E-Cigarette Essay

1181 Words Sep 28th, 2015 5 Pages
BA 3103-015
Critical Analysis Paper: 1

E-CIGARETTE

Big tobacco companies are betting on e-cigarettes. Why are tobacco companies investing in a product that will directly compete with their most profitable product, cigarettes? With the use of these analytical frameworks it will help us to better understand this situation.
PEST
PEST Analysis of Global Trends – 2011-2016 Political * Increased emphasis in healthcare | Economic * Recovering/Growing | Social * Health conscientiousness | Technological * Battery life advances * Material utilization * Portability |

Beginning with the PEST Analysis we can get a macro perspective on the trends. There has been a global
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Materials are readily available and due to competition suppliers don’t have much the control in the market. Although one problem that could arise is the intellectual property rights that it takes make these devices. Threat of entry is also low in this industry due to the high initial cost of entering and the amount of competition. Even with growth projected, the market is now saturated with big tobacco companies competing against each other. These companies have very deep pockets that could potentially out-market and out-price the competition. It’s no longer a level playing field for anyone trying to enter the market. The compliments in this industry are medium due to the almost unlimited flavors companies are able to produce and have a competitive advantage on the product.
Industry rivalry is high in this market. There are many competitors with stores offering a large array of different brands to customers. According to statistics Njoy has 32% market share, Vapor (Krave) 16%, Metro 6%, Blu only has 2% while the rest of the market has 41% share with numerous smaller companies competing. Same with buyer power, due to the competition and low switching costs the threat is also high. The highest threat to this industry would the rather large amount of substitutes to this product. Smoking can be done in so many ways with so many instruments including thank

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