Altria Group, Inc.

Introduction

I did some research on the Altria Group, Inc. and found that they are using a growth strategy known as conglomerate diversification. What this means is that the industry they are currently in is unrelated to the industry they have entered, through diversification. With this strategy, managers are more concerned with financial concerns such as cash flows. This is usually due to a company's current industry achieving maximum growth and has to enter into other industries to gain more opportunities for future growth. Altria is a parenting company who parents Kraft Foods, Philip Morris International, Philip Morris USA, and Philip Morris Capital Corporation (Altria, 2008). What products they produce are tobacco, packaged food, beverages, and financial services. The USA and Europe are their primary producers.

SWOT Analysis

Strengths:

Versatility—they produce several products such as tobacco, packaged food, beverages, and financial services. Their versatility comes with their cigarette companies. Philip Morris International's leading cigarette brands are Marlboro, L&M, Philip Morris, and Parliament (Altria, 2008). Philip Morris USA's leading cigarette brands are Marlboro, Basic, L&M, Parliament, and Virginia Slims (Altria, 2008). John Middleton, Inc.'s brands include Black & Mild, Carter Hall, Middleton's Club, and Kentucky Club (Altria, 2008).

Diversification—they have recently entered into other industries to achieve more growth such as the Philip Morris Capital Corporation. This is an investment company whose portfolio consists of leveraged and direct finance lease investments and other tax-oriented and third party financing. Altria also has 28.6 percent interest in SABMiller, which is the world's second largest brewer (Altria, 2008).

Strong corporate governance—this company believes in order for a business to have strong performances they have to have good corporate governance. They strive to be transparent in their governance practices and policies. They also strive to be responsive to their shareholders while managing the Company for long-term success.

Constant innovation—this company's growth is driven by their constant innovation. Constant innovation is the key to their enterprises future. When they signed the tobacco settlement agreement in 1988 it fundamentally changed the way cigarettes are advertised, promoted, and sold in the US. This impacts every aspect of Philip Morris USA's marketing practices. While they are complying with this agreement they are also being responsible by marketing to adult smokers. They also have policies and practices in place to address all issues with their primary stakeholders along with their secondary stakeholders such as the general public, public health communities, parents, community leaders, decision makers, and the government (Altria, 2008).