Analyze the Business Situation and Problems

Question: Discuss about the Analyze the Business Situation and Problems. Answer: 5Cs Analysis According to Schripp et al. (2013), in order satisfy the needs of customers and to gain significant amount of profit a company has to understand its internal situation. It includes analyzing customers, market environment and capability of the firm. 5 C Analysis is considered as a useful framework to perform situational analysis. The major aspects of 5 C analyses for e-cigarette companies are discussed below: Company The product e-cigarette was developed in the year of 2003 by a Chinese pharmacist (Padon et al. 2017). It is an electronic nicotine delivery system appeared in the US market in the year of 2007. During the starting period the sales of e-cigarettes were low as they are considered just as novelty. However, due to increased marketing campaign and increased awareness of people the sale of the product increased gradually. The major goal of this product is to reduce the harm done by nicotine by traditional cigarette. Presently there are more than 400 e-cigarette companies and 7000 different flavors can be found by 2014 (Schripp et al. 2013). Figure 1: Total annual revenue of e-cigarette (2008-2013) (Source: Schripp et al. 2013) Figure 2: Predicted global sales of e-cigarette (in million dollars) (Source: Cameron et al. 2014) In the year of 2013, the brand leaders in e-cigarette were blue Cigs, NJOY and LOGIC. Their combined market share is more than 89% (Cameron et al. 2014). Collaborators The major wholesalers of the e-cigarette are Siverline Wholesale, P-Rider Novelty, EXHALE, iBliss Vapor products. There are 5 easy steps in which wholesalers and distributors for e-cigarette can be selected. They are mentioned below: 1) A company has to investigate the Better Business Bureau (BBB) about each wholesalers and suppliers (Padon et al. 2017). 2) Investigate about the background of the suppliers about the company history. 3) Meet with them personally 4) Place small retail order to test the product 5) If the quality is good then develop an agreement with the distributor and wholesalers. Customers From a survey analysis it has been found that the customers of this product belong to various age groups. 17% customers belong to 18-24 years, 21% belong to 25-44 years. 19% belong to 45-64 years and 9% belong to 65 or more that 65 years (Cameron et al. 2014). In terms of race and ethnicity, customers can be categorized as: Alaska Natives or American Indians 21% Asians 11% Blacks 18% Whites 20% Hispanics 12% Multiple race individuals 18% Table 1: Customer segmentation for e-cigarette in term of ethnicity or race (Source: Bunnell et al. 2014) There are various types of health risks that users of electronic cigarettes have to face. 1) The major risk that e-cigarette users have to face is related with nicotine. A committee has been developed U.S. to exmine the impact of liquid nicotine. This committee has identified liquid nicotine as toxic (Bunnell et al. 2014). 2) Padon et al. (2017) stated that e-cigarette customers have to face health issues related with use of the devices, especially in unregulated condition (flaw of manufacturing device). However, it has been witnessed that e-cigarette containing nicotine causes lesser harm compare to combustible traditional cigarette. Regan et al. (2013) mentioned that, e-cigarette can be used as smoking cessation devices as well. Most of users of the product mentioned that the use of e-cigarette has reduced or elimination of traditional cigarette. Competitors The brand leaders in e-cigarette were blue Cigs, NJOY and LOGIC. However, there are various other companies that try to enter in this business. In the year of 2012, Alteria group, the biggest, formed Nu market in order to use its existing brand image and supply chain management infrastructure to enter the e-cigarette market (Bunnell et al. 2014). In the year of 2014, the company had announced $110 million acquisition of e-vapor business. In addition, in the year of 2012 a new start up named British American Tobacco had entered this market. Climates The climate of business of e-cigarette companies are discussed with the help of PEST analysis. They are discussed below in table PEST analysis Political As this product causes less damage than traditional cigarettes, it is promoted by majority of country governments (Goniewicz et al. 2013). There is lack of advice available from department of health concerning use of e- cigarettes. Economic It has been found that NHS has to spend 2.7 billion to cure cancer caused due to cigarette smoking. Using e-cigarette can reduce this cost for NHS. Social Presently, people have become more aware about health issues caused due to smoking. There are 1.3 million people across Britain have substituted traditional cigarette with e-cigarette (Regan et al. 2013). Technological (Goniewicz et al. 2013) stated that, with the technical advancement, companies have become more focused to remove flaws from devices and make it more harm free (nicotine free). References Bunnell, R.E., Agaku, I.T., Arrazola, R., Apelberg, B.J., Caraballo, R.S., Corey, C.G., Coleman, B., Dube, S.R. and King, B.A., 2014. Intentions to smoke cigarettes among never-smoking US middle and high school electronic cigarette users, National Youth Tobacco Survey, 2011-2013.Nicotine Tobacco Research, p.166. Cameron, J.M., Howell, D.N., White, J.R., Andrenyak, D.M., Layton, M.E. and Roll, J.M., 2014. Variable and potentially fatal amounts of nicotine in e-cigarette nicotine solutions.Tobacco control,23(1), pp.77-78. Goniewicz, M.L., Lingas, E.O. and Hajek, P., 2013. Patterns of electronic cigarette use and user beliefs about their safety and benefits: an internet survey.Drug and alcohol review,32(2), pp.133-140. Padon, A.A., Maloney, E.K. and Cappella, J.N., 2017. Youth-Targeted E-cigarette Marketing in the US.Tobacco Regulatory Science,3(1), pp.95-101. Regan, A.K., Promoff, G., Dube, S.R. and Arrazola, R., 2013. Electronic nicotine delivery systems: adult use and awareness of the e-cigarettein the USA.Tobacco control,22(1), pp.19-23. Schripp, T., Markewitz, D., Uhde, E. and Salthammer, T., 2013. Does e?cigarette consumption cause passive vaping?.Indoor air,23(1), pp.25-31.