A grand strategy is a comprehensive approach for achieving goals of an organization. Of the three basic strategies within this concept, Philip Morris is poised to follow the growth strategy. By investing in companies such as Miller Brewing Company and Seven Up, they have decided to focus on increasing sales and profits of the organization in the long term, with hopes of positioning themselves as a leader within their industry. They are taking risks by entering new markets with existing products.
By changing the slogan of Miller High Life, they were able to appeal to more drinkers thus increasing their sales comparable to Budweiser. They were equally as successful using the growth strategy with Miler Lite, providing satisfaction to the calorie conscious drinkers. Using Miller Lowenbrau, they were able to cater to status conscious beer drinkers. After purchasing Seven Up, they were able to shake up the current market by appealing to consumers favoring less caffeine in their cola’s.
By the time they purchased Rothmans International, Phillip Morris had already penetrated the domestic market place and is now looking forward with visions of truly expanding their portfolio on a global scale. These are all examples of a company using the growth strategy and taking advantages of many opportunities that follow such tactical planning. A strategic business unit is a part of an organization that is responsible for its outcome. According to the “growth share matrix,” Marlboro would be classified as a cash cow.
Their product generates steady and dependable cash flow. They have large shares of the market and show little opportunity for growth. Miller’s leading product, High Life could be considered a star in respect to the matrix. They offer attractive profit and growth opportunities but require money to sustain high market growth. Basically, in order to keep up with Budweiser, it will require more resources; the same can be said for Miller Lite. Lowenbrau is a question mark strategic business unit. They experience high market growth coupled with low market share.
This is a beverage I’ve personally never heard of. I perceive their profit potential to be uncertain. Seven Up could be classified as a cash cow as well. They have not generated any new market growth that I am aware of in a long time. However, Seven Up is just as popular today as it was 10 years ago. They do not seem attractive from a growth standpoint but in terms of profits, I’m sure they are very successful. The almost caffeine free beverage “Like,” could be classified as a dog according to the growth matrix.
Despite early reports of consumers responding in favor of, this is a product that would be classified as a low market growth/low market share cell. Finally, Rothmans International could be classified as a cash cow. Because they are categorized as the fourth largest cigarette company in the world, they must be generating a substantial cash surplus. They are a great example of a company that is currently in the low growth/high market share cell in the BGC matrix. The tobacco industry will always be subject to health concerns, tax increases and environmental threats.
Despite this, Phillip Morris decided to return to the industry because companies and investors see the business as a giant cash cow. Because of his successful brand name, his company can experience low market growth coupled with very high market shares. The reason he returned was for the extraordinary amount of money that is to be made. People will always smoke and as long as they do, companies like his will always be there to cash in. According to the “Responsibility” page at altria. com, there is much to discuss concerning socially responsible behaviors.
Altria claims to promote public interest by encouraging community growth and development. The group has allegedly set goals to reduce environmental impact of businesses and to promote sustainability of natural resources. Altria is attempting to reduce instances of energy use, green house emissions, and the over use of water. I personally feel they have provided enough statistically data to adequately look like a “good corporate citizen. ” However, big tobacco companies have not always been known as truthful. I somewhat question the validity of the data.