Geographic
Philip Morris is adept at identifying growth regions with under-addressed demand for tobacco products. Its 2005 acquisition of four Indonesian tobacco companies eventually helped the company attain a market-leading position in the nation. As certain nations apply new regulations and increase taxation on tobacco products, this global flexibility allows Philip Morris to maximize potential business in other areas. Over the past few years, Eastern Europe, Africa, and the Middle East have been identified as emerging smoking markets. The combined contribution to companywide revenues of the three aforementioned regions has grown from 23.7% in 2011 to 27.4% in 2013. Accordingly, the company has invested in new ventures in the United Arab Emirates and Jordan over the past year.
Electronic
Amidst the pressure to limit consumption of traditional tobacco products, one of the rare pockets of growth for the industry exists in vaporized nicotine e-cigarettes. The segment’s growth has accelerated over the past few years in tandem with various public smoking bans and other factors. Philip Morris, for its part, was recently awarded with exclusive distribution and marketing rights to sell Altria’s suite of alternative products, namely the recently released MarkTen e-cigarette and the chewable Vuse. This segment, while currently slight compared to the rest of its operations, will likely be relied on down the road to offset any losses the company might experience in some struggling nations.