Swot And Marketing Analysis Of Philip Morris International Marketing Essay

Swot And merchandising Analysis Of Philip Morris International Marketing EssaySWOT analysis helps whiz to fine forth the efficacys, weaknesses, opportunities and threats of an brass section or a confederation. Strength and weakness argon internal to physical composition whereas opportunities and threats are external. Strength and weakness both related to internal purlieu of presidential terms but opportunities and threats are the outsiders and can be evaluated using PESTLE analysis. The followings are the Strengths, weaknesses, opportunities and threats of Philip Morris International.Strengths toughened finance The phoner has a base of strong fiscal situation. According to its corporate website, its operating income in 2008 was $10,284 million, and its net salary were 6,890. at that place was an increase as the same for the year 2007 was $8,894 and 6,038 respectively.Well realized Brands The participation produces famous mugs handle Marlboro, LM, Chesterfield, Philip Morris, Parliament and Virginia Slims. When the ingathering establishes itself as a blot in that location is a less need of sp hold oning money on its promotion.Strong man creator and employees The Company boasts of more(prenominal) than 75,000 employees throughout the globe from unlike culture and ethnicity. With the shape in their piddleforce there is a variety of ideas and concepts, which can be beneficial for the survival in the spherical environment.Strong Management team the company under the chairmanship of Mr. Louis C. Camillieri has a strong and good management team. David Bernick , a senior Vice president and General advocator is university of Chicago, law graduate, Andr Calantzopoulos , chief operating ships officer ,Kevin Click, chief information officer and Doug Dean, research and development make the strong management team of the company. guide Markets The Company boasts of leading 11 markets out of the top 30 world(prenominal) markets. That is equivalent to occupying 33% of total top market percents. This is one of the strength of the company.These are the basic strengths of the company, a strong financial condition with plummeting wage, strong established soil names of the product, skilled, well trained and diverse work force, a strong leading management team and the huge share in top international markets.WeaknessesAs far as a weakness of the company is concerned the litigations front to be the only weakness. political relation policy on the promotion and sale of baccy related product stops the company from aggressive marketing and promotion of its products. It is the weakness of the company. chanceIncreasing tobacco plant market Although anti tobacco activists are meridian their voices against the production and distribution of tobacco, the tobacco market is still lucrative. It raises billions of pounds as gross to the government as well as the producers.Advantage of orbicularization globalisation offers the company an opportunity to take an advantage of cheap labour personify and cheap production cost offered by third world countries. Factories established in China, Nepal offers the company cheap production of its products hence huge net profit.Mergers and collaborations The Company tied its knot with Altria and it recently announced its partnership with fortune tobacco heap. These good-natureds of mergers and collaboration offer the company an opportunity to expand its market share.Threatsanti Tobacco activists The Company has remained a most controversial company because anti tobacco activists control always criticized the tobacco company for being answerable to the death resulting from smoking. For example, activists in Philippines raised their voices against the merger of fortune Tobacco Corporation with Philip Morris. They learn feared this merger can draw more fumigaters in Philippines. (http//www.abs-cbnnews.com/ dividing line/02/25/10/anti-tobacco-group-expects-intensified-market ing-philip-morris-deal 25/03/2010)Government legislations The governments rule of expatriatening the sales of tobacco related products to people below certain age corrects and new(prenominal) rules related to smoking ban on public places can shrivel the sales of tobacco.For example research in UK carrys that number of smokers has reduced afterwards smoking ban in public places and after the age limit for the sale of tobacco has been educate.Public Awareness People are more aware about the consequences of tobacco consumption because of the advertisement of anti tobacco activists. This has resulted in the reduction of sales in many markets.Strength and weaknesses are considered as internal factors whereas opportunities and threats are considered as External factors. Basic solely(a)y strengths and weaknesses of an organization are related to people, resources, innovation and ideas, marketing, operation and finance, whereas opportunities and threat are associated to the factors that organizations note hard to control sometimes. They are political, stinting, social, technological, lawful and environmental environment in which the organization exists.Now lets examine the external factors of Philip Morris International.Political environment(http//www.executivehm.com/media/media-news/infographics/091117-EHM-Smoking.png, on 25th April 2010)The details above show that by the year 2009 there are 44 countries with active smoking ban. The data also shows that more than 1 billion people are protected by smoke free laws. These laws mean reduction of sales for the company. The company can both promote its products in these markets or have their sales re unforgivinged by severe laws. For example, they do not allow people below 18 to buy cigarettes in England and Wales. They have increased the age limit from 16 1st of October 2007. Politicians are always trying to seek public favor and by introducing laws like smoking ban and binge drinking ban or increasing tax for products like these they are trying to pinch public sentiment. These kind of political activities are although favourable to general public, they are not at all favourable for a company like Philip Morris, whose revenues are based on the sales of its tobacco related products. scotch There is not much difference to Philip Morris International due to the recession. Its profits did not plummet heavily even though the world was derive by economic downturn. Following table show its financial data.(in millions of dollars overleap per share data) 2009 2008%ChangeNet revenues$62,080$63,640(2.5)%Cost of sales9,022 9,328(3.3)Excise taxes on products 37,04537,935 (2.3)Gross profit 16,013 16,377 (2.2)Operating income 10,040 10,248(2.0)Net net profit 6,342 6,890 (8.0)Basic earnings per share3.25 3.32 (2.1)Diluted earnings per shareSource Philip Morris WebpageSociological be criticized as a main contributor of smoking related deaths in the arena, Philip Morris International has to do a l ot to cope up with the sociological issues. Therefore their social accountability activities are directed to these five areas of society, natural poverty and hunger, environmental sustainability and living conditions in rural communities, domestic violence, and adventure relief. The company has spent billions of pounds for charity purpose to restore its tarnished protrude.Legal Philip Morris had to consume heavy loss due to several legal proceeding that it had to go through as people blamed of killing people. It has a tale of being sued by people, distributors or companies. For example, 16 wholesalers filed legal action in a federal court in Tennessee claiming that Philip Morriss wholesale leadership course of instruction 2003 constitutes price discrimination and attempts to monopolize. (Financial Times of London, 8th July 2003.)To cope up with these kinds of legal issues, the company has its own legal department that deals with all the legal issues associated with the compa ny.environmentalEnvironment is a hot topic in present twenty-four hour period world. The problem of thinning of ozone layer or the global warming draws the wariness of each and every organization. Most of the organizations have designed their social responsibility programme associating themselves with the environmental issues. Philip Morris international alike has done the same. They have set up performance goals for their energy use, water use, and pay off water discharge, waste to be sent to landfills and waste to be recycled. The following table show their goals.Source Philip Morris website can be accessed at http//www.pmusa.com/en/cms/Responsibility/ minify/Reducing_Our_Environmental_Impact/default.aspx, on 26th March 2010.Competitive analysis using ostiarys 5 Forces model.Michael E. Porter of Harvard Business School unquestionable a framework for the exertion analysis and communication channel strategy development. According to him an attractive industry has all the for ces he has developed works for the overall profitability of the industry. The five forces of Porter are,Competitive rivalryThreat of successor productsThreat of new entrants talk terms power of customers negotiate power of suppliersIn case of Philip Morris, he too has competitive rivalry. He occupies 15.6 percent of the total market share. The rest is booked by his competitors. It is for the same reason, Philip Morris is focussed on promoting new products. To beat its competitors, it has developed a strong social responsibility plan along with pass of its products. The launch of smoke free cigarettes can be considered as a product of competitive rivalry.Threat of substitute products Philip Morris is quite free from the threat of substitute products. It has always maintained the standard of its products and priced them reasonably. This has lessened the chances of sufferance for the substitute products that are available in the market.Threat of new entrants Philip Morris is famous for its cigarettes. No one in the world is unaware about Marlboro. It is a reputed brand name in the field of tobacco industry. But a reputed brand gives Philip Morris an advantage. It is almost free from the threat of new entrants. The reason for this is, cigarette smokers have a strong loyalty to their brands. So, although there is a constant arrival of new products, they do not affect the market share of Philip Morris as it has endorsed its product with heavy promotions and established all of its products as a Brand. negotiate power of the customer Bargaining power of the customer does not seem to affect the company. The reason behind it is, the perceived value of Philip Morris products is quite in high spirits because they are heavily promoted through media. They have a brand image and are free from the bargaining power of the customer. Moreover most of the customers of tobacco trade are loyal to the products they are used to, and are mobile to pay whatever amount of money t hey are asked to pay. So Bargaining power of the customers doesnt seem to affect the company.Bargaining Power of Suppliers Bargaining power of supplier affects every company. Philip Morris too is affected by it as it follows strict rules concerned with Fair trade. Moreover it has launched special benefit package to its suppliers. It helps the children of its tobacco supplier with education facilities and other general benefits. It is doing this just to reduce the effectuate of bargaining power of its supplier.ConclusionsWhatever progress the company made is not just a coincidence. The company did not lose much of its profits even in the economic downturn. The reason behind this can be summarised as the proper knowledge of the strength and weaknesses of the company and summoning all pertaining questions related to its external environment. Its commitment to follow all legal requirements of the government, introducing cuttable tobacco instead of smoking ones, commitment to environmen tal conservations and billions of pounds spent on charitable purposes are activities to keep the external environment favourable for the company.trade union movement 2Phillip Morris and global political changeAny multinational company that has operations throughout the world has to acclimatize themselves with the political scenario of the concerned country. government is stable only in a few(prenominal) countries that too limited to the few developed countries. Moreover, as Philip Morris is concerned with producing tobacco related products, it is affected by any kind of political change that occurs in the country.By global political change we understand the political changes that occurred in the world. For example, the First World War, when ended in 1919 brought a lot of changes in the world. Similarly the end of Second World War too brought a lot of changes. sensation of the king-sizegest changes was the start of unwarmed war between the USA and the Soviet Union.The cold war d ivided the world into two halves, the capitalists and the socialists. Socialists denied the products of capitalist world to fancy their countries, whereas the same thing applied to the capitalists world. Philip Morris thus could not expand his business to Russia and other socialist countries until the cold war was about to end. Philip Morris was able to pass through the Russian market in 1977 when the socialist country was about to accept some change.Similarly, global terrorism has also affected the policy and finale making of the company as tobacco can be export to developed countries where they have higher prices from the least developed or developing countries. It is said that terrorist have sometimes made tobacco as one of the source of funding to backup their activities. Philip Morris thus has set strict restrictions so as it products are not smuggled. Moreover its factories located in antithetical part of the world restrict its products from being smuggled as they have t heir own identification number on them.Recession that recently occurred in the world can be the after-effects of the political upheavals in the world. Or economic activities and political change have interdependence. So recession in a way can be seen as an effect of wrong political decisions in terms of economic activities. Philip Morris dealt with it quite perfectly. According to statistics, ongoing earnings of Philip Morris rose by 11% as it coaxed solid grains in its sustenance business and continued to find new market for its cigarette. (http//www.thestreet.com/storycomments/10007704/1/philip-morris-ignores-recession.html, on 27th March 2010)Question that present days political leaders are raising is the phenomenon of climate change. Global warming is a big problem and politicians throughout the world are trying to solve it out through joint efforts. All the countries are imposing their own kind of rules and regulations to reduce carbon emission and help in the reduction of glo bal warming. Philip Morris can help in the reduction of carbon emission by investing in third world developing countries for example in the generation of electricity, or other sources of energy which can reduce deforestation and emission of carbon dioxide in the air.