Business Analysis of Philip Morris International

 Analyze Historical Performance, Strategic Priorities, And Business Improvement Opportunities of Philip Morris International

PHILIP MORRIS INTERNATIONAL

Business Overview

Philip Morris International Inc., through its subsidiaries, manufactures and sells cigarettes, other tobacco products, and other nicotine-containing products. Its portfolio of brands comprises Marlboro, Merit, Parliament, Virginia S., L&M, Philip Morris, Bond Street, Chesterfield, Lark, Muratti, Next, and Red & White. The company also owns various cigarette brands, such as Dji Sam Soe, Sampoerna, and U Mild in Indonesia; Champion, Fortune, and Jackpot in the Philippines; Apollo-Soyuz and Optima in Russia; Morven Gold in Pakistan; Boston in Colombia; Belmont, Canadian Classics, and Number 7 in Canada; f6 in Germany; Delicados in Mexico; Assos in Greece; and Petra in the Czech Republic and Slovakia. It markets and sells its products in the European Union, Eastern Europe, the Middle East, Africa, Asia, Latin America, and Canada. Philip Morris International Inc. was incorporated in 1987 and is based in New York, New York.

Philip Morris International

Philip Morris International


R&P Rank: 33
Sector: Consumer Goods
Industry:Tobacco
H.Q Location:New York
Website: www.pmi.com
Company Address:
120 PARK AVENUE, NEW YORK NY 10017
Ph:917-663-2000

Business Analysis of Philip Morris International

The Consumer Goods Sector is witnessing a major shakeup, new age business models in the industry are transforming both customers and businesses. Faced with this uncertainity, companies are investing resources to transform their business. An in-depth business analysis is a valuable resource to identify and articulate the need for a business model change. At R&P Research we believe, the starting point for a business analysis is Benchmarking. Business benchmarking can be done at various levels: 1) Industry Benchmarking 2) Peer Benchmarking 3) Disruptors Benchmarking. In this report, we share the snapshot of how Philip Morris International compares against the industry on the major performance indicators. This analysis, along with peer group/disruptors benchmarking and revenue model understanding can help identify growth and cost optimization opportunities to maximize the value delivered by Philip Morris International to its stakeholders. R&P Research Industry Intelligence Platform provides historical data for last 15 years with an easy to use benchmarking interface for an in-depth comparative business analysis.

Here is the performance snapshot of Philip Morris International with an interactive chart.

  1. Revenue Growth: Philip Morris International reported a revenue growth of 1.4% year-on-year during 2016. Tobacco Industry grew at 2.7% in the same period
  2. COGS share of Revenues: As a percentage of revenue, Philip Morris International spent 76.9% of its total revenues on COGS. Tobacco industry average (COGS share of revenue) in the same period was 68.5%
  3. R&D share of Revenues: Philip Morris International R&D share of Revenues details are not available because either company does not share the data or we do not have it
  4. SG&A share of Revenues: As a percentage of revenue, Philip Morris International spent 8.5% of its total revenues on Sales, Marketing, and General Administration (SG&A). Tobacco industry average SG&A spending in the same period was 9.8%
  5. Inventory share of Revenues: As a percentage of revenue, Philip Morris International spent 8.7% of its total revenues on Inventories. Tobacco industry average Inventory spending in the same period was 10.1%
  6. Accounts Payable share of Revenues: As a percentage of revenue, Philip Morris International invested 4.4% of its total revenues on Accounts Payable (A/P) Tobacco industry average Accounts Payable investment in the same period was 4.6%
  7. Accounts Receivable share of Revenues: As a percentage of revenue, Philip Morris International invested 4.7% of its total revenues on Accounts Receivable (A/R). Tobacco industry average Accounts Receivable investment in the same period was 4.1%
  8. PP&E share of Revenues: As a percentage of revenue, Philip Morris International invested 8.1% of its total revenues on Property, Plants, and Equipments (PP&E). Tobacco industry average PPE investment in the same period was 8.5%
  9. Intangibles share of Revenues: As a percentage of revenue, Philip Morris International invested 13.1% of its total revenues on Intangibles. Tobacco industry average Intangibles investment in the same period was 61.1%
  10. Net Margins: Philip Morris International Net Margins in the year 2016 were 9.3%. Tobacco industry average Net Margins in the same period were 22.8%

Sector and Industry Association of Philip Morris International

For the purpose of performance benchmarking of a company with a sector or industry average, R&P Research associates every company with one sector and one industry. An industry consists of companies with related/similar business models. A sector comprises of a group of related/similar industries.

Philip Morris International is associated with Consumer Goods Sector and Tobacco Industry.

Consumer Goods sector is comprised of the following industries: Beverages; Personal Goods; Food Products; Diversified Food; Household Goods & Home Construction; Food Distribution; Tobacco; Toys and Games. The definitions for each of the industries is as follows:

  • Beverages industry consists of: Brewing Companies - manufacturers of cider or malt products such as beer, ale and stout; Distillers and Vintners Companies - blenders and shippers of wine and spirits such as whisky, brandy, rum, gin or liqueurs; and Soft Drinks Companies - manufacturers, bottlers and distributors of nonalcoholic beverages, such as soda, fruit juices, tea, coffee and bottled water.
  • Personal Goods industry includes: Clothing & Accessories Companies - manufacturers and distributors of all types of clothing, jewellery, watches or textiles, sportswear, sunglasses, eyeglass frames, leather clothing and goods, and processors of hides and skins; Footwear Companies - manufacturers and distributors of shoes, boots, sandals, sneakers and other types of footwear; and Consumer Packaged Goods Companies - makers and distributors of cosmetics, toiletries and personal-care and hygiene products, including deodorants, soaps, toothpaste, perfumes, diapers, shampoos, razors and feminine hygiene products.
  • Food Products industry includes: Farming & Fishing companies - companies that grow crops or raise livestock, operate sherries or own non-tobacco plantation; Food Products Companies - food producers, including meatpacking, snacks, fruits, vegetables, dairy products and frozen seafood. It also includes producers of pet food and manufacturers of dietary supplements, vitamins and related items.
  • Diversified Food industry includes companies that offer a diverse portfolio of food products across agricultural, animal and dairy product categories.
  • Household Goods & Home Construction industry includes companies that offer: Durable Household Products - Manufacturers and distributors of domestic appliances, lighting, hand tools and power tools, hardware, cutlery, tableware, garden equipment, luggage, towels and linens; Nondurable Household Products - Producers and distributors of pens, paper goods, batteries, light bulbs, tissues, toilet paper and cleaning products such as soaps and polishes; Furnishings - Manufacturers and distributors of furniture, including chairs, tables, desks, carpeting, wallpaper and office furniture; Home Construction - constructors of residential homes, including manufacturers of mobile and prefabricated homes intended for use in one place.
  • Food Distribution industry includes companies that distribute food, beverage and consumer goods to restaurants, healthcare, educational facilities, lodging establishments; equipment and supplies for the foodservice and hospitality industries.
  • Tobacco industry includes Manufacturers and distributors of cigarettes, cigars and other tobacco products. It also includes tobacco plantations.
  • Toys and Games industry consists of manufacturers and distributors of toys and video/computer games, including such toys and games as playing cards, board games, stuffed animals and dolls.

Industry Ranking of Philip Morris International

With $75 billion revenues, Philip Morris International ranked number 1 of all the companies in the US Tobacco industry. There were a total of 8 public companies in the US Tobacco industry that had revenues greater than $50 million during 2016.

The top companies in the US Tobacco industry by revenues during 2016 were:

  1. Philip Morris International ($75 billion)
  2. Altria Group ($25.7 billion)
  3. Reynolds American ($12.5 billion)
  4. Universal ($2.1 billion)
  5. Alliance One International ($1.9 billion)
  6. Vector Group ($1.7 billion)
  7. SunOpta ($1.3 billion)
  8. Turning Point Brands ($206.2 million)

Business Model Analysis (BMA) Framework

We use the following framework to assess the business model of a company. Business Model Analysis framework can be used by organizations to articulate growth strategies and identify cost optimization opportunities. Technology and consulting companies can use this framework to identify the value drivers and pain points of their targeted customers. Entrepreneurs can use this framework to understand the language of business and identify promising business opportunities. This framework can be used by any professional aspiring to take up a leadership role to better understand the businesses challenges, articulate growth strategy, and monitor the business improvement requirements for the organization.

Next Steps

  • Conduct a holistic benchmarking; to identify and target additional sources of value
  • Get in touch with us to learn more about Business Model Analysis Framework
  • Get free data, charts, and analysis of Philip Morris Internationaland its peers on select key performance indicators by clicking the reports provided below

Industry Peers and Competitors of philip-morris-international

Altria Group (MO) Business Analysis – Analyze Historical Performance, Strategic Priorities,...

Altria Group, Inc. with $26 billion revenues in the year 2016 was the number 2 Tobacco company. Read this report to know the top competitors of Altria Group and identify growth and cost optimization opportunities of Altria Group

Reynolds American (RAI) Business Analysis – Analyze Historical Performance, Strategic Priorities,...

Reynolds American Inc with $13 billion revenues in the year 2016 was the number 3 Tobacco company. Read this report to know the top competitors of Reynolds American and identify growth and cost optimization opportunities of Reynolds American

Universal (UVV) Business Analysis – Analyze Historical Performance, Strategic Priorities, And...

Universal Corp with $2 billion revenues in the year 2016 was the number 4 Tobacco company. Read this report to know the top competitors of Universal and identify growth and cost optimization opportunities of Universal

Alliance One International (AOI) Business Analysis – Analyze Historical Performance, Strategic...

Alliance One International, Inc. with $2 billion revenues in the year 2016 was the number 5 Tobacco company. Read this report to know the top competitors of Alliance One International and identify growth and cost optimization opportunities of Alliance One International

Vector Group (VGR) Business Analysis – Analyze Historical Performance, Strategic Priorities,...

Vector Group Ltd with $2 billion revenues in the year 2016 was the number 6 Tobacco company. Read this report to know the top competitors of Vector Group and identify growth and cost optimization opportunities of Vector Group

SunOpta (STKL) Business Analysis – Analyze Historical Performance, Strategic Priorities, And...

SunOpta Inc. with $1 billion revenues in the year 2016 was the number 7 Tobacco company. Read this report to know the top competitors of SunOpta and identify growth and cost optimization opportunities of SunOpta

Revenues Analysis

Philip Morris International (PM) Revenues And Revenue Growth From 2012 To...

This report provides the last five years revenues and revenue growth of Philip Morris International Inc. (PM) from 2012 to 2016. Philip Morris International generated a total of $75 billion revenues during 2016. Philip Morris International reported a revenue growth of 1.4% year-over-year during 2016. The revenues and the revenue growth correspond to the fiscal year ending in December.

Philip Morris International (PM) Revenues And Revenue Growth From 2006 To...

This report provides the last eleven years revenues and revenue growth of Philip Morris International Inc. (PM) from 2006 to 2016. Philip Morris International generated a total of $75 billion revenues during 2016. Philip Morris International reported a revenue growth of 1.4% year-over-year during 2016. The revenues and the revenue growth correspond to the fiscal year ending in December.

Philip Morris International (PM) Revenue Growth Comparison With Industry Growth From...

This report provides a comparison of Philip Morris International Inc. (PM) revenue growth with Tobacco industry growth during the last five years from 2012 to 2016. Philip Morris International reported a revenue growth of 1.4% year-over-year during 2016. The Tobacco industry growth was 2.7% year-over-year during 2016. Philip Morris International growth was slower than the industry during 2016.

Profit Analysis