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Phillip Morris, Inc.

Consumer Product Oriented

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. 

Primary Activities

Marketing and Sale
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). 

  1. 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. 
  2. 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. 

In-Bound Logistics
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. 

Out-Bound Logistics
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. 

Supportive Activities

Firm's Infrastructure
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 problem.

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.

Technology Development
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. 

  1. 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. 
  2. 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. 

Human Resource
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 more profitable.