Detailed SWOT Analysis of Marlboro – The Best-Selling Cigarette Brand In The World

Quick Stats on Marlboro

Founder	Philip Morris
Year Founded	1924
Origin	The United States
No. of Employees	71,000+
Company Type	Public
Market Cap	US$160.945 Billion (2021)
Annual Revenue	US$76.047 Billion (2020)
Net Income/ Profit	US$8.056 Billion (2020)

 

Products of Marlboro

• Cigarettes
• Codentify
• Fine-cut rolling tobacco
• Snuff
• Rolling papers and tubes

Competitors of Marlboro

Marlboro competes on a global level while maintaining its quality and uniqueness, it competes with global brands such as

• Davidoff
• Parliament
• Dunhill
• Lucky Strike
• Camel
• Pall Mall

Now that we have seen a brief overview of the company, we can now delve right into the SWOT analysis of Marlboro.

SWOT Analysis of Marlboro 

A SWOT Analysis is a strategic planning and management technique that helps an organization determine their strengths, weaknesses, opportunities, and threats related to business competition or project planning. It is a useful planning system that allows Marlboro to help identify its performance about its competitors and the industry as a whole.

To better understand the SWOT Analysis of Marlboro, refer to the infographic below:

Let us now learn more about the SWOT Analysis of Marlboro by starting with the strengths of Marlboro.

Strengths of Marlboro

Strengths are determinants that help identify the company’s unique qualities, what features does it excel at and what makes the organization stand out from the rest of the competition.

• Target Consumer: While most of the other cigarette brands under the competition target youngsters, Marlboro has always focused its target towards an older group; an adult and grown-up set of males and females who live luxurious and classy lives. The brand targets both men and women and in fact research indicates that the cigarette is marketed as a “ladies’ favourite”.
• Marketing and Advertising: Marlboro has always been a consistent advertiser and over the years it has changed its slogans or positioning according to changing trends. Moreover, Marlboro advertises its cigarette as more than just a tobacco product which made Marlboro’s market share rise from more than 1% to the fourth best-selling brand.
• Leadership in the Market: Marlboro is regarded as one of the best selling cigarettes in its respective category while being a prime leader in the export section. Further, in the U.S, Marlboro cigarettes dominate the market claiming 40%, which accounts for more than 100 million customers.
• Sports Sponsorship: Marlboro is well known for its collaboration with motor racing especially Formula One racing where the clothing of the Ferrari team was completely done by Marlboro. Similarly, it was also the strong sponsor of other racing sequences like the Superbike world championship and Grand Prix motorcycle racing.
• Reliable Distribution Network: Despite a ban on direct advertising, the product was at the No.1 position in FMCG products in 2019-2020 and the brand has built a reliable distribution network over the years that can cover the major potential market.

Weaknesses of Marlboro

Weaknesses are pointers that may prevent an organization from functioning at its prime level. There are areas in which Marlboro has to improve:

• Incorporation Issues: The integration between Philip Morris International and its international operating company Altria has been undergoing a lot of legal and functional crises in turn affecting both Marlboro and other products sales.
• Decreasing Brand Value: Marlboro is facing problems across the globe due to economic issues, causing a huge drop of $14.94 Billion in brand value from 2019 $71.96 Billion to 2021 $57.01 Billion. The reason could also be the government’s aim to reduce tobacco use. 
• Inability to Advertise: To comply with government rules and regulations, the company cannot directly advertise its products in the market which takes increasing marketing efforts for Marlboro to how to advertise the brand indirectly. 
• Inflating Prices: Due to an increase in taxes and regulatory impositions, the prices of cigarettes are increasing rapidly. Consumers focus on price and buy cheaper local cigarettes ignoring quality, thereby might lead to losses for Marlboro. 

Opportunities for Marlboro 

Opportunities are prominent external circumstances that may provide Marlboro with a competitive advantage.

• Increased Awareness of Foreign Brands in Various Countries: In emerging nations like India, for example, where the number of clubs and pubs are increasing in the city, a majority of people ask for the brand ‘Marlboro’ due to its universality in the US, Canada and various other nations.
• Launch New Varieties: Marlboro only deals in 4 varieties of cigarettes named light, ultra-light, medium and mild. Marlboro should think of launching new products like new cigarette varieties. Marlboro can also consider launching cigarettes that may be low-tobacco to decrease the rising health impacts of smoking.
• Improve its Digital Presence: Being one of the top cigarette brands in the world, Marlboro should take the opportunity of the booming digital era and build a stronger relationship with its customers online using digital marketing strategies. Having a strong digital presence creates a lasting impression and attracts new customers.

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• Strong Free Cash Flow: There is a strong free cash flow that puts resources into the hands of the company to expand into new projects. Also, it can buy its rivalries to establish itself as the strongest brand all over the world. 

Threats to Marlboro

Threats are factors that have the likelihood to disrupt an organization. 

• Government Regulations: Marlboro should monitor the fast-changing government regulations under the growing pressure from protest groups and non-government organizations, especially regarding the aspects of consumer health and labour safety.
• Competitors’ Low Prices: The company may be challenged to control its prices as compared to its main competitors. Other competitors have lower prices compared to them. Consumers may opt to purchase cheaper products that may look and taste like Marlboro cigarettes.
• The Subject of Litigation: With tobacco being addictive and the single most prominent reason for preventable demise globally, Marlboro is highly controversial, not short because of its record of confusing scientific proof around the health effects of smoking. It has been the subject of litigation and restrictive ruling from governments.
• Breaking Other Country’s Smoking Regulations: Health officials in India are not happy with Godfrey Philips parent company Philip Morris’s lobbying tactics that break India’s smoking regulations. Implementation of such tactics by Philip Morris company could lead to some serious legal actions by the governments of foreign countries.
• Changing Habits: The habits of consumers are continuously changing. They are becoming increasingly more careful about their health after the Covid-19 outbreak and quitting smoking due to its respiratory effects.

This ends our detailed SWOT analysis of Marlboro. Let us conclude our learnings below.