Analyzing Philip Morris International's Environmental Impact in China

This report provides a comprehensive analysis of Philip Morris International's (PMI) environmental impact, focusing on its operations in China. It begins with an executive summary and an introduction that highlights the significance of environmental issues in the business world, particularly for tobacco companies. Task 1 delves into the external influences on PMI, utilizing a PESTLE analysis to examine political, economic, social, technological, legal, and environmental factors affecting the company's performance. Task 2 assesses the relevance and influence of environmental issues in China, including toxic waste, CO2 emissions, air pollution, and the use of plastics. It evaluates the effectiveness of PMI's responses to these issues and suggests areas for improvement, offering recommendations for mitigating the negative environmental impacts of tobacco production and distribution. The report concludes with a summary of findings and a list of references.

Contemporary
Developments in
Business and
Management

(See Company profile in Appendix 1)

EXECUTIVE SUMMARY
Smoking cigarettes can cause pollution and numerous health issues through releasing
various toxic gages and air pollutants into the environment. The entire report is structured around
the industry that involves the manufactures of tobacco products. In the initial section of the
report, the eternal industrial setting has been thoroughly assessed in order to capture the key
factors that come into play and influence the performance of Philip Morris International (PMI)
and its competitors that function in the dynamic industrial environment. The PESTLE framework
has been used to capture the factors of political, economic, social, technological, legal and the
environmental that influence the operational processes the reputed tobacco manufacturer. The
report is developing, analysing, evaluating and measuring numerous evidence, causes, relevant
outcomes and distinct effectiveness of those practices that can aid in achieving outcome to
understand the influence of PMI on China's environmental issues in more significant and
authentic manner.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................3
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
External influences to company and their value.........................................................................1
PESTEL ANALYSIS.............................................................................................................1
Political Factor...................................................................................................................2
Economical Factor.............................................................................................................2
Social Factor......................................................................................................................2
Environmental Factor........................................................................................................3
Legal Factor.......................................................................................................................3
Technological Factor.........................................................................................................3
TASK 2............................................................................................................................................4
i) Relevance and Influence of environmental issues...................................................................4
Environmental Issues in China...............................................................................................4
Toxic Waste.......................................................................................................................5
CO2 emissions and climate changes..................................................................................5
Air pollution.......................................................................................................................6
Use of plastics as packaging material and post-consumer waste.......................................7
Transport and distribution..................................................................................................7
ii) Critical evaluation of environmental issues response on its effectiveness.............................7
Emerged Issues Effectiveness................................................................................................8
Air pollutions.....................................................................................................................8
Toxic Waste.......................................................................................................................8
Tobacco production & climate changes............................................................................8
Transport............................................................................................................................9
Use of plastics as packaging material and post-consumer waste.......................................9
iii) Improvement areas and recommendations............................................................................9
Provided Suggestions to Resolve Issues ..............................................................................10
Air pollutions...................................................................................................................10

Toxic Waste.....................................................................................................................11
Tobacco production & climate changes..........................................................................11
Transport..........................................................................................................................11
Use of plastics as packaging material and post-consumer waste.....................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................12
APPENDIX 1.................................................................................................................................15
A)...............................................................................................................................................15
B)...............................................................................................................................................17
C)...............................................................................................................................................18
D)...............................................................................................................................................19

INTRODUCTION
Existing, living and occurring at the same time period, it is significant for company to
maintain and manage their work in suitable manner. Numerous environmental issues are
significantly affecting the business industry and development of many companies. Various issues
such as waste disposal, pollution, change in climate inadequate water access or drought etc. are
there that are influencing the organisational environment in numerous ways. Report emphasise
the environmental issues causing from distinct functions and activities from Philip Morris China
based in Beijing (Alvarez, 2016). The company is one of the largest Tobacco organisations that
have recently expanded its business in China in 2005. The major purpose of this report is to
highlight external environmental forces of company along with understanding numerous aspects
of environment issues supporting with facts and authentic documents.
TASK 1
External influences to company and their value
Philip Morris International is one of the leading global tobacco company.(appendix 1)
Organisation is spinning its position as six top global brands among 15 expanded in approximate
180 markets (Symon and Cassell, 2014). Most popular product of Philip Morris International is
Marlboro enlisted as world's number one. For the purpose of understanding numerous external
business environments, the company need to outline those components of external factors i.e.
discussed as below:
PESTEL ANALYSIS
It is paramount for a retailing organisation to analyse whole external environmental
components of market for supporting and expanding the organisation's growth and sustainability
(Amin, 2014). This is essential for the company to analyse numerous macro components such as
social, technological, political, environmental, economical and legal factor which is required to
understand condition of organisation and set outcome accordingly. Here are discussed some
major determinants briefed as below:

Political Factor
Philip Morris International is operating their business operation in numerous nations and
exposes themselves to distinct political environment and risks associated with this; Political
barriers like Govt. tax and legal components might become PMI hindrance to raise their business
operational strategy. Cigarette industry is widely developing in China as number of cigarette
smokers has increased. Knowing its worse influence of health, government has enacted strict
regulations and policies barring foreign investment in the nation's enormous tobacco industry
restricting international organisational investment along with individual business involvement in
the retail, wholesale and alternative trading forms of tobacco. According to the report, 2.3billion
people are protected from the Smoke Free law in which major statics were counted from China
(Azevedo, Apfelthaler and Hurst, 2012). Hence, this indicate a major fall in the revenues of PMI
and made it’s more difficult to promote sponsorship and advertising due to numerous restrictions.
Although due to favoured trading partners and intellectual property protection, Philip Morris
International has facilitated more benefits overall.
Economical Factor
The components such as saving rates, interest rates, inflation or exchange rate etc. which
sets the aggregate investment and demands in an organisation's economy. These elements such as
competition norms influence the competitive edge of company. Philip Morris International
possesses more than 15.7% market share of entire cigarettes along with nearby $138.31billion
market capital at the selling time of product with constant demands cause of addictive product
nature. Approximate 10% smoker of China quit through choice in relation to more than 50% in
various high nation income where there are more previous smokers than smokers (Broadbridge
and Simpson, 2011). PMI in China are influence by many factors but are economically widely
influenced by the assistance of the whole industry. Hence, this has positive as well as negative
influence over the society.
Social Factor
Culture and methods of social activities can influence the organisation working
environment. Understanding the popularity and leading activities, Marlboro is one most famous
cigarette brand, direct PMI to criticism like major smoking contributor associated to global

death. 68% of Chinese men smoke relatively to only 32% are women. Ineffective restrictions of
smoking in public and indoor places like offices and restaurants mean about 740million which
are provided to second-hand smoke. As people are facing numerous issues, the company might
face different consequences within the organisation. Hence, these practices are affecting the
growth and development of organisation (Bučiūnienė and Kazlauskaitė, 2012). Through
organisation is working over less health harming products.
Environmental Factor
Due to the cigarettes litter, smoking has been banned on various places of china such as
beaches, jungles etc. Tobaccos growing often include substantial utilisation of chemicals
involving growth regulator, fertilizers and pesticides. Due to its environmental harm, China
Government has formed numerous acts and regulations as due to the ineffective smoking
restriction, pollution is increasing each and everyday that is leading to the lung cancer fatalities
and diagnoses in the global environment.
In regard of developing business and reducing the environmental harm, the company is
working over several practices e-cigarette. The company is leading fast-moving customer goods
enterprise in environmental foot-print terms (Budhwar and Debrah, 2013).
Legal Factor
In numerous nations, the legislative institutions and structure are not strong enough to
safeguard the IP rights of organisation. Philip Morris International Inc. is facing different family
smoking preventions and Tobacco control act regulated by the state of China. There are
numerous different regulations and anti-smoking acts that are operated for reduce the use of
tobacco from nation (Storey, 2014). Company has faced numerous issues such as plain
packaging laws case in Australia etc. Hence, these practices are creating different influence over
PMI and its market.
Technological Factor
Philip Morris International is entirely built over automated technology along with future
and recent innovations and discoveries reducing the smoking harm. To reduce the issues
associated with environment and making the organisation more technically enriched, research
and development division of PMI is developing each and every day. PMI has developed e-

cigarette (Appendix 2) to produce smokeless products and service that is influencing for the
company. Since 1998, PM USA launched the first electronically heated tobacco product and then
first e-cigarettes were commercialized in China since 2004. (PMI,sustainability report,2016.p12)
Hence, it can be affirmed from the discussed report that PMI is mainly influenced
negatively in the competitive business environment of China. This is fundamental for Philip
Morris International Inc. to manage their practices and introduced more effective techniques in
regard of achieving business objectives (Schneider and Spieth, 2013). Main legal and political
factors are influencing adversely in the country such as China as these regulations and laws are
strict. On the other hand, technological advancement, e-cigarette and other smokeless products
with harmless structuring are leading positive influence to organisation. According to the figures,
approximate 100 out of each 100, 000 are killed due to smoking and pollution created by this
(Air pollution is bigger killer in China than smoking, says new Greenpeace study, 2015). This
analysis presents some main tobacco player in environment issues.
TASK 2
i) Relevance and Influence of environmental issues
Environment issues can be referred as the dangerous influence of human affairs on
biophysical environment (Carney and et. al., 2011). Social, environmentalism and movement of
environment addresses issues of environment by education, advocacy and activism. Numerous
climate disasters have increased in the different environments of business that are leading to
changes and technological advancement in the competitive world.
Environmental Issues in China
The raised issue is authentic in context of PMI and its business & management
development this is the major issues that world is suffering due to the tobacco use despite of
health problems. Numerous conflicts can be identified in the environment causing PMI various
consequences and situation led to reduce in revenues as well. PMI is focusing over development
of technologies adopted and employed through their research and development team (Dumas and
et. al., 2011). China is making efforts to decline or ban of smoking in specific public places that
are not year enforced and well-coordinated in relatively.

This is complex to separate the influence of tobacco and pollution which is contributing
approximate PM2.5 (fine particles in air) and more in the whole. According to the report, more
than 44% of the world's cigarettes are smoked within China. More than a million people lost
their lives due to tobacco diseases. Air pollution could be identified as one of the main cause of
death which ratio is 1 by 3 in China. Among 74 cities evaluated some 3.03million deaths tracked
in 2013 which has increased by the end of 2018. The level of pollution is reaching about 500
PM2.5 (fine particles in air) determined over each cubic meter (Easterby-Smith, Thorpe and
Jackson, 2011). The level of environmental issues has hiked to the peak level which is led 30,
000 deaths in the year of 2013 due to the pollution.
PMI’s sustainable operational structure could help the tobacco business have a
sustainable existence in the Chinese market setting and positively influence the customers. Here
are discussed major impacts as below:
Water pollution
China tobacco company operating factory and farming use a lot of fresh waters. Farmers
plant tobacco with heavy pesticides which are carried pollutants into lakes, rivers and
underground. (Daniel Shemie and Kari Vigerstol,2018) It harms human health and environment.
Regarding this issue, PMI is concerning water stewardship to achieve improvements in
water efficiency and recycling water. It also ensures access to sanitation, hygiene and Safe in all
PMI’s facilities and supply chain. (PMI,sustainability report,2016,p58-60)
Toxic Waste
Estimated 6.25 trillion cigarettes worldwide in 2012, the smoke of cigarettes release
toxicants which Toxic emissions include 3000–6000 metric tonnes of formaldehyde;12 000–47
000 metric tonnes of nicotine to pollute environment directly.(University of California, 2016).
Farmers plant tobacco with heavy pesticides which are highly toxic to plants and human as well
as animals which can affect soil and seep waterways for numerous years. Hence, this is affecting
badly to the environment.
Therefore, PMI had established Integrated Pest Management(IPM) aims to manage
chemicals for crop protection to minimizing into environmental impact or safety of human. It
created a biopesticide database of 120 active substances to help our suppliers and affiliates to

test their substitution over synthetic substances. The IPM is doing any possible applications for
recycled material from e-cigarettes. (PMI,sustainability_report,2016,p60)
Since PMI developed the e-cigarettes(IQOS) which were first launched it to China in
2004. Afterwards,this product has captured the global attention include IQOS, TEEPS, E-vapor
products, etc.(Appendix_2)
The IQOS is a tobacco heating system that heats the tobacco component to release the
nicotine vapour without actually burning the tobacco. Similarly, the TEEPS warms the tobacco to
release the natural taste. The E-vapor products are the smoke-free cigarette substitutes without
tobacco ingredient. (PHILIP MORRIS INT,2018). These products reduce in harmful toxicants
compared to cigarette smoking.
Air pollution
China Xinhya news reported for China National Tobacco Corporation (CNTC or China
Tobacco) that “... total industrial emissions of sulfur dioxide, [are] 5688 metric tonnes, down
29.8%; chemical oxygen demand emissions [are] 2751 metric tonnes, down 11.7%” (Xinhya
News,2012). incurred environmental costs of approximately RMB 451 000 and RMB 589 000
for the years ended 31 December 2014 and 2013,respectively”, refer to this annual report that is
unclear whether these are government fines for polluting or other costs.
On the other hand, air pollution is causing the death of 1.6million people in which 25%
part is contributed due to the cigarette consumption. Using the statics from the reporting system
of national air quality of China as well as other third party sources, numerous scientists mapped
focus of size key pollutants across the China which is affecting approximate 97% lives of people
(Air pollution in China is killing 1.6 million people a year, researchers say, 2016). The situation
of climate is altering and rapidly worsening each and every day according to the stated graph
(Refer to the Appendix C).
For solving the issues, the best example of their invention is e-cigarette (IQOS,Teeps
orE-vapor) in appendix 2. But, it raised on expensiveness which make only elite people use of
that product. Also Philip Morris International Inc. has come up with smokeless and less harming
Nicotine products which can reduce the issue of environment led to the organisation. Philip
Morris International is aiming over vision of cigarette-free future that can be attained with
scepticism. They have predicated a phase-out-period for cigarette that is less harmful unlike
traditional smoking. This is the new initiative to resolve the air pollution issues from the country.

Product and post-consumer waste
The factory waste are always disposed in landfill plus each year have about 340 to 680
million kg of waste tobacco product litters the world that contain over 7000 toxic chemicals
harming environment directly (Wright,2015). The costs of clean up and disposal are not borne
by smoker or producers but solving by government.
For solving this, PMI’s factory has waste management program to recycle, reuse and
reduce before any disposal. But, post-consumer waste lies on their behaviour that is big
challenge.
However, PMI’s IQOS heated tobacco units are made by bio-based polymer and wood
pulp, these materials can be recycled for using in retail fixtures, cloth’s fabrics or frames of
glasses etc.(PMI,sustainability_report,2016,p62)
Transport and distribution
For vehicle CO2 emissions, PMI’s agricultural of supply chain removed middlemen to
reduce transportation costs and reduce truck fuelling(PMI,sustainability.report,2016,p49).
Furthermore, PMI’s fleet management and optimization program train worker mindful of
efficiency of their fleet of vehicles. It improved 10% of fuel efficiency of vehicles from 2013 to
2015 which helps to reduce CO2 emission. (FAO Stat,2014).
CO2 emissions and climate changes
The largest of CO2 emissions and climate change are contributed by deforestation to
plant tobacco, and farmer burns woods to cure the tobacco leaves. In China lost about 16,000 ha
of forest and woodland for tobacco farming yearly where about 5% of national
deforestation(Geist H,1999). As results, it effected greenhouse gas emissions(GHG) problem.
For solving this, under PMI’s good agricultural Practices (GAP) program for supplier
including reforestation program, recycle program, use of sustainable sourcing for fuel, curing
barn improvements and using solar energy etc. They target to reduce 70% of greenhouse gas
emissions from tobacco curing against 2010 to 2020, no deforestation and no coal usage due to
cure tobacco by 2020 (FAO Stat,2014).
Though, the government of China is making numerous changes in the system i.e. leading
to better outcomes (Guest post: China’s CO2 emissions grew less than expected in 2017, 2018).

Hence, this is required to make different changes and modification for which distinct projects
and sessions are being carried out by the country. According to the regarded graph, this can be
observed that due to fossil fuels and gases, major pollution is been carried out within the
environment (REFER TO THE APPENDIX D).
ii) Critical evaluation of environmental issues response on its effectiveness
China will abandon their recent framework under which numerous polluters are properly
charged locally in relation to the environment of entire country's protection, planned to avoid
soil, air and water contamination. In the mid of august, the ministry of Environment Protection
enacted new tax i.e. environment protection tax for exercising the joint edict (New environment
tax will hit businesses in China hard, say experts, 2017). Mainly, factors that impact on early
trials along with cigarettes may be distinct for Philip Morris International Inc. from those who
impact on persistence as well as progression. In today's times, concept of developing smoke
emphasis a perspective of social ecological which include broader context of environment as
well as social in which use of tobacco occurs.
Emerged Issues Effectiveness
Water pollution
PMI developed a broader water stewardship strategy and was aiming to continue
improving their water using efficiency year on year.
Refer to managing report from 2014 to 2016, All factories of water used about 3,886,000
m³ in 2014, 3,654,000m³ in 2015 to 3,394,000 m³ in 2016. All factories of water were used
about 4.35m³(in 2014yr),4.05m³(in 2015yr) to 3.95m³(in 2016yr) per million units of cigarette
equivalent.
(Source:PMI,sustainability_report,2016,p.65)

Toxic Waste
PMI had made substantial progress in highly hazardous pesticides residues. The percentage
of purchased tobacco without detection of any world Health Organization(WHO) crop protection
agents or other identified pesticides residues were improving year on year from 2014 to 2016.
The goals are 100% of purchased tobacco without any Crop protection agents by 2018 and
without any identified residues by 2020.
(Source:PMI,sustainability_report,2016,p.65)
The IQOS
Already over three million people have stopped smoking cigarettes and switched to IQOS,
More than 1m people have stopped smoking by switching completely to IQOS (December 2016)
and 8,000 more are switching every day.(June 2017) In the first 10 weeks from April 2017, we
collected 100,000 IQOS heated tobacco units – estimated 50% of consumption – to be recycled
into fixtures for our retail environment.
Air pollutions
In 2016, slight change in Co2 emission were observed in per-unit of service production,
it was cause of change process resulting impermanent development in complexity of production.

(Source:PMI,sustainability_report,2016,p.65)
Result of the reduction energy attained 29% in the CO2 emission reducing while 2010-
2016. In relation to this, agreement of Paris on climate change. Company identified 40%
decrement in emission of operations and value chain against 2010 – 2030 goal. Firm's water
stewardship make certain the safe water access, hygiene and sanitation in entire supply chain and
facilities that attained 26% development in efficient since 2010 .
(PMI,sustainability report,2016,p56)
Product and post-consumer waste
As succession of recycle target i.e. approximate 85% of company's factor in2015, PMI
have switched their aim to reduce the waste amount which does to incineration without recovery
of energy: “Disposal Ratio”.
(Source:PMI,sustainability_report,2016,p.65)
A group of tobacco research and policy experts gave their views about the response of
PMI. According to this, it was said that these findings are raising concern about Philips Morris
trial program. As per the words given by Philips Morris, it was said that the device which is
heating small tobacco is only meant for smokers who are not in a condition to quit. The CEO of
PMI, Andre Calantzopoulos said that they are thinking to replace cigarettes with iQOS.

As per the reports given by U.S FDA, it was ascertained that PMI has reduced significant
level of harmful substances which the users were being exposed to compared to cigarettes and
were satisfying their nicotine craving.
Transport and distribution
(Source:PMI,sustainability_report,2016,p.65)
iii) Improvement areas and recommendations
Electronic Cigarettes: The looming environmental fiasco
As bad as butts are, electronic cigarettes pose long-term an even graver environmental
threat. Because they are primarily composed of plastics and electronics, not only are they more
energy- and resource-intensive to manufacture, but as disposable computerized plastic products,
they leach far more chemicals than the average cigarette butt, which is already known to be
toxic. Electronic cigarettes (e-cigarettes) are perhaps pending biggest environmental tobacco
threat facing communities and public health.
While cigarettes still comprise almost 90% of all tobacco sales in the US, other tobacco
products also weigh heavily on the environment 13 billion cigars and over 128 million pounds of
smokeless tobacco were sold in the US last year. Cigarette butts, are made of cellulose acetate
that in the best case scenario disintegrate and pollute beaches and bodies of animals in around
five years; but e-cigarettes are an entirely different robotic beast. While cigarettes could still
exist without butts (with no added harm to smokers), e-cigarettes are non-biodegradable in their
entirety. The majority of them made to be disposable, the heavy metals, batteries, hard plastic,
heating rods, and residual e-liquids (and their plastic refill containers) will not degrade for
hundreds to thousands of years. Astonishingly, no research to date has looked at the long-term
environmental impacts of e-cigarettes (Jeston, 2014).They are initials referred CO2 emission to
develop to 3.5% for 2017 in the international Carbon Budget 2017. Also the coal projection is

clearly obtaining CO2 growth emission which is very close redo to measure the consumption of
coal estimation.
Environmental issues are the main cause which arises due to the operations of the
manufacturing business. The Ministry of Environmental Protection (MOEP) has enacted
numerous laws and legislation that are developed to improve (China’s Pollution Crackdown and
its Impact on Business, 2017). Sustainable Development Goals reflects health cannot be adopted
in isolation from a host of other components, of which where the environment is one of them
(Kerzner and Kerzner, 2017). Philip Morris International Inc. as translated their energy into
fundamental reduction into the carbon emission along with This problem needs an entire
regulatory and society approach and involvement (Macfarlane and Ottewill, 2013).
Provided Suggestions to Resolve Issues
Air pollutions
Government of China is focusing over the smallest particles of pollutions that have been
efficient and effective (How China cut its air pollution, 2018). Government of Chain, in order to
provide better air quality, is forming a future command-and-control measures that were imposed
in Oct. and are in existence in mid-March (Is Living in Beijing Really Like Smoking 40
Cigarettes a Day?, 2015).
Toxic Waste
In regard of prevent littering effectively, the company need to manage their stakeholder
in sustainable manner which have vital role in efficient manner. Company need to create
awareness for which they are organising firm-wide session associated with the waste of products
to the smoke-free services and e-devices.
Tobacco production & climate changes
Company reports their progress and activities status to CDP each and every year which is
an authentic benchmark. By energy reduction and use of greener energy optimisation in the
production factories, company is able to attain certain reduction by 29% between 2010—16. To
measure and understand the influence, PMI has included emission decrement from both PMI's

operations and value chain by 2013 to 40% against the base set for achieving short term target.
By the end of 2015, factory's recycle rates are being attained by 87% approximate.
Transport
Philip Morris International can enable oneself in managing these environmental issues
overall. Developing and evolving waste management and reducing the Marin pollution is also
one efficient impact.
Use of plastics as packaging material and post-consumer waste
Through creating anti-littering numerous activities, company can manage post-consumer
waste and other practices more significant manner (Tobacco control in China, 2015). Another
initiate and influence over the country was formation of new policy in which the China banned
the foreign waste in their country.
However, PMI itself needs to make a strong policy that can be used in order to lower the
environmental issues in an effective manner. It can be recommended to Philip Morris
International Inc. that they need to develop a smoke free world for which their technologies are
being improved each and every day.
CONCLUSION
It get concluded from the project that contemporary development is a major thing through
which better enhancement of society get done. Thus, there are various aspects are related with
the management and business that need to assess by management properly so that better and
effective working get done. Along with this, management also have to determine the relevance of
these external influences with business and manage so that relevant strategies get framed which
further enable in accomplishing the target. Along with this, effectiveness of such stances for
organisational responses would get done in define course of frame for effective working and
operation management.

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APPENDIX 1
A)
Company Background
Philip Morris China based in Beijing. The company is one of the largest Tobacco organisations
that have recently expanded its business in China in 2005. Philip Morris International is one of
the leading global tobacco companies including diverse workplace around 81,000 individual
employed in organisation working internationally. Organisation is spinning its position as six
top global brands among 15 expanded in approximate 180 markets. Most popular product of
Philip Morris International is Marlboro enlisted as world's number one .PMI and made its more
difficult to promote sponsorship and advertising due to numerous restrictions.
Philip Morris International Inc. is one of leading American tobacco and cigarettes
producing organisation with services sold in more than 180 nations overseas. Main recognised
and bestselling tobacco product of organisation is Marlboro (Denk, Kaufmann and Roesch,
2012). Organisation produce cigars, cigarettes, snuff rolling paper, tubes and other Codentify
rolling tobacco etc. Organisation is highly conversational as the product of organisation is
causing of preventable death internationally and people become addictive of it. This has been
subject of restrictive and litigation laws from the state.
Tobacco has been consumed at ceremonial and social functions since ages. This was
either smoked, chewed snuffed. This is consumer globally in various manners such as cigars,
cigarillos, cigarettes etc. In the present decade, the tobacco consumption has witnessed a shift
from developing and developed nation. Its production in the emerging countries has gained
exponentially cause of the advertisement and promotion through lenient state regulations,
transnational organisation, growing population and increasing incomes etc. Cigarettes recently
account mainly for the international sales of tobacco complied through different manner such as
Cigarillos, Cigars, Nicotine replacement therapy, smokeless, pipes and electric cigarettes etc.
On the grounds of those regions, China represents and claims both the largest consumer and
producer of tobacco accounting for approximate one by second part of whole production at
international level (Coviello, McDougall and Oviatt, 2011).
Global Cigarette Industry
For understanding the current situation of organisation, this is fundamental for company

to demonstrate their competitive situation and position of their competitor. International
cigarette industry is one of deadly and profitable industry in the whole world. Overall retail
values in 2016 was worth US$683.4billion in 2016 (Drucker, 2012). Approximate 5.5 trillion
cigarettes were sole to the global smokers worldwide. It is being predict that by the end of 2021,
volume of international cigarettes will be reduce by 8.2% with the real value decline to 1.1%.
PMI has numerous competitors that are giving strong competition to the organisation.
Their competitors are discussed in the presented report which are briefed as below: China National Tobacco Corp.: Owned and functioned by Chinese Govt. British American Tobacco: This is publicly traded within more than 200 markets.
 Japan Tobacco Inc.: This is headquartering in parent Tokyo to the Japan Tobacco
international.
Hence, this can be claimed from the illustrated graph that revenues of last 5 year of
Philip Morris International Inc. are widely increasing each and every day (THE GLOBAL
CIGARETTE INDUSTRY, 2017). This can be seen conveniently that in 2009, where the
revenues amount is $60 billion approximate, this have increased up-to $80 billion that
increasing each and every day as per the calculation of 2018.

B)
Illustration 1: PMI revenues increment
Source 1: PMI revenues increment, 2017

C)
Illustration 2: Increasing climate change in China
Source 2: Increasing climate change in China, 2018
Philip Morris China based in Beijing. The company is one of the largest Tobaccos
organisations that have recently expanded its business in China in 2005. Philip Morris
International is one of the leading global tobacco companies including diverse workplace around
81,000 individual employed in organisation working internationally. Organisation is spinning its
position as six top global brands among 15 expanded in approximate 180 markets. Most popular
product of Philip Morris International is Marlboro enlisted as world's number one. MI and made
it’s more difficult to promote sponsorship and advertising due to numerous restrictions.
According to WHO FCTC Article (World Health Organization,2018) of Extended Producer
Responsibility (EPR) programmes and legislation are reducing tobacco use, labelling to make
product less attractive and increasing the cost of tobacco product, no indoor smoke, increase
outdoor smoking bans etc.

D)
Illustration 3: Growth of Pollution in China
Source 3: Growth of Pollution in China, 2018
Appendix 2:

(Source: Philip Morris International,2018)
Appendix 3:
(Source:PMI,sustainability_report,2016,p.65)