Philip Morris is one of the giant tobacco industry United States. Marlboro is one of the trademarks of Philip Morris., Which covers a quarter of people in the United States. Philip Morris over 43% market the United States market, so that was all fine in Marlboro Country. That happened in 1989. At the time, cigarette-branded cigarettes could not claim to have mastered the market 40%, cut the Marlboro market in the United States up to 30%. Resulted in the collapse of the stock of Marlboros. Michael Miles, as the CEO of Philip Morris when it must make a strategy to save the Marlboros. Strategies undertaken by Miles is to lower the price dramatically. Price reduced greatly. Reducing the world's leading cigarette prices 25% of basic price to increase its stock price is a gamble with very high risk. Miles is a strategy that is, by its commentators, observers and analysts is a strategy driven by a sense of panic than the long-term considerations.
He led a series of strategies other consequences of any further, which turned the theory that well-known brands that developed in the 1980s, successful because it uses a high price (premium price). This strategy is not lip service. Miles knows, that the company does not usually continue to maintain a premium price for the Marlboro brand, which is obviously the price is considered excessive by many consumers. Miles may see Campaq strategy conducted in lowering its PC prices and use the power of big brands in order to control the stock market to compete with Dell Computer and IBM.
Miles strategy initially was greeted with disbelief by the market, so that Philip Morris shares fell sharply by 23% in one day. But little by little, the stock price began to recover. Even fast-growing and the total shares of the company reached the United States tobacco market increased from 42% to 46%. Marlboro stock grew from 22% to 27%. In July 1994, Philip Morris could reap a profit of 17.6% after tax, or for 1.23 billion dollars. More striking, sales increased to almost 22% in the United States, so the stock rose 6.5%. In 2003, Stock Marlboro reached 38.5% of the cigarette market in the United States.
According to Michael E. Porter, the strategy undertaken by Miles called the total cost leadership strategy. Total cost leadership strategy is more feature lower prices than competitors. This strategy is part of the generic strategy most clearly, among other generic strategies. If a company can achieve and maintain a total cost advantage, these companies will be companies that achievement above average in its industry if it can set the price level or close to the average price in the industry. With a price equal to or slightly lower than the price of its competitors, low cost position of the company that this cost advantage will be realized in the form of higher profits. This strategy is carried out Miles on Friday. Strategy created by Michael Miles is remembered as Marlboro Friday.
He led a series of strategies other consequences of any further, which turned the theory that well-known brands that developed in the 1980s, successful because it uses a high price (premium price). This strategy is not lip service. Miles knows, that the company does not usually continue to maintain a premium price for the Marlboro brand, which is obviously the price is considered excessive by many consumers. Miles may see Campaq strategy conducted in lowering its PC prices and use the power of big brands in order to control the stock market to compete with Dell Computer and IBM.
Miles strategy initially was greeted with disbelief by the market, so that Philip Morris shares fell sharply by 23% in one day. But little by little, the stock price began to recover. Even fast-growing and the total shares of the company reached the United States tobacco market increased from 42% to 46%. Marlboro stock grew from 22% to 27%. In July 1994, Philip Morris could reap a profit of 17.6% after tax, or for 1.23 billion dollars. More striking, sales increased to almost 22% in the United States, so the stock rose 6.5%. In 2003, Stock Marlboro reached 38.5% of the cigarette market in the United States.
According to Michael E. Porter, the strategy undertaken by Miles called the total cost leadership strategy. Total cost leadership strategy is more feature lower prices than competitors. This strategy is part of the generic strategy most clearly, among other generic strategies. If a company can achieve and maintain a total cost advantage, these companies will be companies that achievement above average in its industry if it can set the price level or close to the average price in the industry. With a price equal to or slightly lower than the price of its competitors, low cost position of the company that this cost advantage will be realized in the form of higher profits. This strategy is carried out Miles on Friday. Strategy created by Michael Miles is remembered as Marlboro Friday.
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