Chapter 17: Chow Lines Summary

Hamish Maxwell ran Philip Morris efficiently; as a thirty year veteran, he was intimate will all aspects of the company. Maxwell was also a strategist - as opposed to his predecessors. With Philip Morris at the top of the heap, Maxwell worked to use its huge cash reserves to diversify from tobacco. Maxwell saw that future eroding. When taxes increased, his marketers raised prices accordingly. This scapegoat allowed Philip Morris to raise prices at double the inflation rate. Maxwell was also not a micromanager; he managed his managers. Philip Morris continued to be successful with its premium brands throughout most of the 1980s, while its competitors, including RJR, turned more to generics with low profit margins. Philip Morris finally began aggressively marketing generics when the economy slowed in the late 1980s. It also fought to increase its store presence...