International Tobacco Companies’ Strategies of Adaptation to Russian Diminishing Market

The present study is devoted to the development of international tobacco companies’ strategies of adaptation to Russian diminishing market. To optimize the strategy this study addresses the following goals: identification of Russian tobacco market specifics and its main producers; Russian tobacco market regulatory model evaluation and future prospects analysis of tobacco industry. PESTEL-analysis, Porter's five forces analysis, SWOT-analysis and SPACE matrix are used as the main strategic analysis methods. As a result, two adaptation strategies to Russian diminishing market were recommended to JTI company. The first idea suggests a short-term strategy, aimed at reduced risk products and value low segment of cigarettes development. Based on a long-term forecast, second strategy is aimed at narrow market segment of electronic nicotine delivery systems and diversification by entering a new industry. Implementation of these strategies is expected to enable the company’s growth and competitiveness on falling market. An important implication in this research is that, to a certain extent, the identified strategies on the Russian tobacco market could be of use to tobacco companies and other interested parties. Furthermore, tobacco market regulatory model analysis might be useful for existing and future anti-smoking initiatives evaluation.