Term Paper on "Phillip Morris"

Term Paper 8 pages (2393 words) Sources: 1+

[EXCERPT] . . . .

Profiling Phillip Morris, An International Firm

Organization type

Planning

Market Assessment

Marketing Strategy

Organizational Structure

Organizational Culture

Locations of the Organization and Business Operations

Philip Morris position towards environmental, political, social, economic, legal and labor forces of the international economy

Annex

Annex

Annex

The present paper aims at constructing a comprehensive profile of Philip Morris, the tobacco giant, by examining issues like: organization type, its strategy, the planning process within the company, its market assessment, its marketing strategy, organizational structure, organizational culture, its locations, business operations. Additionally, the paper will look into how the analyzed company confronts environmental, political, social, economic, legal and labor force related issues on the international background.

Organization type

Philip Morris is the world leading Tobacco Company, its products being sold in more than 160 countries (PMI, 2008; PMUSA, 2008).

In March 2008, Philip Morris International, Switzerland-based operations in charge of the company's operations outside U.S. span off from the Altria Group's umbrella, for reasons to be analyzed under the "Strategy" headline.

Consequently, today, Philip Morris International acts as a standalone entity from Philip Morris USA. (O'Connell, 2008)

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For the purpose of the present paper, the operations of the two Tobacco Businesses, Philip Morris USA and Philip Morris International will be analyzed, in order to create a complete and comprehensive profile of its businesses, strategies and operations all over the world.

With a portfolio built of major brands such as Marlboro, Parliament, Virginia Slims, Basic and L&M - in the U.S. And Marlboro Parliament, Virginia Slims, Chesterfield, Philip Morris in the International Market (Altria, 2008), the company is strengthening its leading position on the world market, with more than one of every three cigarettes smoked currently in the U.S. being a Marlboro (Adbrands.net, 2008) and with a share of 15.6% of the international cigarette market (outside U.S.) held by the Philip Morris International (PMI, 2008).

Strategy

Similar to other leading Tobacco Companies, Philip Morris follows a strategy of expansion in the emerging markets, where fewer restrictions both on smoking and on cigarettes advertising are imposed (BBC News, 2007).

Following the same line of ideas, the split of PMI from Philip Morris USA, wanted to free the giant's international operations of the usual annoyances of legal and public-relations nature in the U.S., that have hindered its international growth in the past.

Consequently, on 30 January 2008, the Board of Directors of Altria Group, Inc. authorized the spin-off of 100% of Philip Morris International's shares to Altria's shareholders (PMI, 2008).

Thus, the standalone entity will be exempt from the harsh U.S. tobacco regulations and far away from the bothering American litigators and public opinion, opening the door for new opportunities such as a broad market for product experimentation (O'Connell, 2008)

Planning

As suggested by the document found on Philip Morris documents website (www.pmdocs.com) andattached as an Annex to the present paper, the strategic planning process within Philip Morris International (and it is a logic conclusion to draw that a similar structure of a strategic planning process would be used for the Philip Morris USA branch) follows the above described flow:

The Country Cross-Functional Team (for PMUSA can be the a Team formed of State Cross-Functional or Regions Cross Functional - responsible members) are in charge of objective setting using as a base inputs from external environment, local market information, etc. With these objectives in mind, the Strategy and Development area develop the Strategic Planning Process that build into the Global Strategy.

The Strategic Planning Process is then applied at local level through the Local Strategies and Action Plans (that are responsibilities of the Local Marketing Teams).

As the dates of the planning related documents found on the PMUSA Documents Site suggest, the Global Strategic Planning was taking place every 5 years, and regionally every year. (PMUSA Docs, Year Unknown).

Even though direct secondary resources have not been found to support this idea, it is most probable that starting with the company's March 2008 breakup, that had been an operation planned for years (despite its concerns regarding the U.S. regulators that could have tried to stop it) (Cordeiro, 2008) all strategically major Philip Morris moves will continue to be planned separately for the Philip Morris International Spin Off and the U.S. Altria's Tobacco Holding Philip Morris USA, as before.

Market Assessment

Growth in global tobacco products market has been restricted for the past several years due to ever more severe government regulation and taxations, allied with increasing health concerns derived from smoking effects over long-term smokers, as well as due to the various lawsuits across the world. With all these issues taken into account, world market value continued to expand at a steady rate, and it is likely to reach a value of around $374 billion by 2010 to be spent on tobacco products (including thus cigarettes and cigars), according to a new report by Global Industry Analysts, Inc. (Industrial Manufacturing News, 2008).

According to Euromonitor International, the current number of smokers reaches 1.3 billion, with more than a third being Chinese (McKay, 2008). See Figure 1 in Annex 2.

The U.S. cigarette market, different from the international markets has been registering declining consumption trends, which makes the international market with its real growth opportunities of significant interest to the cigarette companies, and Philip Morris International is on its way to take the most advantages from it (Norton, 2008).

Marketing Strategy

While Philip Morris USA remained in charge of the home market, Philip Morris International sales its products in about 160 countries, in many of them holding the Number 1 or Number 2 position of market share. As it is much diversified from a geographic point-of-view, it has significantly reduced the regulatory or legislative risk of being tied to a single market.

While on the U.S. market Philip Morris USA holds about 50% market share, in the international market, Philip Morris International accounts only form about 15.4% and has a lot of opportunities to gain more volume from its competitors and thus increase its market penetration. Which is exactly what it does. (Norton, 2008)

On the long-term, the biggest growth driver seems to be the development of its relationship with the state owned China National Tobacco Corporation (CNTC). With an estimated volume of exceeding 2 trillion cigarettes annually and about 350 million smokers, China is the most significant market a cigarette company could work on for two years already Philip Morris international negotiates possible agreements that would help it to enter production and sales in the country, probably by manufacturing Marlboro cigarettes within the CNTC national fabrics (Norton, 2008, McKay 2008). If this type of agreement should enter into force, "PMI could catch fire" from the speed of its growth, as the title of Norton's article states.

The same author mentions in the above mentioned article, that "in contrast to Altria's leaders driving with one foot on the brake, I believe that the PMI management team feels like a turbo-charged sports car let loose on the open road after being constrained to school-zone speeds for far too long."

The most probable strategies to be followed by Philip Morris International are to be related to improved operating performance, development of innovative products and reduction in costs, while management acts will tend to be more aggressive in order to exceeding by far its initial targets (Norton, 2008).

As well as other international tobacco giants, Philip Morris International denies that the company is targeting new smokers or that it is currently seeking to expand in areas with minimal regulation. Nevertheless, they are working on increasing sales volumes in countries where population is growing, where the middle classes are getting thicker and where smoking is perceived as a sign of upward movement in the society. Concomitantly, Philip Morris International is also developing and promoting new or adapted products to attract new consumers, such as shorter cigarettes that respond better to the tobacco restrictions in public places (McKay, 2008).

According to Philip Morris International spokesman, cited by McKay's article "Where there's smoke: Emerging World," the company's goal is "to appeal to adult smokers who've already made the decision to smoke, and get them to smoke our brands."

Organizational Structure

Exact information on "low level" organizational structure for both Philip Morris USA and its International peer could not be encountered at the time of the writing of this paper. Nevertheless, from the sole document publicly available and containing information regarding "high level" organizational structure has been selected the Figure 3 in Annex 3 can be observed the matrix like division of operational responsibilities both on geographic areas, as well as on functional areas.

Organizational Culture

As it is known, Organizational Culture is comprised of the values, assumptions, norms and tangible signs of organization members and their behaviors.

Philip Morris is a company that has kept its image of a company with great people, significant opportunities, interesting and challenging work and corporate and individual responsibility.

It has a relatively low distance to power, thus giving opportunity to ideas to reach fast to the decision makers. Its… READ MORE

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Quoted Instructions for "Phillip Morris" Assignment:

“

~Profiling an International Firm~

~Goal/Objectives~

This project is a semester-long endeavor, starting from Day 1 of class. In the past I have used similar projects to this one, in which students can apply weekly-lessons learned towards the finishing of an overall project. Each week, if at all possible, some time should be devoted to incorporating the discussions, lessons and vocabulary learned in class in the final draft of your projects.

For this project, I would like for you to follow 1 of two paths:

1.) Examine an existing International Firm, and profile it according to:

a. Organization type,

b. Strategy,

c. Planning,

d. Market Assessment,

e. Marketing Strategy,

f. Organizational Structure,

g. Organizational Culture,

h. Locations of the Organization,

i. Business Operations (Import/Export, Banking, etc.), and then:

i. How does this company confront the environmental, political, social, economic, legal, and labor forces of the international economy?

-OR-

2.) Create the profile of an International Firm you would like to establish as an entrepreneur, according to:

a. Organization type of your future organization,

b. Strategy of your future organization,

c. Planning of your future organization,

d. Market Assessment of your future organization,

e. Marketing Strategy of your future organization,

f. Organizational Structure of your future organization,

g. Organizational Culture of your future organization,

h. Locations of the Organization of your future organization,

i. Business Operations (Import/Export, Banking, etc.) of your future organization, and then:

i. How shall your future company confront the environmental, political, social, economic, legal, and labor forces of the international economy?

No matter which path you choose, YOU MUST RESEARCH, CITE, & REFERENCE OUTSIDE SOURCES FROM:

A.) Lirn

B.) NetLibrary,

C.) The Economist,

D.) The Wall Street Journal,

E.) BBC,

F.) CNN,

G.) MSNBC,

H.) Al Jazeera,

I.) ANY PROFESSIONAL/RELIABLE NEWS SOURCE.

~Referencing/Researching Your Project~

Your references must absolutely be in APA style (Please refer to the Course Home Section entitled *****Writing Scholarly*****, and be sure to visit the Webliography for outside reading sources as well as APA links to guide you.

Please do not forget that I am here to help you, so please, do not hesitate to leave me a message in the virtual office if you need help.

~Reference, Writing & Researching Guides for Your Paper~

Class, please make sure that you revisit the following parts of this online course so that your project goes smoothly:

1.) Webliography APA Links (I shall be looking for APA standards of research throughout your paper),

2.) Webliography Outside Reading Links (These are a great source for helping you build your research basis),

3.) LIRN/ NetLibrary (Again, more great resources for helping you build your research basis of the project),

4.) Writing Scholarly section of the Course Home (Your project shall be heavily weighed against this writing guide),

5.) Plagiarism Policy (Found in the Syllabus under *****PLAGIARISM POLICY*****)

6.) Semester Project section of the Course Home (As this page will help refresh your memory of what I am looking for in your projects).

Also, do not forget that I can always be reached for any issues regarding this project in the Virtual Office/Email.

~Last Weeks of Class~

Throughout Week 14 I shall be available for you to submit rough drafts for review before your final submission in Week 16, so please be sure to take advantage of my availability. However, make sure that you submit your rough drafts in the *****Journal***** or *****Doc Sharing***** sections of your course AND MARK THE DOCUMENTS AS PRIVATE (so that only I can see them). PROJECTS SUBMITTED AFTER THE DUE DATE (11 MAY 2008 @23H59 [11:59 PM] US EST) SHALL RECEIVE 10% OFF FOR EACH DAY NOT RECEIVED!!!!!

Nextly, class, once you have finished your composition please post the final draft (saved in .pdf, .rtf, .doc, or .html) in the Doc Sharing section or the Journal section of your course (please mark private so that only I can see your project).

Finally, Class, have fun with this project: it will not only get you accustomed to researching methodologies for the online learning environment, but it will also enrich your learning experience by placing the concepts we learn in class into a real-world context.

NO ONE ever said that researching and composing a project couldn*****t be fun and educational (consider this project your weekly-homework). There is no reason why any member of this class shouldn*****t make a high mark on this project worth 175 points with all of these resources available. Good luck! ïŠ

Writing a Scholarly Work:

When writing a scholarly text, there are 10 major points to be considered. I am going to now go over the following 10 points and hope that you will print this out and use this *****quick guide***** as a sort of measuring stick by which to begin, judge and edit your own research projects in the future. When writing an academic paper, a scholarly paper that shall be reviewed by other scholars and possibly even used as a work of research, one must consider the following:

1.) Document Content, Development & Organization

a. Cover the main focal points/key elements in a substantive way, and, as the author, use your own words/voice while carefully NOT improperly using the words of others (Plagiarism).

b. Content comprehensive, accurate, and/or persuasive

c. CLEARLY state and support/back up the major points of the essay

d. The organization of your paper should emphasize central theme or purpose

e. Where appropriate and necessary, support your major points of the paper with theory (citations/quotations)

f. REMEMBER to use an economy of discourse: eliminate any unnecessary words/quirky sentence structures, etc*****¦

2.) Introduction

a. Purpose identified or problem statement clearly formulated

b. Does the introduction provide sufficient background on the topic?

c. Do the major points of the introduction match the assignment?

d. As the author you must always create a sense of focus and direction for your subject matter to be discussed starting from THE BEGINNING (Introduction)

e. Consider that the introduction would be a good place to preview-prep your audience (the reader) for your subject

3.) Body of Paper

a. Ideas are consistent and flow in logical sequence

b. Make sure not to stray, in writing each and every sentence of each and every paragraph ask yourself is this content worthy of inclusion? *****“ does it serve the purpose of delivering what I originally described/previewed in the introduction? If not, how can it be used to do so? OR, it does not belong. A good rule to remember is that if a point (no matter how wonderful a point it may be) does not easily fit into the greater discourse/scheme of the paper being written, then perhaps it must be left out. Better to leave out a wonderful point that has no logical place in the paper, rather than include a wonderful point with the risk of losing focus/direction.

c. Major points are organized using appropriate headings wherever necessary.

d.Points are supported with appropriate research and references

e. State your ideas clearly and concisely

f. Bridge your topics of discussion-points of interest with transitions from one paragraph to the next, making sure that each paragraph is fully developed.

4.) Conclusion

a. The conclusion should be like a goal or aim. With regards to the conclusion at which you, the author, are arriving, does it flow logically from the material presented?

b. Your conclusion insights should be drawn from summarized major points

c. The conclusion MUST contain a strong closing that lends strength and power to the paper and a sense of well-argued, logically presented completion/closure

5.) Organization

a. Use non-monotonous voice, making sure to use a varied display of CORRECT sentence structure

b. Paragraphs well structured with logical and effective transitions

c. As far as achieving a fully developed body, each one of your paragraphs should touch on ONE of each of your major points of discussion and examine it in great detail with sufficient supporting information

d. Your paper should review relevant concepts and create a coherent theoretical framework for the subject (in some way, however miniscule it may seem, contribute to the theoretic discourses of the subject you are examining).

6.) Punctuation

a. Used correctly throughout the document

b. The word *****and***** and the ampersand (this is an ampersand = &) are used correctly

c. Punctuation correctly placed with quotations marks

7.) Grammar

a. Subject-verb agreement (For example: Avoiding mistakes like, *****She do*****, *****the dog speak*****).

b. Proper voice (active vs. passive) and person used

c. Pronouns unambiguous and congruent (For example: *****IT*****, *****HE*****, *****SHE*****, *****THEY***** = to what or whom do they refer?)

d. Gender-correct pronouns used

e. Plurals are used correctly

f. Appropriate hyphenation of terms

8.) Style In-Text Citations

a. All outside ideas properly cited (*****outside***** meaning *****not your own*****)

b. Citations complete and properly formatted according to APA standards

c. Electronic sources properly cited according to APA standards

d. Personal communications cited in text only

e. Page numbers included for direct quotations are used properly.

f. Indirect or secondary sources properly cited

9.) Text/APA Format

a. Courier/Times Roman 12-point font used

b. Document double-spaced throughout

c. Margins at least 1 inch (2.54cm) on all sides and ragged right edge

d. Paragraphs indented 1/2 inch

e. Headings and subheadings properly formatted

f. No end-of-line hyphenation

g. Only one space after punctuation

h. No bold type used for emphasis

i. Italics used instead of underlining

10.) Tone

a. There is no hyperbole (exaggeration)

b. There is a balanced and scholarly presentation of information

c. Writing is clear and precise

d. Creative writing conventions such as setting up ambiguity, inserting the unexpected, and omitting the expected are avoided

e. Colloquial expressions, slang, clichÃ©s or overused phrases are avoided and shunned

f. The author uses an assertive tone and language that is not hesitant, not aggressive, not obnoxious but confident and well-informed

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