Tobacco Asia

Volume 19, Number 4

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18 tobaccoasia / Issue 4, 2015 (September/October) Imperial Tobacco Group PLC was originally formed in 1901 as The Imperial Tobacco Com- pany (Great Britain and Ireland) Limited. Over the following decades, the company – today head- quartered in Bristol, UK – went through several expansions, mergers, demergers, and acquisitions, but also has seen rationalizations and brand diver- sifications. Staying in tune with the times, it had to deal with and adjust to sometimes dramatic changes in technology, commerce, and society, too. Until 1973, Imperial's trade was almost en- tirely limited to the UK and Ireland, but then the business gradually began to spread out around the world. Nowadays the company's diverse global market footprint spans more than 160 countries and it employs approximately 33,000 people. A Business Model and Strategy for the 21st Century Life isn't particularly easy for tobacco companies these days, especially the multinationals. Not only do they have to prevail over formidable competi- tion, but also must deal with increasingly restric- tive legislations and regulations regarding tobacco product sales pretty much everywhere they're ac- tive. Add to that the rising cost of raw materials and logistics, and shareholders will develop deep furls on their foreheads. But Imperial is successfully tackling this multi- pronged challenge by implementing an ingenious business model that creates value through a strate- gic focus on sales, cost, and cash. "Our focus on quality sustainable sales growth combined with the efficient way in which we man- age costs throughout our operations delivers high operating margins," explained Iain Watkins, group communication manager of Imperial Tobacco. This approach generates the strong cash flows that not only satisfy concerned shareholders but also are reinvested in the business. That strategy supports sustainable growth and at the same time enables sustainable returns. Sales across all of the company's brands and in all markets are developed through four main growth drivers: portfolio management, innova- tion, customer engagement, and pricing. Markets are clustered to either generate growth or returns. In growth markets, long-term share and profit Established as early as 1901 in the UK, Imperial Tobacco Group has for decades been a global force to be reckoned with, offering a string of often iconic cigarette brands and other tobacco products in its diverse portfolio. Managing a Global Empire: Imperial Tobacco Group *All images courtesy of Imperial Tobacco Group PLC Head office in Bristol, UK Mark Williamson, current chairman of the board By Thomas Schmid

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