Market Structure and Market Failures in Sri Lankan Tobacco...

Table of Contents 1.0 INTRODUCTION TO TOBACCO CURRENT MARKET IN SRI LANKA 2 2.0 SRI LANKAN TOBACCO MARKET STRUCTURE ANALYSIS 3 2.1 THE PRIVATE AND SOCIAL COSTS OF SMOKING 5 2.1.1 Private Costs and Social Costs of Smoking 5 2.1.2 Explaining the Market Failure 5 3.0 TAXATION AND REGULATIONS 7 3.1 COMMAND AND CONTROL OF THE INDUSTRY 7 3.2 INDIRECT TAXES AND PRICE ELASTICITY OF DEMAND 9 4.0 PROBLEMS AND FUTURE FORECAST 10 4.1 PROBLEMS 10 4.2 FUTURE FORECAST 11 5.0 RECOMMENDATIONS 12 REFERENCES 14 1.0 Introduction to Tobacco Current Market in Sri Lanka Farming: The number of registered tobacco growers rose during the 1980s and most of the 1990s, but fell sharply in 1998 and 1999. It is estimated that tobacco growing provides between 5,355†¦show more content†¦Bargaining power of suppliers †¢ Bargaining power of the tobacco leaf growers are low. Since subsidiary companies operate leaf growing programs through which they provide direct agronomy support to farmers if it is not otherwise available. So CTC has the direct control over the leaf growers. Even though the import option is also available bargaining power of international suppliers also high due to huge demand worldwide. †¢ When it comes to the tobacco leafs there exists low presents of substitutes. Threats of substitute †¢ Threats of substitute are low †¢ Herbal cigarettes, Weed, Marijuana, Cannabis, Nicotine Patches, Nicotine Gums, Nicotine inhalers are among the substitutes. †¢ Since high impose of the regulations and taxes, increasing number of illicit cigarettes can be seen. Rivalry Among competitors †¢ There is low concentration of companies therefore competition is very low, the fact that there is heavy branding and brand loyalty supports this. In fact CTC is playing the monopolistic role where it enjoys the abnormal profits with the high market share. 2.1 The Private and Social Costs of Smoking Smoking creates a difference between private and social costs and benefits. Cigarette consumers derive private benefit from smoking and their habit entails a private cost. But the act of consumption creates negative externalities so that the social cost of exceeds the private cost. It is unlikely the smokers consider the external costs they areShow MoreRelatedDoing Business in the Asia/Pacific Rim Region31325 Words   |  126 Pages6534-5155 PHONE +(65) 6534-2622 FAX www.wrp.com.sg Contact Attorney: Rajaram Ramiah rr@wrp.com.sg SRI LANKA SINGAPORE Yoon Yang Kim Shin Yu 19th Floor, ASEM Tower 159-1 Samsung-Dong, Gangnam-Gu Seoul 135-798 Korea +(82-2) 6003-7000 PHONE +(82-2) 6003-7804 FAX www.hwawoo.com Contact Attorney: Jay K. Lee jklee@hwawoo.com THAILAND SOUTH KOREA Nithya Partners No. 51, Gregory’s Road Colombo 7 Sri Lanka +94-11-4712-625 PHONE +94-11-2695-223 FAX www.nithyapartners.com Contact Attorney: ChanakaRead MoreWorking Capital Management8877 Words   |  36 Pagesstatements will also assist in analyzing the profitability of the years and with the figures of the competitive firm in the industry for making analysis of relative efficiency. In sri-lanka, selected all listed companies are divided as the sectors by Colombo stock exchange. Here researcher considers Impact of working capital management on profitability of the five firms in trading industry in listed companies and do research based on the five years data between the 2003-2007 1.2. Research problem ResearchRead MoreManagement and Teaching Note19520 Words   |  79 Pagescases from all sources. Visit www.ecch.com to subscribe. Economics, Politics and Business Environment 9-407-049 ALLIANZ AG: BECOMING A EUROPEAN COMPANY Lorsch, JW; Chernak, A Harvard Business School Publishing 20pp 205-024-4 BRITISH CHOCOLATE MARKET: UP FOR A FAIRTRADE ORGANIC MAKEOVER? Structured assignment Rathore, RS; Ragu, SP IBSCDC 15pp; Teaching note 205-024-8 (12pp) 207-057-1 BURGEONING CHINESE ECONOMY: SIGNS OF OVERHEATING? Gonela, SK; Kompella, R IBSCDC 9pp; Teaching note 207-057-8 (12pp)Read MoreOne Significant Change That Has Occurred in the World Between 1900 and 2005. Explain the Impact This Change Has Made on Our Lives and Why It Is an Important Change.163893 Words   |  656 Pagesmovement of people. These upsurges and their regional unevenness created unprecedented incentives for long-distance migrations, as well as the resources and technologies that made them possible. In turn, these migrations provided the labor and markets that made these upsurges in production, integration, and flows possible. Modern migration is unprecedented in its volume and in its temporal concentration. Less than 3 million Europeans went to the New World during more than three centuries of