The most long-term source of integration difficulties however will be in aligning domestic vs. international channel partners, specifically on the issue of synchronizing demand forecasts to the shared Altria Group supply chain. The need for making the Collaborative Planning, Forecasting & Replenishment (CPFR) process which is used for coordinating the demand for tobacco through its many suppliers and procurement partners as efficient as possible (Bowe, 2007) is both a process- and system-related challenge that is long-term in scope. In conjunction with the challenge of disengaging the CPFR process from a single location to a domestic and international one, Altria Group will in turn have to define unique supply chain, order management, manufacturing and new product development processes for each geography. These added costs will be more than offset by the stock repurchase program and the reduction in operating expenses. Manufacturing locations that are specifically designed from a process, systems and information technologies standpoint are also needed to make the specific product strategies in each geography profitable as well.
Additional sources of integration difficulties will be in the areas of marketing and branding (Smith, Malone, 2003). As Philip Morris International looks to both capitalize on the strength of the Marlboro brand in the U.S. By propagating and promoting the brand internationally, it must tread a fine line between the American-based brand the need of creating a unique identity for itself. The branding challenges for Altria Group will be made more significant and therefore also become a source of integration difficulty as the company attempts to penetrate larger, high growth Asian markets with significantly different values and perceptions of smoking. While smoking is not seen with nearly the level of health risk in China, India or other Asian nations, there are specific cultural and in some nations, religious norms and values that must be respected in advertising any product. These specific aspects of branding in countries with significantly different cultural values that westernized nations will force Altria Group to invest in learning about new cultures with greater...
Outside of their internal processes including CPFR and supply chain coordination, Altria Group will face the greatest challenges in integrating their previously westernized organization to Asian cultures and their needs and preferences. For Altria Group the integration challenges will also center on navigating government regulations in Asian nations that are more concerned with tariffs and accumulating tax revenue than the health and welfare of their citizens. While this is may initially appear as a positive for Altria Group, the ethical considerations must be considered and taken into account. As the world has become increasingly transparent with the growth of the Internet and blogs, microblogging on Twitter and all other forms of social media, Altria Group must be cognizant of this and define global strategies that are consistent and considerate of the customers they sell to. The integration difficulties at the process, system and people level will eventually be resolved only through an effective series of programs for bringing lasting change initiated at the strategic level of the company. Redefining processes at the strategic level will have global implications for Altria, and will be critical for their success in spinning off these specific business units.
References
Thomas Anderson (2008, February). The Virtues of Vice Stocks. Kiplinger's Personal Finance, 62(2), 27. Retrieved August 17, 2008, from ABI/INFORM Global database. (Document ID: 1459822271).
Andrew Bary (2007, September). A Savvy Spinoff. Barron's, 87(38), 30-32. Retrieved August 16, 2008, from ABI/INFORM Global database. (Document ID: 1339629821).
Christopher Bowe in New York (2007, August). Altria to split up Philip Morris. FT.com,1. Retrieved August 16, 2008, from ABI/INFORM Global database. (Document ID: 1328160371).
Brian Hindo (2008, January). Altria's Split: Where There's Smoke. Business Week (Online),1. Retrieved August 17, 2008, from ABI/INFORM Trade & Industry database. (Document ID: 1420857831).
Elizabeth a Smith, Ruth E. Malone. (2003). Altria means tobacco: Philip Morris's identity crisis. American Journal of…
