Dibrell Case:
To assess the competition and attractiveness of the tobacco industry, Porter's five forces model of industry competition will be utilized. Using analysis from the Porter model, the tobacco leaf industry is shown to be an impenetrable market using three factors: 1) the tobacco industry is presently encapsulated in a state of flat growth, 2) the players in this industry are absorbing smaller companies, and 3) mergers amongst the big four tobacco companies have been considered. With support from Porter's model, these three factors will show the associated risks that a prospective entrant would have to endure in order to penetrate the tobacco leaf industry.
The first of Porter's five forces is the threat of new entrants. Threats of new entrants into the tobacco leaf industry are low according to the material presented in the case. Reasons that may lead an entrant to conclude this are associated with low access to specific tobacco types and subsequent financial capital that would be required for a new player to infiltrate the industry. Corporations currently involved in the tobacco leaf industry are international companies that have tobacco plantations all over the globe. Furthermore, the customer base that this company has spans over 60 countries; this would seem to be the largest tobacco company in the world, however, it is not as it places third in terms of the four major international tobacco players in the world. The size of Dibrell and other tobacco corporations has allowed them to differentiate a standard product (the quality of their flue-cured and burley tobacco's) and in turn retain customer loyalty; this was made possible by processing standards that exceeded the demands ...