Analysis of British American Tobacco Malaysia in Achieving the Company’s Goals

To: Ms. Lim Hooi Hoon

From: Chan Kian Onn, Tan Chyn Fei, Tan Yong Sheng

Subject: Analysis of British American Tobacco Malaysia in achieving the company’s goals.

Introduction

This report provides an analysis and evaluation on how the British American Tobacco Malaysia Company to achieve their company’s goal by using the competitive strategy. However, the critical success factor is the main success factor and important parts of the company to achieve their goal. The critical success factor is the things that the company must follow and practices, otherwise, it will lead to a failure in achieving the goals and strategy. From the report, we will investigate out what is the objective based on the perspective in the Balance Scorecard and the key performance indicator (KPI) of the company should apply so that it can measure the company performance and achieve the company’s goal. British American Tobacco Malaysia has a shared history in Malaysia more than 100 years. The most well-known product of the company is Dunhill. It is a market leader in Malaysia and one of the top 30 companies in Bursa Malaysia. In order to fulfill the customer needs, it always provides a high quality products designed. Moreover, British American Tobacco Group is a world’s second largest tobacco group in the world. There have around 55,000 employees and cigarette factories in the world.

Strategy’s goal and competitive strategy

British American Tobacco Malaysia is currently focusing on their premium product which is Dunhill, one of the cigarette brands. From their annual report published in Bursa Malaysia, we found out that the company’s goal is to be the world’s best at satisfying the consumer moments in tobacco and beyond. They believe by being a world’s best satisfying consumer moments, they can become the market leader in tobacco industry. Consumer is at the core of everything they done and their success is depending on figure out their changing behaviors, concerns and needs. The competitive strategy used by the company is the differentiation strategy which is under the area of taste, their strong company and product reputation and also brings less harmful effects to the public. Those strategy used will make the company more competitive advantages to their direct competitor. As we know that, cigarette is actually like a drug that will make people addicted and have to keep on using so the company had always make improvement to the cigarette so that it will causes less harmful to their customer’s health.

Critical Success Factors

In the annual report, we investigate out there are few critical success factors to make the company can grow bigger and faster. In the same time, achieve the company’s goals and competitive strategy. Firstly, it is critical for the company to maintain the same taste and less harmful effects to satisfy the customers. This is also one of the reasons that why the customer prefer Dunhill compare to others brand is because the taste never changed and always the best and smooth taste for them. This also means that the company is more focusing on maintaining the quality products and bringing a greater value to their customer. They always ensure that their company has the enough resources, skills and ambition to develop range or products in helping to reduce the public health burden of smoking. In the past 5 years, the company has invested around US$ 1 Billion in doing the research about the improvement of products and supporting the growth of the products.

Secondly, it is critical to for the company to working together with all farmer around the world to ensure quality and flexible supple chain. By doing this way, the company can directly get the quality and cheaper material in doing cigarette and enhance the livelihood of the farmer. It is actually a win-win situation as the company can reduce their cost and the farmer in rural place can get more income. One of the practices done is tackling rural poverty in Sri Lanka. This program is designed to help the families become more independent and knowledgeable while also maximizing the use of the land. In the past 10 years, this program assists more than 75,000 people from 19,000 families from the rural place. They also get the reliance of the farmer so that those farmers will sign a long term contract with them.

Thirdly, it is critical to retaining the core management team and talented employees in their company and also developing a winning organization. This is because the employee is the biggest assets for the company and also one of the main factors to grow rapidly. If a company able to remains the talent and core employees in their company, it is actually one of the competitive advantage to the company. As we know that, people sometimes do not stay in jobs because of the pay and opportunities but also the culture in the company. A supportive and harmony culture can make the employees to stay and work with the company. Moreover, the company also focused on enhancing the knowledge and skills of the employees. They have concentrated on giving their employees get involved into a range of quality training program such as functional training, management training and leadership training. By doing this way, it can strengthen the performance and the ability of the employees.

Lastly, it is critical to have an efficiency operation in the business to improve productivity. Efficiency operation is very important as it can help the company to generate more income and also cut the irrelevant cost. The company has turned their business from multinational business operating in over 180 markets into an integrated global enterprise which can have better advantages. By doing this way, the company found out it has reduced their overheads and indirect cost around USD 239 million and expected to be more in the future. Another that, the company also provides competitive benefits to their workers to motivate them such as medical, parking, meals and etc. For example, a male employee who has worked 3 years and above in the company, he can enjoy an extended benefits of up to 10 days of paternity leave and RM 2,000 can be claimed which is not provided by most of the company in Malaysia.

Objectives

Learning and growth perspective

One of the objectives is mentoring programs and new online learning system should be achieved in order to retain the core management team and talented employees in their company and thus developing a winning organization since employees were considered as an important resources to lead the company into success way. Throughout mentoring programs, every senior manager should be paired with a mentoring junior manager to develop young generation in way of leadership, creativity and innovative. It is to ensure that company would not face the problem of shortage of talents in future time and retain competitive advantages by having talent employees to work together. New online learning system provides their employees with access to a suite of e-learning applications and the company also has a clearer view of the learning and capability gaps in their operations. Another objective is diverse workforce. In order to retain talents, the company should show their efforts to attract talented individuals with different backgrounds and make sure that the culture of company supports them. For example, the company will try to understand what’s their customer needs in order to retain them. In the same way, the company must understand what to do in order to attract, retain and develop a diverse talent pool.