The UST Inc. analysis
1. What Are the Company’s Strengths, Weaknesses, Opportunities and Threats?
UST Inc. is the newest wholly endemic accessory of Altria Group as of 6 January 2009 for US$11.7 billion. Through the acquisition, UST Inc. was able to canyon off its debt amounting to US$1.3 billion to the accepting company. (Altria, 2009) Altria Group is a bunch aggregation actively affianced in the food, wine and tobacco sectors. Before the acquisition, Altria Group already endemic a cardinal of smoked tobacco and wine brands. The accretion of UST Inc. adapted its wine artefact brands and added smokeless tobacco artefact line. On the allotment of UST Inc., the accretion acclimatized its debt, widened its administering network, and broadcast its bazaar ability (MindTools, 2009). The change in the authoritative anatomy and processes afterward the accretion agency that UST Inc. needs to advance a new action by because accouterment in its centralized strengths and weaknesses and alien opportunities and threats (MindTools, 2009.
§ Strong cast names
§ Specialized business knowledge
§ Access to alcove bazaar administering networks in the U.S.
§ Artefact innovativeness
§ Trade secrets
§ Aerial amount structure
§ Anemic banking management
§ Operational inefficiency
§ Dependence on a baby chump base
§ Anemic procedures or processes
§ Developing the online market
§ Movement into beginning bazaar segments
§ Entry into new adopted markets
§ Solidify ascendancy of the clammy smokeless tobacco market
§ Alter clammy smokeless tobacco products
§ Entry of new competitors
§ Alliance of the industry
§ Emergence of acting products
§ Change in chump taste
§ Added acrimonious regulations
UST Inc. needs to advance cast disinterestedness and booty advantage of its specialized ability in smokeless tobacco and wines to advance new and different articles (UST Inc., 2009) as a agency of appropriate its articles and the aggregation from its competitors. The aggregation additionally needs to abode its areas of weakness such as its aerial amount anatomy and anemic administering strategies causing the aggregation to abatement in debt admitting its favorable bazaar position, abnormally in the smokeless tobacco sector. It should additionally accede the sustainability of its assurance on a baby chump abject (Datamonitor, 2008).
Its added administering network, added bazaar reach, and basic beverage opens the befalling for bazaar and artefact amplification to UST Inc. including the online bazaar and able adopted markets. It could additionally actualize or move into new bazaar segments, defended its position in the smokeless tobacco market, and assortment its smokeless tobacco products. To defended cardinal success, UST Inc. has to bouncer adjoin aggressive articles and competitors, accumulate clue of changes in chump tastes, accretion a favorable position amidst alliance (Datamonitor, 2008), and advance accident affairs for the appulse of authoritative changes.
Based on the centralized strengths and weaknesses; and alien opportunities and threats faced by UST Inc., it is in bigger position because of the opportunities that opened afterward the accretion that the aggregation can apprehend by capitalizing on its strengths, acclamation its weaknesses, and advancing or preventing the accepted threats.
2. Are the Company’s Prices and Costs Competitive?
Understanding the bearings of UST Inc. to abutment cardinal development is by because its amount alternation (MindTools, 2009). The primary activities absolute the operations of the aggregation accommodate accumulation alternation management, artefact innovation, packaging, business and administering to accompany its articles to consumers. Its exceptional appraisement is abundantly due to its advanced assurance in artefact addition involving a cogent breadth of investment. Apart from marketing, assembly addition is a cogent contributor to cost.
Supply Alternation Management
Human Ability Management
Its abutment activities are accretion for accumulation alternation management, animal ability administering for business and artefact innovation, and a ambit of basement activities such as affection control, administering and accounts planning. These abutment casework are appropriately important so that these added or beneath appropriately accord to costs that reflect on the exceptional amount of UST Inc. articles (UST Inc., 2009). However, advance in bodies development and accounts planning would crave hardly college investments aback these acerb abutment artefact addition and marketing.
The antecedence amount items of UST Inc. reflects complete cardinal accommodation because the company’s aggressive action of adverse requires its abundant advance in artefact addition accurate by animal ability administering and accounts planning.
UST Inc. competes in the tobacco and wine sectors. In the tobacco sector, the aggregation competes with Altadis, British American Tobacco, and Philip Morris International Inc. (Hoovers, 2009). These are all bunch companies aggressive in the all-around market. A application of the about amount of the artefact curve and brands of the aggressive firms appearance that the prices of UST Inc. not aggressive primarily because of its exceptional appraisement aback all its competitors accept low-end brands. The alms of low-end brands agency that the companies were able to cut aback amount through economies of calibration and accumulation marketing. UST Inc. is not in this favorable situation. Its exceptional appraisement targets a alcove market. In the wine sector, the primary adversary of UST Inc. is Kendall-Jackson (Hoovers, 2009). In this sector, the amount of UST Inc. is aggressive because of similarities in the amount ambit of its wine brands with its competitor.
In employing benchmarking assay (MindTools, 2009), it appears that the amount and circumstantial prices of UST Inc. is not aggressive in the tobacco breadth but aggressive in the wine sector. This has implications on strategy. In tobacco sales, UST Inc. could aggrandize its alcove bazaar to abduction the all-around bazaar and it can advance a low-end cast for its smokeless tobacco product. In its wine products, UST Inc. can administer its amount to defended accumulation at the exceptional amount or it can additionally alter by introducing a bargain cast of wine.
Altria. (2009). Altria completes accretion of UST. Retrieved February 2, 2009, from http://www.altria.com/investors/02_00_NewsDetail.asp?reqid=1240832
Datamonitor. (2008). UST Inc. aggregation profile. Retrieved February 2, 2009, from
MindTools. (2009). Problem analytic techniques. Retrieved February 2, 2009, from http://www.mindtools.com/pages/main/newMN_TMC.htm
Hoovers. (2009). UST Inc. Retrieved February 2, 2009, from http://www.hoovers.com/ustinc./--ID__11533--/free-co-factsheet.xhtml
UST Inc. (2009, 2 February). Aggregation overview. BusinessWeek. Retrieved February 2, 2009 from
Order a unique copy of this paper