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In 2010, Japan Tobacco International (JTI) was the world's third-largest tobacco company. It had 11% of the global market and a market capitalization of $32B.

In 2010, Japan Tobacco International (JTI) was the world's third-largest tobacco company. It had 11% of the global market and a market capitalization of $32B. They were experiencing slow growth and noticed the number of smokers in Japan was declining. They noted the following factors as being critical based on their PESTEL Analysis:

  1. Democratic Party of Japan (DPJ) wants to reduce smoking rates
  2. DPJ currently mandates all tobacco be purchased from locally sourced growers in Japan
  3. Pending tax increases on cigarettes
  4. Aging population in Japan, total population shrinking
  5. Population becoming more health conscious
  6. Rise of tobacco alternatives and smokeless products
  7. Increase in R&D for pharmaceuticals
  8. Age verification added to urban vending machines
  9. Forest preservation becoming a large legislative priority in Japan

Which of these do you think is most troubling for the business? Is it related to the element of PESTEL that you found the most concerning for the tobacco industry? What could JTI do to mitigate its risk exposure?

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