Malawi and Tobacco Essay -- Trade Tobacco Malawi Essays

Malawi and TobaccoWhat strategies can Malawi use to overcome problems relating to a change in demand of its main export, tobacco.QUESTION- what strategies can Malawi use to overcome problems relatingto a change in demand of its main export, tobacco?Malawi, a LEDC, located in Confederate Africa, has a population of 10million. Tobacco is its main export and this provides the majority ofthe countries export revenues. It has become dependant on exportingtobacco to firms based in MEDCs such as the United States. Demand forcigargonttes has recently decreased because of health and ethicalreasons. Cigarettes, has reached the end on its product lifecycle.However South East Asia corpse a growing market, because of theeffects of globalisation and dumping. The decrease in demand is amajor problem for Malawi, a country that is not market oriented ormarket aware. Decline in demand for cigarettes will obviously have adirect effect on demand for tobacco because they are complimentaryproducts. With decreased demand for its crops of tobacco, Malawi willfind itself in a very dangerous situation that will not only threatenits frugal position but the very lives of its population.An other(a) concern that Malawi must take into account is the state of thetobacco industry. At present the market could be expound as anoligopoly (see appendix) where suppliers compete on price. The outcomeof this is that the firms involved have a high market persona andtherefore have much power to declare supply and demand. They have thepower to control prices of tobacco and they can exploit countries likeMalawi. The national economy is dictated by exports of tobacco. Thedecreased revenue, due to exit of demand, will an... ...E UK (BRANDS)Two firms, Gallaher and Imperial Tobacco, who between them, controlaround 80% of the market, dominate the cigarette and tobacco market inthe United Kingdom. One other major firm, British American Tobacco(BAT), manufactures cigarettes in the UK but sells almost all of themabroad. In 1999 BAT merged with Rothmans International therebyincreasing 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