Changes in Cigarette Smoking Are in Decline. Is It Also an Opportunity for Growth?

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Regulations about the E-Cigarettes

There is currently no official regulatory response to Electronic-Cigarettes from governments, and this category of cigarette still remains unregulated (Sealy, 2014). But the Food and Drug Administration has to provide a framework soon concerning the risks and the addiction to these products. Of this report will depend most of the future of Electronic-Cigarettes, because of possible regulations and effect on health.

Other opportunities created with E-Cigarettes

According to Sealy (2014), another opportunity we don’t have talked yet for Electronic-Cigarettes is the possibility to introduce the Chinese market, representing one-third of the global tobacco consumption. The country is currently closed to tobacco imports and controlled by the Chinese-National-Tobacco-Company (CNTC). Some time ago, one of the major tobacco company has states the only possibility to enter in the Chinese market is with a reduced-risk product for human-health, like can be the Electronic-Cigarette.

But, according to Sealy (2014), vapor technology also introduces new possibilities and opportunities in other areas. For example, the system can be re-used as an “application of vapor technology to delivering other drugs, like insulin” (Sealy, 2014). An application such as this one can be revolutionary and has huge profit and potential benefit for everyone. And we can imagine the system can be improved in another system which goes further. And like this, a tobacco company can shifted to be a kind of pharmaceutical company which sells drugs and other health systems. And this possible future constitutes here again an opportunity.

Limitations

I have to do a limitation concerning the potential players for this opportunity. Indeed, according to Sealy (2014), it is possible that big tobacco companies exclude of the run small companies and take the overall of the market, without leaving any opportunity for other companies. First because big tobacco companies have already diversified their products in many ways, doing classic cigarettes, cigars, roll-your-own… So, Electronic-Cigarette is just the natural evolution of the brands. Secondly, tobacco companies are already prepared and accustomed with high taxation, regulation and litigation (Sealy, 2014), which can possibly be the same for Electronic-Cigarettes. And third, because big tobacco companies have huge financial and human resources which allow them to create, innovate, produce and distribute more efficiently than anyone else. All of these things, which are related to experience, economies of scale, supply cost and product/process design, are sources of cost efficiency (Johnson et al. 2008) and place big tobacco companies in the first place to succeed with this new product.

Conclusion

We have discussed in this paper the major opportunity relative to cigarette smoking which is the Electronic-Cigarette.

According to Sealy (2014), Electronic-Cigarettes can accelerate the decline of the cigarette industry but it also allows industry’s companies to innovate and create Blue Oceans which is much more profitable for everyone, with maybe less harmful effect on the consumer (Kim and Mauborgne, 2005).

According to Kim and Mauborgne (2005), Electronic-Cigarettes fit completely with the Blue Ocean framework. The product is still unregulated by authorities, constitutes an opportunity for highly profitable growth, and is almost in an untapped market space even if the competition is already launched. And this is only for Electronic-Cigarette. The possibilities of the vapor delivery systems also represent an incredible potential Blue Ocean which can be exploited.

The innovations concerning the Electronic-Cigarette have opened new markets and maybe new geographic spaces. All of these elements mean that the consumption of tobacco is set to change (Sealy, 2014).

To conclude Electronic-Cigarette can be “a vital breath of fresh air for the nation’s fading tobacco industry” (Drake, 2014).

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References

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