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Operations Management: Marlboro and East African Breweries Limited Comparison

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Operations Management: Marlboro and East African Breweries Limited Comparison
Table of Contents
  1. Introduction
  2. Political
  3. Social
  4. Ethical
  5. Legal decisions
  6. Conclusion and recommendations
  7. References

Introduction

The tobacco and beer manufacturing industries are facing challenges in marketing their products; there are a number of restrictions on advertising and marketing for the products imposed by governments, health organizations, and anti-alcohol/anti-tobacco campaigners. Marlboro is an international cigarette manufacturer and distributor with its main operating base at Philip Morris USA (the Brach concentrates on the United States market) and Philip Morris International that concentrates on the company sale abroad; currently, Marlboro is the world largest cigarette company in the world and has its headquarters at Richmond, Virginia (Marlboro Official Website, 2011). East African Breweries Limited (EABL) is an East African regional brewing industry situated in Nairobi Kenya, the company has been in operation since 1922 when two white settlers, George and Charles Hurst, established it. The company has been a leader in the brewing industry in Kenya, Uganda and Tanzania, with its main brands as Tusker, Pilsner and Guinness (East African breweries Limited official Website, 2011). Since 2007, the company has been the second-largest taxpayer in Kenya, however in 2009; the government put restrictions on the advertising of beer products in an effort to curb an increasing rate that was experienced in the country among the young. In 2010, a bill was introduced in the parliament that aimed at reducing the hours of operation of clubs, bars and restaurants. This affected the company’s sales amidst of other competitors getting into the market. This paper takes a comparative analysis of the two firms operating in different countries but facing the same problem; it will focus on how political, social, ethical, and legal differences affect decision-making in the companies.

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Political

Since the establishment of a relationship between the smoking of cigarettes and lung cancer in the 1940’s, the ruling class has hard difficulties with the sector of the economy; they feel that it’s hampering governments main agenda of providing quality and reliable health care to its citizens. There have been a number of bills implemented to hinder advertisements. The United States cigarette market segment has been skewed to a minimal number, the population that the major players are expected to target is adult smokers, and the players in the industry should not try to increase the number of smokers. However, it should only be interested with the existing groups in the community who are smokers and of the age of 21 and above. The American Cancer Society International Agency for Research on Cancer (IARC), Tobacco Settlement Agreements and the U.S. Surgeon General, prohibits promotion of tobacco products to non-users and the youth, the agencies also regulate the marketing approaches that companies in the industry should use (Mejia & Ling, 2010).

In Kenya, the bills to control alcohol consumption was triggered by women movements who they have been demonstrating discouraging alcohol use among the communities; they were to a great extent assisted by women MPs in the current government who brought the issue to the floor of the house calling for some actions. This lead to a bill brought about by Naivasha Member of Parliament John Mututho who is believed to have a son fighting with alcoholism (Bankelele. Com, 2010).

When making decisions, managers of these two organizations must ensure they use the allowed means of advertising and exploit them fully; for example, there have been no restrictions in advertising on print media, both the companies should ensure they have eye-catching adverts on these Medias.

Social

The restrictions imposed in the two companies are implemented for the interest of the communities; people are the focus that the governments have. The governments seem concerned about the increasing social evils like alcoholism and cigarette smoking as well as the effect it has on people’s health and economies. When dealing with the restrictions, the governments are keen in addressing the root courses.

When making decisions, managers of either company should focus on ensuring that the social damage that it has on the people using its products are minimal. Managers have been given the chance of ensuring they do not increase the number of people taking alcohol, in the case of EABL and does not increase those taking cigarettes in the case Marlboro.

Ethical

Both Marlboro and EABL, have the responsibility of operating their business in an ethical manner, they should ensure that they do not injure the communities and societies they are operating. When making decisions, managers have the task of improving the welfare of the communities; however, the same products they are managing are the ones that are harmful to the communities.

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Both the companies have embarked on corporate social responsibilities to the benefit of the communities.

The restrictions made by the Kenyan and United States governments are expected to be respected by the companies. The management has the main task of ensuring that the decisions they make does not contradict the legal legislations. They should be sensitive to the requirements of law (Fred, 2008).

Conclusion and recommendations

External environments of a business affect the decisions made by its leaders; in Kenya and the United States, there are restrictions in sale of alcoholic and tobacco products respectively. Managers of companies in the industries must ensure they comply with the set restrictions despite the policies/legislations having negative impact on their profitability.

To remain competitive, both Marlboro and East African Breweries Limited should not concentrate on getting new smokers or beer takers, as this would be seen unethical, but should enlarge their market base by targeting the existing users of the products.

References

Bankelele. Com. (2010).Alcohol Law in Kenya. Web.

Fred, D. (2008). Strategic Management: Concepts and Cases. New Jersey: Pearson Education.

East African breweries Limited official Website. (2011). East African breweries Limited. Web.

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Marlboro Official Website. (2011). Responsibility. Web.

Mejia, A., & Ling, P. (2010). Tobacco industry consumer research on smokeless tobacco users and product development. American Journal of Public Health, 100(1), 78-87.

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