FDI in a Developing Country Case of British American Tobacco Article Review

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FDI- BAT

"FDI in a Developing Country: Case of British American Tobacco" examines the particularities of British American Tobacco's long, and complex, history in India. The article traces the company from its origins as the result of a merger between a major American tobacco company and a major British tobacco company in 1902 all the way up to present times. In addition to providing a seemingly comprehensive detailing of the mergers, acquisitions, and other changes in ownership, leadership, and revenue that have marked the company's history, including that within India, the article highlights some characteristics of British American Tobacco and its actions in India that distinguish the company from many others involved in foreign direct investment in a developing country. One of these was the decision by company leadership to align the company's business interests with the professed national interests of India and its government. The second distinguishing characteristic relates to the company's full integration into India, from management personnel to equity shares. While the company has a long and profitable history, the article makes clear that much of this continued success is the result of these distinguishing characteristics.

Analysis:

British American Tobacco entered the Indian market in 1906 with two major brands of cigarettes (Nayak 2008, p1). The company promptly commenced on a somewhat convoluted ownership path that included subsidiaries, associate companies, and joint ventures, among other arrangements; the Indian sector of the company has, over time, become to be known as ITC Ltd. (India Tobacco Company).

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One weakness of the article is the means by which the succession of companies, corporate names, and organizational dynamic is presented. These changes are, for the most part, not adequately contextualized as far as the reasoning for why the changes were made are concerned.

British American Tobacco made a decision relatively early in its tenure in India to actively align its interests with those of the Indian state. Upon independence from British rule, the Indian government set forth an array of developmental goals, including employment generation, increased foreign exchange reserves, local production as a replacement for importation, and private investment in a host of core industries and sectors (Nayak 2008, p5). To a degree, BAT internalized these goals as its own and embarked on a remarkable undertaking of investment and acquisition. This led the company to invest in and develop ventures in disparate industries like hospitality (notably up-market hotels), information technology, finance and financial services, in addition to those industries and products that are connected to the tobacco and cigarette business, at least in an….....

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"FDI In A Developing Country Case Of British American Tobacco" (2012, June 20) Retrieved May 22, 2025, from
https://www.aceyourpaper.com/essays/fdi-developing-country-case-british-american-110628

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"FDI In A Developing Country Case Of British American Tobacco" 20 June 2012. Web.22 May. 2025. <
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"FDI In A Developing Country Case Of British American Tobacco", 20 June 2012, Accessed.22 May. 2025,
https://www.aceyourpaper.com/essays/fdi-developing-country-case-british-american-110628
   

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