SWOT Analysis of Gold Flake: Classic Indian Cigarette Brand

Quick Stats on Gold Flake

Founder	W.D. & H.O. Wills
Year Founded	1901
Origin	Bristol, England
No. of Employees	N/A
Company Type	Subsidiary Brand
Market Cap	US$2634.86 Billion (2021)
Annual Revenue	Rs 5,433 Crores (2021)
Net Income/ Profit	Rs 1,836 Crores (2021)

Products of Gold Flake

• Cigarettes
• Codentify
• Fine-cut rolling tobacco
• Snuff
• Rolling papers and tubes

Competitors of Gold Flake

Gold Flake competes on a global level while maintaining its quality and uniqueness, it competes with global brands such as

• Insignia
• India Kings
• Lucky Strike
• Classic
• Navy Cut

Now that we have seen a brief overview of the company, we can now delve right into the SWOT analysis of Gold Flake.

SWOT Analysis of Gold Flake

A SWOT Analysis is a strategic planning and management technique that helps an organisation determine their strengths, weaknesses, opportunities, and threats related to business competition or project planning. It is a useful planning system that allows Gold Flake to help identify its performance about its competitors and the industry as a whole.

To better understand the SWOT Analysis of Gold Flake, refer to the infographic below:

Let us now learn more about the SWOT Analysis of Gold Flake by starting with the strengths of Gold Flake.

Strengths of Gold Flake

Strengths are determinants that help identify the company’s unique qualities, what features does it excel at and what makes the organisation stand out from the rest of the competition.

• Premium Brand: Gold Flake is known for its upper-class quality and king-size cigarettes. With continuous innovation it comes up with classy designs of its products. It also introduced a new way of stuffing tobacco that supposedly made cigarettes easier on the throat.
• Target Consumer: While most of the other cigarette brands under the competition target the older group, Gold Flake has always been admired by youngsters; an adult and grown-up set of males and females who live luxurious and classy lives.
• Introduction of Lights: The introduction of lights that was backed by a dew drop symbol gave Gold Flake a recognizable differentiator. The brand gave it a visual symbol and the biggest claim is the smoothness of it.
• Market Captured: Apart from India, Gold Flake also serve many other countries like Canada, Jamaica, Ireland, the United Kingdom, the Netherlands, Germany, Switzerland, Egypt, South Africa, the Palestinian territories, Nepal, Pakistan, and Malaysia.
• Range of Options: Gold Flake cigarettes comes up with a range of cigarette options like Gold Flake Kings, Gold Flake Kings Lights, Gold Flake, Gold Flake Lights and many more along with soft packs with the traditional style packaging and design.
• Sponsorships: Gold Flake was the main sponsor of the Gold Flake Open tennis tournament from 1997 until 2001. It was an ATP tennis tournament held in Chennai, India which helped Gold Flake get a significant presence in the market.
• Strong Parent Support: Gold Flake gets both financial and administrative support by its parent association ITC which is one of the strongest MNC groups in India and this in itself is one of the biggest strengths of Gold Flake. 

Weaknesses of Gold Flake

Weaknesses are pointers that may prevent an organisation from functioning at its prime level. There are areas in which Gold Flake has to improve:

• Add is Banned: Advertisements for these products are completely banned in India. As in India, there is a lot of government regulation and speculation on these industries.
• Slightly Higher Price: The price of gold flake is slightly higher than other cigarette brands and in the Indian market cheaper products with lower quality works for people.
• Limited Success Outside Core Business: Gold Flake, although being one of the industry’s leading companies, has had difficulty expanding into new product sectors due to its current culture. Also, the brand was the number one brand of cigarette in India in the 1970s but it has been surpassed now by leading competitors.
• Inflating Prices: Due to an increase in taxes and regulatory impositions, the prices of cigarettes are increasing rapidly. Consumers focus on price and buy cheaper local cigarettes ignoring quality, thereby might lead to losses for Gold Flake. 
• Efficient Marketing: The product’s marketing leaves a lot to be desired. In terms of sales, the product is a success, but its positioning and unique selling proposition aren’t.

Opportunities for Gold Flake

Opportunities are prominent external circumstances that may provide Gold Flake with a competitive advantage.

• Launch Tobacco-free Cigarette: As the demand for a tobacco-free or less harmful cigarette is increasing day by day there is a great opportunity for Gold Flake to capture that market by launching a tobacco-free cigarette under the same brand. 
• New Product of Lower Price: As the majority of customers in India are always in seek of cheaper products. So Gold Flake can take advantage of it by adding a new product “a low price cigarette” in their product line.
• Youth & Teenagers: The ratio of chain-smoking among teenagers and youngsters are increasing in India. And the habit or the taste which gets developed at a young age in humans will remain throughout the life so there is a golden opportunity for Gold Flake to retain them as their loyal customers by making the product as per their desire.
• Launch New Varieties: Gold Flake only deals in 4 varieties of cigarettes named Gold Flake Kings, Gold Flake Kings Lights, Gold Flake, Gold Flake Lights. Gold Flake should think of launching new products like new cigarette varieties. 
• Improve its Digital Presence: Being one of the top cigarette brands in the world, Gold Flake should take the opportunity of the booming digital era and build a stronger relationship with its customers online using digital marketing strategies. Having a strong digital presence creates a lasting impression and attracts new customers.

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• Strong Free Cash Flow: There is a strong free cash flow from its parent company that puts resources into the hands of Gold Flake to expand into new product categories. Also, it can buy its rivalries to establish itself as the strongest brand all over the world.

Threats to Gold Flake

Threats are factors that have the likelihood to disrupt an organisation. 

• International Competition: As there are many new national and international companies that have entered the market like Davidoff, Marlboro, Pall Mall, Parliament and this is leading to a heavy competition for Gold Flake.
• Government Regulations: Gold Flake should monitor the fast-changing government regulations under the growing pressure from protest groups and non-government organisations, especially regarding the aspects of consumer health and labour safety.
• Competitors’ Low Prices: The company may be challenged to control its prices as compared to its main competitors. Other competitors have lower prices compared to them. Consumers may opt to purchase cheaper products that may look and taste like Gold Flake cigarettes.
• The Subject of Litigation: With tobacco being addictive and the single most prominent reason for preventable demise globally, Gold Flake is highly controversial, not short because of its record of confusing scientific proof around the health effects of smoking. It has been the subject of litigation and restrictive ruling from governments.
• Local Distributors: The growing strengths of local distributors and local cigarette producers also pose a threat in some markets, as competition is paying higher margins to local traders and consumers also switch to cheaper products with similar tastes.

This ends our detailed SWOT analysis of Gold Flake. Let us conclude our learnings below.