There is a high level of stratification throughout the markets served at the end customer and dealer levels; the varying levels of quality has dictated in the past which cigars are sold to which customers.

Buyers choose which cigars they purchase more on perception of quality than on price. The reputation of Cuban cigars still connotes quality.

Recommendations

Integrating free-market-based strategies into a communist country's industry must begin with privatization of specific aspects of the value chain first so that quality control and enterprise-wide quality management techniques can be brought into this industry to save its products. As the quality of cigars has been faltering, privatization would make it economically feasible for experts in the field of tobacco quality and cigar production quality assurance to increase the quality level. The Cuban government needs to look at privatization of certain aspects of their supply chain, including quality assurance, as an opportunity...

An industry-wide enterprise quality management program must be defined and staffed by experts from the industry, not just from the Cuban government. Second, Cuba needs to actively seek out branding experts to better position their cigars from a global standpoint so they can retain their premium status. This is critical as Cuba today is not working to sustain this branding effort. Third, Cuba must work to create a more effective approach to joint ventures with global tobacco distributors and also look to allow for more foreign ownership of the supply chain to gain needed expertise in managing it optimally. Cuba must focus on how to make this supply chain as efficient as possible to stay globally competitive. Lastly, Cuba's communist leaders need to balance their ideologies with the realities that their nation needs economic growth to survive. This will require looking to compromise on their absolute control of their nation's tobacco value chain.