Preview

Strategy at Philip Morris

Powerful Essays
Open Document
Open Document
6866 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Strategy at Philip Morris
The best smoking experience in the world, today and tomorrow

Strategies employed by Philip Morris International

Title adapted from the mission statement of Philip Morris

Executive Summary

The Philip Morris Group is a leading cigarette manufacturer in the world and consists of Philip Morris International, which sells cigarettes outside the USA and
Philip Morris USA. Philip Morris International is the operating company of the Altria group.

The purpose of this report is to examine the strategy of Philip Morris International within the wider business environmental context. This is done by firstly taking an in-depth look at the external changes that have affected the tobacco industry. The profitability of the tobacco industry in spite of all the pressures, regulations, laws, bans, taxes and other obstacles makes interesting reading. Significant factors are highlighted using the PESTLE analysis.
An assessment of the effect that the changes have had on the competitor behaviour is undertaken by means by the Porter’s Five Forces model. The top four competitors of the cigarette industry are analyzed by using significant factors. A list of all the premium brands along with their marketed description and prices is also used as a further aid to judge the competition.

Since Philips Morris International is a global player an attempt is made to look at the effectiveness of their world wide strategy, with a special focus on the United Kingdom market. The period under focus is from 2002 to 2007. Strategy is analyzed by examining the mission statement of the organization and the creative ways in which Philip Morris tried to overcome obstacles. The strengths and weaknesses are analyzed by means of a TOWS matrix. Philip Morris adopts a strategy of differentiation (Porter, 1985) and distinctive capability (Kay, 1993). Their core competency remains their robust brand – Marlboro.

The organisation has to deal with numerous stakeholder pressures and it has not only


References: Altria, 2008. Philip Morris International Spin-Off. [Online]. Available from: http://www.altria.com/ [accessed: 18 February 2008] Americans for non smoker’s rights, 2003 BBC News, 1998 A. Smoking – puffing the power of the image [Online]. Available from: http://news.bbc.co.uk/1/hi/uk/57431.stm [accessed: 18 February 2008] BBC News, 1998 B BBC News, 1998 C. What’s in a name? [Online]. Available from: http://news.bbc.co.uk/1/hi/uk_politics/213917.stm [accessed: 18 February 2008] BBC News, 1999 A BBC News, 1999 B. The economics of tobacco. [Online].Available from: http://news.bbc.co.uk/1/hi/business/the_company_file/459157.stm [accessed: 11 December 2007] BBC News, 2005 BBC News, 2006. Tobacco firm makes Hollywood plea [Online]. Available from: http://news.bbc.co.uk/1/hi/entertainment/6157446.stm [accessed: 18 February 2008] British American Tobacco, 2008 Business week, 2005. Leader of the packs. [Online]. Available from: http://www.businessweek.com/magazine/content/05_44/b3957107.htm [accessed: 18 February 2008] Corporate accountability International, 2008 Cunningham, R, 1996. Smoke and Mirrors - The Canadian Tobacco war. [Online]. Available from: http://www.idrc.ca/en/ev-28814-201-1-DO_TOPIC.html [accessed: 21 December 2007] Department of Health, 2007 Financial Times, 2008. Tobacco brands. Available from: http://markets.ft.com/tearsheets/news.asp?s=MO%3ANYQ [accessed: 17 December 2007] Hafez, N and others, 2005 Imperial Tobacco, 2008. About us. [Online]. Available from: http://www.imperial-tobacco.com/index.asp?page=2 [accessed: 11 December 2007] JT International, 2008 McGowan, R. (1995) Business, politics and cigarettes – multiple levels, multiple agendas. Greenwood publishing group. Philip Morris International, 2008. Our business. [Online]. Available from: http://www.philipmorrisinternational.com/PMINTL/pages/eng/ourbus/Our_business.asp [accessed: 11 December 2007] SourceWatch, 2007 Taking on tobacco, 2001. Quotable quotes. [Online]. Available from: http://www.takingontobacco.org/qofm/0112.html [accessed: 18 February 2008]. The Observer, 2005. Tobacco firm’s subtle tactics to lure smokers to their brand. [Online]. Available from http://www.guardian.co.uk/media/2005/sep/25/advertising.smoking [accessed: 18 February 2008] Tobacco-Free kids, 2000 Tobacco-Free kids, 2001. Tobacco company quotes on marketing to kids. [Online]. Available from: http://www.tobaccofreekids.org/research/factsheets/pdf/0114.pdf [accessed: 17 February 2008] Wall Street Journal, 2008 World Health Organization, 2007. Tobacco free initiative. [Online]. Available from: http://www.who.int/tobacco/statistics/tobacco_atlas/en/ [accessed: 17 December 2007] Bibliography BBC News, 1998. Billion dollar tobacco deal agreed. [Online].Available from: http://news.bbc.co.uk/1/hi/world/americas/218751.stm [accessed: 11 December 2007] BBC News, 1999 BBC News, 1999. Tobacco industry victory. [Online].Available from: http://news.bbc.co.uk/1/hi/business/the_company_file/438101.stm [accessed: 11 December 2007] BBC News, 1999 BBC News, 2000. Toxic Cigarette ingredients revealed. [Online].Available at: http://news.bbc.co.uk/1/hi/health/641327.stm [accessed: 11 December 2007] BBC News, 2001 BBC News, 2002. Tobacco firms fight grisly Thai ads. [Online].Available at: http://news.bbc.co.uk/1/hi/world/asia-pacific/1975304.stm [accessed: 11 December 2007] BBC News, 2002 BBC News, 2006. Concerns over cigarette testing. [Online].Available at: http://news.bbc.co.uk/1/hi/health/4690848.stm [accessed: 11 December 2007] Capehart, T Hong, M and Bero, 2006. Tobacco industry sponsorship of a book and conflict of interest. Society for the study of addiction, [Online], vol.101, pp1202-1211.
Continue Reading
View Writing Issues

You May Also Find These Documents Helpful

  • Good Essays

    BUS 250 Week 3 Assignment Case Study Government Regulation of Tobacco Products
    • 486 Words
    • 2 Pages

    BUS 250 Week 3 Assignment Case Study Government Regulation of Tobacco Products

    This archive file contains BUS 250 Week 3 Assignment Case Study Government Regulation of Tobacco Products…

    • 486 Words
    • 2 Pages
    Good Essays
    Read More
  • Better Essays

    America's Smoke Screen-Portion
    • 1184 Words
    • 5 Pages

    America's Smoke Screen-Portion

    This paper will examine the history of the tobacco industry and its advertising campaigns from the 1920s to the present. Some of the issues discussed in this paper will include: What forms of mass communication has tobacco companies used to persuade the public, how changes in technology have influenced the way tobacco companies communicate with target audiences, and how the United States government restrictions affect the current efforts of tobacco companies advertising strategies. Other topics that this paper will expound upon are, the ethics of the tobacco industry’s advertising approaches, how tobacco companies responded to health warnings from the government, and what type of communication models have the tobacco industry used to transmit messages to the public.…

    • 1184 Words
    • 5 Pages
    Better Essays
    Read More
  • Better Essays

    Why Do Tobacco Companies Use Electronic Cigarettes?
    • 1194 Words
    • 5 Pages

    Why Do Tobacco Companies Use Electronic Cigarettes?

    This new controversial product falls between our social morals, and our nations devotion to capitalism. For years the United States has put forth an anti-smoking campaign with efforts to de-normalize the use of cigarettes in public spaces. By reviving cigarettes and putting them fresh into our minds through television and radio ads we risk the gain of popularity of smoking in our culture once again.…

    • 1194 Words
    • 5 Pages
    Better Essays
    Read More
  • Best Essays

    Are People Rational in the Economists Sense.
    • 3562 Words
    • 15 Pages

    Are People Rational in the Economists Sense.

    Laux. F.L, (2000) Addiction as a market failure: using rational addiction results to justify tobacco regulation. [online]. Available at: <http://econ.tu.ac.th/archan/chalotorn/on%20mkt%20failure/laux.pdf> Accessed: [2nd December 2010].…

    • 3562 Words
    • 15 Pages
    Best Essays
    Read More
  • Powerful Essays

    An Analysis of the Social Gradient of Health in Relation to the Australian Indigenous Population
    • 2818 Words
    • 12 Pages

    An Analysis of the Social Gradient of Health in Relation to the Australian Indigenous Population

    National Tobacco Campaign. 1999. ‘Australia’s National Tobacco Campaign: Evaluation report Volume 1’. Commonwealth Department of Health and Aged Care, Canberra.…

    • 2818 Words
    • 12 Pages
    Powerful Essays
    Read More
  • Powerful Essays

    How Does Tobacco Affect The Culture Of Native Americans?
    • 1982 Words
    • 8 Pages

    How Does Tobacco Affect The Culture Of Native Americans?

    Tobacco has been a cash crop in America since the first colonists settled here. In fact, many historians have said America would not exist as we know it without the original routes of tobacco here. While there are significant health risks with tobacco, it is an essential part of the American economy. In 2011, the huge sum of 17,653,708,000 dollars were collected in revenue from taxation on cigarettes (Tobacco Tax Revenue). Apart from this immediate benefit of the taxes, it also dissuades people, particularly youth, to smoke. “Every 10 percent increase in the price of cigarettes reduces consumption by about 4 percent among adults and about 7 percent among youth”…

    • 1982 Words
    • 8 Pages
    Powerful Essays
    Read More
  • Good Essays

    E-Cigarettes: Case Study
    • 596 Words
    • 3 Pages

    E-Cigarettes: Case Study

    Currently big tobacco companies are generating small net profits on the sales of e-cigarettes. The reason to stay in this business is not for maximizing short term profits, but to come up with an innovative product and maximize long-term profits. This is a perfect opportunity to gain competitive advantage over the competition by creating a healthier alternative for the future generation. There is still a lot of uncertainty over e-cigarette benefits or flaws, but big tobacco companies have nothing to lose due to “self-funding” mechanism of the industry. Relevant key performance indicators are market awareness and reach to the new customer base. Tobacco companies must increase both indicators in order to educate more people about the benefits of…

    • 596 Words
    • 3 Pages
    Good Essays
    Read More
  • Better Essays

    Speech
    • 983 Words
    • 4 Pages

    Speech

    Warner , K. (n.d.). Cigarette advertising and media coverage of smoking and health. - see more at: http://www.popline.org/node/407372…

    • 983 Words
    • 4 Pages
    Better Essays
    Read More
  • Good Essays

    Tabacco Economic Factors
    • 854 Words
    • 4 Pages

    Tabacco Economic Factors

    Although the tabacco industry is one of most successful economic operations, tabacco products are associated with the most deaths more than any other product (1). The consumption of tabacco leads to numerous fatal diseases such as lung cancer, heart disease, stroke, chronic respiratory disease, and other conditions and approximately 4.2 million Canadians are smokers as of 2015 (4). The consumption of tabacco also has an economic impact of $17 billion dollars in annual social costs including $4.4 billion in direct health care costs (5). First the article will discuss the health consequences of smoking and recent global trends. Subsequently we will examine and analyze relationships between tabaco and several economic factors such as price, consumption and taxation as well as the behavioural perspective of smoking. Following the application of economic theories will be an econometric analysis of the influences of tabaco…

    • 854 Words
    • 4 Pages
    Good Essays
    Read More
  • Powerful Essays

    The Truth Campaign
    • 1463 Words
    • 6 Pages

    The Truth Campaign

    The main objective of Truth is to reduce youth smoking through changing social norms. The truth campaign sought to reveal the “tricks” and “schemes” tobacco companies were using to try to hook new generations of smokers. The campaign also sought to “brand” rebellion against adults and companies that promoted smoking, particularly in youths. To clarify its mission however, Truth is not an anti-smoking campaign, nor does it seek to ban smoking. Rather, the campaign is focused on anti-manipulations and the disclosure of Big Tobacco’s manipulative tactics as a means to inform and dissuade smoking (Truth - American Legacy Foundation, 2012). The campaign established its success and made its mission “cool” by targeting the inherent, rebellious nature of the target group (teenagers), and reduced the price of the behavior by focusing it towards adults that everyone agreed had been…

    • 1463 Words
    • 6 Pages
    Powerful Essays
    Read More
  • Good Essays

    Man in Black
    • 1939 Words
    • 8 Pages

    Man in Black

    Tobacco advertising has changed drastically over the years, mainly in terms of an increase in regulation. Cigarette commercials were prohibited from airing on television long ago. Ads that are still able to run elsewhere are not allowed to “glorify” the act of smoking, and they cannot use images or tactics that obviously target children as an audience. They are also legally required to display the Surgeon General’s warnings about the dangers of smoking. But regardless of these rules, tobacco companies still manage to successfully advertise their products, whether ethically or otherwise.…

    • 1939 Words
    • 8 Pages
    Good Essays
    Read More
  • Good Essays

    Persuasive Essay
    • 889 Words
    • 4 Pages

    Persuasive Essay

    Cited: Frieden, Thomas R., and Blakeman, Drew E. "The Dirty Dozen: 12 Myths That Undermine Tobacco Control." American Journal Of Public Health 95.9 (2005): 1500-1505…

    • 889 Words
    • 4 Pages
    Good Essays
    Read More
  • Satisfactory Essays

    Imperial Tobacco
    • 339 Words
    • 2 Pages

    Imperial Tobacco

    BBC NEWS., 2012. BBC news: imperial tobacco launches supreme court challenge to display ban [online]. London: BBC News. Available from http://www.bbc.co.uk/news/uk-scotland-20299304…

    • 339 Words
    • 2 Pages
    Satisfactory Essays
    Read More
  • Good Essays

    Socially Responsible Tobacco Companies
    • 1648 Words
    • 7 Pages

    Socially Responsible Tobacco Companies

    Tobacco remains the leading preventable cause of death in the United States, with an annual death toll of more than 400 000--all, in theory, preventable. The poor, the less educated, and the disenfranchised smoke more than their better-off counterparts. Consequently, they suffer a disproportionate burden of tobacco -related illness and death. They are also the most exploited victims of predatory marketing practices that capitalize on their lack of education and other…

    • 1648 Words
    • 7 Pages
    Good Essays
    Read More
  • Powerful Essays

    Smoking War
    • 1630 Words
    • 7 Pages

    Smoking War

    Between the years of 1967, when the anti-smoking ads first aired on television, and ending in 1970, when they went off, per capita cigarette consumption dropped four years in a row - something that had not happened since the turn of the century. Naturally, there were other reasons for this decline, but researchers tend to agree that the ads were a powerful factor. They also permeated the culture in ways that can 't be quantified, making people less likely to associate cigarettes with glamour. In Hollywood movies, where smoking had been seemingly mandatory for decades, cigarettes disappeared like the hats from mens ' heads.…

    • 1630 Words
    • 7 Pages
    Powerful Essays
    Read More

Related Topics