Case 10-2: Philip Morris International
Philip Morris International is the leading international tobacco company. PMI owns a total of 56 manufacturing sites, over 78,000 employees around the world, and product availability over 180 countries. PMI holds an estimated of 28.1% international market shares, where US and China accounts for 12.1% of their total market shares. They are the largest company in 13 markets. They are the current owner of top international tobacco brands around the world, such as Marlboro, L&M, Bond Street, Philip Morris, Chesterfield, and much more. Their main goal is to meet the expectations of adult smokers by offering innovative tobacco products of the highest quality available in their preferred price category.
Here are some facts on PMI:
Some anti-tobacco critics sounded alarm bells about the PMI spin-off fearing that the cigarette maker now has more freedom to pursue sales growth in the emerging markets by shielding the company from US legal and regulatory issues. Do you agree with that concern?
Yes we agree. Philip Morris International’s parent company, Altria Group Inc, is located in the States which means that they are only under the law and regulations of America. Once Altria approves and legalized new innovation spin-off products – proportion of tar and nicotine, filter length, cigarette size – under American laws, they are free to commercialize those products over 160 countries which also take accounts of emerging countries such as Pakistan (up 42%), Ukraine (up 36%), Argentina (up 18%), and especially in China. One of PMI’s goals is to setup a foothold in China where there are a total of 350 million smokers, 50 million more than US, which is considered as a marvellous opportunity for Philip Morris. This allows Philip Morris to gain access to a much greater market opportunity with extra flexibility and freedom on their product penetrating strategies into emerging countries and thus...
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