An Overview of Tobacco Industry
The global tobacco industry is being majorly dominated by five companies which produce more than 80% of tobacco volume to be sold. The production of cigarettes being produced on an annual basis has increased by 5.7 trillion in 2002 to that of 6.3 trillion cigarettes in 2011. On the other side, cigarette production per person has reduced from almost 1000 person in the year 1996 to almost 900 per person in the year 2011.
The ratio of tobacco industries are more in developing countries and China is now emerging as a major exporter of tobacco products. In several countries, the tobacco companies have to face rigid yet effective tobacco controlling measures including developing of international laws and regulations.
In Pestle Analysis of the Tobacco Industry, we will analyze the political, economic, social, technological, environmental and legal factors and these pestle factors affect the tobacco industry.
How Political Factors Affect Tobacco Industry
Countries all over the world are well aware about the fact that tobacco and its related products have a very negative impact over human health. Rather than out rightly banning the sale and purchase of tobacco products, the governments of countries have adopted a way to reduce its consumption as well as generate additional revenues through implementing increased tax rates over tobacco products like cigars, cigarettes and pipe tobacco. Applying taxes are mainly political and are decided by ruling. In Pestle Analysis of the Tobacco Industry, we will analyze the political, economic, social, technological, environmental and legal factors . As a matter of fact, there is a trend on part of the governments to make consumption of tobacco products harder for consumers which is a major political factor which is affecting the industry.
But for many third world and developing countries, tobacco is an important cash crop and also a good source of foreign exchange. According to National Center for Biotechnology and Information, from 1960 – 75, in Africa there was a 5-fold increase in the production of tobacco. Similarly in Latin America 46-fold increase and 13-fold in European countries. Western governments are facing immense pressure to deal with this issue wisely. The tobacco production counties should not depend on tobacco growth and find the substitute for example, food crops.
Governments should be more socially responsible and banned tobacco advertisement, smoking in public places and take necessary measure to stop sale of cigarettes to children.
How Economic Factors Affect Tobacco Industry
There is a general consensus that people around the world are becoming richer and richer. This eventually means that their disposable income is more than before which can be easily spent over those items that are not a necessity such as consumer electronics, designer clothes and tobacco products. This trend is more in developed countries where people have more disposable income to spend on tobacco products however, in developing countries; this increased cash is associated with an increase in demand of tobacco.
How Social Factors Affect Tobacco Industry
Tobacco products have devastating effects on human health and the general public has accepted the dangers of consuming tobacco products. Moreover, there are many areas where consuming tobacco is strictly prohibited as well as who can consume tobacco. This increased level of awareness about the detrimental effects of tobacco is reducing the number of people consuming tobacco.
Tobacco includes a stimulant known as nicotine which has addictive compound properties. The result of this is that people consuming tobacco gets addicted to it and this addiction grows stronger with time. This eventually means that the tobacco industry has customers that are loyal because of their necessity which increases tobacco customers.
Although, smoke pollution may be more like an environmental issue, it is also a social factor as most non-smokers prefer to not inhale tobacco smoke thereby, increasing no-smoke areas. As more and more individuals are protesting against tobacco smoke, this makes smokers left with no place to smoke.
Along with caffeine, tobacco is also one of the few legal drugs that are widely available. However, a recent trend is towards increased usage of cannabis as it has been legalized by several jurisdictions including different states of the United States. Moreover, cannabis has lesser negative effects which make people divert to cannabis from tobacco.
How Technological Factors Affect Tobacco Industry
In the 21st century, a new alternative to smoking is vaping which mimics the feel of smoking by emitting vapor of warm water which can include some quantity of nicotine and can be flavored as well. Although, because of nicotine, people can get addictive to vaping as well however, it has far fewer negative impacts on health as there is no inhaling of smoke. Vaping being an alternative to traditional smoking can be helpful in diverting interest away from tobacco products.
Google is a leading technology company which what to keep people safe both online and offline. The company doesn’t allow the promotion of any products that can cause damage or injury, for example, cigarettes, rolling papers, tobacco filters, e-cigarettes and Hookah lounges.
How Environmental Factors Affect Tobacco Industry
Undoubtedly, cigarettes are the most popular tobacco product and include chemical filters in its butts. Unfortunately, these filters contain many pollutants as toxic chemicals are released whenever a cigarette is discarded improperly.
How Legal Factors Affect Tobacco Industry
The tobacco industry is laid back by several laws which prevent minors from consuming tobacco and its products. In many developed counties, tobacco purchasing and consuming is rendered to be illegal for people below the age of 18. Most of these laws are brought in to place because of the health effects associated with consuming tobacco products. As the laws are becoming more and stricter, tobacco consumption is reducing. Moreover, there are some countries which are considering upon increasing the age threshold where people can buy and use tobacco.