Strategy Formulation Essay Example | Topics and Well Written Essays - 1500 words

Strategy Formulation - Essay Example Expansion into foreign markets proved successful for Altria and they added more countries to the list to distribute their products to. Some critics cite the reason for foreign expansion as to sell their controversial products where policies are not as strict as in the US. After the Master Settlement Agreement which imposed some marketing and selling sanctions on Altria’s products, Altria had to reinvent their strategy and aim to expand worldwide where such restrictions weren’t applicable. Although Altria has been successful in worldwide operations, their controversial tactics, health hazards of their products, increasing litigations and the availability of cheaper counterfeit products pose serious challenges to them to operate globally. Maybe to counter these threats, Altria has announced that it would split up the International division of Philip Morris in 2008 after the meeting on January 30, 2008 subject to favorable tax ruling. (Ambregni, 2008) Question 2: SWOT Analysis Altria's basic revenue comes from its cigarette brands of Philip Morris. Therefore any factors that affect Philip Morris brands, affects Altria to a large extent. Therefore the analysis done below is strongly related to the cigarettes brands of Altria Strengths Global Operations - Altria operates globally in more than 150 countries with over 25 Philip Morris brands (MapofWorld, 2005). Although their competition is strong, brands such as Marlboro being the most popular cigarettes in the world. Having different laws and opportunities to exploit certain rulings that are not applicable in US, Altria has penetrated the international market. Philips Morris international, once spun off, is expected to get 48 billion dollars of annual revenue. This would also free the international division to focus on external soils without any restrictions that the company still faces because of US policies. (Ambregni, 2008) Strong Brand Names - Altria is the parent company of basically cigarette manufacturing companies. Over the years Altria's company, Philip Morris have built strong brands such as Marlboro, Benson and Hedges, Philip Morris, Parliament, Virginia Slims etc. the popularity and awareness of these brand linking to Altria has created benefits for the company in terms of profitability, sales, product diversification and customer loyalty. Addictive Capability of their Products - Altria's companies all have a similarity in one aspect of the products made. They all have addictive tinges. Almost all Philip Morris cigarette brands, John Middleton's Cigars and SAB Millers brews contain the characteristics of leaving a person want more of it. Since customers want to keep having these products, Altria has ensured that its customers remain loyal and get 100% customer retention. Supports FDA Regulation - "Philip Morris USA is the only U.S. tobacco company that supports meaningful and effective regulation of tobacco products by the U.S. Food and Drug Administration (FDA)." This creates a competitive advantage for Altria in the US to have the support of FDA which the consumers follow very strictly. (Altria, 2005) Focus in One Area - In 2007, Altria spun off its food subsidiary Kraft Foods so that Altria could focus on tobacco side. By focusing on one area, the management and strategies can be all aligned to meet the corporation's objectives easily and more efficiently. (Ambregni, 2008) Opportunities Production in Foreign Markets - banking on the success in US, Altria can expand its operations further by increasing production in foreign markets. Some countries that have to import Altria products, have to pay high prices. By adding those countries to