Enterprise systems development strategy BRITISH AMERICAN TOBACCO
British American Tobacco (BAT) is a leading tobacco company globally producing 200 brands of cigarettes. The company global drive brands are Dunhill, Pall Mall, Kent, and Lucky Strike, and these brands provide 35% of the company revenue. Other international brands manufactured by the company are Benson & Hedges, Rothmans, Viceroy, Vogue, Kool, Gold leaf, John player, Express 555 etc. British American Tobacco operates under tobacco industry and is the second largest tobacco company in the world with market capitalization of $98.07 billion. The overall market capitalization of tobacco industry is $356 billion and within the global tobacco industry, British American enjoys 27.55% of the market share. However, Philip Morris International Inc. is an industry leader with the market capitalization reaching approximately $151.2 billion.
British American Tobacco operates in 180 markets with more than 708 billion cigarettes sold annually. The vision of the company is to achieve leadership role within the global tobacco industry. At the end of the 2011 fiscal year, British American Tobacco recorded the revenue of £15.4 billion and the company turnover was £46 billion. The company business strategy is its dedication to increase the funding on research and development (R & D) as well as investing in innovation to produce high quality and less toxic products for customers. The company differentiates itself within the industry by focusing on the innovation, which contributes to the revenue growth and building shareholder value.
British American Tobacco has been operating for more than 100 years. The company was formed in 1902 forming a joint venture with the UK's Imperial Tobacco Company. However, since the last five decades, British American Tobacco has focused on the acquisition of other companies as well as expanding internationally. By 1970, British American Tobacco engaged in the manufacturing of Tobacco in 140 factories across 50 countries. In 1976, the company underwent re-organization process, and within two years, the company became the third largest company in the UK and largest tobacco company globally. Through continuous acquisition, the company has been able to acquire several important brands such as Kent in 1970s. However, in 1990, the changing of the communist economy to free market economy provided added opportunities for British America Tobacco.
"In the 1990s, economic liberalization and the break-up of state monopolies open up new trading opportunities in Central and Eastern Europe and the Far East. British American Tobacco acquires Hungary's Pecsi Dohanygyar in 1992. Acquisitions and joint ventures follow rapidly in Ukraine, Uzbekistan, the Czech Republic, Russia, Romania and Poland." (British American Tobacco 2011 P. 5).
The years 2000s opened series of opportunities for the company. In 2009, the company concluded a deal of U.S.$580 million acquisition of Bentoel. More importantly, the company has just concluded $452 million acquisition of Protabaco based in Colombia. (British American Tobacco 2011).
Continuous success of British American Tobacco has been attributed to the significant investment in the innovation, which the company has embarked on in the last few years making the company to be able to differentiate itself in the industry. The company implements the latest technology for the manufacturing of product and packaging making the company to enjoy speed in the market. The company also employs latest technology in the exploration of low toxic cigarette, which is less harmful to consumer. Additionally, the company has also implemented Enterprises Resources Planning (ERP) to reduce maintenance costs. Within the tobacco industry, firms implement ERP to integrate data to achieve efficiency.
Use of ERP and associated IT within the Tobacco industry
Rapid changes in the Information Communication Technology (ICT) have created both benefits and threats to organizations. Digital information system has created a new paradigm where business leaders use digital knowledge to deliver value to customers as well as achieving business performances. Tight competition within the tobacco industry and vision to achieve leadership role within the industry have forced tobacco industry to integrate Enterprises Resources Planning (ERP) to achieve performances. (Zain, 2008). More importantly, many leading firms within the industry have profoundly incorporated ERP system in the business model to facilitate best business practice, cost reduction, rapid decision-making, and better management practice. The implementation of ERP system has been identified as an effective tool to facilitate both strategic and operation benefits in competitive market environment. (Huang & Hsu 2011). Unfortunately, many organizations are yet to derive the benefits associated with ERP due to the huge costs of implementation.
Enterprises Resources Planning is the strategy that firms employ to provide easy working environment and...
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