Philip Morris USA: Strategic Analysis

An analysis of the American tobacco company, Philip Morris USA.

This paper explains Philip Morris Company’s current external environment and examines the strengths, weaknesses, opportunities and threats to PMUSA. The paper then explains their marketing strategy for the new millennium and includes a personal perspective on their future.
The US tobacco market has become increasingly hostile in some traditionally receptive demographics while it has remained supportive in others. That the growing Spanish-speaking and Eastern European immigrant populations are particularly receptive to tobacco marketing and usage is no surprise, given that tobacco use by adult males is virtually assumed in many Latin American and European countries (FAO, 1990: 22). With the dramatic rise in taxes in many states, and the severe decrease in smoking venues in large metropolitan areas, PM and its cohort (RJ Reynolds, Lorillard) have had to lobby on many levels for the mere continued acceptance of their product. Secondhand smoke studies have given the middle- and upper-income demographics considerable ammunition in the fight to make all restaurants and government buildings non-smoking zones. In New York, this battle has resulted in grassroots petitioning to keep some bars smoke-friendly (FAO, 1990: 67). Competition from other tobacco brands has also been intense, with RJR, Lorillard, and smaller producers clamoring for a share of the dwindling US tobacco market. PM’s acquisition of Miller Brewing has also proven to be a small gain, if any, since the beer market does not show signs of becoming a growth industry now that the microbrew boom seems to have petered out.