What are some of the geographic elements of RJR’s customer profile? What are som

Question

What are some of the geographic elements of RJR’s customer profile?

What are some of the key internal factors related to RJR’s organization and general management?

What are some of RJR’s weakness in the marketplace?

What is RJR’s current principal business strategy?

What is the reason for RJR’s failure in international tobacco markets?

How does RJR expect to achieve success in the future?

Please write the answer in 2 to 4 lines.

5 SMOXE ALARMSA 36-1 CaSe 36 BusinessWeek SMOKE ALARMS AT RJR 1 Steven F. Goldstone bas bocn a busy guy. As head of RJR Nabisco Holdings Corp, he has spent the past year jetting from city to city as the tobacco industry's point man in & dramatic effort to reshape the most vilified business in Ametica. Penitent, he admitted before Congress that his product is ad dictive. Then, defiant, ho led a succossfiul drive to kill federal legislation once it became clear the in- dustry would have to pay billions of doilars mare than it had agreed to in settlement talks with state attorneys general. Throughout, Goldstone has been front and center engaging in what he describes as a "publio-policy debate on the issues that affect our indnstries and our castomers. 2Only problem is, while CEO Goldstone works tirelessly to exticate Big Tobacco from its legal quagmire, his conpany is being eaten alive oa the operating front. At home, industry giant Philip Mornis Cos. is kicking No. 2 RJR's cigarette batts with its Marlboro brand, outmarketing and out spendiag its smaller riral to steal almost a full percentage point ofU.S. market share so far this year. Things are even worse abrcad. Allhough foreign markets are widely considered the tobacco makers' most fartile grounds for growth, RJR has let the opportunity slip away amid managemeat missteps and economic malaise. It now plans to unload its hobbled international tobacco unit. To top things oft, RJR's usually reliable profit machine, the Nabisco food division, is losing out to more nimble Op competitors as its cookie and cracker line grows stale as a week-old Oreo. 3 RJR's numbers show more smoke than fire. While Philip Morris posted third-quarter operating gains up 10%, RJR's operating profits slumped 14%. For the full year, analysts expect RJR's earn- -ings to drop 11%, to $3.1 billion, on slightly lower sales of $16.9 bmian. That's after operating earn. ings rose a patty 3% last year. 4 The bottora line: Whatever comes oflawsuit-sottlement discussions between tobacco S. compames ead the sintes, RJR is in deep trouble. And the poor operating performance it has turaed in latoly has convinced many investors that patt of the problem is Goldstone himsolf. While few doubt his smarts es a legal strategist, Wall Street has Htle regard for his management prowess. Critics complain ho is too far removed from the fray. This company has boen very badly run," says Stophon Smith, axocu- tive vice-president of Brandywine Asset Management Inc., owner of 1 million RR sharos. "They ck et- re noed someone who can really turn it eround." rst LOOKING TO SPLIT? 5 But then, many investors admit that isn't the reason they're sticking around. They view Goldstone as a sort of Mikhail Gorbachsv, presiding over the last days of a decrepit empire. They're ounting on the lift that could come if the industry settles and Goldstose can then follow drough with plans to splt RIR in throe. Says Arthur Cecil of T. Rowe Price Associates Inc, which owns 4 million RJR shares: "We're really, really banking on a reversal of fortune. 6 Goldstone, who admits his operational knowhow is limited, lets the divisioa chiefs alone while be grapples with legal and financial matters. "I' not going to follow their every footstep," says Gold- stone, who after his slevatioa to CEO in December, 1995, replaced all three division heads. Industry insiders and analysts generally praise the credentials of that team-Andrew Schindler, prosident oi R.J. Reynolds, Reynolds Intenational President Pierre do Labouchere, and Nabisco President James M. Kilts. But they question their ability to rejuvenate RJR when the goal of the boss is to break np Sou a ight hNew Yut, with r Kui InTokyo, Carol Macackin Moscow, tnd bura eports,"Smoke Alns at RJR, Brsinee libak Nov tabor 16, 1998; and Carol Made ? ia Masco A Long Hud Slog on te Russian Pr t nu hess eak: November 16, 1598

Explanation / Answer

(a)

Some of the geographical elements of RJR's customer profile

(b)

Some of the key internal factors related to RJR's organization and general management

(c)

Some of the RJR's weaknesses in the marketplace

(d)

RJR's current principal business strategy

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