Presented by

Muhammad Ali Mukhtar

Introduction
PTC was incorporated in 1947 as the first
foreign investment in the newly born
Pakistan
Imperial Tobacco Company of British India
which had been operational in south Asia
since 1905. This makes PTC the oldest
multi-national of Pakistan.
Single warehouse near Karachi port largest cigarette manufacturer of Pakistan.

FIVE FORCES ANALYSIS FOR

PAKISTAN TOBACCO COMPANY
Potential Entrants:
Rivalry among competing firms:
Barriers to entry and how a company can make a Most important model as it shows how company
place in the market, while increasing the
adopts its competitive strategy
competition
After Phillip Morris takeover of Lackson tobacco,
only two major competitors left in market
New entrants would have to focus on low pricing as
switching cost in this market is really low
PTC has the highest market share as they target
lower class with cheaper cigarettes
Barriers to entry are high but firms may enter if
they follow low pricing strategies and better There are very few rival firms but rivalry with
quality than existing firms
Phillip Morris is fierce
The company has to set up its capital and firm
along with its brand image to indulge in the ongoing war
Suppliers:
Substitutes:
50 percent national suppliers and 50 percent Threat od substitute products is medium
international
Since tobacco containing product are many such as:
There is a two way relationship between the Sheesha
suppliers
Nicotine patches/gum
Bargaining
power
of
suppliers
is
low
as
they
select

Naswaar
feasible vendors from many
Take quotations from different suppliers
Buyers:
Buyer power is extremely high because it all depends upon their salary and budget. If a period of inflation
is going on, the buyer is likely to switch to a cheaper brand of Buyer power is extremely high
The buyer is likely to switch to a cheaper brand e.g in a period of inflation
Because of close competition and substitutes available, power of buyers is high
They are likely to shift to some other brand of cigarette if offered less price

PAKISTAN TOBACCO COMPANY

CAPABILITY ANALYSIS

PAKISTAN TOBACCO COMPANY

SWOT ANALYSIS
Strengths:
Weaknesses:
Gross turnover and net turnover increased
12% and 10% respectively from 2010
This means that the company has boosted its
net sales
by increasing on the sales revenue or from
cutting down on taxes and duties
Market leader with highest market share of
cigarettes in Pakistan of 45%.
Facility location in Jhelum and Attock reduces
transportation cost and cheap labor of 224
workers
Excellent relation with supplier - awarded as
best in class in supply chain by performance
measurement group
High regard for Environment and health safety
concern - won BAT environment award

Decrease in market share price from Rs. 112 to

Rs 60 from year 2010 to 2012

Opportunities:
Tobacco usage rate is growing by 1.7% in
developing countries
Tobacco crop gives the largest yield than any
crop of 95%
Young smokers percentage is increasing
gradually, currently its 40%

Threats:
Anti-smoking ordinance 2002 hinders that growth
of the company
The smuggling in tobacco industry is about 23%
and affects PTC
Phillip Morris has taken over LTC and is a
stronger competitor now with a 5% increase in
market share.

Morris took control over Lakson Tobacco Co

Ltd (LTC) because of which PTCs sales fell by
1.6%
PTCs Profit after tax decreased by 61% in
2011
Working capital decreased by 54% as liabilities
increased by 16.5%

THANKYOU