Case study altria.docx - Altria Group Inc Primary Line of...

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Altria Group, Inc Primary Line of BusinessWith corporate headquarters located in Richmond, Virginia, the Altria Group is a multinational corporation with several companies under its name. The company was initially known as Philip Morris Companies Inc, a company that was established in 1847 as a tobacco manufacturer. But changed to Altria Group, Inc in 2001 in a move that was seen as public relation stunt to escape its tainted image of selling tobacco. However, since its inception the organization has managed to acquire numerous subsidiary firms with over the years with an objective of diversifying its operations and improving its competitive advantage in the market. Still, the company’s has diversified to different product lines with distinct brand names to attractsdifferent types of customers. This reduces the risks and uncertainties associated with concentrating on a single product. For instance, in 2009, the firm acquired UST Inc, which is a smokeless manufacturer and SABMiller plc, one of the world’s largest brewers and wine production. Some of the wine brands include; Chateau Ste Michelle, Snoqualmie, Erath. The Altria Group serves as the parent company to Philip Morris USA which is one of the leading tobaccos and cigarette manufacturing corporation in the United States. Beside tobacco, the company acquired John Middleton which is a market leader in the manufacture of machine-madelarge cigars. In addition, it’s a parent company to Philip Morris Capital Corporation, a fully owned subsidiary company that is primarily involved in portfolio leveraged, direct-finance lease investments, and other tax-oriented and third-party financing. Therefore, from the versatility portrayed by the Altria Group has an expansive portfolio of customers range. Philip Morris International, Inc. is a leading manufacturer of various cigarette brands including Marlboro, Virginia Slims, L&M,Basic, Philip Morris, and Parliament while John Middleton, Inc.'s brands
include Black & Mild, Carter Hall, Middleton's Club, and Kentucky Club (Altria Group, Inc, 2018).Over the years since it started diversification, Altria Group Inc. has been performing well than its competitors which led to better returns for the stakeholders. The good performance can be attributed to different product lines established by the management with each sector specializes on a specific task. This has enabled the subsidiary companies to work independently and maximize on their areas of specialization thus the overall success of the company. Altria Group Inc.’s net cash provided by operating activities increased from 2016 to 2017 and from 2017 to 2018 while the Altria Group Inc.’s net cash provided by investment activities declined from 2016 to 2017 and from 2017 to 2018. As shown from the report net earnings reduced significantly from $14,244 in 2016 to $10,222 in 2017 and $6,963 in 2018. The company’s year on year earnings growth rate has been positive over the past 5 years. However, the most recent earnings are below average and the last two years earnings growth is negative and cannot be compared to the 5-year average both on a global scale and US market. For instance, the gross

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