The paper "Success of Philip Morris Companys Strategies" is a good example of a management case study. Philip Morris is a British multinational company founded in London in London in 1847 (Fronk et al. 3). The company has since grown to become a global brand operating in different parts of the world. Although the company began dealing with tobacco, Philip Morris has since diversified its product portfolio by venturing in food and beer industries. Despite the company’ s success in the last centuries, the company has been marred by controversy especially due to the health effects associated with tobacco.
Its tobacco products have been linked to the development of various health conditions, such as cancer, birth defects and heart diseases among others (Fronk et al. 3). Therefore, to prevent people from developing these health problems, the government has created a number of rules and legislation that aims to discourage people from smoking that Philip Morris must comply within its advertising and sale of tobacco. Violation of some of these laws has seen the company being sued on many occasions. Besides the legal and social issues associated with tobacco, Philip Morris also faces the threat of competition from other well-established brands.
This report analyzes how Philip Morris has been successful in its strategy, and conduct a SWOT analysis for the company. The report will also analyze the extent to which its competitor analysis was right, critic its strategy, leadership and organizational structure. The report concludes by projective future direction for the company. Analysis of the Success of PM’ s Strategy The case indicates that Philip Morris has faced many challenges in the tobacco industry due to emergence of new laws that target to control tobacco industry because of the health problems associated with smoking (Fronk et al.
12). Despite the challenges, the case indicates that the company has been successful in its strategy. The success of any company in an industry depends on the strategy that the company adopts. In fact, companies compete in a market based on strategy. A strategy refers to the tactics that a company adopts to overcome challenges and attract companies to the brand. According to this case, it emerges that Philip Morris is the largest tobacco retailer by market share controlling more than 51% of the market share (Fronk et al.
5). All these have come about because of the success of its strategies. To win the market and gain a competitive edge over its rivals, Philip Morris adopted effective pricing strategy that involved charging low prices for its cigarettes at the time its competitor companies of the American Tobacco Trust were increasing their prices (Fronk et al. 3). In this respect, the company positioned itself in the market as the most affordable brand.
This strategy has been a success considering that the majority of cigarette consumers are highly price-conscious and prefer to buy cigarettes that are affordable instead of those that are expensive. Therefore, affordability of its products has made it gain a large market share compared to its competitors in the market. In fact, the case indicates that Philip Morris International controls about 15% of cigarette market share in at least 40 countries, which clearly demonstrate the success of its strategy (Fronk et al. 5).