Study On The Tobacco Manufacturing Group's Financial Strategy Under Monopoly System

Tobacco industry means to engage in tobacco cultivation, processing, cigarette manufacturing, sales, trade and other areas of economic activity. China's tobacco industry has maintained several number one of the world:the world's tobacco acreage, the acquisition of the volume of the world's tobacco, the world's cigarette production, cigarette consumption in the world, the number of smokers. At the same time taxes achieved from the tobacco industry is. also among the forefront of the economy industry. It can be said that the tobacco industry is an important sector of the national economy. In tobacco industry, specializing in the manufacturing of cigarette is of industrial enterprises, specializing in cigarette wholesale is of commercial enterprises. The cigarette manufacturing industry are the core of the whole composition of the cigarette industry, cigarette industry is directly related to the prosperity of the entire tobacco industry's survival and development. However, competitiveness of industrial enterprises is not matched to China's tobacco status and position. Tobacco monopoly system is the cigarette industry group operating system environment, and therefore the study of financial strategies has important theoretical and practical significance. This paper is divided into seven parts.The first part is introduction, explainning the significance of the issue, literature review, the theoretical basis for thesis, research methods, logical structure, innovation and limitation of the paper.The first chapter of the paper does an analysis of the external environment. In China, the tobacco industry is under strict regulation of monopoly system, research the tobacco industry's financial strategy is bound to investigating the industry's external environment. This chapter first reviewed the history of Chinese organization and management system of the tobacco industry and further analysis the status of the Chinese tobacco industry. With a view to the tobacco industry on this basis the Group's financial strategy have a clear scientific starting point for the analysis. The reform of organization and management in the tobacco industry is market-oriented reform under the monopoly system. The reform of the tobacco industry aimed at improving the level of market. Through reformation, the cigarette industry groups and brand market concentration has been improved. Several cigarette groups have begun to take shape. Competitiveness of enterprises has been improved. In this paper, we use the structure, behavior, performance (referred to as SCP) analytical framework analyse the cigarette industry. Through the analysis, we found that there is still a big gap of the market concentration between China's cigarette industry and the developed countries' cigarette industry.Chapter II bring forward the goal of finance strategic management. This article holds that the cigarette industry group should take enhancing its competitiveness as financial strategic management objective. This can control the process and results of financial activities, from a higher strategic level, a more long-term perspective. This is more sustainable than to minimize the cost of capital, to maximize earnings per share, to maximize the stock market.Chapter III studied financial strategic decision-making, based on research of goal of finance strategic management. This paper analyzes methods, advantages and risks in the cigarette industry to implement variety of strategies.Chapter IV detailed the financial strategy implementation from three aspects: corporate governance, value chain analysis and strategic cost management. This chapter analyzes the characteristics of governance of the cigarette industry Group in the monopoly system, points out some of the corporate governance problems, brings forward a number of measures to improve the corporate governance structure. This chapter proposes measures to improve the value chain. Strategic Cost Management is a bridge between the financial management and the competitiveness of enterprises. This chapter brings forward the concept of the cigarette industry groups to build strategic cost management information system as well as specific means and measures.Chapter V is of the implementation control and evaluation of the financial strategy. This chapter starts discussion on three aspects:the financial-business integration system, strategic budget management, and evaluation of the effectiveness of the strategy. This chapter points out that the cigarette enterprise needs to use information technology to create an integrated accounting system. In budget management, this chapter points out that budget is a tool linking corporate strategic objectives and strategic implementation. Researched the budget management of marketing center, R & D center and manufacturing center of cigarette industry Group. This part points out the methods and indicators for the evaluation of the financial strategy.Chapter VI analyzes the prospects of tobacco monopoly, as well as dynamic optimization of industrial cigarette group's financial strategy. This chapter discusses if the tobacco monopoly system is necessary. The conditions to abolish China's tobacco monopoly system are not yet ripe. As a transitional period, we should strengthen the market allocation of resources, so as to ultimately abolish the tobacco monopoly system. The chapter also discusses ways and means of the reform and points out that it is necessary and feasible for dynamic adjustment of the financial strategy in the cigarette industry group.The innovation is mainly reflected in the following areas:1. In the topic selection, the cigarette industry is a special sector of the national economy, but also is an important industry. So far China has not yet doctoral dissertation studying from an entity perspective on the cigarette industry's financial strategy, this article attempts to give a try in this area.2. Production volume of cigarette manufacturing group is an important structural strategy cost driver, this article summarized and analyzed the ways of expanding production volume under monomply system.3. Build an analysis framework and practice guide for cigarette industry group's financial strategic manangement. Startting from environmental analysis, this dissertation explained the goal, decision-making, implementation, control, evaluation and dynamic optimization of cigarette industry group's financial strategic manangement.4. Further more, this paper analysed the route of the reform of the tobacco industry since 2003, pointed out that R&D centre, rather than marketing center is responsibe for brand maintenance, proposed that budget is a tool linking corporate strategic objectives and strategic implementation, achieve real-time budget control by means of information technology.