case 2 philip morris
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21/10/2015
1
Amirul Khair
Dhinda Vitriani
Ratri Ika Pratiwi
Salena Nur Adinda
Overview
• Company Profile
• Main Strategic Issue
• Non-market Strategy
• Management Implications
• Conclusion
PHILIP MORRIS EESTI
• American global cigarette tobacco company.
• Started from a single shop in London’s Bond Street in 1847.
• It owns 7 of the top 15 tobacco brands in the world
COMPANY PROFILE
Industry’s Position
TOBACCO
Main Strategic Issue
• Lobbying in EU
• Theoretical Application
• 4I
• Role of Legal Factors
• Strategic Types : Information Strategy
21/10/2015
2
Lobbying in EU
• As of 2012, Philip Morris spent 1,125,000 Euro for lobbying in EU commission
• As of 2013, that amount jumped to 5,250,000 Euro for lobbying
• 161 Members of European Parliament were approached by lobbyist in 2013
• About 31% of MEP had been approached once by Philip Morris’ Lobbyist
4 I
• Issues : loosening the EU’s tobacco regulations (EU’s Tobacco Product Directive)
• Institution : EU’s comission
• Interest : Tobacco manufacturers (like Philip Morris)
• Information : Expected decrease in Tobacco consumption among younger generation (below 18 years old)
THEORETICAL IMPLICATION
$0
$5.000.000
$10.000.000
2011 2012 2013 20142015
Philip Morris Lobbying Spending
Philip Morris LobbyingSpending
Role of Legal Factors
• Each nation has similar stance towards tobacco products – Strict regulations – Limited distribution – Restrictive packaging
• EU’S TOBACCO PRODUCT DIRECTIVE – 65% of surface area of the cigarette pack should be
covered in health warnings – E-Cigarettes are classified medicinal products (which
means stricter regulations than tobacco products) – Menthol flavors are forbidden to sell
Strategic Types : Information Strategy Businesses provide government policy makers with information to influence their actions. • Lobbying “Lobbyists communicate with and try to persuade others to support an organization’s interest or stake as they consider a particular law, policy, or regulation.” • Political Action Committees (PACs) are groups of
businesses that use financial resources to influence policy.
MANAGERIAL IMPLICATION
PARTIALLY SUCCESS!!
Conclusion
• Philips Morris International (PMI) uses lobbying as a their non-market strategy
• The highest spending for any company in the European Union in 2013 (€5.25 million)
• PMI employed 161 lobbyist to combat a proposed tobacco products directive (TPD)
• Tobacco industry need lobbying specifically because of the tobacco regulation itself is strict
• The lobbying process is PARTIALLY SUCCESS.
21/10/2015
3
THANK YOU
References
http://corporateeurope.org/lobbycracy/2012/11/mapping-tobacco-lobby-brussels-smoky-business
http://www.forbes.com/sites/greatspeculations/2014/10/03/why-did-philip-morris-spend-more-than-anyone-else-lobbying-the-e-u/
http://www.trefis.com/stock/pm/articles/256091/an-uruguayan-lawsuit-with-international-implications-for-philip-morris/2014-09-19
http://www.trefis.com/stock/pm/articles/193927/philip-morris-sues-thai-government-over-anti-tobacco-law/2013-06-28
http://www.trefis.com/stock/ahii/articles/235399/philip-morris-finds-its-footing-in-the-electronic-cigarette-industry/2014-04-22
http://www.euractiv.com/sections/public-affairs/philip-morris-tops-ngos-lobbying-spending-table-308820
http://www.euractiv.com/health/meps-approve-eus-new-tobacco-dir-news-533781
http://www.theguardian.com/business/2013/sep/07/tobacco-philip-morris-millions-delay-eu-legislation
http://www.theguardian.com/world/2012/oct/26/eu-tobacco-crackdown-lobbying-scandal
https://www.opensecrets.org/lobby/indusclient.php?id=A02&year=2010
https://www.opensecrets.org/lobby/indusclient.php?id=A02&year=2011
https://www.opensecrets.org/lobby/indusclient.php?id=A02&year=2012
https://www.opensecrets.org/lobby/indusclient.php?id=A02&year=2013
https://www.opensecrets.org/lobby/indusclient.php?id=A02&year=2014
https://www.opensecrets.org/lobby/indusclient.php?id=A02&year=2015
http://tobaccocontrol.bmj.com/content/early/2015/02/06/tobaccocontrol-2014-051919.full
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