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Pages:
2 pages/β‰ˆ550 words
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4 Sources
Style:
APA
Subject:
Business & Marketing
Type:
Coursework
Language:
English (U.S.)
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MS Word
Date:
Total cost:
$ 10.37
Topic:

UG Economy Enterprise, Possible Business Strategy

Coursework Instructions:

Suppose that you decide to put what you are learning in this class to use in an UG economy enterprise – specifically the commercial smuggling of cigarettes from low tax states to high tax states. Your task is to identify the key opportunities and risks in establishing and operating this enterprise. I have uploaded an industry study and a couple of PDF pages that detail excise taxes by state as well as the leading tobacco growing states in the US.
You may also want to consult one of the studies done by the Mackinac Center for Public Policy, and authored in part by Ohio State's very own Dr. Todd Nesbit. The most recent study report can be found at: http://www(dot)mackinac(dot)org/20900.
I would like you to outline a possible business strategy for cigarette smuggling, focusing on the two questions How? and Where? Be sure to discuss your sourcing strategy – from which states and suppliers would you obtain the cigarettes?; your distribution and marketing strategy - in which states would you sell and how would you get the product there?; and your sales strategy - what firms or individuals would you need to involve to sell your product? In addition, please comment on the ways in which you would hope to avoid detection, arrest, and prosecution by the FBI, local police, and other government agents.
Finally, without doing a great deal of additional research (or more likely - Wikipedia surfing), do you believe the same opportunities would be available in smuggling liquor from one state to another? What logistical features of this new 'opportunity' might make it more difficult or less profitable than cigarette smuggling?

Coursework Sample Content Preview:

Cigarette Smuggling
Name
Institution
Cigarette Smuggling
In order to run a successful cigarette smuggling practice, the best source strategy is to get cigarettes from low tax states to high tax states. In this way, the best state to source the cigarettes from is Virginia where the taxes for cigarettes is very low. Once the cigarettes are sourced from Virginia, they would be sold in New York. The difference of Virginia from New York is that it offers an appropriate market to obtain the cigarettes at a low cost (Hargreaves, 2013). These cigarettes would then have a large market in New York because the taxes are high in New York and many people cannot afford.
Direct distribution would be the most effective for cigarette smuggling. This means reaching directly to the customers without any intermediaries. The idea is to ensure that the product reaches the customer as fast as possible. For example, the distribution would involve taking a truck loaded with the cigarettes and then transported to New York as plastics or toys. The cigarettes would be hidden in a truck packaged as plastics or toys to be transported by road, and then directly sold to the customer (Hargreaves, 2013). The marketing strategy that is suitable for smuggling cigarettes is low pricing. The cigarettes will be going at a significantly lower price than the current market price. The low prices will be enticing to many people who may have been avoiding smoking because they cannot afford those offered in the market (LaFaive, Nesbit & Drenkard, 2015).
The sales strategy will involve reaching out to the black market where there are many customers. Basically, the cigarettes will often be sold in poor neighborhoods where spending a lot of money is not a priority. Further, it is easier to sell in the black market in poor neighborhoods where many other crimes are occurring making it easy to blend in without detection (Hargreaves, 2013). Another sales strategy is to stock with convenienc...
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