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General Environment Analysis 1 Economic segment Cuba is command-economy and is still a poor country The GNP per capita of 2002 is just 1700 The domestic market is not in the perfect situation The government of Cuban still has to face trade deficit foreign exchange and energy problems Mild threat 2 Political-Legal segment In 1990s Cuban government implemented an austerity program to steer through the crisis and Helms-Burton Act added the burden to Cuban economy However the US government punished the economy of Cuban Threat 3 Socio cultural segment In 2002 Cuba had the population of 11224321which including 300 million cigar smokers The traditional way of making tobacco is through families manufacture The cigar industry in Cuban has a long history Opportunity 4 Technological segment In the past people produced cigar with their hands Now people prefer to use machines to produce cigar instead of using hands Sometimes hand made and machine-made will be combined in the producing processes Except for the new agricultural methods are introduced to people to improve the quality of tobacco plants Opportunity 5 Global segment Although the embargo still affects the Cuban exports former US presidents visited in 2002 may improve the relationship between Cuban and the US The market share in 2000 is US 37 Spain 42 and France 33 Cuban cigar exports increase slightly annually Opportunity Task Environment Analysis 1 Threat of New Entrants low The industry works on economies of scale Two corporations control the distribution of Cuban cigar worldwide Opportunity 2 Bargaining Power of Suppliers High Cuban government is the only buyer of the output from the private farms Threat 3 Bargaining power of buyers High The exclusive dealers distribute Havana cigar throughout the world and only these dealers have access to the cigar supply Threat 4 Threat of substitute product Low Although cigarette is another industry of Cuba cigar is still very popular in the world because of its high quality and reputation Not threat
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