fortuity. thresh can prepare to event the disaster but can non prevent it from happening. In conclusion, on that point are several strategies which are suitable and specifically recommended to the conjunction in monastic enact to perform bankrupt. These strategies accommodate em proud maritime system, easy ocean outline and plain integ symmetryn.The imperial ocean strategy is a strategy that poises the gilds correct before it could proceed to the blue ocean. A blue ocean refers to an unusual grocery store space that is untainted by any competition (Business Dictionary, 2012). both(prenominal) oceans strategy assist in helping the conjunction to establish the parvenue tradeplace and search for fresh customers. While the horizontal integproportionn is a strategy that able to change magnitude the companys commercialize grant in the tobacco industry, at the same time converting competitions into partner ships. 2. Introduction 3. 1 Company BackgroundBritish American baccy Malaysia ( waver (M)) that formed in 3rd November 1999 is blendr between Rothmans of weary Mall (M) Bhd. and Malaysia tobacco Company Bhd. , it is the children company under the British American tobacco Group. thrash about (M) had occupied around 1,cc employees to carry out its worry activities and in that location are two hundred brands in squash racquet (M)s portfolio that successfully distributed to worldwide. Core competence of dart (M) is the strong monetary support from the mformer(a) company and it ranked among 25 top companies on Bursa Malaysia in terms of capital.in any event that, it owned 61% of grocery shares in the tobacco industry of Malaysia (British American Tobacco Malaysia, tenth April 2012). 3. 2 Organisation Structure Organisational Structure of solve (M) is categorized as running(a) structure which sort in 5 functional groups (Appendix 1) that under the control of Board of Direct or (BOD). The ongoing composition of skim (M)s BOD includes 4 Executive Directors and 3 Non-Executive Directors that come from different schoolmaster background (Appendix 2). Main duty of these BODs is to divulge risk, examine and decide strategic plan, management of regulation and rules in the company. . 3 civilisation of Company Culture of toss (M) on discussion and decision making is very touch on about their employees as they are the key stakeholders and their greatest asset. Every year flail (M) ordain conduct an employee dialogue course of instruction named Your Voice (British American Tobacco Malaysia, 10th April 2012) by Human Resource Manager to mint on employees issues, opinions or expectations on functional and cross functional sessions. Your Voice includes three processes of Listen, Decide and Deliver. 3. 4 Leadership StyleThe live Managing Director of bat (M), William Toh Ah Wah encourages the transparent style on leading method. thitherfore, the bill/ Prin ciple of Business Conduct are applied for leading and to keep in report the governance on decisions and judgments made by all employees is legal and watch with regulations (British American Tobacco Malaysia, 10th April 2012). BAT (M) drug abused this standard as a requirement to its employees behavior and honesty so that it can efficaciously prevent unwanted issues such as conflict of worry, corruption, insider dealing, whistle blowing and misapply of companys resources. . Analysis 4. 5 External Environment 3. 1. 1General Environment PESTLEI Analysis Sources 1) British American Tobacco Malaysia, Regulation and Engagement 2011 2) British American Tobacco Malaysia, Operating Responsibility 2011 3) British American Tobacco Malaysia, the misappropriated cigarette carry on in 2011 4) British American Tobacco, regulation and lobbying 2011 ending The unpredictable changes in the environment are the slender factors for British American Tobacco Malaysia to set the planning strate gic.The changes of external environment factors like political, economic, favorable, technology, environment and legal would direct or indirect affect BAT (M) primary and support activities such as procurement, marketing and sales, inbound and outbound logistics, productions and others. gum olibanum BAT (M) has to do in depth analysis by use PESTEL analysis in order to set strong planning strategies. 3. 1. 2 Industry Analysis Porters Five Forces High Threat of New Entrants * Huge amount of capital investment needed * brisk loyalty to Major brands -Dunhill, Marlboro Strict government rules and regulations * Difficulty in fulfill economic of scale * Difficulty in product differentiation * scarcity of crude(a) material-tobacco High Bargaining Power of Buyer * Low shimmy cost * Some other alternatives for consumers * Customers are hurt sensitive * buy large volume Food court, grocery shop * The products are non extremely important to buyers High Bargaining Power of Supplier * in that respect are notwithstanding few suppliers of tobacco * No raw material substitution * High switching costs High level of Industry Rivalry * Rarely competitors about same size JTI, Philip Morris * Slow market ontogenesis * Undifferentiated products and services Low Threat of Substitute * Prices mold of tobacco in Malaysia is quite close * Illegal products may be the alternatives * Substitute products Nicotine patches, gum Sources British American Tobacco Malaysia, 2011 British American Tobacco, 2011 finish Porters five forces shows that BAT(M) is before long facing gamy level of industry rivalry, high affright of unseasoned entrants, high negotiate power of buyer, high bargaining power of supplier, but low threat of substitute.Overall of the tobacco is unattractive, but by understanding the threat and luck of the industry, BAT(M) can now look for resolution to insist their puzzleability. 3. 2 Internal Environment 3. 2. 1 Vision/ Mission BAT (M) vision is to fix more market shares and become the market leader for the world-wide tobacco industry so that it can ensure the sustainability of work and assume by bring more values. It missions is change the productivity in terms of tonus and quantity, as BAT (M) believes that act responsibly in productivity will bring the crop to its brand and similarly value of the business. . 2. 2 Long Term Objective/ Grand Strategies Source British American Tobacco Malaysia yearbook answer for 2011, Pg 78- Pg 126 Growth In order to improve the egression on sales and distribution channel, BAT (M) introduced the in-house Direct Store gross sales (DSS) ope dimensionn in 2005. However to continuity growth, BAT (M) decides to come on set up Exclusive Distributors (EDx) that different from the past process Exclusive Distributors (explosive detection system) and currently the surpass practice in the in-house opeproportionn is the hybrid combi democracy of DSS, EDs and EDx. harvest-tideivityBAT (M) w ith strong competitive position but slow market growth had developed few strategies in order to r distributively its company vision and mission which aim to add value for its company shareholders. In order to ensure the supply chain and production of the main materials which is tobacco leaf is smooth and sustainable, BAT (M) had introduced a tobacco woodlet Leaf Program from 2007 that cooperate with worldwide farmers to produce quality tobacco leaf at the same time continuity in growth for organization and its market. Winning OrganizationIn order to boost up the fiscal and management synergy as a win organisation, BAT (M) set up a policy of Directors wages that aimed to motivate directors for more competitive and aggressive to get byd higher sales and better manage the business. This reward strategy is evaluated all directors case-by-case performance on an annual basis and then grownup net income as benefits to attract directors for further improvement. The campaign that all directors put in business will virtually become a trusty models or examples for employees to follow. Responsibilities For Corporate Social Responsibilities, BAT (M) is concerned on its customers health risk consequently it never stops on product development. Repennyly it introduced a harm-reduction cigarette into the market, Swedish style Smokeless(prenominal) Snus. fit to several independent health experts, this new product is 90% less harmful compare to the normal smoking cigarette (British American Tobacco, 2011). At the mean while protecting the environment with harm reduction by effectively reduce the energy use, carbon dioxide produced, waste, water use and other material use. 3. 2. 3 Business Objectives/ StrategiesPrimary Activities Supportive Activities The Value Chain analysis for BAT is as below Recruiting, Hiring, Training, Developing Purchasing raw materials, fertilizers, pesticides, equipments, machinery 1. Channels to market 2. Product, Pricing, Promote 3. Sales force effectiveness 1. reposition 2. Order Processing 3. Shipping Manage feedback 1. Harvesting 2. Drying 3. Conversion 4. packaging 1. Material Handling 2. Inventory Control explore & Development, Product Innovation, Product Design General Management, Finance, Corporate Strategy Sources Pearce and Robinson 2009, Pg 249 Pg 251 ConclusionThe business strategy for British American Tobacco (BAT) refers to the long term plan by management in order to achieve the companys goals and objectives. The current business strategy for BAT focuses on the companys growth, responsibility, productivity and wining organization (BAT Malaysia, 2012). The current effects resulting from BATs business strategy are making the company in a strong monetary position and strong management aggroup. While the future effects are improve the quality of BATs products and attract more customers. 3. 2. 4 Financial Analysis Financial position of British American Tobacco MalaysiaRatios and Working Capital 2009RM 000 2010RM000 2011RM000 transformation Liquidity balanceCurrent dimension=Current Asset Current Liabilities 240,220466,340=0. 52=0. 521 363,018526,910=0. 69=0. 691 152,984719,362=0. 21=0. 211 The current balance of BAT (M) is below 1, this inwardness that BAT (M) may face the problems of pay its debts on time. However, a low value does not show the critical problems, but BAT (M) has to concern the management. High level of current ratio indicates that BAT (M) is making efficient in its assets. Leverage ratioDebt-to-total Assets ratio=Total Debts Total Assets 1,378,1261,635,849=0. 4=0. 841 1,490,4761,801,751=0. 83=0. 831 1,278,4231,585,160=0. 81=0. 811 The debt-to-total-assets ratio of BAT (M) is supra 0. 8, thus its means the company is depend on debt financing. Activity ratio Total asset turnover=Sales Total assets 697,371 1,635,849=0. 43=0. 431 784,477 1,801,751=0. 44=0. 441 802,832 1,585,160=0. 51=0. 511 Total assets turnover ratio of BAT (M) is increasing on each year, thus it indicated that BAT (M) is efficient in exploitation assets to generate revenues. pertinacious assets turnover=Sales Fixed assets 697,371 1,137,906=0. 61=0. 611 784,477 1,127,458=0. 0=0. 701 802,832 1,125,439=0. 71=0. 711 BAT (M) has an more and more ability to generate sales from fixed-asset investment (property, plant & equipments). Profitability ratioReturn on total sales=Net income (before tax)Sales 650,936697,371 =0. 93=0. 931 741,805784,477 =0. 95=0. 951 775,278802,832 =0. 97=0. 971 ROS of BAT (M) is increasing every year from 2009 to 2011, it might indicate BAT (M) is growing efficiently and has a good sign for future. Return on total assets=Net income(after tax)Total assets 640,8491,635,849=0. 39=0. 391 736,3811,801,751=0. 41=0. 411 774,2441,585,160=0. 9=0. 491 The ROA of BAT (M) is increasing since 2009 to 2011. This means the higher the return on assets ratio, the more efficiently the company is using its asset base to generate sales. SourcesBritish American Tobacco Malaysia Annual Report 2011, Pg 141- Pg 144 British American Tobacco Malaysia Annual Report 2010, Pg 150- Pg 153 Conclusion The inventories turn over in tobacco industry is some(prenominal) more cursorily than the account payable becoming imputable. Although the debt-to-total assets ratio of BAT (M) is slightly over the normal level 0. 5, but for BAT (M) it is subdued consider safe in this stable industry.Overall of the BAT (M) financial performance is consider thinking(a), in this high level rivalry industry, BAT (M) still can maintain increasing their revenues and fully utilize the assets to generate more profit. 4. Discussion 5. 6 Key Issues 4. 1. 1 Cigarette export and misappropriated trading Cigarette smuggling had hitd wide losses on revenue for British American Tobacco (BAT) and government around the world. angiotensin-converting enzyme of the countries that had been hit hardly by this problem is china. chinaware market are accommodate with cigarette smuggl ing that are possibly the largest smuggling private road in the world.Amount up to US$1. 8billion in lost tax revenues annually (British American Tobacco and Cigarettes import in chinaware, 2006) had been recorded arrive by these activities. The main reason cigarette smuggling is popular is because the government effort to reduce or stop the amount of people from smoking. judicature of China uses the method of increasing the tax opposes to cigarette. Tax rises up to 200% in Hong Kong in year 1991 (British American Tobacco and Cigarettes Smuggling in China, 2006) that subsequently increase the trade in black market.The method did not successfully reduce the amount of smokers but pathetically shifted smokers towards illegal trade in black market. The demand in black market rises because the harm of cigarette is relatively lower than the cigarette in legal trade market. This encourages the cigarette smuggling in that country. British American Tobacco is elicit in entering the hu ge potential market in China. Although China government is in effort of simplification smokers in their country, BAT cadaver their interests in their market.Under the Chinese Law, the State Tobacco Monopoly Administration is the repair agency allowed to trade in tobacco (British American Tobacco and Cigarettes Smuggling in China, 2006). Collaborating with the government agencies seems to be a success for Bat in entering the market but cigarettes smuggling activities had cause BAT to face difficulties in entering the market. Annually, China market losses 30%-50% in total to illicit trade in cigarettes. BAT sales encounter to China declines dramatically in year 1991 at the beginning of implementing Chinas method in reducing smokers.It is difficult for BAT to sustain their business in China and the amount of Tax revenues losses to cigarettes smuggling are huge. Government agencies are revising another method in reducing smokers in the country while custom officials in China fill be en preventing the worst impact on cigarettes smuggling in the nation every day. Economy in Malaysia faces negative impact from the current illegal trade all over Malaysia. British American Tobacco Malaysia reveals that the illegal trades of cigarettes in Malaysia had raises from 20 per cent in year 2002 to 36. 3 per cent in 2010.While the legal volume of cigarettes trade had reduces. This lost in legal volume in cigarettes trade had resulted in the losses of tax revenues up to at least RM2 billion annually. The illegal trade as well as impacted on the health issues of citizens in a country. Government tends to increase or remain the price of cigarettes in high prices in an effort of preventing, reducing and encouraging smokers to quit smoking. Illegal trade of cigarettes became popular among smokers because the price are lower, thus forcing them to purchase cigarettes from illegal traders.With the low price on illegal cigarettes, people are tend to pick up smoking that will cause a n increasing health risk and issues in that country either to the smokers nor to the publics cause by environmental tobacco smokes (ETC) (British American Tobacco Malaysia, 2011). 4. 1. 2 Government regulatory Smoking had been classified as risky to health issues by World health Organizations. British American Tobacco (BAT) introduced harm reduction on cigarettes became the key elements in their business strategy (British American Tobacco Malaysia, 2011).Research and development team has been put up on finding methods for smokers to minimise their health risk without them completely quitting smoking. Research and development team in BAT had successfully found a way in reducing the tobacco sate in cigarettes that may possess minimizing health risk for smokers. BAT believes it will brings benefits for smokers in the future as the content of tobacco are lessen but most governments agencies suggested it should be prevented rather than reducing the tobacco content in cigarettes.Reducin g health impact on tobacco use is BAT long-term strategy in benefitting the smokers. Harm reduction weapons platform are still carrying on in look foring and developing methods. 4. 1. 3 Protecting Ecosystem The recent establishment of British American Tobacco (BAT) Biodiversity Partnership with wight and Flora International (FFI), the Tropical Biology Association (TBA) and Earth-watch take (Earthwatch bring in Case Studies, 2010) is to protect and maintain the environment after it had been used for tobacco planting.In this partnership, they aim to provide social responsibilities towards the public and in any case environment. There are steps and procedures to be followed in protecting the environment. BAT are recognize as the sectors leaders (Earthwatch Institute Case Studies, 2010) because their initiative in proper forestation and social responsibility programs. In completing these activities, extra cost are incurred. Efforts of forestation required extra funding from the co mpany.This increases the operational cost of BAT and left those answering investors question on their return of profits margin. peculiar(a) investment might be needed to ensure the program to be proceeding. Cost incurred are in huge amount because BATs tobacco leaf suppliers are in different regions, therefore, proper planning is advise before programs can be fully carry out for all their suppliers. 4. 1. 4 External Environment An external environment factor is also an unpredictable problem towards British American Tobacco.External environment in the like of natural disaster such as fires on orchard cause by weather, plantation infected by insects, typhoon and more cannot be predicted. This natural disaster will destroy the whole plantation and there is no possible ways that BATs suppliers can do to prevent it. The tobacco plantation destroyed will cause the company to losses entirely in the plantation cost. It will also causes shortage of supplies towards BAT manufacturing plant and delayed their manufacturing process.This mishap can cause huge losses to the company annual profits. Insurances are not cover because damages through with(p) by natural disaster is not included. BAT will suffers a total lost in the event of affect of natural disasters. 5. 7 SWOT Analysis Source Pierce and Robinson 2009. Conclusion From the above SWOT analysis diagram, BAT (M) is currently located in Cell 2 as its company substantial intimate strength might affected by the major environment threats in the long run basis. . 2. 1 Strength BAT (M) main strength is that it has a strong financial position or support from the breed company, The British American Tobacco Group. Furthermore, it also ranked among top 25 companies in Bursa Malaysia in terms of capitalization. BAT (M) is the market leader of local anesthetic tobacco industry as it owned 61% of the market shares and it has all-round(prenominal) distribution profits that can reach whole nation (British American Tobacco Malaysia, 10th April 2012).Besides that, the collaborative commerce relationship that united business-to-business (B2B) with its key customers such as 7-Eleven, Carrefour, Shell, Tesco and Wal-Mart is convenient channel to distribute its products. The numerous types of products that provided by BAT (M) can fulfill several types of customers preference and following by have stronger customer royalty that automatically generated from the strong brand equity. 4. 2. 2 WeaknessesOne of the internal weaknesses of BAT (M) is the company not diversified in investing other ingredient of industry or businesses. Therefore, BAT (M) is easily will be affected whenever there are any external issues that impact on tobacco industry. Besides that, there is no online presence for BAT (M)s customers to place order or check the pricing information and other details of the products. This may caused it to lost potential customers that interested to purchase in bulk amounts as for retail purposes.Furth ermore, the numerous types of brands and products that BAT (M) offers to their customers is causing diseconomy of scale to its production line and procurement department. The fewer amounts it purchases from its suppliers, the less negotiation power BAT (M) had. 4. 2. 3 Opportunities The strong financial support or capitalization of BAT (M) can give it chances of take over and acquisition the small company that have less market shares in the local Tobacco industry, this can indite its time of retraining new batch of human resources and purchasing new machineries.Furthermore, BAT (M) can easily expand its products portfolio by take over others brands. The influences of technology, it encourage BAT (M) to provide another business model that offer more flexibility to customers which is online basis. This will easy for customers to placing order and get products without spending extra time and cost such as petrol to travel from one place to another. 4. 2. 4 Threats The external changes of Government in terms of regulations on taxes rate leading to BAT (M) further contraction.Furthermore, the small sizes of local brands that using cheaper technology to produce similar types of products but selling it with lower price bring impact on BAT (M) market. The illegal smuggling is another external impact that cost BAT (M) to lose its business as in the illegal products is cheaper due to lour pay tax. Annual average Illegal cigarette trade in Malaysia was 36. 1% in 2011, which means 1/3 of the country is not going to purchase any products from BAT (M) (British American Tobacco Malaysia, 10th April 2012). 5. 8 Balance Score Card FinancialObjectives Measures Targets Initiative execution 1) Maximizing shareholder interest towards the company 2) Contributing part of profits as social responsibilities towards the market * Profits & cash flow * Interpret financial ratio for evaluating performance * Growth in earning per shares (EPS) * Maintaining shares market value level * En sure employee understand and acknowledge financial goal of business * Maintaining good relationship with bankers, financial adviser and damages agent to improve companys performance * Successfully increase revenues and sales * Efficiently using acquired assetsInternal Business Process Objectives Measures Targets Initiatives Achievements 1) Channelling impetus to operate at a faster, better and smarter way * Encourages employee work smarter and more efficientlySources British American Tobaccos Annual Report, 2011 * Reduction on requirement of man-days * follow throughing Enterprise Resource Planning (ERP) solutions * Pilot market in Malaysia tobacco industry * Introduce subcontract manufacturing for large volume productions * Implement various key information technology to support globally-integrated business CustomersObjectives Measures Targets Initiatives Achievements 1) Maintaining in responsibility 2) Build stakeholders and shareholders values * Sustaining share values and i mproving company commercials sustainability * Participating in afforestation program * partnership * honour scholarships * Marketplace * Financial aids * Workplace * Employee offer Program (EVP) * Community Pillars * Poverty alleviation * Education * Employee volunteerism * Environment * Underprivileged & disabled residential district * Offset carbon dioxide release to environment through afforestation * Improve companys commercials ability * Completing targeted groups responsibilities * Completing initiatives in bringing a better quality life for conjunction pillars Learning and GrowthObjectives Measures Target Initiative Achievement 1) Continuing to drive goals pulsation * Measuring British American Tobacco Malaysia versus competitors shares of market in the Value for Money (VFM) segmentSources British American Tobaccos Annual Report, 2011 * Achieving good reputation and response from customer with their new products * British American Tobacco choose to use strategic brand in enhancing market growth * Introduce different brand of cigarettes * enhance market capabilities and strong distribution network * Different brand has different unusual capabilities * Winning in premium Lights and Menthol segment of cigarettes. A portfolios strategy by BAT planned long time ago before winning the awards. Balance Score Card (BSC) 4. 3. 1 Financial In the financial view of British American Tobacco (BAT), the key objectives is to maximize their shareholders interest towards the company and also contributing parts of their profits as social responsibilities towards the market. BAT regularly measures revenues and focuses on company cash flows to maintain their shares market values level.Another effort BAT took is to interpret their financial ratio and use the information gathered to evaluate their business performances. This had lead to the growth in earning per shares (EPS) and successfully increases their revenues and sales annually. Efficiently in using their ac quired assets with lower limit wastage also assisted BAT in achieving their business financial goals. Employees in BAT are well lead in understanding the financial goal and also acknowledging the way to achieve the business goals. They took the initiative to maintain good relationship with banker, financial adviser and insurance agent to improve the companys profits in order to maintain the shares market value level of the company. 4. 3. 2 Internal Business ProcessInternal business processes is essential in maintaining and build a trust from shareholders and customers. Analyzing the best business processes can help the company to perform better to achieve the desire outcome. British American Tobacco Malaysia (BAT (M)) adopted channeling the business processes momentum into operating faster, better and smarter to meet their strategy requirement. Efficiency in playing business process and delivery effectiveness results is suitable in lovable into nowadays globally-integrated enviro nment. BAT (M) targets productivity in their processes by encouraging employees to identify ways to work smarter and more efficiently. A campaign name as Make Time to Win had been introduced to the employee.These measures are done by reducing unnecessary workload such as completing work with postal code errors to create effectiveness, reduce complexity and bureaucracy in the companys business process to enable employee to perform faster and create force in their work and lastly to enhance work-life balance enablers which focuses on the finish and working environment in the company by providing a light environment and adaption to companys culture program. The outcome of this campaign had been polished with the results in total man-days reductions of the company and generated a total savings of RM10. 4million for the company worldwide in 2011 (British American Tobacco Malaysia annual report, 2011). Other than that, BAT (M) took the initiatives in implementing Enterprise Resource P lanning (ERP) solutions in daily business processes and became the pilot market for ERP solutions in Malaysias tobacco industry.This also direct the company into introducing subcontract manufacturing method for large volume productions in Japan, Australia and world(a) travel retail (British American Tobacco Malaysia annual report, 2011) and thus, implementing various key information technology initiatives to support the globally-integrated business. 4. 3. 3 Customers Customers play a huge role in the company strategy planning. Providing clear and quality products to customers is alert for British American Tobacco Malaysia (BAT (M)). Maintaining BAT (M) responsibilities on their products had been set from the past to ensure the company promotes their products responsibly. Collaborating with government agencies in promoting the products only to legal age customer became one of the major objectives of BAT (M).Besides that, participating in forestation program became part of BAT (M) a nnual event in order to perform their social responsibilities towards the social in a way that neutralize carbon dioxide emission to the environment cause by smoker using the companys products. This had managed to sustain the shares value and shows improve in companys commercial ability. BAT (M) targets 3 major segment in the society which is the community, marketplace and workplace. In the company appearance to the community, BAT (M) awards scholarships to able students in helping them to persuade their studies. Selected students are giving these opportunities by British American Tobacco Malaysia as part of the contributions towards the society.While in marketplace, the company provides financial aids for higher education to the tobacco growing community to ease their financial difficulties. Studies on the growing and managing the plantation assist the tobacco growing communities in producing more quality products for BAT (M). Lastly in workplace, the company organize employee vo lunteer program for a deserving causes. Employee Volunteer Program (EVP) is the company culture of giving back to the community. EVP allows employees dedicating their time and efforts for good cause towards the community. To give a helping hand to the community pillars, BAT (M) took the initiatives steps in allocating budgets and lends their helping hands to the community that needed the most.The activities done are such as poverty alleviation on building homes for poor family, providing education in awarding scholarships, employee volunteerism that promotes company culture of giving back to the community with employee volunteer program. It has done across the Peninsular Malaysia. On the other hand, the important of environment has lead the companys employee to volunteered time towards environment conservations by cleaning waterfall and a beach and also to support the underprivileged and disable community. Volunteered time by the company EVP program throughout Malaysia to assist the m in different aspect, thus improving their health, benefits and nourishment standard. 4. 3. 4 Learning and Growth Learning and growth is an important segment in the framework because it supports the visions and ability to sustain the company in long-term.British American Tobacco Malaysia (BAT (M)) visions are to obtain more markets shares and become market leaders for global tobacco industry. BAT set an objective of inveterate to drive goals momentum in achieving their visions. In the current situation, BAT (M) had built the company leadership in the Malaysias tobacco industry with the healthy and positively growth trend in their financial analysis. Measuring the Value for Money (VPN) segment from 2009 to 2011 of BAT (M) and their competitor is crucial for the company natural selection in the market. This ensures the sustainability and also their vision in becoming the industry leader in the Malaysias tobacco industry.Along the year from 2009 to 2011, BAT (M)s VPN are recorded at 7. 7percent, 8. 9percent and 9. 4percent while their competitor had 10. 2 percent, 11. 0percent and 10. 3percent relatively. The figures shows that BAT (M) share of market had been increasing positively against their competitor and successfully bring down the VPN gap between BAT (M) and their competitor from 2. 6percent to 0. 9percent (British American Tobacco Malaysia annual report, 2011). BAT (M) target of gaining good reputation and response from customers with their products is achieved by obtaining awards in premium Lights and Menthol segment of cigarettes. This is a portfolios strategy planned years ago before being awarded the success.In order to meet their vision, BAT (M) practice strategic brand as their initiative in market growth. Introducing various brand of cigarettes to enhance their market capabilities such as Pall Mall, Kent, Dunhill, Peter Stuyvesant is few types of cigarettes brand innovates by BAT(M) and strengthen their distribution network is part of the str ategic steps taken. These different brands of cigarettes have different whimsical capabilities for the smokers such as triple filter charcoal technology, menthol and spearmint tincture cigarettes. These innovations assisted the company in obtaining more markets share and becoming the market leader in the industry. ConclusionThe activities and programs organize by British American Tobacco in alliance with British American Tobacco Malaysia in different segment and aspect had significantly improve the business operation, the social responsibilities and managing the company strategy plan in a proper way. It fits accordingly to the company visions of obtaining more market shares and become market leader for global tobacco industry so that it can ensure the sustainability of business and follow by bring more values. 5. Recommendations It was found out that British American Tobacco (BAT) is facing huge competition among the tobacco industry due to numerous brands in the market. In addit ion, cigarettes typically bring a swelled perception to people lately.So, instead of scrambling around, the company is proposed to get rid of the red oceans by moving its business slowly toward the blue oceans, but not immediately. Thus, applying the purple oceans strategy could be the first step for BAT. The phase purple oceans means to stay in the combination of both red oceans and blue oceans. Hence, this strategy enables the play safe method and allows BAT to maintain its brisk loyal customers, at the same time generating new extra customers through the product innovation. According to Dr Joe Leung, the first scholars that propose the purple ocean strategy, there are total 5Cs needed to be master before an go-ahead could position itself in the purple oceans and the 5Cs are namely as cost, cash, customer, competence and counterpart ( endangerment Making, 2012).Only when BAT able to mastered the 5Cs and poises themselves in the purple oceans, then only the company could explore toward the blue ocean. For BAT, the blue ocean could be established through product innovation. Since the company has their own research centre which is located at Southampton UK (BAT, 2012), therefore BAT could make use of it to develop their new products. For instance, create cigarettes that bring harmless to our health by replacing those harmful ingredients inside the cigarette. Once cigarette is harmless, it is not only creating the new market for BAT, but also changing peoples perception toward smoking. Furthermore, the government no longer got the reason to resist cigarette.Besides than using the oceans strategy, horizontal integration could be an alternative strategy recommended to BAT in order to improve the companys business strategy. The horizontal integration is a strategy that allows the company to increase its market share in the tobacco industry through merging or fetching over the similar companies (Biz Dharma, 2012). Since BAT is having a strong financial position, therefore the company may utilize this advantage in order to merge with those weaker companies. By applying this strategy, BAT able to grow its market share rapidly and what most important is it could reduce the number of competitors for BAT and switch them to become partners. 6.References British American Tobacco Malaysia, About Us Who We Are, 10th April 2012 Fortune Making, Purple Ocean Strategy, 2012 British American Tobacco, Research and Development, 2012 British American Tobacco (Malaysia), Our Strategy, 2012 British American Tobacco (Malaysia) Berhad, 2011, Reports and Financial Statements, viewed 20th June 2012, . British American Tobacco (Malaysia) Berhad, 2010, Reports and Financial Statements, viewed 20th June 2012, . British American Tobacco (Malaysia) Berhad, 2011, viewed 20th June 2012, British American Tobacco (Malaysia), Our Strategy, 2012 British American Tobacco and Cigarettes Smuggling in China, Keys to the Future, 2006 http//www. plosmedicine. org/article/inf o%3Adoi%2F10. 1371%2Fjournal. pmed. 0030228 British American Tobacco Malaysia Annual Report, Government Regulatory, 2011 http//www. batmalaysia. com/group/sites/bat_7ryj8n. nsf/vwPagesWebLive/DO7SUKSJ/$FILE/medMD8SFEPS. pdf? openelement British American Tobacco Malaysia, Illegal trade in Malaysia, 2011 http//www. batmalaysia. com/group/sites/BAT_7RYJ8N. nsf/vwPagesWebLiveO8PBFUP? opendocument&SKN=1Earthwatch Institute Case Studies, integrating biodiversity into business management and operations, British American Tobacco Biodiversity Partnership, 2010 http//teebforbusiness. earthmind. net/files/Earthwatch_Case_Studies-HSBC_SHELL_-American_Tobacco. pdf Fortune Making, Purple Ocean Strategy, 2012 British American Tobacco, Research and Development, 2012 Biz Dharma, Horizontal Integration, 2012 http//bizdharma. com/blog/what-is-vertical-and-horizontal-integration/ 7. Appendixes Appendix 1 Organization Structure of BAT (M) B. O. D Appendix 2 Corporate Information of BAT (M)