Report International Business Environment

Executive summary

Today the transnational tobacco industry is influenced by the great changes in modern global economy and politics. Our based in England company is facing the need to make some proper alterations to maintain our position on Russian tobacco market. The main objective of the present report is to make some proper suggestions with the purpose to adapt to the new circumstances in order to maintain the level of profit and to prevent losses.

The study has revealed that Russian tobacco market attracts multinational firms with a large consumer demand. In recent years some negative for tobacco industry events took place. There was a collapse of the ruble that has led to higher prices and the reduced purchasing power of consumers. Also since 2007 up to the present time there is an anti-smoking program in Russia with the price increase on the excise tax, anti-advertising and a number of prohibitions for the smokers in order to reduce the consumption of tobacco products.

To cope with this problem the following ways are proposed:

- to focus on the production of economy class and cut production of the de luxe brands in order to reduce prices and make the goods available to the consumer;

- include in the number of goods electronic cigarettes, which will fit in with the anti-smoking policy and avoid the problems of expensive excise tax.

Table of contents

Introduction………………………………………………………………….3

Section 1. An analysis of the national business system and cultural conditions in Russia…………………………………………………..…………….4

Section 2. The exchange rate regimes that govern England and Russia: risk and measures…………………………………………………………………….…5

Section 3. Political risks in Russia and their implications…………….…….7

Conclusion…………………………………………………………………...8

Reference list………………………………………………………………...9

Appendices……………………………………………………………...….10

Introduction

Today international business environment is unstable and changeable. It depends on the great changes in modern global economy and politics. The tobacco industry is also influenced by the situation.

Our transnational company, which is based in England, is facing the need to make some proper alterations to maintain our position on tobacco markets of different countries. Especially this is true of our branch in Russia, because this country has undergone great changes in recent years.

The main objective of the present report is to make some proper suggestions with the purpose to adapt to the Russian tobacco market in the new circumstances to maintain the level of profit and to prevent losses. We are going to analyse the national business system and cultural conditions in Russia with an assessment of how this will affect our firm within tobacco industry. Also there will be discussed the exchange rate regimes that govern England and Russia and the political risks that our firm may encounter in Russia.

Conclusion

In this report there were outlined the main problems which our company faces to working at the Russian tobacco market. With the aim to allow our company to function more effectively in the new economic and political conditions, we made the following suggestions.

To minimize our losses we should implement measures to reduce prices. This year we should focus on the production of economy class and cut production of the de luxe brands.

To deal with the anti-smoking policy we should include in the number of our goods electronic cigarettes. They may be used in public places and in this part of the sales we will avoid the problems of expensive excise tax.