Philip Morris International, Leading Maker of Cigarettes

Marlboro Cigarettes

Coca-Cola is a perfect model of a wonderful business. Altria Group and Philip Morris International are two tobacco companies that have so many important features with Coca-Cola that long-term investors ought to hold all three in the same regard

Coca-Cola, Altria and Philip Morris International are leading companies in their respective markets. Coca-Cola has a leading 17% of its market.

Altria and Philip Morris International  produce Marlboro, most popular cigarette brand, which has a biggest share of tobacco market. Marlboro enjoys a 42.6% share of the U.S. and international market.

Altria, that produces and distributes Marlboro within in the USA, has a 50% share of the U.S. cigarette market, 30% of the U.S. cigar market, and 50% of smokeless tobacco market.

Philip Morris International, that distributes Marlboro worldwide, was spun off from Altria in March 2008. Besides Marlboro, it owns 7 of the top 15 international cigarette brands that includes Philip Morris, L&M and Bond Street. Philip Morris International’s cigarettes brands have a 29% share of the world cigarette market, excluding China and the U.S.

Leading market share provide Altria, and Philip Morris International significant advantages. Smokers are literally addicted to cigarettes and show their favorite brand loyalty.

Besides pricing power, Philip Morris International and Altria, and have significant economies of scale in manufacturing and distribution. Each of these tobacco companies has fixed costs across a number of tobacco products sold in comparison with its competitors, which helps then to get higher operating profits.

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