Philip Morris is a holding company whose principal wholly owned subsidiaries,
Philip Morris Incorporated, Philip Morris International Inc., Kraft Foods
Inc., and Miller Brewing Company are engaged in the manufacture and sale
of various consumer products.
Since the company is consumer product oriented, it relies on primary
activities more than supportive activities. For example, marketing is an
extremely important factor to help company to generate profit. The reason
is that company can use their own marketing research to find out what consumers
really want and need (Demand), and what they can provide to satisfy their
wants and needs (Supply).
PM is facing environmental issue and tobacco lawsuits, and these problems
hurt PM's cigarette market tremendously, but it does not mean that smokers
are quitting smoking now. Therefore, PM will need to use their marketing
research technology to find out what consumers really want. For example,
they need to find out if smokers change their smoking preference to EXTRA
LIGHT or maintain the same.
Of the Kraft Cheese, since consumers' eating habit toward are more health
consciously now, if company want to get more customers to buy their product,
PM need to find out if consumers really want to have Low Fat Cheese.
Of the Operation side, since lots of lawsuits are biting their tobacco
market, company should not heavily depend on their cigarette market again.
At this moment, company needs to be more concentrated on their food products.
They need to produce better quality of food and beverage products in order
to get higher market share at this field. Of Operation of cigarette products,
they should reduce their advertising around school and living area, and
set an education fund to help the poor to go to school. They also need
to do ads that intended to discourage the use of Tobacco Products by Children
under age of 18. They need also found a medical research fund to study
more about the disease that related to smoking. These actions should help
to reduce some hostile anti smokers toward the company.
Of In-Bound logistics, company can find their material contractors
who can provide them with cheaper material with better quality. For example,
company can have contract with Farmland Dairies that can provide skim fresh
milk to their cheese production. Thus, company can provide cheese with
healthful qualities. Because the cheese products are with the lower expenses
and better and healthier quality, the product can help company to generate
higher profit margin.
Of Out-Bound logistics, company can always maintain the quality
consistency of their product, and consumers can purchase the cheese without
the second thoughts. Since consumers know what to expect from the purchasing
outcome, they will continuously buy this product. Because word of mouth
is another effective marketing tool, as long as PM can produce this cheese
in consistence quality, their buyer will be more and more.
Follow-up Service is the last factor to help company to gain loyalty
customers. Of the consumer products oriented goods, customers' feedback
is an important factor to help company to keep up and even improving their
quality. Thus, Consumers hotline is an essential tool to get customers
feedback. Of course, feedback is not always good, general speaking. As
customers complain about the product, it means that customers care more
about the quality. Incentives for customers' feedback can help company
to know about its product status. Better feedback with less complaint,
company can get much better profit margin.
Of the consumer goods oriented, the firm's infrastructure is more
Hierarchical than Matrix. The reason is that the company is not like the
hospitality service industry needing to work as a team to make customers
who satisfy with its service. Thus, and the PM's infrastructure is more
likely to be supportive to every departments or every event that the company
is going to take part. For example, as PM faced the tobacco lawsuit and
health consciousness of food consuming, the company is facing the decision
making problem almost on every detail of each department from both supportive
and primary activities. Therefore, at this moment, company needs to have
a strong and quick decision maker. Company's profitability is really involving
how decision maker deal with the problem, and what to do to conquer the
Procurement is an important factor to help company to generate profit.
Since company purchases better deal and more efficiency of new tech. that
can help company to save on the production cost and produce more quality
of goods. In addition, As PM liked to diversify its business operation,
so it merged some profitable companies or factories to be its subsidiaries.
Therefore, PM also become the largest consumer packaged goods company in
the world. Of company acquisition, PM can also try to acquire some lower
level of factories. For example, company can acquire the Farmland, so they
can control the quality of the milk and produce quality of Cheese. As long
as the quality is fitting customer's expectation, company will generate
profit from it. Of course, if company can merge the right company, the
required company will be more likely to help company to maximize its profit.
Of the supportive activity, it is also an important field for company
to provide support to their primary activities. Technology development
is a great example to explain how it supports the primary activities.
Newer technology can help the company to produce better quality of goods.
For example, better technology of their machinery can help the company
to produce firmer filter for their cigarette products; therefore, the filter
can protect the smoker suck in too much nicotine, and reduce the tar to
blacken smokers' teeth. Since the customers are welcome the newer products,
company will generate more profit than before.
Technology can also help PM to do better and faster analysis and decision
on their market research result. For example, newer computer are usually
with faster process power and more stable condition, so company can find
out the result faster and more correctly, and do faster and more precisely
decision of their future products.
The last supportive activity of consumer goods oriented firm is
human resources management. The HR does not play a critical role as hospitality
industry does. The company can hire either skilled or unskilled employees
to operate and assemble the finished product. Even though the unskilled
employees might need some training on some operation part, it does not
need to be highly trained before starting to work as service industry does.
At this situation, if company can hire more skillful personnel to work
for the company, the personnel is more likely to help the company to be