Measuring market orientation of Muscle Pharm Corp. (MSLP:US) British American Tobacco South Africa | 页面 2

British American Tobacco South Africa: Evaluating the role and substance of its strategy in achieving sustainable competitive advantage

I

Executive Summary

During past decades, much attention has been focused on how firms would define new strategies for
viable advantages. In this assignment on strategy, the substance and role of British American Tobacco
South Africa (BATSA) will be critically examined. BATSA created a durable competitive advantage
within the global tobacco group by effectively controlling the majority of the supply chain (sourcing,
production and distribution) within South Africa. Not only is it one of the company’s largest profit center,
with a privileged domestic market stake of more than 85%, it is also confirms an example of successful
cultural and structural advancement which creates the emergence of a world class manufacturing
operation. British American tobacco group is running a transnational strategy which means to build a
strong international reputation for high quality tobacco brands to meet the consumer’s needs that vary
from location to location and aims to achieve location economies of scale and exploit experience curve
effects (BAT, 2013). To make the vision become true, BATSA strategy is driven by marketing its global
drive brands (GDB’s) effectively and consists of four pillars which include growth, productivity,
responsibility and winning firm. BATSA has relied on this strategy for approximately nine years and has
achieved great success due to its proven track record. The management of BATSA demonstrated the
ability to deliver growth despite a challenging external environment and showed of transforming the
gigantic South African Heidelberg cigarette facility from a poor performing operation based on manual
labour to a highly automated and high performing ultramodern factory. The way strategic management
has changed over time within BATSA – Strategic investment decisions required more stakeholder
interests as a way to generate sustainable profits due to the resulting pressure of the external
environment in the form of regulation. In addition, from a strategic perspective, BATSA is addressing
potential threats at earliest stage such as illicit trade and trafficked products.. While the tobacco
business still generates a large portion of revenues for the company and government, well-funded
institutions’ effort to ban smoking in public places and increase awareness of its health risks are growing
exponentially which might affect BATSA profits in South Africa and put additional pressure on BATSA to
sustain profits by creating new profitable business fields.