case 2 philip morris

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






http://tobaccocontrol.bmj.com/content/early/2015/02/06/tobaccocontrol-2014-051919.full














































































































































































case 2 philip morris

Documents