Chapter 20: Blowing Smoke Summary

Michael Miles took over for the retiring Hamish Maxwell in 1991. Because he was a non-smoker, some at Philip Morris viewed him suspiciously. Michael sold off some of the low margin food lines and focused on the high margin areas. The company continued to expand, particularly with tobacco in the Soviet Union. The food side of the business also expanded in Europe. The American tobacco market was more of an issue. Even the fabled Marlboro brand was in decline, but Philip Morris was successful in venturing heavily into the discount market, overtaking RJR in 1991, and new medium priced market. It did make the decision to maintain its premium price levels, even during a recession. RJR began a price war in the early 1990s, to try to take back market share in the discount market. By 1993, discount brands accounted for 40 percent...