Philip Morris International SWOT Analysis Essay

August 15, 2017

Golden Papers

Comments Off on Philip Morris International SWOT Analysis Essay


I. The history of Philip Morris International begins in 1847. when Philip Morris opened his first baccy shop in London England. When Philip Morris died. his married woman Margaret and brother Leopold took over the concern. Philip Morris went public in 1881 as Philip Morris & A ; Company. Four old ages subsequently. Philip Morris & A ; Company became Philip Morris & A ; Co. . Ltd. PM & A ; Co. . Ltd. left the Morris family’s control in 1894. when it was taken over by William Curtis Thomson and his household. In 1902. Gustav Eckmeyer incorporated Philip Morris & A ; Co. Ltd. in New York. 1919 was an of import twelvemonth for PM & A ; Co. . Ltd. : the Philip Morris coronet logo was introduced. the company was acquired in the United States by an American. stockholder held company. and it was incorporated under the name Philip Morris & A ; Co. . Ltd. . Inc. in Virginia. In 1924 the Marlboro trade name was introduced. and would go the company’s most celebrated trade name. In the mid-1950s. PM & A ; Co. . Ltd. . Inc. launched Philip Morris International ( PMI ) to fabricate and market its merchandises worldwide.

Philip Morris ( Australia ) became the first affiliate outside of the United States to bring forth and market the company’s merchandises in 1954. Marlboro was foremost manufactured outside the US in 1957 in Switzerland. Ten old ages subsequently. in 1967. Philip Morris & A ; Co. . Ltd. . Inc. established separate companies to each be responsible for specific parts of the company’s operations: Philip Morris Industrial. Philip Morris International and Philip Morris Domestic. Philip Morris International organized a license understanding with Japan Tobacco to get down fabricating Marlboro coffin nails in Japan. PMI opens its largest mill in the Netherlands in 1980. This mill is still PMI’s largest in the universe today.

PMI is incorporated as an operating company of Philip Morris Companies Inc. in 1987 and two old ages subsequently. PMI runing income tops $ 1 billion. In 1992. the largest individual investing by a U. S. company in Europe at the clip. PMI acquires a bulk keeping in Czech Republic Tabak AS. a province owned company. for $ 420 million. In 2008. PMI spins off from Altria. going the world’s largest international baccy company. ( Philip Morris International. 2014 ) “Our ends are to supply high quality and advanced merchandises to adult tobacco users. bring forth superior returns for stockholders. and cut down the injury caused by smoking while runing our concern sustainably and with unity. ” ( Philip Morris International. 2014 )

II. Organizational Strengths and Weaknesses
A. Strength: PMI owns Marlboro
1. Marlboro has been the figure one merchandising coffin nail trade name in the universe since 1972. ( Philip Morris International. 2014 ) 2. Owning Marlboro. the figure one trade name in the universe. is a typical competency because it is a immense advantage over its rivals. Marlboro has been the figure one merchandising trade name in the baccy industry since 1972. It presently has gross revenues greater than that for its four closest rivals combined. To go the bestselling trade name in the industry. and maintain that standing for 42 old ages. shows the competency and appreciation that Philip Morris International has on the world-wide baccy industry.

B. Strength: PMI owns 7 of the world’s top 15 coffin nail trade names 1. Owning 7 of the world’s top 15 selling coffin nail trade names is a strength because it is a large advantage to have about half of the top merchandising trade names in a market. 2. With Marlboro taking a typical lead on the list and L & A ; M as the 3rd top merchandising coffin nail in the universe. PMI has a distinguishable advantage over their rivals. With PMI having about half of the top 15 selling trade names. and the other half being owned by several different rivals. PMI has a much better opportunity of a coffin nail purchase being one of their trade names than anyone else.

C. Weakness: In the baccy industry
1. It is an organisational failing to be in the baccy industry because. while as one point baccy was a turning market. due to statute law. revenue enhancement and public sentiment. the industry is weakening. 2. Philip Morris International can minimise its failing of being in the baccy industry by increasing its development of Reduced-Risk Merchandises ( RRPs ) . Reduced-Risk Products refer to merchandises that could perchance cut down the hazard of utilizing baccy merchandises compared to smoking a combustible coffin nail. PMI is presently working on this as shown in the gap of its first works designed for the production of RRPs merely outside Bologna. Italy. PMI is presently in the building stage of a larger installation. with the same intent. in Crespellano. Italy. It is expected to be operational by year’s terminal 2016. ( Philip Morris International. 2014 )

D. Weakness: Second Organizational Weakness
1. Reason it is considered a failing
2. Discourse how the organisation can minimise this failing.

III. Opportunities / Menaces
A. Opportunity: Chinese market
1. This chance comes from PMI’s external environment. The force making this chance is a political/legal force because it is the authorities that has to let PMI entree in to the Chinese baccy market. 2. The Chinese baccy industry. while being about wholly province owned. histories for more than 40 % of coffin nails consumed globally. This is the largest baccy industry in the universe.

B. Opportunity: E-cigarette market
1. The E-cigarette market is an chance stemming from the company’s external environment. It is driven by the socioeconomic force as societies. globally. are recognizing the wellness hazards that come with traditionally smoking coffin nails. 2. The E-cigarette market is turning at a rapid rate due to the wellness hazards that come from smoking traditional coffin nails. As the consciousness of these hazards grows globally. the e-cigarette market will go a socially acceptable replacing around the universe.

C. Menace: Higher baccy related revenue enhancements
1. Higher baccy related revenue enhancements are a menace that originates from the organization’s external environment. The force it is coming from is a political/legal force because the assorted authoritiess dictate excise revenue enhancements. 2. Governments impose increased revenue enhancements on baccy merchandises for two grounds: public wellness issues and gross. These assorted revenue enhancements can be between 30 % and 80 % of coffin nail grosss in assorted states. These revenue enhancement additions and other unfavourable alterations to the construction of how these revenue enhancements are figured lead to less demand due to higher monetary values. ( Trefis. 2014 )

D. Threat: Proposed anti-tobacco statute law
1. Anti-tobacco statute law is a menace that originates in the organization’s external environment. The force it is coming from is political/legal because statute law comes from the authorities. 2. Governments deter coffin nail and baccy usage by originating anti-tobacco Torahs and statute law. Legislation such as restricting where you can smoke ( i. e. merely in designated countries or non indoors of concerns ) discourages baccy usage. This so leads to cut down gross revenues and hence reduced net incomes. Anti-tobacco statute law. such as statute law naming for revelation in assorted states and mandating field or generic packaging for baccy merchandises. can ensue in the authorities taking or modifying the belongings rights of a baccy company’s hallmarks for what it deems as being in the best involvement of the people. ( Trefis. 2014 )

IV. Summary
A. Philip Morris. through a license understanding with province owned Chinese National Tobacco Corporation. in the lone international company to hold such an understanding. However. until the Chinese authorities decides to open the market to foreign companies. operations in the state remain limited and it is non expected to do any important growing. PMI is working to develop some low-risk merchandises to utilize as an alternate path to come in the Chinese market to assist give it a competitory advantage. ( Trefis Team. 2013 ) Because the baccy industry is chiefly province owned in China. the authorities has complete control over when Philip Morris International can take advantage of this chance. PMI has developed a new merchandise called HeatSticks. as an option to traditional coffin nails. to let it to vie in this market.

HeatSticks will be produced and manufactured under the Marlboro name. Current e-cigarettes usage liquid nicotine. while the HeatStick will utilize existent baccy. The HeatStick will heat baccy to 660 grades Fahrenheit doing a vapour to be inhaled alternatively fume as when firing the baccy. Similar merchandises “represent a possible paradigm displacement for the industry. public wellness and grownup tobacco users. ” says CEO Andre Calantzopoulos. ( Philip Morris to debut e-cig with existent baccy. 2014 ) B. As anti-tobacco statute law and increased revenue enhancements drive down the demand for baccy merchandises in developed states. international baccy companies. like Philip Morris International. have directed their attempts in developing and transitional economic systems around the universe. like the Asiatic market.

They are making demand in these states through advertisement. bring forthing and selling baccy merchandises. It has shown to be an effectual agencies of get the better ofing statute law in developed states. as 84 % of baccy users live in these countries. International baccy companies are besides directing advertisement and gross revenues towards kids in these states. since the Oklahoman a individual gets addicted to tobacco. the longer they will be a client of the baccy industry. ( Shah. 2014 )

Plants Cited
Philip Morris International. ( 2014 ) . Company Overview. Retrieved November 14. 2014. from World Wide Web. pmi. com: hypertext transfer protocol: //www. pmi. com/eng/about_us/company_overview/pages/company_overview. aspx

Philip Morris International. ( 2014 ) . Our Brands. Retrieved November 16. 2014. from World Wide Web. pmi. com: hypertext transfer protocol: //www. pmi. com/eng/our_products/pages/our_brands. aspx

Philip Morris International. ( 2014 ) . Our History. Retrieved November 14. 2014. from World Wide Web. pmi. com: hypertext transfer protocol: //www. pmi. com/eng/about_us/pages/our_history. aspx

Philip Morris International. ( 2014. October 10 ) . PMI opens pilot works and celebrates groundbreaking on building of new fabricating installation for potentially reduced-risk merchandises. Press Release. Retrieved November 16. 2014. from hypertext transfer protocol: //www. pmi. com/eng/media_center/press_releases/Pages/201410101014. aspx

Philip Morris to debut e-cig with existent baccy. ( 2014. June 26 ) . New York Post. Retrieved November 16. 2014. from hypertext transfer protocol: //nypost. com/2014/06/26/philip-morris-to-debut-e-cig-with-real-tobacco/

Shah. A. ( 2014. January 5 ) . Tobacco. Retrieved November 16. 2014. from Global Issues: hypertext transfer protocol: //www. globalissues. org/article/533/tobacco # ExpandingintoDevelopingNationsMarkets

Trefis. ( 2014 ) . Philip Morris International ( PM ) . Retrieved November 14. 2014. from World Wide Web. trefis. com: hypertext transfer protocol: //www. trefis. com/stock/pm/model/trefis? freeAccessToken=PROVIDER_cdf8c3471854385cf55ca0dd3cf7d9d1fd516873 #

Trefis Team. ( 2013. March 5 ) . A Closer Look At Philip Morris’ Asia Opportunity. Retrieved November 14. 2014. from World Wide Web. forbes. com: hypertext transfer protocol: //www. forbes. com/sites/greatspeculations/2013/03/05/a-closer-look-at-philip-morris-asia-opportunity/