If we analyse the revenue trends of both companies we find that Pakistan Tobacco Company experienced negative growth in its revenues in 2010, which later aced by 9.5 percent in positive territory the next year and in 2012 the growth in sales fetched 12.7 percent mark. Phillip Morris Pakistan on the other hand also witnessed a negative growth in 2010 by 0.73 percent but the growth was further negated by 5.5 percent in 2011, however the company was able to turnaround the figures for the good; clinching nearly 11 percent positive growth in 2012 (PTC 2012)(PMP 2012).
The negative growth of Pakistan Tobacco Company in 2010 was due to various micro and macro-economic factors. In the year 2010 Pakistan was facing the calamity of natural disaster in form of floods, the floods wiped out the economic growth of the country, causing the economy to grow by just 2.9 percent on average during the last three years. Otherwise, according to estimates the country could have fetched a growth rate of 6.5 percent (Saeed 2013).
The energy shortages in the country are also causing much of the economic activity to erode. The economic and political structure of the country is not only root cause of these shortages but also is pushing the situation to the worst side. The circular debt in the country is causing many multinational companies, and also local companies to consider a potential disinvestment from the country. The flight of foreign direct investment from the country is castigating the economy as well (Saeed 2013).
The above factors can reasonably attend to negative growth postulates of both companies. However in 2011, Pakistan Tobacco Company was able to revive itself because of registering a positive growth. The company managed to appease its ...
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...ous year and the sales of its Gold Leaf brand also increased by more than 10 percent, because of which Pakistan Tobacco Company commanded more than 50 percent of the market share. The management was also able to earned from non-regular activities such as renting out its vehicles to other marketing companies to generate extra returns, gains from this activity were almost Rs. 17 million; a healthy dose for its financial statements. However the surge in sales of Phillip Morris Pakistan was not because of improving factors but was sue to aggressive sales strategy adopted by the company; it resorted to deep incentive programs to dump its products in the market, a desperate attempt to revive itself, although the sales increased by almost 11 percent but its net profits potentially beaten because of increasing administrative and marketing expenses (PTC 2012)(PMP 2012).
In 2007, Harley Davidson was the world’s most profitable motorcycle company. They had just released great earnings and committed to achieve earnings per share growth of 11-17% for each of the next three years. Their CEO of 37 years, James Ziemer, knew this would be an extremely difficult task seeing Harley’s domestic market share recently top off at just under 50%. The domestic market was where Harley’s achieved the most growth over the past 20 years and with it leveling off, where was Harley going to get the 11-17% was the million dollar question.
Due to the fact that British American Tobacco is such a global business this means it operates within different tax boundaries. So this can influence revenue and if the tax is high on the cigarettes in a certain location for example the United Kingdom, this may make potential customers less likely to buy the products compared to Gibraltar where the tax is duty free. So this may be a pull factor for some potential customers here as the cost is so low so more people may smoke therefore increasing sales and profits.
Overall this research in the business and financial performance of WHSmith plc, this report figure out their performance and position is improving every year. The company is doing very well to achieve its corporate objectives and that’s what is giving them more sales in every year and hence the company is becoming more profitable. If look at the ratio analysis in the above section, can easily see that the companies most of the ratios are improving and they are getting ever stronger than before in both financial terms and as a
BHP Billiton is the most successful company throughout the world by using unchanged strategies in their business. They have a strategy to operate large, low cost, expandable, and upstream commodities by using raw materials, geography, different assets and market, which give them a superior marginal costs throughout economic and commodity cycles for several years. They put the security of their workers first and supporting them by providing various facilities (see appendix 1). Their diversification makes the easy cash flow system by reducing the exposure to any one commodity and give for more identifiable and great financial performances. To become more successful BHP have heaps of human resources or workforce which reflect their values and communities. They have aim to recruit and attract other people who make their organization successful and thrive on working in teams and going to their extra miles to give their best. Moreover, they are committed to meet the changing needs of their customers. They have world class portfolio of growth option that will make them able to plan for a short term and long term goals and continuing them to create value for their shareholders which BHP more powerful (BHP Billiton, 2014). By using these all measures BHP Billiton kept its solid position in the nine month period till the end of March 2014 with the record of production attained for four items and at 10 operations. In aggregate, processing expanded by 10% for throughout the period what's more is required to develop by 16% over the two years to the end of the 2015 fiscal year. For further development BHP having a plan to start new projects where they pursuing a higher rate of returns on incremental investment and increasing inter...
Another correlation between the management’s discussion within Fords 10-k and the financial analysis within this essay is Ford’s market expansion into the Pacific Asia Africa segment (SEC, 2015). Because ford is entering into new markets, their costs are increasing for selling and administration. The costs include hiring new salespeople and promoting their new products in new market segments. Thus causing the increase of selling and administrate costs in the horizontal income statement analysis. Furthermore, Ford’s fixed assets are also increasing because they are investing in new land and equipment to manufacture their new
British American tobacco plc is a multinational tobacco leading group. They have more than 55000 employees work for this mighty company. They deal with brands in more than 180 markets all around the world. The company founded in 1902 when the United kingdom's Imperial tobacco company and the American Tobacco company. And they also agreed do not trade is each other domestic territory. Mr James Buck Duke became CEO after the collaboration.
An additional option would be to increase efficiency in operations. This could mean layoffs, sourcing less expensive raw materials for cigarette manufacturing, and closing redundant factories if consumption volumes drop. While none of these strategies are attractive for PMI, and at this time likely not justified as operating income remains steady, the decline of this market plus PMI’s high percent of operating income that come from this region mean some defensive strategies should be considered.
With the help of porters five forces factors we can analyze the varying profitability of the food and beverage industry between 1973 and 2012 in terms of Porter’s five factors and sub factors.
Businesses may be focused on their missions, goals, and making a profit, but they must not forget their obligations to society. As huge companies have much power and influence, it is their responsibility to make sure that they do not cause irreversible harm to the society and the environment that helps sustain their business. Ethics in business is always a hot topic issue; the government of India has cracked down on the tobacco industry by banning the advertising and sponsorship of sports and cultural events by tobacco companies (Ban on Tobacco Ads by the Government of India, 2001). The Indian government claims that is for ethical reasons; tobacco jeopardizes the health of its users and the government believes banning the advertising will help
Besides, Merbatty is operating in a competitive market. Hence, it has to ensure that its prices are competitive against similar models by its competitors. Merbatty also needs to offer its products in a competitive way, which may expose it to loss of revenue due to currency changes. Currency changes have r...
It is crucial to take note of the significance of the business growth as one way of attaining the objectives of profitability. The path that is yet to be taken by Popina Pty Ltd is one of the diverse strategies that a firm would like to utilize in entering a new market. The brand Arnold’s Farm Museli is conveniently a product to watch in the India’s market as it takes a toll in the snacking habits of the population (Hundekar, 2010). Popina has voluminous experience about exports and, therefore, the India’s situation should just be a replica, but enhanced strategy to what has been actualized in its other international markets (Lehtinen, 2011).
Economic factors affecting negative or positive way the companies. The inflation and currencies rates have big influence.
Professor Paul Collier has argued, “ Economic growth is not a cure-all; but the absence of growth is a kill-all”. Economic growth can cause a few problems. Economic growth is
But there are also studies that have examined the financial consequences of growth. Some have carried on the relationship between growth and profitability. It has been observed that over the growth of a company, its profits grow to a point where it peaked. The relationship between profit and growth is curvilinear, which could be explained by dysfunction trained by to be too large. But there are other empirical studies, however, conclude that there is a strictly positive relationship between growth and
Philip Morris International is determined to manage its activities with strict compliance with laws and regulations. The company aims to both reduce water consumption and waste production while putting a lot of effort in reusing and recycling. Thus, they follow the 3R Concept – Reduce, Reuse, and Recycle – in the manufacturing operations they have. Given that, they are aware of the fact that recycling alone is not pollution prevention and they focus on the first step of P2 which is source reduction.