Philip Morris International Inc. (pmi)
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Introduction
We live in a world of managed organisations. As we become more specialised in our work we depend more on others to meet our needs. That interdependence requires organisation to make the work productive. The work of management is to build organisations which work, in the sense that they use resources to create value.
Well- managed organisations create value in many ways. It may be tangible value or intangible. Good managers understand what customers value, and build an organisation to deliver it – whether in commercial or non-profit enterprises.
Although the purpose of managing is to add value and create wealth this does not always happen. People may produce goods and services inefficiently, using more resources than customers are willing to pay for. Their work may create pollution and waste, so destroying wealth. The idea of creating value is subjective and relative. (Boody, 2008).
Here is clearly framed the case of Philip Morris. Company itself believes they create value because they meet the demands and needs that adult consumers expect of them. It is likely that many smokers believe that the company creates value; this is because they see it from the consumer point of view and for the tobacco really is value. However, Government, health authorities, and in general any smoker or not who is a bit informed about tobacco riskiest, saying that Philip destroys value, destroys health and environment.
Whatever its function, how well an organisation performs its value-creating role depends on those who work within it. But most of the time it is the quality of management that determines whether an organisation fails or succeeds.
Manager is someone who gets things done with the aid of people and other resources, which leads to a definition of management as the activity of getting things done with the aid of people and other resources. (Rosemary Steward, 1967, cited in Boddy, 2008)
Therefore manager have decisions about what to make, how to make it and where to sell it. They take responsibility for some management task they take control of the physical and financial means of the production. They also try to take control of the time, behaviour and skill of employees.
Boddy (2008) in his book management an introduction, presents the competing values framework (see appendix 1). A model represents a complex reality and help to identify the main variable in a situation, and the relationship between them. But no model offers a complete solution in itself; the four are complementary elements in a large whole. Therefore managing a global competitive business requires flexibility, quality, and low-cost production.
Application
Organization
Philip Morris International Inc. (PMI) is the leading international tobacco company, with seven of the worlds top 15 international brands, including Marlboro, the number one cigarette brand worldwide. In 2010, their brands, sold in approximately 180 countries, gave PMI an industry leading estimated share of the total international cigarette market, excluding the Peoples Republic of China and the U.S., of 27.6%.
PM USA is an operating company of Altria Group, Inc., a Virginia corporation whose stock is traded on the New York Stock Exchange (MO).
PM USA is more than 160 years old. The history of the company can be traced back to Philip Morris 1847 opening of a single shop on Londons Bond Street, selling tobacco and ready-made cigarettes. In 1902, Philip Morris & Co., Ltd. incorporated as a small tobacco company in New York City. In 1960, Philip Morris was the smallest among the six major tobacco companies in the United States. By 1983, PM USA had become the largest cigarette company in the country.
The consolidated operating results in 2010 were $ 7,259 million
To an overview of the company, the following analyses are made: SWOT; PESTEL; and PORTER`S FIVE FORCES:
SWOT:
Throughout SWOT analysis we study strengths, weaknesses, opportunities and threats to PMI:
Strengths:
PH has huge brand identity and brand awareness. They have seven of the worlds top 15 international brands, and the number one brand, Marlboro.
Control of the market, they are industry leaders
Strong infrastructure. They have a center that is designed to promote collaboration and creativity and to develop technologies that improve Altrias operating companies current products and lead to innovative new products.
They have strong distribution channels, they opera in 180 countries.
Weaknesses:
PM sells dangerous product, so they may get a negative public perception.
They just depend on the sale of tobacco products.
Opportunities:
Use of their already existent brand awareness to help promote new product in the market.
Growing new markets in developing countries.
Forming strategic alliances with local corporations in foreign markets.
Threats:
The tobacco industry faces a number of challenges that may adversely affect tobacco business, volume, results of operations, cash flows and financial position. These threats are listed in annual report of Philip Morris (2010):
actual and proposed tobacco legislation and regulation;
actual and proposed excise tax increases, as well as changes in excise tax structures and retail selling price regulations;
price gaps and changes in price gaps between premium and mid-price and low-price brands;
significant governmental actions aimed at imposing regulatory requirements impacting our ability to communicate with adult consumers and differentiate our products from competitors products;
increased efforts by tobacco control advocates to “denormalize” smoking and seek the implementation of extreme regulatory measures;
proposed legislation to mandate plain (generic) packaging resulting in the expropriation of our trademarks;
pending