British American Tobacco Malaysia

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Executive Summary

British American Tobacco Malaysia is a largest tobacco company in Malaysia. This company is under a large tobacco group which is British American Tobacco Group. It is the second largest tobacco group in the world. Back to Malaysia, it owns 60% of market share in Malaysia.

BATMalaysia producing and distributing risky product which is cigarette, it is restricted by many laws and regulation which set by the Malaysian Governments. One of the acts is Tobacco Products Control Act, 1993. Furthermore, BATMalaysia promoting a campaign which is youth prevention programs, it is to prevent youngster to have a contact with cigarette. BATMalaysia is playing an important role in Malaysian economy. It’s distributing around 3% of tax revenue for Malaysian Government which is count in billions. In social factors, cigarettes are always only allowed to sell to adults but nowadays many underage kids start smoking which is uncontrollable. BATMalaysia is not just selling cigarette, it is also telling everyone that the harmful of smoking too, but it is not effective which number of people smoking is just increasing yearly. There is a research and development on cigarette department in BATMalaysia, their job is to minimize the harmful of cigarette. The most important resources BATMalaysia depend on are tobaccos plantation, the plantation of tobacco is not harmful to the soil. On the other hand, the company is committing a high standard of environment protection like save energy.

1.0 INTRODUCTION

British American Tobacco Malaysia (BATMalaysia) is a combination of two large tobacco companies which is Rothmans of Pall Mall Berhad and Malaysian Tobacco Company Berhad which makes it become the largest tobacco company in the country. The merging was on 3rd November 1999 and it is very successful. Today, BATMalaysia owns 60% market share and ranks amongst the top 25 companies on Bursa Malaysia Securities Berhad in terms of market capitalization. This company owns quite a lot of brand of cigarettes and the famous brands are Dunhill, Kent, and Pal Mall. BATMalaysia is a company who produces, manufactures and distributes cigarette. This company is under a group which is British American Tobacco Group, the world second largest tobacco group. This group has 45 cigarette factories in 39countries, and more than 60,000 employees worldwide.

For such a large company, there must have a macro environmental forces which impact the company in terms of political, economical, social, technological, and natural factors.

2.0 POLITICAL ENVIRONMENT

British American Tobacco Malaysia is clearly producing risky product which is cigarettes and tobacco products. So there is a tobacco control legislation set by the Malaysian Government which is Tobacco Products Control Act, 1993. This act is to restrict smoking in public places, advertisement of tobacco products is prohibited, youth should not smoke, sales to age under 18s is not allowed, and every pack of cigarette needs to show a picture of harmful of cigarette. BATMalaysia using youth prevention programs to counteract the Malaysian government’s tobacco control legislation. This youth prevention program is to both promote tobacco and discourage smoking to the younger generation at the same time. The tobacco industry needs the young market, BATMalaysia used marketing strategies to target the youngsters which going deep into sports, entertainment, packaging and affordability. BATMalaysia sponsored sports event with Dunhill brand like football cup and snooker which is popular in Malaysia. In entertainment, BATMalaysia used music to promote Benson and Hedges brand.

3.0 ECONOMICAL ENVIRONMENT

A Malaysian tobacco industry is a wide ranging industry because it is included producing, manufacturing and distributing. Tobacco industry contributed 3% of GDP in Malaysia and it is represent 8% of the Malaysian Government’s total indirect tax revenue, which is about 3% of the...
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