Excerpt from Composition:
Electronic digital Cigarettes Worldwide Group (ECIG): Report in Strategic Administration
Electronic Cigarettes International Group (ECIG) is a publicly traded (OTC: ECIG) company that specializes in creating, distributing and selling e-cigarettes, vaporizers, e-liquids, and related merchandise to consumers looking for an alternative smoking cigarettes experience or maybe a method to help them quit smoking classic cigarette or tobacco products. ECIG evolves and provides a number of brands including VIP, FIN and Vapestick in the united kingdom, U. S i9000., and European countries. The company uses nontraditional full strategies, including kiosks in heavy foot-traffic areas in britain and the U. S. additionally Internet-based stores. The company is currently situated in a fancy position – for in the united kingdom, the British government features promoted e-cigarettes as being 95% less damaging than traditional cigarettes (Public Health England, 2015), however in the U. S., the FDA has adopted a lot less favorable view of e-cigarettes and vaporizers, essentially deflating the market to them in the States (Berr, 2016).
This kind of report will certainly assess the tactical purpose of ECIG in terms of mission, vision and values. It will eventually examine the relationship and suitability between proper statements and functional aims of the firm. It will assess the extensive macro-environment with the company in terms of political, economic, social, technological, ecological and legal elements as well as risks and opportunities in order for the organization to gain lasting competitive benefit. It will make use of Porter’s Five Forces analysis to determine the attractiveness of the market and the market and to discover potentials pertaining to change. It is going to identify what comprises ideal capabilities when it comes to organizational solutions and competences and how these types of relate to the strategies of the organization. It will analyze the business features of ECIG and provide critical analysis from the generic strategies of the company throughout the Strategy Clock. Finally, it will eventually examine the real key directions to get future growth for the corporation, using Ansoff’s Matrix. The report will conclude with tips for ECIG about the strategic concerns the company currently faces.
Desk of Articles
Strategic Goal
The ideal purpose of E-CIG is based on a near-term perspective to save itself via costly acquisitions made beneath the former CEO that have left the company hooked in debt. The mission in the company under new CEO Dan O’Neill is to build VIP because an international superior brand, broaden the company into nontraditional stations, strengthen the organizational ability pool, save money and improve working capital (SA Transcripts, 2015). The long term mission of ECIG is usually “to deliver profitable growth to enhance shareholder value” (SA Transcripts, 2015). The company’s perspective is that it provides a premium product in a burgeoning sector and can make a positive impact on the lives of people looking for a healthy and balanced alternative to smoking cigarettes (SA Transcripts, 2015). Their values are rooted in an ethical determination to offering a quality item to the health-conscious consumer; because of this the company underneath O’Neill beliefs honesty, visibility, and efficiency (SA Transcripts, 2015).
Romantic relationship between Strategic Statements and Functional Targets
O’Neill’s decide to turn the corporation around from the brink of bankruptcy handles upon you’re able to send ability to refinance its debt obligations, which usually so far include caused the stock to be diluted (and has harm shareholder worth substantially – a reverse stock divided in 2015 caused the share cost to jump and the stock seems to be a fatality spiral while loans turn into due quarterly and the business has no choice but to offer warrants to lenders in lower and lower prices). Currently the inventory trades at 14 mere cents on the OVER-THE-COUNTER. In 2015, Wells Fargo was to underwrite the company’s jump to the NASDAQ – and when that dropped through, the stock was hammered downward from north of one-hundred dollar per share to simply pennies today. O’Neill’s strategy of increasing shareholder worth depends upon producing do while using nontraditional stations available to the firm in the united kingdom (kiosks) and reducing debt obligations. After one year at the helm, O’Neill has not been in a position to turn the organization around with regards to shareholder value; however , this individual has reduced costs and managed to decrease SKUs year-over-year (SA Transcripts, 2015).
Exterior Analysis
The broad macro-environment of the company consists of this:
Politcally, ECIG is well-situated in the UK nevertheless nowhere different, as government regulation in Europe, the Middle East, Asia, and the U. S. can be unfavorable to e-cigarette and vaporizer retailers. Only the UK government offers given virtually any indication of promoting e-cigarette usage openly; for this reason, the company’s main sales revenue comes from the UK (SA Transcripts, 2015).
Socially, the business is well-situated to make profit on the vape trend, numerous communities have banned public smoking in bars, college campuses, places of work, etc . While many communities and governments watch vaping because different from smoking (since there is absolutely no actual smoke cigars, only water vapor from water), others view it as the same and do not need it to be allowed anywhere cigarette smoking is suspended. Thus, there is certainly still a lot of confusion regarding whether the public will accept vaping or perhaps treat it while using same social scorn demonstrated cigarettes recently; ecologically and technologically speaking, some analysts view vaping and the technology used (and its effect on the health of vapers and on the environment) since bad all the way up around and highly harmful (Allen et al., 2015).
Legal factors remain uncertain, though the latest settlements have been made with relation to exclusive technology, which is why ECIG and lots of other vape manufacturers had been sued; yet , with regard to restrictions concerning vaping and ecig sales along with e-liquid juice, only the UK indicates any favorable legal regulations regarding the sector (Cancer Research UK, 2013; Gwynn, 2015).
Threats facing the company consist of competitors via Big Cigarettes, as they have far more syndication abilities than ECIG and still have a much higher market hat, with a a lot more stable share record through which to attract investors – a major weakness of ECIG on the current time (SA Transcripts, 2015). Other threats consist of a aggressive market place led by negative reviews of researchers citing dangerous additives in vaping liquid and regulatory bodies like the FDA issuing strict recommendations for the industry rendering it difficult for smaller firms like E-CIG to be competitive against global companies that can find the money for to spend the expenses related to the guidelines (Berr, 2016; Chaudhui, 2015; Giovenco et approach., 2014).
Chances are still present, however , in the UK for example , exactly where ECIG provides over 2 hundred kiosks inside the London and other metro areas. The company is developing a stronger brand photo and has got the opportunity to progress brand commitment through marketing strategies like the Wonderful Giveaway which in turn it done leading up to New Year’s 2016, whereupon smokers look to give up and can employ ECiG’s items to help adhere to their fresh resolution (Gwynn, 2015).
Porter’s Five Pushes
Threat of recent Entry, Customer Power, Dealer Power, Competitive Rivalry and Threat of Substitution will be the five pushes of Porter’s model. Existing Rivalry involves Blu, V2, and Apollo, as well as a great many other smaller brands. Because the amazing technology involved in manufacturing e-cigs and vaporizers can be generically reproduced, you cannot find any end towards the possibility of many brands competitive in this sector (Goodman, 2013). Likewise, the threat of new entrants is usually high as well, as the merchandise are pretty cheap to manufacture, distribute and sell – so that as ECIG shows, all you need is a tiny kiosk to set up shop. Because of the competitive nature of the sector, the negotiating power of potential buyers is large, which is why E-CIG seeks to supply high-quality customer satisfaction to make itself standout among competitors (SA Transcripts, 2015). And the bargaining power of suppliers is limited because ECIG makes its e-liquid juice and parts regionally so as to adapt with rules (SA Transcripts, 2015).
Inner Analysis
What comprises proper capabilities in terms of organizational methods and competences is one of the company’s stated key elements of help in the business’s turnaround: employing high-level expertise (O’Neill formerly led Molson and CFO Phil Andersen worked preceding for Pinnacle Investment Finance, with Monsell Darville performing as Key Marketing Expert, formerly of Bacardi). With high-level talent, and shifting the headquarters to Colorado, CO, to be able to be more appealing to employees, you’re able to send focus is usually to attract strong leadership in key positions moving forward. Fundamental resources range from the company’s interior organizational framework, with CEO, CFO and Chief Advertising Officer becoming leadership jobs that can help the organization moving forward, and unique solutions being the high-level of experienced skill and command brought in to fill these roles. As the strategy from the company is always to increase shareholder value, these kinds of moves could help to reinforce shareholder assurance – yet so far they may have not – and that could be the result of the company’s crushing financial debt and continuous dilution of the stock.
The organization functions from the company range from the development, division and selling of e cigarettes, vaporizers, e-liquids and other related merchandise for kiosks in the united kingdom, U. H. and The european countries. The online shop is also portion of the business and it is maintained via headquarters in Denver, CO.
