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Essay on Philip Morris
Company Specific Analysis
Overview
Philip Morris is the world’s largest packaged goods company. They operate in nearly 200 countries. Their diverse lines of business include some of the world’s most successful companies, with total operating revenues over $80 billion in 2000. It is the largest cigarette company in the United States, with a 50% market share. Together, Kraft Foods North America and Kraft Foods International, is the world’s second-largest food company. Miller Brewing Company is America’s second-largest brewer.
Philip Morris relies a lot on the tobacco industry, as that is where most of their revenue is derived from. About 60% of their total revenue comes from the tobacco industry alone. Their food market comes in second with about 33% and beer and financial services lag behind at about 6%.
Corporate Strategy
Philip Morris strives to be the best and biggest consumer goods company in the world. They consistently try to reinvest their businesses and brands and meet the changing demands of consumers through innovation and new product development. A very import practice to them is to enhance shareholder value. They do this by raising the dividend and repurchasing shares. Philip Morris has continually met or exceeded their earnings estimates. In the future, we predict their earnings to continue to increase to $3.85 in 2001 and $6.02 in 2007.
Life Cycle
The corporate life cycle of Philip Morris is in the stable stage. It is a mature company in a mature industry. Despite this fact, Philip Morris has a lot of potential possibility for growth. Internationally, they have been gaining market share in the tobacco industry due to stronger preference for American style cigarettes. The recent acquisition with Nabisco has opened the door for continued growth and larger profits.
North American Food
Kraft Foods retails packaged food that includes cheese & cheese products, processes meat and poultry products, coffee, ready to eat cereals, salads, desserts and snacks....
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