FAST FOODHistoryThe history of fast food started in America in July 7, 1912, with the opening of a fast foodrestaurant cal...
down the garbage cans and scraping gum off the cement. Another concept Kroc added wasgreat swaths of glass which enabled t...
PAKISTANThe concept of fast food restaurants came to Pakistan in the early 1980s. Since then there hasbeen an increase mar...
Political Risks:1) An unsatisfactory law and order situation is a threat to the fast food chain of industries.Safety of ca...
United Kingdom (England and North Ireland)      POLITICAL   1) Health and Safety Guidelines-                              ...
1) Low set up costs-                       The investment for setting up a fast food chain is very less   which is good. B...
One of the most fundamental barriers to entry is resourceownership, the ownership and control over a critical input used i...
CHINACHINA may boast a 5,000-year-old culinary tradition, but when it comes to fast food,Western-style outlets rule. For t...
its home turf, and the company aims to double its Asia-Pacific presence to some 1,400 outletsover the next five years.In C...
Economical riskChinese consumers may have more spending power, but they also have less time to cook: aperfect recipe for t...
prefer Chinese food‖. He adds that Xiabu’s revenues have grown by ―well over 50 per cent‖per year.No one is predicting tha...
AUTOMOBILE INDUSTRYThe first practical automobile with a petrol engine was built by Karl Benz in 1885 inMannheim, Germany....
PakistanThe Automotive industry has been an active and growing field in Pakistan for a long time,however not as much estab...
Political riskProtection level:Before the TBS was introduced the auto industry was well protected by the government butnow...
Economical riskFuel pricesAccording to the authorities the fuel prices which currently are Rs 78 and hasincrease by more R...
UKThe automotive industry in the United Kingdom is now best known for premium andsports car marques including Aston Martin...
a friend of Lawson a disused cotton mill in Coventry for car engine and chassis manufacturewhere, it is claimed, Britains ...
POLITICAL              In taxicabs, banking, telecommunications, and broadcasting, entry usually              requires the...
ChinaChina’s automobile industry sees a promising future after years of development. In1998, China produced 1.56 million a...
Risks related to the legal and political framework. The legal and political framework has aconsiderable impact on Daimler’...
TOBACCO INDUSTRYThe tobacco industry comprises those persons and companies engaged in the growth,preparation for sale, shi...
Pakistantobacco industry — growing, manufacturing, distribution and retailing — contributed4.4 per cent or over Rs 27.5 bi...
Pakistan, 78 per cent of the retail price of premium brands ( all brands whose retailprice is over Rs 10 per 20 sticks) an...
UKOver the last year there have been significant changes among the largesttobacco companies with Imperial Tobacco acquirin...
ChinaPeople in china are addicted to tobacco and lot of people overe there are chain smoker.Political riskGovernmentThe Ch...
Economical riskTRADE AND CURRENCY DISPUTESSigns of a thaw in relations between Washington and Beijing have convinced forei...
MEDIA INDUSTRYJames Augustus Hickey is considered as the "father of Indian press" as he started the firstIndian newspaper ...
PakistanMedia in Pakistan provides information on television, radio, cinema, newspapers, andmagazines in Pakistan.Though P...
2005 and lastly the Access to Information Ordinance of 2006. Also there wereattempts in 2006 for further legislation osten...
UKMedia of the United Kingdom consist of several different types of communications media:television, radio, newspapers, ma...
Upcoming SlideShare
Loading in …5
×

Sm cia

359 views

Published on

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
359
On SlideShare
0
From Embeds
0
Number of Embeds
3
Actions
Shares
0
Downloads
2
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Sm cia

  1. 1. FAST FOODHistoryThe history of fast food started in America in July 7, 1912, with the opening of a fast foodrestaurant called the Automat in New York. The Automat was a cafeteria with its preparedfoods behind small glass windows and coin-operated slots. Joseph Horn and Frank Hardarthad already opened the first Horn &Hardart Automat in Philadelphia in 1902, but their―Automat‖ at Broadway and 13th Street, in New York City, created a sensation. NumerousAutomat restaurants were built around the country to deal with the demand. Automatsremained extremely popular throughout the 1920s and 1930s. The company also popularizedthe notion of ―take-out‖ food, with their slogan ―Less work for Mother‖.Some historians and secondary school textbooks concur that A&W, which opened in 1919and began franchising in 1921, was the first fast food restaurant (E. Tavares). Thus, theAmerican company White Castle is generally credited with opening the second fast-foodoutlet in Wichita, Kansas in 1921, selling hamburgers for five cents apiece from its inceptionand spawning numerous competitors and emulators. What is certain, however, is that WhiteCastle made the first significant effort to standardize the food production in, look of, andoperation of fast-food hamburger restaurants. William Ingrams and Walter Andersons WhiteCastle System created the first fast food supply chain to provide meat, buns, paper goods, andother supplies to their restaurants, pioneered the concept of the multistate hamburgerrestaurant chain, standardized the look and construction of the restaurants themselves, andeven developed a construction division that manufactured and built the chains prefabricatedrestaurant buildings. The McDonalds Speedee Service System and, much later, Ray KrocsMcDonalds outlets and Hamburger University all built on principles, systems and practicesthat White Castle had already established between 1923 and 1932.The hamburger restaurant most associated by the public with the term "fast food" was createdby two brothers originally from Nashua, New Hampshire. Richard (Dick) and Maurice (Mac)McDonald opened a barbecuedrive-in in 1940 in the city of San Bernardino, California. Afterdiscovering that most of their profits came from hamburgers, the brothers closed theirrestaurant for three months and reopened it in 1948 as a walk-up stand offering a simplemenu of hamburgers, french fries, shakes, coffee, and Coca-Cola, served in disposable paperwrapping. As a result, they were able to produce hamburgers and fries constantly, withoutwaiting for customer orders, and could serve them immediately; hamburgers cost 15 cents,about half the price at a typical diner. Their streamlined production method, which theynamed the "Speedee Service System" was influenced by the production line innovations ofHenry Ford.By 1954, The McDonald brothers stand was restaurant equipment manufacturer PrinceCastles biggest purchaser of milkshake blending machines. Prince Castle salesman RayKroctraveled to California to discover why the company had purchased almost a dozen of theunits as opposed to the normal one or two found in most restaurants of the time. Enticed bythe success of the McDonalds concept, Kroc signed a franchise agreement with the brothersand began opening McDonalds restaurants in Illinois.[4] By 1961, Kroc had bought out thebrothers and created what is now the modern McDonalds Corporation. One of the majorparts of his business plan was to promote cleanliness of his restaurants to growing groups ofAmericans that had become aware of food safety issues. As part of his commitment tocleanliness, Kroc often took part in cleaning his own Des Plaines, Illinois outlet by hosing
  2. 2. down the garbage cans and scraping gum off the cement. Another concept Kroc added wasgreat swaths of glass which enabled the customer to view the food preparation, a practice stillfound in chains such as Krispy Kreme. A clean atmosphere was only part of Krocs granderplan which separated McDonalds from the rest of the competition and attributes to their greatsuccess. Kroc envisioned making his restaurants appeal to suburban families.[5]At roughly the same time as Kroc was conceiving what eventually became McDonaldsCorporation, two Miami, Florida businessmen, James McLamore and David Edgerton,opened a franchise of the predecessor to what is now the international fast food restaurantchain Burger King. McLamore had visited the original McDonalds hamburger standbelonging to the McDonald brothers; sensing potential in their innovative assembly line-based production system, he decided he wanted to open a similar operation of his own.[6][7]The two partners eventually decided to invest their money in Jacksonville, Florida-basedInsta-Burger King. Originally opened in 1953, the founders and owners of the chain, Kieth J.Kramer and his wifes uncle Matthew Burns, opened their first stores around a piece ofequipment known as the Insta-Broiler. The Insta-Broiler oven proved so successful atcooking burgers, they required all of their franchises to carry the device.[6] By 1959McLamore and Edgarton were operating several locations within the Miami-Dade area andwere growing at a fast clip. Despite the success of their operation, the partners discoveredthat the design of the insta-broiler made the units heating elements prone to degradation fromthe drippings of the beef patties. The pair eventually created a mechanized gas grill thatavoided the problems by changing the way the meat patties were cooked in the unit. After theoriginal company began to falter in 1959, it was purchased by McLamore and Edgerton whorenamed the company Burger King.[8]While fast food restaurants usually have a seating area in which customers can eat the foodon the premises, orders are designed to be taken away, and traditional table service is rare.Orders are generally taken and paid for at a wide counter, with the customer waiting by thecounter for a tray or container for their food. A "drive-through" service can allow customersto order and pick up food from their cars.Nearly from its inception, fast food has been designed to be eaten "on the go" and often doesnot require traditional cutlery and is eaten as a finger food. Common menu items at fast foodoutlets include fish and chips, sandwiches, pitas, hamburgers, fried chicken, french fries,chicken nuggets, tacos, pizza, and ice cream, although many fast food restaurants offer"slower" foods like chili, mashed potatoes, and salads.
  3. 3. PAKISTANThe concept of fast food restaurants came to Pakistan in the early 1980s. Since then there hasbeen an increase market growth in this industry in Pakistan. Many international companieshave stared there branches over there. Brands such as McDonalds, KFC, and Subway etc. arecapturing the market at an increasing rate. There are lot of local fast food chains who aretrying to settle in the market.Pakistan is a relatively ―young‖ country. Out of the estimated population of 173 million, themedian age is approximately 20 years, with and about 104 million Pakistanis being below theage of 30. Pakistan is doing well among its immediate neighbours in terms of demographicsbut the growth rate of 2.05% is the highest, compared with China, India and Bangladesh.(Tonnes)7.46The fast food chains in Pakistan have collectively over 200 outlets catering to more than20,000 people at any one time. Pizza Hut has lead the market, with a more than 30% share, isthe largest among the foreign and domestic fast food chains operating in the country.Theshares of KFC and McDonald’s are estimated to be around 25% and 16%, respectively.Subway is the fourth largest player with a 7% market share, with the collective share of theother fast food players being almost 20%. The most interesting trend is of the growth of thefast food industry in Pakistan. In the last 10 years, the industry has shown phenomenalgrowth. From approximately 50 outlets in 2001, it has grown to over 201 outlets in 2010.The fast food industry in Pakistan commenced formally with the entry of McDonald’s, KFCand Pizza Hut in 1997-98. The industry grew at a rapid rate of almost 20% a year till 2007.However, the pace of growth reduced to just 10% a year from 2008 to 2010.Industry InvestmentsResponding to the consistent growth of the fast food and snack food sector in Pakistan, theoils and fats industry, realising the importance of value addition, has expanded further byinvesting in fractionation plants. Currently there are more than four leading oils and fatsmanufacturers who are producing specialised palm-based frying oils for the fast food industryin commercial packaging. These products are being used by both national and internationalsnack food and fast food companies in Pakistan and this sector shows great potential infuture.
  4. 4. Political Risks:1) An unsatisfactory law and order situation is a threat to the fast food chain of industries.Safety of capital and the security for the personnel engaged in the projects are essentialingredients that govern foreign investment. Unfortunately, Pakistan’s law and order situationhas remained far from satisfactory in the major growth poles of the country. Karachi, thelargest industrial and commercial center and the only commercial port of the country, hasbeen disturbed in varying degrees since 1989. In recent years the law and order situ ation hasalso deteriorated in the Punjab province.2)Government policies: Pakistan’s track record in maintaining consistent economic policieshas been poor. The abrupt changes in policies with a change in government as well as achange in policy within the tenure of a government have been quite common. Pressures toraise revenues (for fiscal consideration), and other conflicting objectives have generally led toinconsistencies in investment and industrialization policies. Revenue measures are not inharmony with the industrial policies3) the Pakistan government is very unstable and it is difficult for industries to enter in thiscountry..even the increase of terrorism in the country it is very difficult for people to start abusiness over thereEconomical risk1) Investors would not want to invest in a country where the economic fundamentals are soweak that it is unpredictable what the government would do next to prop up a saggingeconomy. In countries of high economic strength, the investor is assured of a growing of higheconomic strength, economy, and of increased opportunities for business, as moregovernment development projects and private sector investments put purchasing power in thehands of the people.2) The availability, reliability, and cost of infrastructure facilities (power,telecommunications, and water supplies) are important ingredients for a businessenvironment conducive to foreign investment. Pakistan compares unfavorably ininfrastructure facilities with other developing countries.3) The Pakistan economy faces several long term challenges such as curbing inflation andexpanding investment in healthcare, education, and electricity production. Which does nothelp in getting more business in the country
  5. 5. United Kingdom (England and North Ireland) POLITICAL 1) Health and Safety Guidelines- There are lot of guidelines that a fast food chain has to take consideration to perform its task comfortably. If the rules are not followed then there can be lot of trouble for them.they have to maintain cleanees in there restaurant and provide there customers with good quality of food. 2) Labelling of GM Foods- The safety of GM food products and ethical issues related to the use of gene technology are constantly debated. Some people would like to know if any food product they are purchasing is from a GM source. New labelling rules for genetically modified foods, or food containing GM ingredients, were introduced in December 2001. The new food labelling standard required the labelling of GM food and food ingredients – additive or processing aid - where new DNA and/or new protein is present in the final food or where the food has altered characteristics.thecompany should mentin there labelling properly as this things are taken seriously by the government. So every think shoul be mentioned properly. 3) Animal rights campaigns- people over there have been having fighting for the life of animals as lot of domestic animals like chicken, cow and pigs are killed so they can just fill humans stomach. This are important for fast food chins as there work is related to this animals and most of this animals are killed by these industries. So it has to work with the socity which is present in UK .I have no doubt that it is a part of the destiny of the human race, in its gradual improvement, to leave off eating animals, as surely as the savage tribes have left off eating each other when they came in contact with the more ECONOMIC
  6. 6. 1) Low set up costs- The investment for setting up a fast food chain is very less which is good. But it help lot of people to set up there own fast food chain which increases the competitions in the market. Which is very high in UK market and can cause lot of trouble for the big companies who have invested heavely in the fast food chains as they get competition from small chains and also from the other big fast food chains.2) Patents and Copyrights- In some cases a key productive input or even the output itself involves a patent or copyright. A patent is the exclusive right to use, sell, or market an invention for a specified period. In the United Kingdom, patents give inventors exclusive rights for a given number of years. A copyright is the exclusive right to reproduce, copy, and sell written materials. In the United Kingdom, copyrights also are awarded for a given number of years. Patents and copyrights impose barriers to entry.While copyrights work in much the same way, they tend to create less of a barrier toentry. A patent on the technology behind Flex-Star Interactive Trophy Plaques is asevere barrier to entry. In contrast, the copyright on a Brace Brickhead, MedicalDetective novel is much less restrictive. Another author could write and copyright asimilar detective novel about Chance Chesterfield, Super Sleuth. Each is a relativelyclose substitute for the other.3) Inflation Rates- Inflation rate is the general rise in prices measured against a standard level of purchasing power. In April 2009, prices dropped 1.5% from last year, after steady falling at the beginning of 2009. Falling prices lower the costs on goods and encourage consumers to spend. This helps the UK economy recover its diminishing exports. Inflation was at 8.5% which caused the price of pork to increase because the shortage on meat. Food fell 1.3% from a year earlier which represents the biggest part of the index. Non-food prices fell 1.5%, garments fell 2.5%, service costs dropped 1.4%, and utilities fell 2.2%. Producer prices decreased on lower raw-material and energy costs.4) Resource Ownership-
  7. 7. One of the most fundamental barriers to entry is resourceownership, the ownership and control over a critical input used in the production ofa good. Limiting ownership of this input effectively limits entry into thecorresponding industry.To enter this industry, the eleventh firm must acquire ownership over resources.This could be accomplished in a couple of ways. (1) It could purchasing existingresources from any of the ten firms currently in the industry. An easy option, but ifthe original ten are unwilling to sell, then number eleven faces a sizeable enterbarrier. (2) It could seek out as of yet undiscovered resources through exploration.The expense of such an endeavor also imposes a significant barrier to entry for firmnumber eleven.
  8. 8. CHINACHINA may boast a 5,000-year-old culinary tradition, but when it comes to fast food,Western-style outlets rule. For this you can thank—or blame—changing consumer tastes, andthe breathless expansion plans of chain restaurants, which are eager to grab a bigger slice ofthe country’s estimated annual 200 billion yuan ($29 billion) fast-food market.For two decades the battle for the modern Chinese stomach was fought between twoAmerican giants: McDonald’s, the world’s largest fast-food chain; and Yum! Brands, whichoperates the KFC and Pizza Hut brands in China. Yum!, which first arrived in China in 1987(three years before McDonald’s), has always stayed ahead of its rival—going by both thenumber of restaurants and consumers’ awareness of the brand. In 2005 the two titans werejoined by another American stalwart, Burger King, the world’s second-largest burger chain.In April Burger King had just 12 outlets on the mainland, including nine in Shanghai. Butafter this cautious start, the company is pushing ahead with a faster store roll-out: in June itannounced plans to open between 250 and 300 outlets in China over the next five years,including another ten restaurants in Shanghai. As in other markets, 90% of them will befranchised and a tenth owned by Burger King. For comparison, KFC has more than 2,200outlets in some 450 cities and McDonald’s has 950 outlets.Airport eateries will also be vital. Some 200 of Burger King’s 11,500 outlets worldwide areat airports. Catering there has a number of advantages, including steady, captive customersand limited competition. In February Burger King opened its first outlet at Beijing CapitalAirport’s Terminal 3, and the following month it opened two restaurants at Shanghai PudongInternational Airport’s Terminal 2. Another ten mainland airports are also on its menu.One problem for Burger King is that its trademark ―Whopper‖ is made out of beef. LikeMcDonald’s, the chain must cope with the fact that Chinese consumers prefer chicken.McDonald’s has launched lots of marketing campaigns to try and convince mainlandcustomers about the health benefits of eating beef (apparently, there are some). This has donemuch to overcome the traditional indifference of Chinese towards beef, probably saving timeand money for Burger King’s own marketing campaigns.Burger King is also adapting its menu for China. It has added chicken dishes and has alsoadded chili to some of its offerings. It has not localised its China menu as much as its rivalshave, however. KFC has gone the furthest in tailoring its menu for Chinese tastes, withofferings ranging from pumpkin porridge and Beijing chicken rolls to the Chinese deep-friedtwisted dough sticks (youtiao) on its breakfast menu. McDonald’s (and to a lesser extent,KFC) is also ahead of Burger King in making ―off-the-menu‖ innovations. These include―dessert‖ kiosks selling just sweet pastries and drinks. McDonald’s also runs a 24-hourservice at 600 outlets.With its two American rivals so far ahead, is Burger King likely to be successful in China?There should be demand enough for more than two big American fast-food firms here,analysts reckon, and the company has the resources to finance rapid and sustained expansioninto mainland cities. Most important, it is strongly motivated. Burger King is keen to build itsbusiness outside America. Four-fifths of the new restaurants to open this year will be outside
  9. 9. its home turf, and the company aims to double its Asia-Pacific presence to some 1,400 outletsover the next five years.In China, Burger King’s strategy is particularly to chase younger, more individualistic dinersin the country’s big cities. Its idea is that these restaurant-goers will want to set themselvesapart from older family members or colleagues by trying the newcomer. If so, the Whopper—sold in China as huangbao, or ―Emperor Burger‖—may yet dethrone the Big Mac here.Political risk “China talks capitalism, but breathes socialism… Karl Marx believed that socialismpresupposes capitalism; in other words, that society has to undergo capitalist transformation before the correct conditions for socialism can exist…. An economy containing privately owned businesses is just one of those things, like adolescence, that one has to go through. How long will this capitalist phase last?”this is one of the main problms faced by the companies that are having business in china asthe government is more socialism and not capitalism.A unique form of political risk occurs in China, and this is the constant battle betweenthe country’s central government and the provincial and local governments overapplicable law, and observance or non-observance of it. This makes it difficult forcompanies operating in China to know exactly what the rules are. The concept iscaptured by the Chinese saying: "The mountains are high and the Emperor is faraway."Other point is that his is all happening when the countrys top leadership is going into asuccession battle; President Hu Jintao and Prime Minister Wen Jiabao are due to step downin 2012. Though this is being fought out far from the public eye, what can be made out isshowing unexpectedly deep divisions between various factions within the Party, army andbureaucracy, with a particular rift between economic reformers and those who seeeconomic management as part of national--and Party--security.
  10. 10. Economical riskChinese consumers may have more spending power, but they also have less time to cook: aperfect recipe for the growth of fast food in China, where western and Asian chains arebattling over the increasing appetite for restaurant meals.In urban China, high property prices, long commutes, gruelling working hours, a latermarriage age and smaller families all add up to more fast food.The country’s food service industry has recorded double-digit annual growth since 2003 butis still only half the size of the US market, says AlixPartners, a consulting firm in China. Theindustry, estimated at about Rmb2,000bn ($303bn) in 2009, is forecast to grow to aboutRmb3,000bn by 2014, according to industry estimates.Multinational fast food chains, such as KFC and McDonald’s, arrived early and have cometo dominate the market for western quick service meals.Yum Brands, the US group that owns the KFC chain, opens more than one new restaurant inChina every day. And it predicts it earned more operating profit in 2010 in China than in theUS, for the first time.Yum expects soon to have a 3:1 market share lead over its nearest fast food rival, butMcDonald’s is investing heavily to catch up. The US burger group took two decades to get to1,000 restaurants in China, but expects to take only four years to get to 2,000.McDonald’s even offers home delivery in China. And now that China boasts the world’slargest auto market, it plans to equip half of its new mainland restaurants with drive-throughwindows.But the battle for ―stomach share‖ inChina is about more than fried chickenand Big Macs. Thanks in part to aninflux of venture capital and privateequity funds in recent years, Asian fastfood chains are increasinglycompetitive.―Global brands are running into fiercelocal chains that are good at branding,and have raised the money to gonational,‖ says Shaun Rein, of ChinaMarket Research in Shanghai.Lim Meng Ann, China head of Actis, aprivate equity fund that invested $50m in XiabuXiabu, a Chinese hotpot chain, at the heightof the global financial crisis in 2008, says that ―given a choice, Chinese people would always
  11. 11. prefer Chinese food‖. He adds that Xiabu’s revenues have grown by ―well over 50 per cent‖per year.No one is predicting that the Chinese will forswear burgers and fries anytime soon, not tomention KFC’s more indigenous offerings, including a dish sometimes referred to as riceporridge with pork and 1,000-year old eggs for breakfast – a dish so popular it often sells outbefore 8am.But diners recently riding on Shanghai’s ―Lunch Bus‖ – a free shuttle that takes white-collarworkers from the city’s financial district to a local fast food emporium – made clear that,given the time and the choice, they prefer Asian.Yan Bo, 25, a vegetable oil trader at a local bank, says he is ―too Chinese‖ to lunch atMcDonald’s.―Last year I was very busy and I ate McDonald’s five times in one week,‖ he says ruefully.―But I only do that if I have no time at all. It’s too unhealthy.‖Lunch bus riders named Ajisen, a Japanese noodle chain that offers 98 menu choices, andBanana Leaf, a Thai curry chain, among their favourites. Little Sheep, a Mongolian hotpotchain part owned by Yum Brands, and Country Style Cooking Restaurants, a Sichuan chainthat recently raised $82m in a New York IPO, and the ubiquitous Kungfu, are other Asianchain high-fliers.―I don’t think it is necessarily a battle between western and Chinese quick servicerestaurants,‖ says Mr Lim of Actis.Chain restaurants in general have very low market share, says Christian Paul of AlixPartners,but he predicts that will change. ―Chinese consumers ... like a brand to give them comfort,‖and that is just as true of food as of handbags, he says.Xia Lianyue, vice-chairman of the China Fast Food Association, says rising urban salariesand long commutes are driving the emergence of an all-new ―simple meal‖ market averagingRmb50-Rmb100 per meal, a cut above fast food at Rmb30 per person. That will be thebattleground for food companies in China: the battle for the stomach of China has just begun.
  12. 12. AUTOMOBILE INDUSTRYThe first practical automobile with a petrol engine was built by Karl Benz in 1885 inMannheim, Germany. Benz was granted a patent for his automobile on 29 January 1886, andbegan the first production of automobiles in 1888, after Bertha Benz, his wife, had provedwith the first long-distance trip in August 1888 (from Mannheim to Pforzheim and back) thatthe horseless coach was absolutely suitable for daily use. Since 2008 a Bertha Benz MemorialRoute commemorates this event.Soon after, Gottlieb Daimler and Wilhelm Maybach in Stuttgart in 1889 designed a vehiclefrom scratch to be an automobile, rather than a horse-drawn carriage fitted with an engine.They also are usually credited as inventors of the first motorcycle, the Daimler Reitwagen, in1885, but Italys Enrico Bernardi, of the University of Padua, in 1882, patented a 0.024horsepower (17.9 W) 122 cc (7.4 cu in) one-cylinder petrol motor, fitting it into his sonstricycle, making it at least a candidate for the first automobile, and first motorcycle;. Bernardienlarged the tricycle in 1892 to carry two adults.About 250 million vehicles are in use in the United States. Around the world, there wereabout 806 million cars and light trucks on the road in 2007, consuming over 260 billiongallons of gasoline and diesel fuel yearly.The automobile is a primary mode oftransportation for many developed economies. The Detroit branch of Boston ConsultingGroup predicts that, by 2014, one-third of world demand will be in the four BRIC markets(Brazil, Russia, India and China). Other potentially powerful automotive markets are Iran andIndonesia.Emerging auto markets already buy more cars than established markets.According to a J.D. Power study, emerging markets accounted for 51 percent of the globallight-vehicle sales in 2010. The study expects this trend to accelerateWorld motor vehicle production Year Production Change 2001 56,304,925 2002 58,994,318 4.80% 2003 60,663,225 2.80% 2004 64,496,220 6.30% 2005 66,482,439 3.10% 2006 69,222,975 4.10% 2007 73,266,061 5.80% 2008 70,520,493 -3.70% - 2009 60,986,985 13.50%
  13. 13. PakistanThe Automotive industry has been an active and growing field in Pakistan for a long time,however not as much established to figure in the prominent list of the top automotiveindustries. Despite significant production volumes, transfer of technology and localization ofvehicle components remains low. Most cars in the country have dual fuel options and run onCNG which is more affordable and cheaper than petrol in the country.There are only three major cars manufacturing companies in the Pakistan: PakSuzuki Indus Motors Honda AtlasPaksuzuki has a almost complete monopoly in the small car segment as it faces almost nocompetition other than the single odd DiahatsuCuore produced by Indus Motors. In theSubcompact Sedan segment Toyota Corolla, Honda Civic, Honda City, and the Nissan Sunnyare currently the only cars in production. There are still no locally made SUV, Mid or Fullsized sedans available.Toyota Corolla and Suzuki Mehran are currently the highest sellingcars in the countryAs of 2010, Pakistan has not adopted any automotive emission or safety standards. Therefore,most cars manufactured and sold in the country are still carburetor based and do not meet anyinternational emission standards. Many locally made cars such as Suzuki Mehran, SuzukiCultus, Suzuki Bolan, DiahatsuCuore, etc are globally obsolete cars from the 1970s or 1980swhich are no longer produced or sold in any country other than Pakistan.At present most cars assembled in Pakistan also do not have safety features mandatory by lawin other countries. For e.g No car currently sold by Paksuzuki, the countrys largestassembler, offers any airbags. Paksuzuki currently does not sell any automatic transmissionvehicles and only offers manual transmission vehicles.The local auto industry is also known to overcharge genuine customers by collecting"premium" and selling cars at a much higher price than their official retail amount. Theexisting auto lobby has also severely objected to the recent proposals to give new assemblersincentives to enter the Pakistani market.
  14. 14. Political riskProtection level:Before the TBS was introduced the auto industry was well protected by the government butnow as the import of CKD and CBU is liberalized the protection level to industry bygovernment is decreasedSmuggling of auto partsThe auto industry is generally faced by multiplicity of taxes; the presumptive tax regime hasled to increase in prices of imported inputs and the finished goods. Component manufacturersare struggling to compete with under-invoicing, miss declaration and smuggling. Import ofused parts is still continuing at a large scale. Smuggling, under-invoicing and dumping ofauto partsDecreasing tariff structure:For localized parts of CKD cars, the tariff would reduce from 50 per cent to 45 percent in2008-09 and further to 35 per cent in the next two years. The tariff for CKDnon-localizedparts would be reduced from 35 per cent to 32.5 per cent in 2007-08and would keep ondecline by 2.5 per cent every year to 25 per cent in 2010-11.The rate for CBU cars up to 1500cc, the tariff would be reduced from 50 per cent tozero nextyear (2007-08) and to be kept at that level thereafter. For CBU carsbetween 1500-1800cc, thecurrent rate of 65 per cent would be reduced at the rateof five per cent annually to 50 per centby 2010-11. For CBU cars exceeding 1800cc,the applicable rate of 75 per cent would bereduced at the rate of five per cent perannum to 50 per cent in 2010-11.For LCVs, the tariff on CKD kits would be reduced from 20 per cent to 15 per cent atthe rateof one per cent every year. However, the tariff for CBU LCVs, the rate wouldbe reducedfrom 60 per cent to 50 per cent in a phased manner by 2010-11.For two-wheelers, the tariff on CKD kits would be reduced from existing 30 per centto 20 percent in phased manner to 2010-1. Similarly, the tariff on CBU twowheelers would reduce to60 per cent by 2010-11 from existing rate of 90 per cent.For localised CKD parts of tractors and heavy commercial vehicles, the existing tariffof 35 per cent has been proposed to be reduced to 25 per cent in 2010-11.For prime movers (up to 280 HP) the tariff for CKD would be reduced from 10 percent to five per cent next year and then kept at that level onwards. Similarly, thetariff for CBUs would be reduced to 25 per cent next year and then kept at that levelfor the next five years. The tariff for prime movers (above 280HP) and would remainunchanged, while it would be reduced for trucks from 10 to five per cent and from30 to 25 per cent next year.
  15. 15. Economical riskFuel pricesAccording to the authorities the fuel prices which currently are Rs 78 and hasincrease by more Rs. 6 by the end of 3-Jun-11and now the price for petrol is Rs 84.Competition from import carsAuto industry is facing a threat from the import of cars which is already liberalizedfurther it is said that government will cut about 15% of duties till 2011.Lack of skilled manpower for modern machineryIn Pakistan conventional machines are not able to meet the precision manufacturingand theavailable labor is not familiar with modern technology it caused by lack ofcoordination andlinkages with Government/Semi Government Supporting Bodiesand Technical TrainingInstitutesScarcity of raw material especially steelThrough previous years the world prices are rising and causing costly inputs andPakistan hasleft with scarce Steel and Iron left, so manufacturers are facingdifficulties in producing carswith low prices.WTO—Deletion program:THE World Trade Organization (WTO) has rejected Pakistan’s request for theextension ofthe deletion program which enabled it to lay down the condition of thelocal contentrequirement (LCR). Under LCR, the automobile and other engineeringindustry was requiredto use locally manufactured parts and accessories in terms ofgovernment’s deletion policy.The condition of the LCR was an aberration to theClause 5.2 of the WTO Agreement onTrade Related Investment Measures (TRIMs),Article III–-National Treatment under theGATT, 1994.WTO’s decision for not extending its deletion program / LCR condition has variedimpact onPakistan’s vendor industry, automobile assemblers, car users and thegovernment.Input CostIn Pakistan as the inflation is increasing so as the input costs and for manufacturersit isbecoming harder to produce at lower cost. Increasing cost of energy and itsunreliable andinconsistent supply adds up the cost of manufacturing and wastageof resources. It isestimated that by the year 2012, auto industry consumption ofelectricity will cross 500 – 600MW from around 250 - 300 MW, as of now.
  16. 16. UKThe automotive industry in the United Kingdom is now best known for premium andsports car marques including Aston Martin, Bentley, Daimler, Jaguar, Lagonda, Land Rover,Lotus, McLaren, MG, Mini, Morgan and Rolls-Royce. Volume car manufacturers with amajor presence in the UK include Ford, Honda, Nissan, Toyota and Vauxhall Motors (ownedby General Motors).[1] Commercial vehicle manufacturers active in the UK includeAlexander Dennis, Ford, GMM Luton (owned by General Motors), Leyland Trucks (ownedby Paccar) and London Taxis International.In 2008 the UK automotive manufacturing sector had a turnover of £52.5 billion, generated£26.6 billion of exports and produced around 1.45 million passenger vehicles and 203,000commercial vehicles.In that year around 180,000 people were directly employed inautomotive manufacturing in the UK, with a further 640,000 people employed in automotivesupply, retail and servicing. The UK is a major centre for engine manufacturing and in 2008around 3.16 million engines were produced in the country. The UK has a significant presencein auto racing and the UK motorsport industry currently employs around 38,500 people,comprises around 4,500 companies and has an annual turnover of around £6 billion.[2]The origins of the UK automotive industry date back to the final years of the 19th century. Bythe 1950s the UK was the second-largest manufacturer of cars in the world (after the UnitedStates) and the largest exporter. However in subsequent decades the industry experiencedconsiderably lower growth than competitor nations such as France, Germany and Japan andby 2008 the UK was the 12th-largest producer of cars measured by volume. Since the late1980s many British car marques have become owned by foreign companies including BMW,SAIC, TATA and Volkswagen Group. Rights to many currently dormant brands, includingAustin, Riley, Rover and Triumph, are also owned by foreign companies.Famous and iconic British cars include the Aston Martin DB5, Aston Martin V8 Vantage,Bentley 4½ Litre, Jaguar E-Type, Land Rover Defender, Lotus Esprit, McLaren F1, MGB,original two-door Mini, Range Rover and Rolls-Royce Phantom III. Notable British cardesigners include John PolwheleBlatchley, Ian Callum, Colin Chapman, Alec Issigonis,Charles Spencer King and Gordon MurrayThe British motor industry started when Frederick Simms became friends with GottliebDaimler, who had, in 1885, patented a successful design for a high-speed petrol engine.Simms, a London consulting engineer, bought the British rights for Daimlers engine andassociated patents and from 1891 successfully sold launches using these Cannstatt-mademotors from Eel Pie Island in the Thames. In 1893 he formed The Daimler Motor SyndicateLimited for his various Daimler-related enterprises.In June 1895 Simms and his friend Evelyn Ellis promoted motorcars in Britain by bringing aDaimler-enginedPanhard&Levassor to England and in July it completed, without policeintervention, the first British long-distance motorcar journey from Southampton to Malvern.[Simms documented plans to manufacture Daimler motors and Daimler Motor Carriages (inCheltenham) were taken over, together with his company and its Daimler licences, byLondon company-promoter H J Lawson. Lawson contracted to buy The Daimler MotorSyndicate Limited and all its rights and on 14 January 1896 formed and in Februarysuccessfully floated in London The Daimler Motor Company Limited. It then purchased from
  17. 17. a friend of Lawson a disused cotton mill in Coventry for car engine and chassis manufacturewhere, it is claimed, Britains first serial production car was made.The claim for the first all-British motor car is contested, but George Lanchesters first cars of1895 and 1896 did include French and German components. In 1891 Richard Stephens, amining engineer from South Wales, returned from a commission in Michegan to establish abicycle works in Clevedon, Somerset. Whilst in America he had seen the developments inmotive power and by 1897 he had produced his first car. This was entirely of his own designand manufacture, including the two-cylinder engine, apart from the wheels which he boughtfrom Starley in Coventry. This was probably the first all-British car and Stephens set up aproduction line, manufacturing in all, twelve vehicles, including four and six-seater cars andhackneys, and nine-seater buses.Early motor vehicle development in the UK had been effectively stopped by a series ofLocomotive Acts introduced during the 19th century which severely restricted the use ofmechanically propelled vehicles on the public highways. Following intense advocacy bymotor vehicle enthusiasts, including Harry J. Lawson of Daimler, the worst restrictions ofthese acts, (the need for each vehicle to be accompanied by a crew of three, and a 2 mph(3.2 km/h) speed limit in towns), was lifted by the Locomotives on Highways Act 1896.[13]Under this regulation, light locomotives (those vehicles under 3 tonsunladen weight) wereexempt from the previous restrictions, and a higher speed limit - 14 mph (23 km/h) was setfor them. To celebrate the new freedoms Lawson organised the Emancipation Run held on 14November 1896, the day the new Act came into force. This occasion has beencommemorated since 1927 by the annual London to Brighton Veteran Car Run
  18. 18. POLITICAL In taxicabs, banking, telecommunications, and broadcasting, entry usually requires the granting of a license by a public authority. Individuals have benefited from governments granting them an exclusive right to ply a particular trade or offer a particular service. ECONOMIC The capital costs of getting established in an industry can be so large as to discourage all but the largest companies. The problem for new entrants is that they are faced with the choice of either entering on a small scale and accepting high unit costs, or entering on a large scale and running the risk of underutilized capacity while they build up sales volume. Apart from economies of scale, established firms may have a cost advantage over entrants simply because they entered earlier. In an industry where products are differentiated, established firms possess the advantages of brand recognition and customer loyalty.Whereas lack of brand awareness among consumers acts as a barrier to entry to new suppliersof consumer goods, a more immediate barrier for the new company is likely to be gainingdistribution
  19. 19. ChinaChina’s automobile industry sees a promising future after years of development. In1998, China produced 1.56 million automobiles, accounting for only one sixth ofGeneral Motor’s annual output and one third of Toyota’s yearly production. After lessthan one decade of development, China has emerged into the world’s fastest-growing major auto market, with an average annual growth of more than 22.2% from1998 to 2006. In 2006, it overtook Japan as the world’s second largest autoconsumer after the U.S., with auto sales rising 25.1% year-on-year to 7.2 millionunits. Meanwhile, it surpassed Germany to become the third largest auto maker afterthe U.S. and Japan, with automobile production climbing 27.6% year-on-year to 7.3million units. In 2007, automobile production and sales jumped over 20%,despite soaring raw material prices, indicating continued robust growth in the world’ssecond largest auto market. Automobile production amounted to 8.88 million in2007, with an increase of 22.02% over 2006. This figure closely approaches thetarget of 9 million units set in the eleventh 5-year (2006-2010) plan for theautomobile industry by China’s National Development & Reform Commission, thenation’s top economic planner. Auto sales totaled 8.79 million, representing a growthof 21.84% year-on-year.China’s automobile industry is currently dominated by passenger cars. The share ofpassenger cars in the country’s total number of automobiles rose from 18.4% in1994 to 53.6% in 2006 by output, while the average annual growth rate of passengercar output was 6.9 times that of commercial vehicles from 2001 to 2006.Political riskGeneral market risks. The global economic and financial crisis led to substantial falls indemand for automobiles and commercial vehicles in 2009. State scrappage incentivesalleviated the slump in demand for cars somewhat, but Daimler profited from these actionsonly to a very limited extent. There is a danger, however, that the discontinuation of thisfiscal support will lead to significant falls in unit sales in the coming years. Customers havemeanwhile become used to a certain level of sales supporting actions. Such additionalfinancing offers and price incentives could have a negative impact on earnings in the comingyears. Competitive pressure in the automotive markets, which was already a significantfactor, has therefore intensified. In many markets, customers’ heightened sensitivity to theissue of vehicles’ environmental friendliness and high fuel prices have boosted demand forsmaller, more fuel-efficient automobiles. In order to enhance the attractiveness of less fuel-efficient vehicles, additional measures could become necessary with an adverse effect onprofitability. These additional actions would not only reduce revenues in the new-vehiclebusiness, but would also lead to lower price levels on used-vehicle markets and thus to fallingresidual values for leased vehicles.
  20. 20. Risks related to the legal and political framework. The legal and political framework has aconsiderable impact on Daimler’s future business success. Regulations concerning vehicles’exhaust emissions, fuel consumption and safety play a particularly important role.Complying with these varied and often diverging regulations all over the world requiresstrenuous efforts on the part of the automotive industry. We expect to have to significantlyincrease our spending aimed at fulfilling these requirements in the future. Many countrieshave already implemented stricter regulations to reduce vehicles’ emissions and fuelconsumption, or are about to do so, one example being European regulations on exhaustemissions and fuel consumption. The key elements of the European Union’s regulation oncarbon dioxide, which was passed by the EU parliament at the end of 2008, call for asignificant reduction in new vehicles’ CO2 emissions already as of 2012, and for phasedimprovements whereby the average emissions of manufacturers’ entire fleets of new carshave to meet new limits by 2015. Non- compliance with those limits will lead to penaltypayments for manufacturers. Similar legislative proposals is also available in ChinaEconomical riskChina is slowing, but its a slowdown coming off a high base and its a slowdown that isneeded in the interests of economic stability. Russia is strongly up this year. India is up, too.Europe may be two speed but Germanys economy has been very strong. The underlyingsituation in North America can perhaps be described as one of continuing gradualimprovement. The supply-chain disruption caused by the March 11 earthquake and tsunamiin Japan is slowly but surely being overcome.There are some pretty big concerns in the background though. One is the situation in the USwith the possible US government debt default. Another is the fragile state of the Europeaneconomy and the pressures at work that threaten financial stability in the eurozone. There is aneed for the relevant authorities and key actors to steer a course through these potentiallydangerous waters to ensure the global economy doesnt receive a sizeable negative shock. Abroader financial crisis is not out of the question. We also need the price of oil to stay stable.After looking unexpectedly strong in the spring, the economic recovery has had a fragile feelabout it lately. The latest US economic data hasnt lived up to the upbeat promise suggestedearlier in the year. Interest rates are still on the floor here in Britain, despite an uptick ininflation, such are the concerns over the strength of underlying demand in the economy.Household incomes are falling in real terms and house prices are going down again. With thebase rate at 0.5%, if the economic situation deteriorates there isnt room for big interest ratecuts as there was a few years ago. And government finances are not exactly in good shape, sosupport from government spending isnt really an option either.The overall situation isnt too bad given where things were a few years ago, but keeping theglobal economic recovery on track and avoiding financial instability is perhaps moreimportant than ever right now.
  21. 21. TOBACCO INDUSTRYThe tobacco industry comprises those persons and companies engaged in the growth,preparation for sale, shipment, advertisement, and distribution of tobacco and tobacco-relatedproducts. It is a global industry; tobacco can grow in any warm, moist environment, whichmeans it can be farmed on all continents except Antarctica. The tobacco industry isparticularly significant for those seeking to understand modern public relations techniquesand the operations of specific companies for two reasons. Firstly, as a global industry thatcame under sustained criticism from the mid-twentieth century onwards, it pioneered manybig-budget campaigns that fueled the growth and evolution of the public relations industry.Secondly, as a result of legal actions against the major tobacco companies, there are now over40 million pages of internal company documents publicly available on searchable websitesthat provide a fascinating insight into the inner workings of past and still running campaigns.Tobacco, one of the most widely used addictive substances in the world, is a plant native tothe Americas and historically one of the half-dozen most important crops grown by Americanfarmers. More specifically, tobacco refers to any of various plants of the genus Nicotiana,(especially N. tabacum) native to tropical America and widely cultivated for their leaves,which are dried and processed chiefly for smoking in pipes, cigarettes, and cigars; it is alsocut to form chewing tobacco or ground to make snuff or dipping tobacco, as well as other lesscommon preparations. From 1617 to 1793 tobacco was the most valuable staple export fromthe English American mainland colonies and the United States. Until the 1960s, the UnitedStates not only grew but also manufactured and exported more tobacco than any othercountry.Since 1964 conclusive epidemiological evidence of the deadly effects of tobaccoconsumption has led to a sharp decline in official support for producers and manufacturers oftobacco, although it contributes to the agricultural, fiscal, manufacturing, and exportingsectors of the economy. Tobacco is an agricultural commodity product, similar in economicterms to agricultural foodstuffs: the price is in part determined by crop yields, which varydepending on local weather conditions. The price also varies by specific species grown, thetotal quantity on the market ready for sale, the area where it was grown, the health of theplants, and other characteristics individual to product quality. Laws around the world nowoften have some restrictions on smoking, but 5.5 trillion cigarettes are still smoked each year.Tobacco is often heavily taxed to gain revenues for governments and as an incentive forpeople not to smoke.
  22. 22. Pakistantobacco industry — growing, manufacturing, distribution and retailing — contributed4.4 per cent or over Rs 27.5 billion to the total GDP of Pakistan including Rs 15.17billion, including Rs 14.54 billion in excise duty and sales tax, in 1997. It is the singlebiggest contributor of excise duty, six-times than that from cotton yarn. Over 5 percent of all taxes collected in the country comes from the tobacco industry. It employsover one million people directly or indirectly which in terms of full-time equivalentjobs means 312,500 jobs supporting some 1.2 million persons.The area under tobacco cultivation increased by 30 per cent during 1990-91 to 1998-99 — from 44,000 hectares to 57,000 hectares. The production has increased evenmore significantly during the same period — by 145 per cent from 75,000 tonnes to109,000 tonnes. The value-added sector, the cigarette production, depicted a farmore unproportionate increase of 72 per cent — from 29.8 billion sticks to 51.5 billionsticks during the same period.Tobacco is the only crop grown in Pakistan whose yield is well above the worldaverage and matches the per hectare yield in the US and other developed countries— an average yield of 1,900 kilograms per hectare. Tobacco industry — growing,manufacturing, distribution and retailing employs over one million persons directly orotherwise. This translates in the full time equivalent of 312,500 jobs supportingapproximately 1.2 million persons. Manufacturing employs the highest number ofpersons — 35 per cent followed by 33 per cent by growing and 32 per cent indistribution and retail.Political risk Political Instability Lack of Favourable policies, effective regulations and reasonable provisions relating to the IndustryEconomical riskSmugglingIt is easy to understand the threat of huge revenue loss that presence and easyavailability of smuggled cigarettes pose to the economy of Pakistan. The governmentis losing a substantial revenue of Rs 3 billion from the smuggling of cigarettes intothe country. According to AslamKhaliq, the director consumer and regulatory affairsof Pakistan Tobacco Company, the second top cigarette manufacturer after LaksonTobacco, the government is losing at least Rs billion every year due to cigarettesmuggling. He blamed the high taxation as the singular most important incentive forcigarette smuggling.This is true if one looks at the global trends of taxation on cigarettes. Smokers inPakistan pay the highest tax in the world second only to Denmark and the UK where85 per cent and 82 per cent of the retail price respectively goes toward taxation. In
  23. 23. Pakistan, 78 per cent of the retail price of premium brands ( all brands whose retailprice is over Rs 10 per 20 sticks) and 58 per cent of the retail price of low segmentbrands go toward taxation.Price warDefending the price war started by PTC by slashing the prices of a number of itsmiddle-priced brands early this year, Aslam said that it brought numerous domesticmanufacturers in the excise duty and sales tax net. For instance, slashing the priceson some of its brand by 50 per cent from Rs 19 to Rs 9 reduced the excise duty from63 per cent to 43 per cent with sales tax remaining unchanged at 15 per cent.Despite price reduction, Aslam said, PTC was able to break even due to increasedturnover and at the same time forced manufacturers who did not pay excise duty andsales tax in the net to create a level playing field.Though worried about smuggling and high taxation, Aslam expressed that cigaretteprices in Pakistan are on the much low side. He said that the manufacturers shouldbe allowed to increase the prices of their products to better their revenues which areconstantly threatened by massive smuggling. He also suggested that price increaseswould help discourage smoking in the country.True. Experience in many countries show that each 10 per cent increase in cigaretteprices results in a 5 per cent decrease in the numbers of smoking adults and muchmore in young adults — between 6 to 8 per cent — who have little surplus funds tospend on smoke. However, the argument that high prices discourage smoking is abit flawed particularly in the context of Pakistan.Number one, unlike all developed and many developing countries Pakistan choosenot to spend even a negligible portion of tobacco taxes on healthcare, research,education, and anti-smoking activities. Such developing countries, not to mention thedeveloped ones, as Nepal and Peru spend a share of cigarette taxes to supportcancer research and treatment. Latvia allocates 30 per cent of the revenue which itearns from the tobacco tax on healthcare. Iran earmarks a portion of tobacco taxrevenue on healthcare and education.if the manufacturers and policy makers are really serious about reducing smoking inPakistan through price increases — and no one say that they are — they need toraise taxes on all brands of cigarettes be it locally manufactured — imported.Supporting the domestic tobacco industry against imports, as is the case withPakistan, may be good for the local industry but negates the very argument thathigher prices and taxation discourages smoking.
  24. 24. UKOver the last year there have been significant changes among the largesttobacco companies with Imperial Tobacco acquiring Altadis, formerly thefifth largest company in the industry, and Altria (Philip Morris) retaining itsoperations in the USA and spinning off its international tobacco operations(Philip Morris International).Excluding China, which accounts for a third of total global cigaretteconsumption, the five largest tobacco companies are Philip MorrisInternational (24%), British American Tobacco (19%), Japan TobaccoInternational (17%), Imperial Tobacco (9%) and Altria (5%). Together theyaccount for 74 per cent of the total cigarette market. The cigarette and tobaccomarket in the United Kingdom is dominated by two firms, Gallaher and ImperialTobacco, who between them control around 85% of the market. British AmericanTobacco (BAT) manufactures cigarettes in the UK but sells most of them abroad. Inrecent years, the proportion of smokers using hand-rolled tobacco(HRT) hasincreased so that now approximately one in four cigarettes smoked in the UK ishand-rolled. However, over half of all hand rolled tobacco smoked in the UK issmuggled. The legitimate, tax-paid market is dominatedby five brands which comprise over 90% of legal sales.In the UK, the tobacco industry has been steadily reducing its workforce, largely as aresult of mechanisation and rationalisation.One study found that of the 19,400 jobs lost between 1963 and 1985, 16,000 (82%)could be attributed to general factors such as productivity improvement According tothe latest official estimates, in 2007 around 5,000 people were employed in tobaccomanufacturing. POLITICAL Laws around the world now often have some restrictions on smoking, but 5.5 trillion cigarettes are still smoked each year. Tobacco is often heavily taxed to gain revenues for governments and as an incentive for people not to smoke. Tough law enforcement measures are the way to tackle tobacco smuggling. The tobacco industry is being disingenuous in claiming that tax increases will result in massive leaps in smuggling. Since the government started cracking down on smuggling and new laws were put in place with the threat of heavy fines for manufacturers which allow their products to be smuggled, smuggling has reduced dramatically. ECONOMIC The tax on a packet of 20 cigarettes rose 34p last year and the budget is scheduled to bring the increase for 2011 to 39p a pack. Tobacco sales are a major contributor to Treasury coffers, with about 77% of the pack price going directly to the chancellor.
  25. 25. ChinaPeople in china are addicted to tobacco and lot of people overe there are chain smoker.Political riskGovernmentThe Chinese government consists of a system of multi-party cooperation and politicalconsultation under the leadership of the CPC. The system ensures that the CPC is the onlyparty in power in the Peoples Republic of China. Under the precondition of accepting theleadership of the CPC, the eight other political parties participate in the discussion andmanagement of state affairs, in cooperation with the CPC.Human RightsThe China country reports in the State Departments 2007 Human Rights Practices andInternational Religious Freedom Reports noted Chinas well-documented and continuingabuses of human rights in violation of internationally recognized norms, stemming both fromthe authorities intolerance of dissent and the inadequacy of legal safeguards for basicfreedoms.Political StabilityThe level of foreign business activity in China after the Tiananmen Square massacre hasfallen off dramatically in many areas, including tourism and foreign investment. Whilecompanies not already involved in China are wary of committing investment to China,countries already involved in investment activities seemingly are waiting for a quiet period inwhich economic progress will begin again and believe that China will not expel foreigninvestors in the meantime. There is not much likelihood that extant joint ventures and foreignmanufacturing plants will be closed under the present regime, but political stability is still abig question to foreign investors.
  26. 26. Economical riskTRADE AND CURRENCY DISPUTESSigns of a thaw in relations between Washington and Beijing have convinced foreignexchange markets China will soon unshackle the yuan from its dollar peg and allow it toappreciate against other global currencies, two years after it was fixed at a rate manyeconomists regarded as undervalued, and which many Western policymakers said gaveChinese firms an unfair advantage which worsened global imbalances.U.S. Treasury Secretary Timothy Geithner delayed a report due in April that could havebranded China a "currency manipulator", avoiding an embarrassing spat during President HuJintaos visit to Washington for a nuclear security summit. The two global powers alsonarrowed their differences over how to contain Irans nuclear ambitions. But while theconsensus opinion in financial markets and diplomatic circles overwhelmingly expects achange in Chinese currency policy this year, the key questions of when and by how much theyuan is allowed to rise remain unknown.There is also a risk another diplomatic row could complicate currency policy -- members ofthe U.S. Congress have demanded tougher steps to press Beijing, including the threat of extratariffs on Chinese goods, and rising disquiet about Chinese trade policy in the United Statescould be exacerbated by broader tensions over Tibet and Taiwan and by U.S. Congressionalelections in November. Meanwhile, the willingness of Chinas government to consider anypolicy change tends to be inversely proportional to how strongly such change is demanded bythe West.SOCIAL STABILITYChinas Communist Party has so far maintained general authority and control despite fears in2008 and 2009 the global economic crisis could spark unrest among laid-off workers.Outbreaks of discontent have remained brief and localised.But with the Party and global markets treating social stability as a crucial issue, even limitedchallenges to the Partys control can produce outsize policy reactions.Ethnic tensions in Tibet and Xinjiang have distracted the central government and drawninternational concern, but have not seriously threatened national stability.
  27. 27. MEDIA INDUSTRYJames Augustus Hickey is considered as the "father of Indian press" as he started the firstIndian newspaper from Calcutta, the Calcutta General Advertise or the Bengal Gazette inJanuary, 1780. In 1789, the first newspaper from Bombay, the Bombay Herald appeared,followed by the Bombay Courier next year (this newspaper was later amalgamated with theTimes of India in 1861).The first newspaper in an Indian language was the SamacharDarpan in Bengali. The firstissue of this daily was published from the Serampore Mission Press on May 23, 1818. In thesame year, Ganga Kishore Bhattacharya started publishing another newspaper in Bengali, theBengal Gazetti. On July 1, 1822 the first Gujarati newspaper the Bombay Samachar waspublished from Bombay, which is still existant. The first Hindi newspaper, theOoduntMarthand began in 1826. Since then, the prominent Indian languages in which papershave grown over the years are Hindi, Marathi, Malayalam, Kannada, Tamil, Telugu, Oriya,Assamese, Urdu and Bengali.[1]The Indian language papers have taken over the English press as per the latest NRS survey ofnewspapers. The reason being the growing literacy rate. Increase in the literacy rate has directpositive effect on the rise of circulation of the regional papers. The people are first educatedin their mother tongue as per their state in which they live for e.g. students in Maharashtra arecompulsory taught Marathi language and hence they are educated in their state language andthe first thing a literate person does is read papers and gain knowledge and hence higher theliteracy rate in a state the sales of the dominating regional paper in that state rises.The next reason being localisation of news. Indian regional papers have several editions for aparticular State for complete localisation of news for the reader to connect with the paper.MalayalaManorama has about 10 editions in Kerala itself and five outside Kerala and twoabroad (Bahrain and Dubai). Thus regional papers aim at providing localised news for theirreaders. Even Advertisers saw the huge potential of the regional paper market, partly due totheir own research and more due to the efforts of the regional papers to make the advertisersaware of the huge market.
  28. 28. PakistanMedia in Pakistan provides information on television, radio, cinema, newspapers, andmagazines in Pakistan.Though Pakistani media enjoy relative freedom compared to some ofits South Asian neighbours, the industry is subjected to many undemocratic and regressivelaws and regulations.The country was subjected to alternating military and democratic rule – but has managed tothrive on basic democratic norms. Though the Pakistani media had to work under militarydictatorships and repressive regimes, which instituted many restrictive laws and regulationsfor media in order to ‘control’ it, the media was not largely affected. The laws are, however,detrimental to democracy reform, and represent a potential threat to the future of Pakistanimedia and democracy.Political riskCompanies with cross border interests in unstable or emerging markets face avolatile risk environment that requires careful planning and management. Aonworks in partnership with some of the world’s leading financial institutions,global corporations, traders and exporters, to help them mitigate and managetheir risk exposures utilizing a full service political risk management practiceOur team of experts provides comprehensive but flexible solutions, designed forthe complex requirements of their global operations. Our services include in-depth program assessment, crisis management consulting, political risk analysisand individually-structured for proper media industryPolitical violence and Government WeaknessAttacks on politicians, and alliances formedbetween Islamist parties to challenge the government. Changes in political balance of power.Markets will be watching manoeuvring by opposition parties and the military to gauge thepossibility of a challenge to the government. Most analysts expect the government to remainin power for now, but distracted from reforms because of its focus on survivalMedia lawsThere are a number of legislative and regulatory mechanisms that directly and indirectlyaffect media. Besides the Press and Publication Ordinance (PPO) mentioned above, theselaws include the Printing Presses and Publications Ordinance 1988, the Freedom ofInformation Ordinance of 2002, the Pakistan Electronic Media Regulatory Authority(PEMRA) of 2002, the Defamation Ordinance of 2002, the Contempt of Court Ordinance of2003, the Press Newspapers News Agencies and Books Registration Ordinance 2003, thePress Council Ordinance 2002, the Intellectual Property Organization of Pakistan Ordinance
  29. 29. 2005 and lastly the Access to Information Ordinance of 2006. Also there wereattempts in 2006 for further legislation ostensibly to streamline registration of newspapers,periodicals, news and advertising agencies and authentication of circulation figures ofnewspapers and periodicals.Economic riskThere are lot of illiterate and poor people in PakistanBribery and CorruptionBribery is illegal. It is an offence for British nationals or someone who is ordinarily residentin the UK, a body incorporated in the UK or a Scottish partnership, to bribe anywhere in theworld.In addition, a commercial organisation carrying on a business in the UK can be liable for theconduct of a person who is neither a UK national or resident in the UK or a bodyincorporated or formed in the UK. In this case it does not matter whether the acts oromissions which form part of the offence take place in the UK or elsewhere.In 2010, Pakistan was ranked the 36th most corrupt country (out of 178) in TransparencyInternational’s corruption perception index (CPI)Corruption in Pakistan is widespread and deeply entrenched into the system. Corruption takesmany forms in Pakistan ranging from petty bribery, nepotism and misuse of power. The mainreasons for this high rate of corruption are poverty and low incomes especially of governmentemployees and lack of accountability.According to surveys regarding corruption in Pakistan respondents, the police are consideredas the most corrupt department. Police officers, who are poorly paid, often demand smallbribes for alleged infringements, usually from motorists; this has an impact on the daily livesand disposable income of employees, as well as on public trust in the police.
  30. 30. UKMedia of the United Kingdom consist of several different types of communications media:television, radio, newspapers, magazines, and Internet-based Web sites. The UK also has a strongmusic industry. The UK has a diverse range of providers, the most prominent being principle publicservice broadcaster, the British Broadcasting Corporation (BBC). The BBCs competitors include ITVplc, which operates 11 of the 15 regional television broadcasters that make up the ITV Network.News Corporation, who operate a number of leader national newspapers through NewsInternational such as The Sun and The Times as well as holding a large stake in satellite broadcasterBritish Sky Broadcasting and various other media holdings. Regional media is covered by local radio,television and print newspapers. Trinity Mirroroperate 240 local and regional newspapers in the UK,as well as national newspapers such as the Daily Mirror and the Sunday Mirror.Political risk

×