Share
Explore BrainMass

Global Strategic Management

What is your impression of the world wide operation of Altria?

Does Altria have a competitive advantage and/or a competitive strategy.. justify?

Choose a product of Altria's and describe the components of this product's value chain.

What strategic alternatives are open to Altria explain and justify?

Solution Preview

I located some relevant information for you to consider for each section. I also attached extra resources for Atria for consideration (e.g., information about the financial standing compared to its competitors, profile of the Altria and product lines, and then many other links to other Altria articles and information).

One approach to help you with an assignment like this one is to provide information for each question, which is supported by research information (excerpts from the business literature) used to justify each point. This is the approach this response takes.

RESPONSE:

Altria Group, Inc. (ALG) is primarily a holding company. The Company, through its wholly owned subsidiaries, Philip Morris USA Inc. (PM USA) and Philip Morris International Inc. (PMI) are engaged in the manufacture and sale of cigarettes and other tobacco products. ALG's 89% owned subsidiary Kraft Foods Inc. (Kraft) is engaged in the manufacture and sale of packaged foods and beverages. Philip Morris Capital Corporation (PMCC), another wholly owned subsidiary, maintains a portfolio of leveraged and direct finance leases. As of December 31, 2006, ALG had a 28.6% economic and voting interest in SABMiller plc (SABMiller), which is engaged in the manufacture and sale of various beer products. The Company operates in five segments: domestic tobacco, international tobacco, North American food, international food and financial services. On March 30, 2007, the Company completed the spin-off of Kraft to ALG's shareholders. http://www.investor.reuters.com/business/BusCompanyOverview.aspx?ticker=MO&target=%2fbusiness%2fbuscompany%2fbuscompfake%2fbuscompoverview(see full company description in attached resource file)

1. What is your impression of the worldwide operation of Altria?

Overall, it seems to be impressive in terms of financial growth expectations and a savings of $250 million reported by Altria.

As of June 30, 2007, Altria Group, Inc. owned 100% of Philip Morris International Inc., Philip Morris USA Inc. and Philip Morris Capital Corporation, and approximately 28.6% of SABMiller plc. The brand portfolio of Altria Group, Inc.'s tobacco operating companies includes such well-known names as Marlboro, L&M, Parliament and Virginia Slims. Altria Group, Inc. recorded 2006 net revenues from continuing operations of $67.1 billion (http://www.altria.com/investors/02_00_NewsDetail.asp?reqid=1046116).

Advantages:

"The Philip Morris International business is seen as having better growth opportunities, especially in emerging markets, than the Philip Morris USA business. U.S. cigarette consumption has fallen steadily since 1981."We view PM USA as a declining cash cow, and PMI as an attractive ...

Solution Summary

This solution responds to the questions in some detail and provides extra information on aspects of the world wide operation of Altria.

$2.19