Philip Morris U.S.A. and Marlboro Friday (A) (Condensed) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Philip Morris U.S.A. and Marlboro Friday (A) (Condensed)
This case is a condensed version of "Philip Morris U.S.A. and Marlboro Friday (A)". In July 1993, Philip Morris executives met to consider second-quarter data on U.S. tobacco sales. Three months earlier, the company had announced a 40-cent-per-pack promotion for Marlboro cigarettes, the number-one-selling cigarette in the world. On the day of the announcement, April 4, Philip Morris stock fell $14.75, to $49.375, while the Dow Jones Industrial Average fell 68.63 points. On June 4, the company announced an extension of the promotion through August 8. After eight months of consecutive share declines, Marlboro's share had rebounded by three points. Philip Morris executives now faced several important decisions: Should the Marlboro promotion be extended beyond August 8? Should the promotion be replaced with a permanent cut in wholesale prices? Should the prices of other Philip Morris premium brands be lowered? Finally, should the prices of the company's discount brands be altered in any way?
Authors :: Paul W. Farris, Mark Parry, Richard Johnson
Swot Analysis of "Philip Morris U.S.A. and Marlboro Friday (A) (Condensed)" written by Paul W. Farris, Mark Parry, Richard Johnson includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Morris Philip facing as an external strategic factors. Some of the topics covered in Philip Morris U.S.A. and Marlboro Friday (A) (Condensed) case study are - Strategic Management Strategies, Pricing and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Philip Morris U.S.A. and Marlboro Friday (A) (Condensed) casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing government debt because of Covid-19 spendings, increasing transportation and logistics costs, competitive advantages are harder to sustain because of technology dispersion, technology disruption,
challanges to central banks by blockchain based private currencies, geopolitical disruptions, etc
Introduction to SWOT Analysis of Philip Morris U.S.A. and Marlboro Friday (A) (Condensed)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Philip Morris U.S.A. and Marlboro Friday (A) (Condensed) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Morris Philip, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Morris Philip operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Philip Morris U.S.A. and Marlboro Friday (A) (Condensed) can be done for the following purposes –
1. Strategic planning using facts provided in Philip Morris U.S.A. and Marlboro Friday (A) (Condensed) case study
2. Improving business portfolio management of Morris Philip
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Morris Philip
Strengths Philip Morris U.S.A. and Marlboro Friday (A) (Condensed) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Morris Philip in Philip Morris U.S.A. and Marlboro Friday (A) (Condensed) Harvard Business Review case study are -
Effective Research and Development (R&D)
– Morris Philip has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Philip Morris U.S.A. and Marlboro Friday (A) (Condensed) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Successful track record of launching new products
– Morris Philip has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Morris Philip has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Ability to lead change in Sales & Marketing field
– Morris Philip is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Morris Philip in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Morris Philip is present in almost all the verticals within the industry. This has provided firm in Philip Morris U.S.A. and Marlboro Friday (A) (Condensed) case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
High switching costs
– The high switching costs that Morris Philip has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Morris Philip digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Morris Philip has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Sustainable margins compare to other players in Sales & Marketing industry
– Philip Morris U.S.A. and Marlboro Friday (A) (Condensed) firm has clearly differentiated products in the market place. This has enabled Morris Philip to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Morris Philip to invest into research and development (R&D) and innovation.
Training and development
– Morris Philip has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Philip Morris U.S.A. and Marlboro Friday (A) (Condensed) Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Operational resilience
– The operational resilience strategy in the Philip Morris U.S.A. and Marlboro Friday (A) (Condensed) Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Low bargaining power of suppliers
– Suppliers of Morris Philip in the sector have low bargaining power. Philip Morris U.S.A. and Marlboro Friday (A) (Condensed) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Morris Philip to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Morris Philip has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Morris Philip to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management
– Morris Philip is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses Philip Morris U.S.A. and Marlboro Friday (A) (Condensed) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Philip Morris U.S.A. and Marlboro Friday (A) (Condensed) are -
Capital Spending Reduction
– Even during the low interest decade, Morris Philip has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Morris Philip is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Philip Morris U.S.A. and Marlboro Friday (A) (Condensed) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Philip Morris U.S.A. and Marlboro Friday (A) (Condensed), it seems that the employees of Morris Philip don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Philip Morris U.S.A. and Marlboro Friday (A) (Condensed) HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Morris Philip has relatively successful track record of launching new products.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Philip Morris U.S.A. and Marlboro Friday (A) (Condensed), is just above the industry average. Morris Philip needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Products dominated business model
– Even though Morris Philip has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Philip Morris U.S.A. and Marlboro Friday (A) (Condensed) should strive to include more intangible value offerings along with its core products and services.
Slow to strategic competitive environment developments
– As Philip Morris U.S.A. and Marlboro Friday (A) (Condensed) HBR case study mentions - Morris Philip takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Workers concerns about automation
– As automation is fast increasing in the segment, Morris Philip needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Aligning sales with marketing
– It come across in the case study Philip Morris U.S.A. and Marlboro Friday (A) (Condensed) that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Philip Morris U.S.A. and Marlboro Friday (A) (Condensed) can leverage the sales team experience to cultivate customer relationships as Morris Philip is planning to shift buying processes online.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Philip Morris U.S.A. and Marlboro Friday (A) (Condensed), in the dynamic environment Morris Philip has struggled to respond to the nimble upstart competition. Morris Philip has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Skills based hiring
– The stress on hiring functional specialists at Morris Philip has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Opportunities Philip Morris U.S.A. and Marlboro Friday (A) (Condensed) | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Philip Morris U.S.A. and Marlboro Friday (A) (Condensed) are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Morris Philip can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Philip Morris U.S.A. and Marlboro Friday (A) (Condensed), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Developing new processes and practices
– Morris Philip can develop new processes and procedures in Sales & Marketing industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Morris Philip is facing challenges because of the dominance of functional experts in the organization. Philip Morris U.S.A. and Marlboro Friday (A) (Condensed) case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Creating value in data economy
– The success of analytics program of Morris Philip has opened avenues for new revenue streams for the organization in the industry. This can help Morris Philip to build a more holistic ecosystem as suggested in the Philip Morris U.S.A. and Marlboro Friday (A) (Condensed) case study. Morris Philip can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Morris Philip to increase its market reach. Morris Philip will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Morris Philip in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
Leveraging digital technologies
– Morris Philip can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Learning at scale
– Online learning technologies has now opened space for Morris Philip to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Buying journey improvements
– Morris Philip can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Philip Morris U.S.A. and Marlboro Friday (A) (Condensed) suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Morris Philip to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Morris Philip in the consumer business. Now Morris Philip can target international markets with far fewer capital restrictions requirements than the existing system.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Morris Philip can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Morris Philip to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Morris Philip to hire the very best people irrespective of their geographical location.
Threats Philip Morris U.S.A. and Marlboro Friday (A) (Condensed) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Philip Morris U.S.A. and Marlboro Friday (A) (Condensed) are -
Environmental challenges
– Morris Philip needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Morris Philip can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Morris Philip will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Stagnating economy with rate increase
– Morris Philip can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Morris Philip.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Morris Philip business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– Morris Philip has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Morris Philip needs to keep up with the evolution of technology in the Sales & Marketing sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Morris Philip in the Sales & Marketing sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Morris Philip high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Increasing wage structure of Morris Philip
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Morris Philip.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Morris Philip needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Morris Philip can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Morris Philip can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Philip Morris U.S.A. and Marlboro Friday (A) (Condensed) .
Weighted SWOT Analysis of Philip Morris U.S.A. and Marlboro Friday (A) (Condensed) Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Philip Morris U.S.A. and Marlboro Friday (A) (Condensed) needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Philip Morris U.S.A. and Marlboro Friday (A) (Condensed) is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Philip Morris U.S.A. and Marlboro Friday (A) (Condensed) is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Philip Morris U.S.A. and Marlboro Friday (A) (Condensed) is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Morris Philip needs to make to build a sustainable competitive advantage.