SWM - Mark Moore

Total Assets 3500 3000 2500 2000 1500 1000 500 0 2004 2005 2006 2007 2008 SWM UVV AOI BTI This chart displays how Universal Tobacco is the leader in total amount of assets. A large partof this can be attributed to the amount of out-sourcing and business that is done in othercountries requiring more plants and assets. Schweitzer-Mauduit requires the least amount ofassets, solely because they are not actively involved in the cigarette and tobacco producing orselling industry.Learning EconomiesLearning economies allow firms to gain a substantial competitive advantage overcompeting firms by encompassing extraordinary knowledge, significant research anddevelopment, and possessing patents. Patents are one of the most significant features oflearning economies, because it allows a firm to mastermind a process or a product that otherfirms are not able to duplicate without re-engineering. Most firms in the consumer paper andtobacco industry do not invest that much in research and development or in patents. No firm inthe industry has invested more than one and a half percent into research and development.Tobacco rolling and other tobacco activities have taken place since the beginning of theeighteenth century, which makes it very difficult to perfect the process any further. Cigaretteand other tobacco products have evolved very little from when they were originally created.This makes it hard to develop something that another competitive firm would want to duplicate.Learning economies have very little involvement in the consumer paper and tobacco industry.25