Managing in Troubled Times Case Study

Challenging Times of Japan Tobacco

OR

Abstract:
By 2003, Japan Tobacco (JT), the largest tobacco company in Japan and the world's third largest, had been facing challenging times. Since the late 1990s, due to a decrease in the number of smokers in Japan over rising health concerns, toughened tobacco regulations and economic recession in Japan, the company saw a dip in its domestic sales revenue. Its domestic market share also declined from 77.1% in 1998 to 72.7% in 2003. Another major concern for the company was the forthcoming expiry of its license agreement with Philip Morris in 2005. As the agreement had allowed JT to manufacture and market 'Marlboro', one of the most famous brands of Phillip Morris in Japan, the expiry of the agreement was believed to adversely affect JT's domestic sales and revenue. To sustain its market share and fend off foreign competitors in its domestic market, JT went ahead to launch many new cigarette brands in Japan in 2003 and early 2004.

Pedagogical Objectives:

• To discuss whether the initiatives taken by JT would keep it ahead of its competitors or not.

Keywords : Japan Tobacco Incorporated; Japan Tobacco and Salt Public Corporation; Japan Tobacco International; Marlboro; Tobacco business law; Japan tobacco law; Managing in Troubled Times Case Study; Global flagship brand; Japan tobacco's domestic business; Phillip Morris; RJR Nabisco; Mild Seven; Lucia; Katshunhiko Honda; Japan tobacco's challenges; Japan tobacco's brands

Contents:

• A brief overview
• Diversifications
• Problems in the tobacco business
• Alliance with Philip Morris
• Challenges ahead