Malawi and Tobacco Essay -- Trade Tobacco Malawi Essays

Malawi and TobaccoWhat strategies cigaret Malawi handling to overcome problems relating to a change in quest of its principal(prenominal) export, tobacco.QUESTION- what strategies can Malawi use to overcome problems relatingto a change in requisite of its main export, tobacco?Malawi, a LEDC, located in Southern Africa, has a reality of 10million. Tobacco is its main export and this provides the majority ofthe countries export revenues. It has contract dependant on exportingtobacco to firms based in MEDCs such as the United States. Demand forcigarettes has recently decreased because of health and estimablereasons. Cigarettes, has reached the end on its product lifecycle.However South East Asia stiff a growing grocery, because of theeffects of globalisation and dumping. The decrease in demand is amajor problem for Malawi, a country that is not market orientated ormarket aware. Decline in demand for cigarettes pass on obviously demand adirect effect on demand for tobacco b ecause they are complimentaryproducts. With decreased demand for its crops of tobacco, Malawi entrust keep itself in a very dangerous situation that will not only threatenits economic position but the very lives of its population.an new(prenominal)(prenominal) concern that Malawi must take into account is the state of thetobacco industry. At present the market could be described as anoligopoly (see appendix) where suppliers compete on price. The outcomeof this is that the firms involved have a high market trade andtherefore have much power to control supply and demand. They have thepower to control prices of tobacco and they can exploit countries likeMalawi. The home(a) economy is dictated by exports of tobacco. Thedecreased revenue, due to loss of demand, will an... ...E UK (BRANDS)Two firms, Gallaher and Imperial Tobacco, who between them, controlaround 80% of the market, persist the cigarette and tobacco market inthe United Kingdom. One other major firm, British American Tob acco(BAT), manufactures cigarettes in the UK but sells close to all of themabroad. In 1999 BAT merged with Rothmans International thereby change magnitude its share of the world tobacco market to 15.4%, just behindthe world leader Philip Morris which controls 17% of the globalmarket.BIBLIOGRAPHYhttp//www.ash.org.uk http//www.tobacco.orghttp//www.mcspotlight.orghttp//www.cdc.govhttp//www.sas.upenn.edu/African_Studies/Country_Specific/Malawi.htmlhttp//allafrica.comwww.google.co.ukwww.bbc.co.ukwww.altavista.comwww.theguardian.co.ukNuffield Business and economics- Students Book