Case Study

PMI’s vision of a smoke-free future: Can a tobacco company be sustainable?

25 pages
November 2019
Reference: IMD-7-2118

Philip Morris International (PMI) CEO André Calantzopoulos announced in 2016 a radical pivot in the Marlboro cigarette manufacturer’s strategy: the company would shift to “smoke-free” products in more than 180 countries around the world. One of these products was IQOS, a new “heat-not-burn” (HNB) device aimed at providing the world’s over 1 billion “adult smokers with better options.” The innovation of the products which, PMI claimed, were less harmful than cigarettes was welcomed by many investors and PMI. Calantzopoulos and PMI’s Board of Directors believed that its sustainability strategy was critical to the company’s long-term success. Nevertheless, convincing important stakeholders that a tobacco company could be part of the solution to rid the world of cigarettes by offering better alternatives was a different matter. The United Nations, World Health Organization (WHO), regulators, public health advocates, and some sustainable investors said that there was no safe level of use and no opportunity for effective engagement with tobacco companies. After a two-year wait, the US FDA issued an order authorizing the sale of IQOS in the US market of 40 million smokers. The FDA found that IQOS was “appropriate for the protection of health.” PMI organized the 2020 Stakeholder Engagement Meeting in Lausanne, Switzerland to convene key stakeholders to engage with PMI’s smoke-free business transformation.

Learning Objective
  • Recognize the role of sustainability in mitigating negative impact and the potential of positive impact.
  • Identify the implications of exclusion and engagement for sustainable investors.
  • Identify stakeholders and recognize which enable a sustainability strategy.
  • Analyze a company that must address negative health impacts of its own business.
  • Examine the strategy of sustainable investors trying to achieve short-term financial success and implement a long-term sustainability vision.
Keywords
Sustainability, Strategy, Purpose, Vision, Environmental Social and Governance, Responsible Leadership, Change, Stakeholder Engagement, Social Innovation, Sustainable Investment, Ethical Investment
Settings
World/global
Philip Morris International, Consumer Goods, Tobacco
Type
Field Research
Copyright
© 2019
Available Languages
English
Related material
Teaching note
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This case study is part of a series
  • PMI’s vision of a smoke-free future: Can a tobacco company be sustainable (Abridged)
  • PMI’s vision of a smoke-free future: Can a tobacco company be sustainable?
2019 EFMD CASE WRITING COMPETITION AWARD WINNER (1st prize) - Responsible Leadership category
Center for Social Innovation
This case study is part of a series
  • PMI’s vision of a smoke-free future: Can a tobacco company be sustainable (Abridged)
  • PMI’s vision of a smoke-free future: Can a tobacco company be sustainable?
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PMI’s vision of a smoke-free future: Can a tobacco company be sustainable (Abridged)
By Vanina Farber and Natalia Olynec
Case reference: IMD-7-2233 ©2020
Summary
Philip Morris International (PMI) CEO André Calantzopoulos announced in 2016 a radical pivot in the Marlboro cigarette manufacturer’s strategy: the...
Reference IMD-7-2233
Copyright ©2020
Copyright owner IMD Copyright
Organization Philip Morris International
Industry Consumer Goods, Tobacco
Available Languages English
Contact

Research Information & Knowledge Hub for additional information on IMD publications

PMI’s vision of a smoke-free future: Can a tobacco company be sustainable?
By Vanina Farber and Natalia Olynec
Case reference: IMD-7-2118 ©2019
Summary
Philip Morris International (PMI) CEO André Calantzopoulos announced in 2016 a radical pivot in the Marlboro cigarette manufacturer’s strategy: the...
2019 EFMD CASE WRITING COMPETITION AWARD WINNER (1st prize) - Responsible Leadership category
Reference IMD-7-2118
Copyright ©2019
Copyright owner IMD Copyright
Organization Philip Morris International
Industry Consumer Goods, Tobacco
Available Languages English
Contact

Research Information & Knowledge Hub for additional information on IMD publications