A Note on the Cuban Cigar Industry – 1

A Note on the Cuban Cigar application 1. Threats of bran-new entrants Product differentiation is study p dischargeer in the market of Cuban Cigars, with certain brands cosmos linked to prestigiousness and honor. Also, restrictions from the world make it difficult for new entrants, because of sell embargos put in manoeuver by a majority of the or so forcefulnessful countries in the world, including the join States. fountain of suppliers Cigar industry is dominated by 2 major suppliers, Altadis and Swedish Match, which control the dispersion of capital of Cuba cigars and Cuban branded names, with Altadis being the largest cigar company in the world.Power of buyers Buyers argon impulsive to pay premium price for character cigars, in that respectfore, the power of the buyer is very minimal, as cigar enthusiast have increased worldwide. Threats of substitutes The brat of substitutes is higher, where the actual tobacco seed has been farmed in locations outside of Cuba, inc luding the United States, Dominican Republic, and Honduras. As noted in the Case, 250 million cigars were merchandiseed to the United States from the Dominican Republic. Competitive competition Rivalry in the Cuban cigar industry is passing high, where the industry growth has tapered finish up because of intense competition.Projections were high in the mid-nineties for Cuban Cigar imports however, with the fear of loss in quality and exclusivity of the cigars, the projections were lessened. Even though there has been a steady increase in exports, it has not been heavy, exhibiting the fact that there are few real producers of Cuban cigars. 2. disposed(p) the previous analysis, based on porters beers Five Forces model, I would without a question invest in the Cuban cigar industry. For a few decades now, the industry has been on the rise, with cigar connoisseurs ceaselessly re of importing loyal and trusty to their preferred brands of cigars.At first, the tobacco firms were inc reasing their takings rapidly, all the while trying to entertain and improve quality, however, that was too difficult of a task, so in turn, Ana Lopez, the head vender for Habanos S. A. changed their focus and decided to keep works at improving quality at any expense. The quality remains, and with that remains a set group of cigar buyers, who would rarely freewheel from a brand that they have extend affixed to. Specifically, I would target my investments towards the distributors of the cigars, as they not only supply Havana or Cuban cigars to the world, but everyplacely many other popular brands and types.The main barriers that exist in investing in the Cuban Cigar industry are the U. S. interchange embargo as well as the type of government ruling over Cuba, communistic. The trade embargo puts a coarse blemish on Cuban cigar export numbers, where the numbers could be increasingly high. Further much, because of the Communist government in place, it isnt always easy for comp etitors to start new ventures, or to keep profits on the rise. 3. My decision would remain the same I would tranquil invest in the Cuban cigar industry, heretofore if the trade embargo is lifted.However, the difference in the analysis comes in the situations of rivalry, new entrants and power of the buyers. All of these would change completely with trade being allowed to the United States, who stakes aver to more than 500million premium cigar imports a year, of which, zippo are officially Cuban cigars. If the U. S. were to lay stake in the Cuban cigar industry, the full(a) market would be revamped, with competitors springing up everywhere, buyers gaining more control, and competitive rivalry going on the rise.