Competition and Industry

As a business operates and becomes profitable, there is space for other businesses to come and make money from the same idea. Thus all businesses naturally have competition, unless competition is made impossible artificially or artificially stifled.

Competition is defined as the rivalry among sellers trying to achieve such goals as increasing profits, market share, and sales volume by varying the elements of the marketing mix: price, product, distribution, and promotion. It is the product of vying for customers by the pursuit of differential advantage, i.e., changing to better meet consumer wants and needs.

Thus an industry is the sum of all competitors within the same category of products.

As industries mature over time, they develop certain norms and practices which are more or less common within them.

The Indian cigarette space is dominated primarily by three players:

• ITC Ltd
• Godfrey Phillips India Ltd
• VST Industries

Output per annum: Indian Tobacco and tobacco products earn a whopping annual sum of about Rs.10271 crores

Percentage in world market: India today holds a meager 0.7% share of the US$ 30 bn global trade in tobacco, with cigarettes contributing for 85% of the country's total tobacco exports.
Market Capitalization: Indian Tobacco Industry's exports are likely to touch Rs. 16,050 million towards the end of current fiscal

The Indian cigarette industry has been posting strong growth in the recent years, but is forecast to slow down

in coming years, primarily due to the strict regulations put in place by the Indian government to curb the

usage of tobacco and tobacco products.

While cigarettes are usually the leading segment in most countries, the Indian tobacco industry is led by the

sale of chewing tobacco followed by cigarettes.

The Indian cigarette industry follows the international phenomenon of the industry size remaining the same even during economic downturns since smokers tend to purchase cheaper brands and thus the sale of cigarettes remains the same.