Tuesday, November 12, 2019
Strategic Analysis for Philip Morris
Mehmet Burkay 251311001 STRATEGIC ANALYSIS FOR PHILIP MORRIS *PEST ANALYSIS ââ¬â Political and Legal Forces â⬠¢ The laws regulated by the governments against the cigarette companies and cigarette advertisements, since early 90s. â⬠¢ Increasing tax rates on cigarettes especially in U. S. and Western Europe â⬠¢ The barriers against outside producers in china, korea, taiwan, japan ââ¬â Economic Forces â⬠¢ Increasing buying power of the consumers in developing countries â⬠¢ Incremental costs of alternative marketing strategies â⬠¢ Compensation expenditures â⬠¢ Shrinking old markets in developed countries Growing new markets in developing countries ââ¬â Social Forces â⬠¢ Developing social awereness against harm of cigarette â⬠¢ Campaigns against cigarette ââ¬â Technological Forces â⬠¢ Researches on cure for cancer â⬠¢ Decreasing costs due to the developments of new Technologies â⬠¢ Comprising new advertisement methods through internet * SWOT ANALYIS ââ¬â Strengths â⬠¢ Companyââ¬â¢s strong financial budget â⬠¢ Well known brands in cigarette market â⬠¢ Prestigious image of Marlboro â⬠¢ Successful partners in foreign markets â⬠¢ Strong distribution channels â⬠¢ Essential corporate culture ââ¬â Weaknesses â⬠¢ Inadequate comunication with public Opportunities â⬠¢ Growing new markets in developing countries â⬠¢ Chance to use brands in different sectors â⬠¢ Merging or forming strategic alliances with local corporations in foreign markets ââ¬â Threats â⬠¢ Aggressive marketing campaigns of competitors â⬠¢ Social campaigns against cigarette â⬠¢ Legal barriers against cigarette consumption and advertisements â⬠¢ Increasing prices in agricultural products â⬠¢ Deaths due to cigarette â⬠¢ Probable compensations * Industry and Competitor Analysis â⬠¢ Potential Entrants: low First investment costs are quite high and markets are quite dom inated by existing firms Bargaining Power of Suppliers: medium In many countries state is the supplier of tobacco and prices are defined by states â⬠¢ Bargaining Power of Buyers: low Cigarette consumers have no chance to bargain on prices â⬠¢ Other Stakeholdersââ¬â¢ Power: high Governments have very strong power to apply sanction on cigarette firms and cigarette market. â⬠¢ Threats of Substitute Products: low Cigarette is easy to reach and use. There is also no serious product that can substitute cigarette â⬠¢ Competition in Industry: high There are many firms activating in industry
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