Imperial Tobacco Productivity

Table of contents

Internal Memo

Overview of growth...........................................................................2

Overview of development...................................................................4

Analysis of growth and development....................................................5

Business Plan

Mission..........................................................................................6

Overview of key objectives............................................................. 6

The market environment................................................................... 8

Strategy......................................................................................10

Financial forecasts.........................................................................12

Activity.........................................................................................14

People........................................................................................15

References..................................................................................16

MEMORANDUM

Date: JULY 6, 2012

Subject: Imperial Tobacco productivity

To: Alison Cooper From: ABC Consultancy

Aim

The objective of this memo is to provide a realistic business plan for the dynamic growth and development of imperial Tobacco, taking the business enterprise to its future success.

Executive Summary

Imperial Tobacco group, the fourth largest tobacco company in the world was formed in 1901 with the merger of 13 other British tobacco companies. The multimillion dollar enterprise specializes in the production selling and logistics of tobacco and tobacco related products. The high rolling brands across the world are Davidoff, horizon (Australia), west, Gaulosies, Blondes, Drum and Rizla (world's best rolling paper). Imperial Tobacco is also the largest producer of fine quality cigars in the world. With revenue of £ 29,223 million (2011), Imperial tobacco has a strong market position to have healthy competition with its rivals around the globe. It is a public Limited company which has its headquarters in Bristol, United Kingdom. The group is listed in the London stock exchange, (LSE: IMT).

Overview of Growth

Since inception in 1901, the company's performance has been steady and significant although there were minimal setbacks. Today, Imperial Tobacco's empire spreads across 160 countries with 51 factories and 40k employees. After Philip Morris international, British American Tobacco and Japan tobacco, imperial tobacco is the largest company in terms of cigarette manufacturing.

Its expansion has been based on international growth since 1996. A brief look in to the history shows that the company has strived to be in the competition by acquiring companies like Reemtsma Cigarettenfabriken GmbH of Germany (2003), Altadis (2008).These major acquisitions have brought the company to the 4th in ranks in the total tobacco market.

The company follows an aggressive form of expansion strategy. It has marked its foot prints in mature markets like United Kingdom, Western Europe, USA, and Australia. Advances have been made in emerging markets including Asia, Middle East and Africa. The main growth drivers are its consumer centric approach and portfolios. Its major share of revenue comes from the home market, United Kingdom. The geographical breakdowns in terms of revenue are as follows, United Kingdom 26.7%, Germany 16%, and rest of Europe 19.4%, and USA 3.6%, rest of the world 34.4%.

Its recent acquisition of Altadis for a whopping $18.33 billion would also mean that imperial Tobacco would leap frog British American tobacco and Japan tobacco to become Europe's second largest player.

Overview of Development

During 1981, there was a major setback for the group which led to the decline in the market for tobacco products. They had also followed a centralized form of management which in turn led to the closing down of 3 factories mainly in Glasgow, New castle and player's cigarette factory in Sterling. As a part of technological and productivity advances the company set a 35 million pound program to re-equip factories with a faster and less labor intensive machinery.

Later in 1986 with the effectiveness in operations 3 new regions for distribution was in place mainly in Bristol, Nottingham and Glasgow. This major breakthrough gave the company inspiration to perform efficiently and lead them to a brighter future.

Imperial Tobacco group plc was listed on the London Stock Exchange in 1996. Later the group acquired the Australian and New Zealand markets in major portfolios like quality cigarettes; fine cut tobacco, rolling paper brands etc. Today, horizon is the bestselling brand in Australia. The company strongly confirms that its growth drivers play a major role in the success. Portfolio management, innovation, pricing, distribution and promotional strategy are the major growth drivers.

Major accomplishments during the past years include:

- Being the leader in United Kingdom cigarette market, further strengthening its position being the largest manufacturer of tobacco products.

- Reaping the benefits of continued investments in portfolios internationally.

- Generating continuous efficiency through target markets and responsibility leading to ongoing cost control.

- Achieving growths in the markets of Sub-Saharan Africa and indo-China.

- Brands like Horizon, Escort and peter Stuyvesant have played a major role in improving the market share in Australia to 17.7%.