COURSE NAME: CONTEMPORARTY DEVELOPMENT IN BUSINESS MANAGEMENT
COMPANY: WEST INDIAN TOBACCO COMPANY LIMITED
STUDENT ID: 07935721
West Indian Tobacco Trinidad Company Limited (W.I.T.C.O.) was established on September 23rd 1904 by Mr. John Phillips, entrepreneur and founder of the tobacco business in Trinidad and Tobago. WITCO is a 50.13% subsidiary of British American Tobacco plc which is incorporated in the UK. In 1970 WITCO became a public company with 20% of its shares owned by local investors. In 1960 Demerara Tobacco Co. Ltd became a public entity but has since transferred its shares to WITCO in 1997.
WITCO’s factory which is located east of Trinidad is just about eight miles from Port of Spain the capital of Trinidad. The company employs just over 200 persons and operates with a functional type structure. The brands that are manufactured by the WITCO are: Mt D’or, Du Maurier, Benson and Hedges, Hollywood, Broadway, Bristol, Embassy, Tacoma, Rothmans, Morello , Pall Mall,Broadway and Dunhill with Du Maurier maintaining its position as the leading brand and continuing to perform well given the 2009 environment.
WITCO operates both locally and regionally in a monopolistic type of market where they enjoy 99%of the market share. Their marketing strategy is to retain their customers through their brand loyalty and win new customers from competing brands using those brands as the flagship.
Over the years the company has managed its resources successfully and has enjoyed significant increases in both share price and profits after tax despite the economic meltdown that the world has been experiencing. For the past five (5) years profit after tax has increased from $116m in 2005 to $258m in 2009 with its share price increasing from $23.02 per share in 2005 to $32.39 in 2009 respectively. WITCO’s commitment to the principles of Corporate Responsibility throughout their business is evident by being a reliable and dependable tax collector for the Government and is reflected in their business principle of Mutual Benefit and has been evidenced over the last five years in $1 billion in Exercise Taxes being leveled Tobacco Products.
In 2009 the company recorded a Turnover of 891.1 million which was a 12% increase over 2008 this was due to the increase sales performance which showed an increase of 19% when compared to the previous year. There was also an increase in total dividend payout of 23% increase for 2009 when compared to 2008.
The Government of Trinidad and Tobago has since passed The Tobacco Control Act No. 15 of 2009 in Parliament in December 2009 and this was introduced on 17th February 2010, this no doubt will have a negative impact on their overall sales performance in the local market
Since WITCO is very committed to Corporate Social Responsibility they continue to sponsor the WITCO Steel Orchestra which they have done for the past forty-five (45) years and recently in 2009 through their Corporate Affairs Programme - Thinking and Going Green they have planted 9,000 trees in both the Aripo and Arima areas. The company also continues with their waste segregation and recycling as part of their carbon reduction programme.
1.1 Background of West Indies Tobacco Company Limited (Trinidad) (WITCO)
West Indian Tobacco Company Limited (Trinidad) is a subsidiary of British American Tobacco (Investment) Limited. WITCO was established on 23rd September 1904 by Mr. John Plillips and is manufacturing and distributing 14 major international brands. Today, after over 100 years it represents 99% market share as a wholesale and retail distributor.
1.2Who Does WITCO Service.
WITCO services the Territory of Trinidad and Tobago as well some major Caricom Countries through a network of Sales Personnel, and Wholesalers. Their products can be found in the following distribution sectors: Pharmacies, Supermarkets, Groceries,...