Philip Morris Vs. Altria
Philip Morris International and Altria are two of the largest producers by market capitalization in the USA tobacco industry. Before the spin-off in March 2008, Philip Morris International constituted a part of Altria Group. After this divide, both cigarette makers are focusing on diverse cigarette brands selling. While PM concentrates mostly on geographical selling in more then 200 countries, Altria pays attention on product diversification by distributing smokeless tobacco.
Altria is stating that both smokeless products and cigarettes constitute 85% of Altria's stock price and it owns almost 50% of the whole market share in the USA. Brand commitment of smokers in these both segments is decreasing the flexibility of the requested price, which implies lower impact of price rise of smoking products. Industry experts estimate that Altria will keep on maintaining its market share of smokeless tobacco and cigarettes in the USA of smokeless tobacco and cigarettes.
PMI pointed out that he has demonstrated a fantastic overall performance on Japanese markets, and there is an enormous prospective for companies to expand in Asia. We hope that the market share of Philip Morris will boost to about 35% in the region, with essential profits in South Korea, Indonesia and probably Japan. In European markets, the company has experienced a drawback where because of the recessionary circumstances there has been a move towards lower priced brands. Additionally the progress of illegal trading could possibly bring to a decrease in Philip Morris's market share in the region.
Experts anticipate that Philip Morris market will rise till 35% in the region, with considerable improvements in South Korea, Japan and Indonesia. As about European markets, the company has suffered unpleasant moments.
Altria owns a large market in USA. However it suffers due to health regulations, restrictive marketing rules and diverse legislative measures. PMI in its turn has a growing market in Asia due to more peaceful rules and increasing volumes in markets of the region.
It is estimated that Altria would be dependent upon the overall performance of its smokeless products and wine. It is likely to decrease in size over the times. The launch of electronic cigarettes in its product range could be a chance for Altria in its varied offering. For Philip Morris, will be a chance to catch the market of share in Asia. Markets from Asia are developed with time, as the health consciousness is expanding and stricter legal rules as well.
By Clark Moore, Staff Writer
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