Measuring market orientation of Muscle Pharm Corp. (MSLP:US) British American Tobacco South Africa | Page 4

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

1.

Introduction – Company Overview

British American Tobacco South Africa (BATSA) is an integrated subsidiary of the global British
American Tobacco Group (BAT) of companies which is the third largest tobacco company by market
share (14%) and which is operating in more than 175 countries globally (BAT, 2014). BATSA produces
over 26 billion cigarettes annually and is the dominant tobacco manufacturer within the country coming
to a market share of just above of 91% of the legal cigarette industry. Furthermore, the company offers
other tobacco products such as cigars, roll-your-own cigarettes and pipe tobacco. BATSA has a long
history of non organic growth driven by mergers and acquisitions - with the merger of British American
Tobacco and Rothmans International in 1999, BATSA automatically emerged to the largest tobacco
manufacturer within South Africa. Since 2010, BATSA is managed by Brian Finch, it currently has over
2’500 employees within South Africa (SA) and offers around 22 brands while among the most popular
include are Dunhill, Kent, Peter Stuyvesant and Rothmans. BATSA classifies those “cash cows and
stars” - as Global Drive Brands Products (GDB’s) (BATSA, 2014). From a revenue stream perspective;
31% is premium, 35% low and 33% within the mid segment. BAT is listed both in London Stock
Exchange (LSE) and in Johannesburg Securities Stock Exchange (JSE) having a market capitalization
of over £65bn by end of July 2014; achieving a turnover of more than £15.2bn and a net profit of
£4.199bn in 2013 (Vontobel, 2013).