Political & legal factors:
Tobacco products are the most taxed goods in the world. Their taxes often exceed half of the retail price generating huge overcome for governments.
Philip Morris sells its products in over 160 countries, operates in approximately 90 markets including Argentina, Algeria, Australia, Austria, Belgium, Canada, Colombia, the Czech Republic, Finland, France, Germany, Greece, Hungary, Indonesia, Italy, Japan, Kazakhstan, Mexico, the Netherlands, the Philippines, Poland, Portugal, Romania, Russia, Saudi Arabia, Serbia, Singapore, Spain, Sweden, Switzerland, Turkey, and Ukraine. It has 58 manufacturing facilities in 32 countries & the company operates in European Union, Middle East & Africa, Asia and Latin America.
Most of these countries are economically stable & have well developed business environment, but the main political factor that affects PM Price of cigarettes are the taxes(excise tax, customs duties & value added tax,VAT). The composition of Price cigarettes per pack is determined by a state laws of taxation, affecting the cigarette pack Price.
Philip Morris is considered a company with stable demand products. Tobacco products do not have a real substitute and are addictive products. That’s why when the Price of this products moves, the demand will remain a bit the same. This happens because of its addictive nature, the demand for tobacco is stable regardless of its price. In other hand, another economic factor that affect this company are the exchange rates. PM has a wide variety of exchange rates due to its huge exporting in a lot of countries.
This factor is the most dangerous for PM, considering smoking harms and affects health. PM developes social awareness campaigns against harm of tobacco, but the tobacco industry has started to be viewed as inappropriate & its bombarded with anti-smoking campaigns regulations.
PM is following current technological trends such as modernizing on its production facilities, increasing production capacity & deceasing costs. PM continues investing in cure cancer researches.
The analysis of macro-envoironmental factors show that PM operates in a stable environment, due to the nature the inelastic goods. Cigarettes consumption levels remain positive throughout the years.
The downside of this company is the high tax rates on consumption goods applied to tobacco. This taxes integrate the biggest portion of cigarette price per pack. Another downside on PM is that cigarettes are a harmful product, affecting costumers health, generating a more strict regulating market.
Despite of all this problems, PM headquarters are located in Czech Republic, and the corporate tax in Czech Republic are decreasing every year. Another positive view of this market, is that the consumption is rising, and the demand remains stable for cigarettes.
One of the biggest concerns to this company since the late 60 ‘s, is that people want a new friendly environment car, as well as safer automobiles. The market Price and the oil Price are important factors to consider from a customer perspective. The labor unions is another important factor, for the assembling lines, The labor unions should practice corresponding to the rules and regulations elevated by the business acts
The car companies are a great deal for economic matters because of the materials that are used to build it. Building a single car not only creates Jobs, but also benefits other companies by acquiring raw materials like: metals, leather, plastic. Also with their new lines of hybrid cars the purchases went up. This company is also a huge job generator it offers hundreds of thousands Jobs. That’s why the US government rescues this company from the bankruptcy. The oil variations consequence the...
Please join StudyMode to read the full document