BUS 101 PROJECT
SUBMITTED TO : NOOR-E-HASNIN
SECTION: 06 SUBMITTED BY : 1. RUSHMIAN ANNOY WADUD (1410221643) 2. SERAJUS SALEHIN (1511397630) 3. HASAN MUSTAFA TARIQUE (1510270630) 4. FARHAN HASAN (1510199630) 5. MD. ARIFUL ISLAM (1230423026)

Acknowledgment

We owe our profound gratitude to our course instructor Ms. Noor-E-Hasnin (NEH), who took keen interest on our project work and guided us all along, till the completion of our project work by providing all the necessary information for developing a complete analytical report.
We thank her for her sincere guidance, supervision and encouragement throughout the course.

Table of Contents

Introduction _______________________________________________________________ 6
Literature Review
Company Background _______________________________________________________ 7
Company Mission and Vision __________________________________________________ 8
Organization Chart ___________________________________________________________ 9
How the Business was formed
Articles and By Laws of Corporation ____________________________________________ 10_
Advantages and Disadvantages of Business _______________________________________ 12

Detains of number and types of product __________________________________________ 15
Industry Analysis
Major Competitors __________________________________________________________ 17
SWOT Analysis ____________________________________________________________ 19
Conclusion ________________________________________________________________ 21
References _________________________________________________________________21

Executive Summary

Bangladesh is Asia Pacific’s most promising opportunities for Tobacco cultivation due to vast cultivable lands and suitable weather.
BAT symbolizes a name - a state of mind. From the beginning, it has today burgeoned into one of the top line conglomerates in Bangladesh
There are currently two leading Tobacco corporations which are British American Tobacco(BAT) and Philip Morris International(PMI). Also there are few more local companies like Akij group, Abul khair & Tobacco, Husna Tobacco etc.
At the end of 2014, BAT had annual sales of 38.8bn USD and a market share of 44.6%
BAT symbolizes the total leadership and dominance in the tobacco industry. But when it comes to market competition, Philip Morris is the closest.
BAT, the cornerstone company, is holding the strong leadership position in the tobacco industry of Bangladesh since 1947.

Introduction

British American Tobacco Bangladesh (BATB) is one of the largest multinational companies in the country and has been operating for over 100 years. They are part of the British American Tobacco Group, the world’s most international tobacco group with brands sold in more than 180 markets.

British American Tobacco (BAT) was formed in 1902 as a joint venture between the UK’s Imperial Tobacco and the American Tobacco Company. It was established to trade outside both the UK and the USA, and grew from its roots in dozens of countries across Africa, Asia, Latin America and Continental Europe.

Literature Review

Company Background :
British American Tobacco (BAT) was founded in Bangladesh on 1910. It had established its first depot at Armanitola in Dhaka. After partition in 1947, it was established in 1949. After the independence of Bangladesh from Pakistan, it was renamed as Bangladesh Tobacco Company (BTC) in 1972. But in 1998, it is again renamed as British American Tobacco Bangladesh (BATB).
Some of its recent milestones are - * 1998 Demerger of financial services and British American Tobacco p.l.c. listed on the London Stock Exchange as a stand-alone business; * 1999 Global merger with Rothmans International; * 2000 Imperial Tobacco Canada became a subsidiary; * 2001 Major investments announced in South Korea, Turkey, Vietnam, Nigeria and Egypt; * 2003 Successfully bid for Italy’s state tobacco company, ETI; * 2004 The US businesses of our subsidiary Brown & Williamson combined with R.J. Reynolds to form Reynolds American, in which we have a 42 per cent share; * 2005 Share price rose above £10 for the first time; * 2006 Expansion of test-markets for smokeless Swedish-style snus in Sweden and South Africa and a new Research and Development facility for snus products. * 2008 We acquire Tekel (Turkey) and ST (Scandinavia), and complete a secondary listing on the stock exchange in Johannesburg (JSE Limited) . 2009 Acquisition of Bentoel in Indonesia

Vision of the company :
As a responsible Company, British American Tobacco Bangladesh believes that the business has a key role to play in helping society to achieve the necessary sustainable balance of economic growth, environmental protection and social progress. Its vision is to extend their leadership through world-class performance.
Mission of the company :
BATB has a few sole missions and of them, the main ones are growing their share on total tobacco company and dominating key identified segments.

Organization chart

How the Business was Formed

Articles and By-Laws of Corporation :
Share capital : All of the Company’s ordinary shares are fully paid and, accordingly, no further contribution of capital may be required by the Company from the holders of such shares.
Objects and purposes : The Company is incorporated under the name of British American Tobacco p.l.c. and is registered in England and Wales under registered number 3407696. Under the Companies Act 2006, the Company’s objects are unrestricted.

Directors : The Company’s Articles of Association provide for a Board of Directors, consisting (unless otherwise determined by ordinary resolution of the shareholders) of not fewer than five Directors, not subject to any maximum, who shall manage the business of the Company. irectors: meetings and voting.

The quorum for meetings of Directors is two Directors. The Directors may delegate any of their powers which are conferred upon them under the Articles of Association to such person or committee as they consider appropriate. The Company may by ordinary resolution suspend or relax to any extent, either generally or in respect of any particular matter, any provision of the Articles prohibiting a Director from voting at a meeting of the Directors or of a committee of the Directors.

Without prejudice to their general powers, the Directors may exercise all the powers of the Company to borrow money and to mortgage or charge its undertaking, property, assets (present and future) and uncalled capital or any part thereof, and (subject to the provisions of the Articles of Association) to issue debentures, debenture stock and other securities whether outright or as security for any debt, liability or obligation of the Company or of any third party.

Dividend rights : Holders of the Company’s ordinary shares may, by ordinary resolution, declare dividends but may not declare dividends in excess of the amount recommended by the Directors. The Directors may also pay interim dividends if it appears that such dividends are justified by the profits available for distribution. No dividend shall be paid otherwise than out of profits available as specified under the provisions of the Companies Act. Any dividend which has been unclaimed for 12 years from the date when it became due for payment shall, if the Directors so resolve, be forfeited and shall cease to be owed by the Company.

Voting rights : Voting at any general meeting of shareholders is by a show of hands unless a poll is demanded. On a show of hands, every shareholder who is present in person at a general meeting has one vote regardless of the number of shares held by the shareholder.

Disclosure of interests in the Company’s shares : There are no provisions in the Articles of Association whereby persons acquiring, holding or disposing of a certain percentage of the Company’s shares are required to make disclosure of their ownership percentage, although there are such requirements under statute and regulation.

General meetings and notices : An Annual General Meeting and all other general meetings of the Company must be called by at least 21 clear days’ written notice. However, the Companies Act allows for this period of notice for meetings other than Annual General Meetings to be reduced to 14 clear days’ notice provided that two conditions are met: (1) a company must allow shareholders to make proxy appointments via a website (such as that hosted by its share registrars); and (2) shareholders must pass a special resolution at the Annual General Meeting every year approving that shortening of the notice period to 14 days.

Variation of rights : If the capital of the Company is divided into different classes of shares, the rights attached to any class of shares may only be varied, either in such a manner as provided by those rights or in the absence of any provision, with the consent in writing of three-quarters in nominal value of the issued shares of that class or with the sanction of a special resolution passed at a separate meeting of holders of such shares. At any separate meeting, the necessary quorum is two persons together holding or representing by proxy at least one-third in nominal amount of the issued shares of the class (but at an adjourned meeting shall be any one person holding shares of the class or his proxy).

How the Business was formed

Advantages of Corporation : Let's explore some of the advantages of corporations:
1. Limited liability. A major advantage of corporations is the limited liability of their owners. Remember, limited liability means that the owners of a business are responsible for its losses only up to the amount they invest in it.
2. Ability to raise more money for investment. To raise money, a corporation can sell shares of its stock to anyone who is interested. This means that millions of people can own part of major companies like IBM, Xerox, and Cisco, and smaller companies as well. If a company sells 10 million shares for $50 each, it will have $500 million available to build plants, buy materials, hire people, manufacture products, and so on. Such a large amount of money would be difficult to raise any other way. Corporations can also borrow money. They borrow from individual investors by issuing bonds, which are promises to repay the loan in the future with interest. Firms can also obtain loans from financial institutions.
3. Size. "Size" summarizes many of the advantages of some corporations. Because they can raise large amounts of money to work with, big can build modern factories or software development facilities with the latest equipment. They can hire experts or specialists in all areas of operation. They can buy other corporations in different fields to diversify their business risks. In short, a large corporation with numerous resources can take advantage of opportunities anywhere in the world. But corporations do not have to be large to enjoy the benefits of incorporating. Many doctors, lawyers, and individuals, as well as partners in a variety of businesses, have incorporated. The vast majority of corporations in the United States are small businesses.
4. Perpetual life. Because corporations are those who own them, the death of one or more owners does not terminate the corporation.
5. Ease of an ownership change. It is easy to change the owners of a corporation. All that is necessary is to sell the stock to someone else.
6. Ease of attracting talented employees. Corporations can attract skilled employees by offering such benefits as stock options (the right to purchase shares of the corporation for a fixed price).
7. Separation of ownership from management. Corporations are able to raise money from many different owners/stockholders without getting them involved in management. The owners/stockholders elect a board of directors, who hire the officers of the corporation and oversee major policy issues. The owners/stockholders thus have some say in who runs the corporation but have no control over the daily operations.
Disadvantages of Corporations:
The following are a few of the disadvantages:
1. Initial cost. Incorporation may cost thousands of dollars and require expensive lawyers and accountants. There are less expensive ways of incorporating in certain states (see the following subsection), but many people do not have the time or confidence to go through this procedure without the help of a potentially expensive lawyer.
2. Extensive paperwork. The paperwork needed to start a corporation is just the beginning. A sole proprietor or partnership may keep rather broad accounting records. A corporation, in contrast, must keep detailed financial records, the minutes of meetings, and more.
3. Double taxation. Corporate income is taxed twice. First the corporation pays tax on its income before it can distribute any, as dividends, to stockholders. Then the stockholders pay income tax on the dividends they receive. States often tax corporations more heavily than other enterprises, and some special taxes apply only to corporations.
4. Two tax returns. An individual who incorporates must file both a corporate tax return and an individual tax return. Depending on the size of the corporation, a corporate return can be quite complex and require the assistance of a certified public accountant (CPA)
5. Size. Size may be one advantage of corporations, but it can be a disadvantage as well. Large corporations sometimes become too inflexible and tied down in red tape to respond quickly to market changes, and their profitability can suffer.
6. Difficulty of termination. Once a corporation has started, it's relatively hard to end.
7. Possible conflict with stockholders and board of directors. Conflict may brew if the stockholders elect a board of directors who disagree with management. Since the board of directors chooses the company's officers, entrepreneurs serving as managers can find themselves forced out of the very company they founded. This happened to Tom Freston, one of the founders of MTV, and Steve Jobs, a founder of Apple Computer (Jobs later returned to the company).

Details of the number and types of products

BAT manufactures and markets high quality and well established international cigarette brands. BAT's current brands are Benson & Hedges, John Player Gold Leaf, Pall Mall, Capstan, Star, Pilot, Bristol, Derby and Hollywood which are positioned in four segments in the Bangladesh cigarette market. 1. Benson & Hedges : Since its launch in 1997, Benson & Hedges has dominated the Premium segment and set the standards in a very competitive market. And in 2012, the house of Benson & Hedges launched a new and unique variant - Benson & Hedges Switch. Keeping innovation at its core, Benson & Hedges Switch became the first ever capsule cigarette to be launched in Bangladesh. 2. John Player Gold Leaf, Pall Mall and Capstan :

John Player Gold Leaf, Pall Mall and Capstan are positioned in the Aspirational Premium segment. Launched in 1980, John Player Gold Leaf is one of the highest selling brands of our company, enjoying large market share in the Aspirational Premium segment. Pall Mall was the Group’s first Global Drive Brand to be launched in Bangladesh in 2006. 3. Star :

Star and Star Next are positioned in the VFM segment. Star was launched in 1964 and Star Next was launched in 2012. The brand has absolute leadership in the segment with a robust performance. 4. Pilot, Hollywood and Derby :

BAT has three brands in Low Segment – Derby, Pilot & Hollywood. Derby was launched in 2013 and is the biggest brand among the three, offering taste differentiation to the consumers through its two variants. On the other hand, Pilot offers true and authentic smoke to the consumers. Pilot was launched in 2009 and at present it is the fastest growing brand in the industry. The third brand is Hollywood which was launched in 2011.

Industry Analysis

Main Competitors :
BAT is one of the largest
• Other companies offering the same products as BAT (now).
• Other companies offering similar products as BAT (now).
• Companies that could offer the same or similar products as BAT in the future.
• Companies that could remove the need for BAT’s products.
While the focus for the BAT (Globe House) Industry & Competition section is on cross-functional issues and cross-regional competitors, it also monitors other companies with a business scope, either current or intended, that extend across BAT’s regional boundaries.
They do not monitor governments and / or regulators a competitors, rather consider them as their partners in developing (and policing) a sensible regulatory environment for the tobacco industry.
BAT’s key international competitors are:
• Philip Morris International
• Japan Tobacco
• Imperial Tobacco
In addition, KT&G, Korea and CNTC, China maintain serious international ambitions.
The competition in the cigarette market is based on the price segment. There are individual competitive brands in each price segment. The following chart shows the competition of cigarette industries in Bangladesh –

Industry Analysis

Segments | Brand | Company | Premium | B&H, switch,State Express 555, Mal | BATB DTI | Medium | JPGL, Pall-mall, Capstan Filter KingsThames | BATBDTI | Low | Star Filter King, Scissors Filter King,Navy, Summon Filter KingSenor GoldMarine | BATBDTIAlpha TobaccoAbul Khayer Tobacco | Very Low | Pilot, Bristol, HollywoodFive Star, Rally, Sheikh, MarisWilsonGold hill | BATBDTIAzzizuddin Tobacco |

Industry Analysis

SWOT Analysis :
SWOT analysis is done to find out the factors important to the operation of a business in the environment, both internal and external. The internal factors help to find out the strength and weakness; the threats and opportunities can be comprehended by scanning the external environment. BATB also has its own strength, weakness, opportunity and threat. The SWOT analysis of BATB is given below:
■ Strength:
1. Because of high regulations, high cost and high entry barriers, new entrants are discouraged, which is good for the current and already established market players.
2. As they are not allowed to go for public promotion, the tobacco companies can use their resources for other purposes. Like BAT is investing for and increasing their filed force.
■ Weakness:
1. Dealing with a product which is sensitive in may issues.
2. Can not promote their products using public media vehicle.
3. A high volume but low value industry
■ Opportunity:
In Bangladesh, tobacco market is pretty strong. Among the sale of all tobacco products, 68% is Biri and the rest 32% is cigarette. But with the up gradation of purchasing power and good economic condition, high rate of migration from Biri to cigarette is also expected. Even now; the migration rate is good enough to sustain the cigarette industry. Total no even if reduce, but the migration will make it sustainable. The cigarette market depends not on increasing number of customers, but on switching to cigarette brands

■ Threat:
1. Increasing amount of awareness among the consumers about the health hazards caused by smoking.
2. Increasing number of regulations and laws imposed by the government about smoking and selling cigarettes.

Conclusion and Bibliography

Conclusion :
This ends the managerial analysis of British American Tobacco Bangladesh (BATB). We sincerely apologize if there are any mistakes as sufficient information was not possible to be extracted from the company.

Bibliography :
Contemporary Business, 14th Edition, Writer: David L. Kurtz. http://en.wikipedia.org/wiki/British_American_Tobacco http://www.batbangladesh.com/group/sites/BAT_85DJTR.nsf/vwPagesWebLive/DO87ELTK?opendocument http://www.batbangladesh.com/group/sites/BAT_85DJTR.nsf/vwPagesWebLive/DO87EKSS?opendocument http://www.bat.com/ar/2011/corporate-governance/other-statutory-and-regulatory-information/articles-of-association/index.html
Personal Interview :
1.Hasan Mustafa Jamil
Territory Officer (Marketing)
British American Tobacco
Nator, Rajshahi , Mobile: 01711430638