<p align="justify">British American Tobacco or BAT is nicotine and Tobacco Company operating in London and forms the part of FTSE 100. The company is successful enough in establishing the strong market and industrial position and sells its products to more than 200 markets across the globe. The company is known as one of the largest tobacco making company across the globe. It has four most selling brands, which are; Dunhill- the native brand, and US brands- Kent, Lucky Strike, and Pall Mall. There are other famous brands which are marketed by the company are Rothmans, and Benson and Hedges. However, BAT does not own all the rights of these brands in different geographical segments in which it is marketing (BAT, 2019).</p>
<p align="justify">Despite of this, the company does not diversify itself, not maximized its marketing opportunities like online stores. BAT has numerous competitive advantages which prevent it from the threats of regulations and litigations. However, BAT does need to analyze its market and industrial position by using Porter five forces model. As this model provides the strategic view of industry and the competition level. Thus, the company will be able to e-examine its approaches and operate accordingly. Here is the detailed Porter five forces analysis of British America Tobacco;</p>
<h2 align="justify">Bargaining Power of Buyers</h2>
<p align="justify">Consumers of tobacco and nicotine companies have relatively low buying power, because of the addictive nature with the brand. Many tobacco contained products eliminate the factor of price sensitivity because of the luxury item rather than necessity. Moreover, consumers have also diffused the interests which cannot reduce the concentrated benefits of the BAT Company. The substitute products in this industry are few regardless of the fact of low switching cost. It is recommended to BAT to produce alternative products for increasing the customer base (Maina, 2018).</p>
<h2 align="justify">Bargaining Power of Suppliers</h2>
<p align="justify">Cigarette or nicotine producing companies require raw material from farmers for creating different types of nicotine contained products. This makes farmers having high negotiation power. In addition to this, some of the farmers are switching their production to fast-moving agricultural items from tobacco. Hence, decreasing the competition among tobacco growers. It is necessary for BAT to maintain good relationship with its suppliers to reduce their negotiation power and its impact on the profitability (Krejci, 2016).</p>
<h2 align="justify">Threats of New Entrants</h2>
<p align="justify">There are very competitors in the tobacco industry with the known fact of low entry to barriers at local level in United States and United Kingdom. However, the barriers to entry at global or national level are high. It has become costly to compete with well-established companies like BAT, or Phillip Morrison, etc. because of restrictions on advertisement and marketing campaigns in developed countries. Furthermore, it is difficult for the new entrants to achieve economies of scales, which are already availed by big names before the legislations were passed. BAT faces low threats to medium level of threats from new entrants (PHD essays, 2016).</p>
<h2 align="justify">Threats from the Substitute Products</h2>
<p align="justify">Threats from the substitute products for British American Tobacco is moderate, as for the smokers, no close substitute is present in traditional sense from the one they use, and equivalent to the price. Moreover, due to the normal production of cigarettes and nicotine proportions by manufacturers, it is difficult for substitute producers to compete with prices that are set by the economies. However, as per the nature of tobacco, it is not a necessity of life, the attractive substitute of it would be products that avoid use of tobacco. Substitute of it can be medical items like nicotine contained drugs, which are easily available in markets for smokers to quit tobacco consumption (Krejci, 2016).</p>
<h2 align="justify">Rivalry of Existing Players</h2>
<p align="justify">The industry of tobacco and nicotine is highly competitive; hence, British America tobacco is dealing with fierce competition. The company was formed by Imperial Tobacco Company of United Kingdom and America Tobacco Company of United States, with the objective of reducing the competition level. It merged with objective of improving market position of these two businesses. There are other companies like Phillip Morris, Japan Tobacco, and China Tobacco national company etc. are the strong rivals. They compete on innovative products and also intensify marketing campaigns. Thus, BAT has to focus more on its research and development for creating best products and gain competitive advantage (Maina, 2018).</p>
<h2 align="justify">References</h2>
<p style="text-align: left;" align="left">BAT, 2019. About us. [Online], Available at: <a href="https://www.bat.com/group/sites/UK__9D9KCY.nsf/vwPagesWebLive/DO52AD6H">https://www.bat.com/group/sites/UK__9D9KCY.nsf/vwPagesWebLive/DO52AD6H</a>, [Accessed on: 21st November, 2019].<br />
Krejci, T. 2016. British American Tobacco, PLC &#8211; EQUITY REPORT 2.0. [Online], Available at: <a href="https://www.slideshare.net/TeddyKrejci/british-american-tobacco-plc-equity-report-20">https://www.slideshare.net/TeddyKrejci/british-american-tobacco-plc-equity-report-20</a>, [Accessed on: 21st November, 2019].<br />
Maina, S. 2018. BRITISH AMERICAN TOBACCO COMPANY ANALYSIS. [Online], Available at: <a href="https://www.academia.edu/37568411/BRITISH_AMERICAN_TOBACCO_COMPANY_ANALYSIS">https://www.academia.edu/37568411/BRITISH_AMERICAN_TOBACCO_COMPANY_ANALYSIS</a>, [Accessed on: 21st November, 2019].<br />
PHD essays, 2016. British American Tobacco, strategies planning and management. [Online], Available at: <a href="https://phdessay.com/british-american-tobacco-malaysia-sdn-bhd-strategies-planning-management/">https://phdessay.com/british-american-tobacco-malaysia-sdn-bhd-strategies-planning-management/</a>, [Accessed on: 21st November, 2019].</p>