Innovation Ecosystem Development as a part of British American Tobacco's Strategy

The purpose of graduation paper is to develop practical recommendations for the formation of innovation ecosystem inside company "BAT Russia" in order to increase the success of company's strategy in the medium term. Experience shows that some companies operating in industries that are in decline simply follow the industry trend, but others try to change it by searching for innovative solutions. Similar trend has been observed in the tobacco industry where over the past decade key players have focused on reduced risk products which have revolutionized the tobacco industry. Based on the analysis of external and internal environment which was conducted using strategic management tools (PESTEL, Porter's 5 forces, SWOT, etc.) and an expert panel consisting of employees of leading companies of the Russian tobacco industry, four strategic alternatives to the development of British American Tobacco were formulated. All of them meet the challenges and opportunities of the company's environment. In addition, methodology for assessing the organization innovation maturity was tested. According to the results of the middle management and non-management staff survey, for a successful transition from "innovator" to champion position "BAT Russia" has to implement the principle of open innovation which is supported by transformation of the corporate culture. In order to form a modern and sustainable innovation system with harmoniously developed internal and external subsystems, several measures were proposed to accelerate and increase flexibility of the company as a whole.