Swot And Marketing Analysis Of Philip Morris International Marketing Essay

SWOT analysis helps one to ticket out the strengths, failings, chances and menaces of an organisation or a company. Strength and failing are internal to organisation whereas chances and menaces are external. Strength and failing both related to internal environment of organisations but chances and menaces are the foreigners and can be evaluated utilizing PESTLE analysis. The followerss are the Strengths, weaknesses, chances and menaces of Philip Morris International.

Strengths:

Strong finance: The Company has a base of strong fiscal state of affairs. Harmonizing to its corporate web site, its runing income in 2008 was $ 10,284 million, and its net net incomes were 6,890. There was an addition as the same for the twelvemonth 2007 was $ 8,894 and 6,038 severally.

Well established Trade names: The Company produces celebrated trade names like Marlboro, L & A ; M, Chesterfield, Philip Morris, Parliament and Virginia Slims. When the merchandise establishes itself as a trade name there is a less demand of passing money on its publicity.

Strong work force and employees: The Company boasts of more than 75,000 employees throughout the Earth from different civilization and ethnicity. With the assortment in their work force there is a assortment of thoughts and constructs, which can be good for the endurance in the planetary environment.

Strong Management squad: the company under the chairmanship of Mr. Louis C. Camillieri has a strong and efficient direction squad. David Bernick, a senior Vice president and General advocate is university of Chicago, jurisprudence alumnus, Andre Calantzopoulos, main runing officer, Kevin Click, main information officer and Doug Dean, research and development make the strong direction squad of the company.

Leading Markets: The Company boasts of taking 11 markets out of the top 30 international markets. That is tantamount to busying 33 % of entire top market portions. This is one of the strength of the company.

These are the basic strengths of the company, a strong fiscal status with plumping net incomes, good established trade name names of the merchandise, skilled, good trained and diverse work force, a strong prima direction squad and the immense portion in top international markets.

Failings:

Equally far as a failing of the company is concerned the judicial proceedings seem to be the lone failing. Government policy on the publicity and sale of baccy related merchandise stops the company from aggressive selling and publicity of its merchandises. It is the failing of the company.

Opportunity:

Increasing baccy market: Although anti baccy militants are raising their voices against the production and distribution of baccy, the baccy market is still moneymaking. It raises one million millions of lbs as gross to the authorities every bit good as the manufacturers.

Advantage of globalisation: Globalization offers the company an chance to take an advantage of inexpensive labor cost and inexpensive production cost offered by 3rd universe states. Factories established in China, Nepal offers the company inexpensive production of its merchandises therefore immense net incomes.

Amalgamations and coactions: The Company tied its knot with Altria and it late announced its partnership with fortune Tobacco Corporation. These sorts of amalgamations and coaction offer the company an chance to spread out its market portion.

Menaces:

Anti Tobacco militants: The Company has remained a most controversial company because anti baccy militants have ever criticized the baccy company for being responsible to the decease ensuing from smoking. For illustration, militants in Philippines raised their voices against the amalgamation of luck Tobacco Corporation with Philip Morris. They have feared this amalgamation can pull more tobacco users in Philippines. ( http: //www.abs-cbnnews.com/business/02/25/10/anti-tobacco-group-expects-intensified-marketing-philip-morris-deal 25/03/2010 )

Government statute laws: The authoritiess ‘ regulation of censoring the gross revenues of baccy related merchandises to people below certain age bounds and other regulations related to smoking prohibition on public topographic points can cut down the gross revenues of baccy.

For illustration research in UK shows that figure of tobacco users has reduced after smoking prohibition in public topographic points and after the age bound for the sale of baccy has been set.

Public Awareness: Peoples are more cognizant about the effects of baccy ingestion because of the advertizement of anti baccy militants. This has resulted in the decrease of gross revenues in many markets.

Strength and failings are considered as internal factors whereas chances and menaces are considered as External factors. Basically strengths and failings of an organisation are related to people, resources, invention and thoughts, selling, operation and finance, whereas chances and menace are associated to the factors that organisations find difficult to command sometimes. They are political, economic, societal, technological, legal and environmental environment in which the organisation exists.

Now let ‘s analyze the external factors of Philip Morris International.

Political environment:

( hypertext transfer protocol: //www.executivehm.com/media/media-news/infographics/091117-EHM-Smoking.png, on 25th April 2010 )

The inside informations above show that by the twelvemonth 2009 there are 44 states with active smoke prohibition. The information besides shows that more than 1 billion people are protected by fume free Torahs. These Torahs mean decrease of gross revenues for the company. The company can either advance its merchandises in these markets or have their gross revenues restricted by terrible Torahs. For illustration, they do non let people below 18 to purchase coffin nails in England and Wales. They have increased the age bound from 16 1st of October 2007. Politicians are ever seeking to seek public favor and by presenting Torahs like smoking prohibition and orgy imbibing prohibition or increasing revenue enhancement for merchandises like these they are seeking to catch public sentiment. These sort of political activities are although favorable to general populace, they are non at all favorable for a company like Philip Morris, whose grosss are based on the gross revenues of its baccy related merchandises.

Economic: There is non much difference to Philip Morris International due to the recession. Its net incomes did non plummet to a great extent even though the universe was hit by economic downswing. Following table show its fiscal informations.

( in 1000000s of dollars except per portion informations )

A A A A A 2009

A A A A A A 2008

% A ChangeA

Internet grosss

A $ 62,080

A A A A A A $ 63,640

A A A A A A ( 2.5 ) %

Cost of gross revenues

A A A A A 9,022

A A A A A A A A A A 9,328

A A A A A A A ( 3.3 ) A A

Excise revenue enhancements on productsA

A A 37,045

A A A A A A A A A 37,935

A A A A A A ( 2.3 )

Gross net income

A A 16,013

A A A A A A A A 16,377

A A A A A A ( 2.2 ) A

Operating incomeA

A A 10,040

A A A A A A A A 10,248

A A A A A A ( A 2.0 )

Net earningsA

A A A A 6,342

A A A A A A A A A 6,890

A A A A A ( 8.0 )

Basic net incomes per portion

A A A A A A A 3.25

A A A A A A A A A A A 3.32

A A A A A ( 2.1 )

Diluted net incomes per portion

Beginning: Philip Morris Web page

Sociological: Bing criticized as a chief subscriber of smoking related deceases in the World, Philip Morris International has to make a batch to get by up with the sociological issues. Therefore their societal duty activities are directed to these five countries of society, utmost poorness and hungriness, environmental sustainability and life conditions in rural communities, domestic force, and catastrophe alleviation. The company has spent one million millions of lbs for charity intent to reconstruct its tarnished image.

Legal: Philip Morris had to endure heavy loss due to several legal proceeding that it had to travel through every bit people blamed of killing people. It has a history of being sued by people, distributers or companies. For illustration, ’16 jobbers filed legal action in a federal tribunal in Tennessee claiming that Philip Morris ‘s sweeping leaders plan 2003 constitutes ‘price favoritism and efforts to monopolise. ‘ ( Financial Times of London, 8th July 2003. )

To get by up with these sorts of legal issues, the company has its ain legal section that trades with all the legal issues associated with the company.

Environmental:

Environment is a hot subject in present twenty-four hours universe. The job of cutting of ozone bed or the planetary heating draws the attending of each and every organisation. Most of the organisations have designed their societal duty programme tie ining themselves with the environmental issues. Philip Morris international excessively has done the same. They have set up public presentation ends for their energy usage, H2O usage, and waste H2O discharge, waste to be sent to landfills and waste to be recycled. The following tabular array show their ends.

Beginning: Philip Morris web site can be accessed at hypertext transfer protocol: //www.pmusa.com/en/cms/Responsibility/Reducing/Reducing_Our_Environmental_Impact/default.aspx, on 26th March 2010.

Competitive analysis utilizing Porter ‘s 5 Forces theoretical account.

Michael E. Porter of Harvard Business School developed a model for the industry analysis and concern scheme development. Harmonizing to him an attractive industry has all the forces he has developed plants for the overall profitableness of the industry. The five forces of Porter are,

Competitive competition

Menace of replacement merchandises

Menace of new entrants

Dickering power of clients

Dickering power of providers

In instance of Philip Morris, he excessively has competitory competition. He occupies 15.6 per centum of the entire market portion. The remainder is occupied by his rivals. It is for the same ground, Philip Morris is focussed on advancing new merchandises. To crush its rivals, it has developed a strong societal duty program along with alteration of its merchandises. The launch of fume free coffin nails can be considered as a merchandise of competitory competition.

Menace of replacement merchandises: Philip Morris is rather free from the menace of replacement merchandises. It has ever maintained the criterion of its merchandises and priced them moderately. This has lessened the opportunities of credence for the replacement merchandises that are available in the market.

Menace of new entrants: Philip Morris is celebrated for its coffin nails. No 1 in the universe is incognizant about Marlboro. It is a reputed trade name name in the field of baccy industry. But a reputed trade name gives Philip Morris an advantage. It is about free from the menace of new entrants. The ground for this is, coffin nail tobacco users have a strong trueness to their trade names. So, although there is a changeless reaching of new merchandises, they do non impact the market portion of Philip Morris as it has endorsed its merchandise with heavy publicities and established all of its merchandises as a Brand.

Dickering power of the client: Bargaining power of the client does non look to impact the company. The ground behind it is, the sensed value of Philip Morris merchandises is rather high because they are to a great extent promoted through media. They have a trade name image and are free from the dickering power of the client. Furthermore most of the clients of baccy trade are loyal to the merchandises they are used to, and are ready to pay whatever sum of money they are asked to pay. So Bargaining power of the clients does n’t look to impact the company.

Dickering Power of Suppliers: Bargaining power of provider affects every company. Philip Morris excessively is affected by it as it follows rigorous regulations concerned with Fair trade. Furthermore it has launched particular benefit bundle to its providers. It helps the kids of its baccy provider with instruction installations and other general benefits. It is making this merely to cut down the effects of dickering power of its provider.

Decisions:

Whatever advancement the company made is non merely a happenstance. The company did non lose much of its net incomes even in the economic downswing. The ground behind this can be summarised as the proper cognition of the strength and failings of the company and citing all refering inquiries related to its external environment. Its committedness to follow all legal demands of the authorities, presenting cuttable baccy alternatively of smoking 1s, committedness to environmental preservations and one million millions of lbs spent on charitable intents are activities to maintain the external environment favourable for the company.

Undertaking 2

Phillip Morris and planetary political alteration:

Any transnational company that has operations throughout the universe has to acclimatise themselves with the political scenario of the concerned state. Politicss is stable merely in few states that excessively limited to the few developed states. Furthermore, as Philip Morris is concerned with bring forthing baccy related merchandises, it is affected by any sort of political alteration that occurs in the state.

By planetary political alteration we understand the political alterations that occurred in the universe. For illustration, the First World War, when ended in 1919 brought a batch of alterations in the universe. Similarly the terminal of Second World War excessively brought a batch of alterations. One of the biggest alterations was the start of cold war between the USA and the Soviet Union.

The cold war divided the universe into two halves, the capitalists and the socialists. Socialists denied the merchandises of capitalist universe to come in their states, whereas the same thing applied to the capitalists universe. Philip Morris therefore could non spread out his concern to Russia and other socialist states until the cold war was about to stop. Philip Morris was able to perforate the Russian market in 1977 when the socialist state was about to accept some alteration.

Similarly, planetary terrorist act has besides affected the policy and determination devising of the company as baccy can be smuggled to developed states where they have higher monetary values from the least developed or developing states. It is said that terrorist have sometimes made baccy as one of the beginning of support to backup their activities. Philip Morris therefore has set rigorous limitations so as it merchandises are non smuggled. Furthermore its mills located in different portion of the universe curtail its merchandises from being smuggled as they have their ain designation figure on them.

Recession that late occurred in the universe can be the after-effects of the political turbulences in the universe. Or economic activities and political alteration have mutuality. So recession in a manner can be seen as an consequence of incorrect political determinations in footings of economic activities. Philip Morris dealt with it rather absolutely. Harmonizing to statistics, on-going net incomes of Philip Morris rose by 11 % as it coaxed solid grains in its nutrient concern and continued to happen new market for its coffin nail. ( http: //www.thestreet.com/storycomments/10007704/1/philip-morris-ignores-recession.html, on 27th March 2010 )

Question that present yearss political leaders are raising is the phenomenon of clime alteration. Global heating is a large job and politicians throughout the universe are seeking to work out it out through joint attempts. All the states are enforcing their ain sort of regulations and ordinances to cut down C emanation and aid in the decrease of planetary heating. Philip Morris can assist in the decrease of C emanation by puting in 3rd universe developing states for illustration in the coevals of electricity, or other beginnings of energy which can cut down deforestation and emanation of C dioxide in the air.