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Strategy at Philip Morris

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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


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