This French Company, leaded mainly from father to son is a true model of international success, as we can discover through the historical of Michelin below.
MICHELIIN HISTORICAL
Source : 2009 Annual and sustainable development report
Michelin geographic
On this below world map, we can show where Michelin is present. Over one century, after of its creation, Michelin had growth. In fact, Michelin has developed its brands and activities. Indeed, nowadays Michelin, group holds, by itself around a fifth of the world tire market.
Algérie Brésil Chine Côte d’Ivoire Colombie
Egypte Hongrie Inde rlande Luxembourg
Mexique Nigéria Pays-Bas Philippines Singapour
Pologne Roumanie Russie Yougoslavie Suisse
Thailande Turquie: Uruguay
To fit with the automotive accessories, Michelin set up on the market many product in various brands
Mains keys information concerning MICHELIN
Type : Publicly-traded Society
Industry : Manufacturing, publishing
Headquarters : Clermont-Ferand, France
Key people : Michel Rollier ( general pathner and CEO), Eric Bourdais de Charbonnière ( Chairman of theboard)
Products : Tyres, travel assistance service
Net sales : €14.81 billion (2009)
Operating income : €450 million (2009)
Profit : €106 million (2009)
Employees : 109,190 (2009)
Rechearch & development : 6 000 people involved with € 500 million alocated
Production facilities : 72 in over 20 countries
Michelin is also
Per day
Source Tire Business, September 2009
BRANDS
Even if the Bibendum Michelin is recognized across the world, Michelin decided to create many brands in order to fit with the marketing of each country and sector where Michelin is. Indeed, Michelin has decided to segment its Market
In fact, the global brand is Michelin, but BFGoodrichs is a brand dedicated to sports cars and SUVs. Michelin is also set up strongly entrenched regional brands, with UNIROYAL in North America. KLEBER is in Europe and WARRIOO is in China.
ORGANIZATION ORIENTATION
MARKETING CONCEPT
Marketing is a discipline that seeks to promote of goods and services that’s based on consumer attitudes. It includes a set of methods and means available to an organization to fit and to answer the consumer’s needs and satisfy the costumers.
The Chartered Institute of Marketing describes marketing as “the management process responsible for identifying, anticipating and satisfying customer requirements profitably.” (Lecture-1, Principles of Marketing, Coventry University).
In the Macmillan Small Business Handbook, already in 1988, Mark Stevens used four main parts of marketing in which organizations should be focus:
Determine the needs of customers through market research
Analyze their own competitive advantages and developing an appropriate market strategy
Select specific target markets to serve
Find out the best marketing mix to satisfy customer needs.
Marketing concept is mainly inter depended on the below three concept. First providing customer satisfaction rather than the convenient of producers and achieving this task is a very big challenge for the organization. For this the company needs integrated effort the second concept from its entire department such as Research and Development, Engineering and other departments. And at last this integrated effort is inter depended on Goal Achievement, the last concept which is achieved through the satisfied customers. (Jobber page 4-5, 2007)
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In other words, if we refer to David Jobber, we can talk about a “Modern Marketing Concept”. The traditional marketing concept is a necessary but not an enough condition for corporate achievement. To achieve success, companies go further than mere customer satisfaction. They have to be better than the competitors. Indeed, the difference is competition. By this below scheme (Principles and practice of marketing of David Jobber from sixth edition pages chapter 4), we can understand that the customer satisfactions is the main issue to success the company’s goal.
In the Michelin case, this scheme looks similar like of marketing concept.
Integrated Effort:
In fact, the staffs of Research and Development use their skills and creativities to allow the brand to develop its new products. Indeed, Michelin is launching, in February 2010, its latest winter tire, the fourth-generation MICHELIN Alpin.
Goal achievement:
This new product will be able to increase its Europe sales from near 54 million in 2010 to 57 million in 2012.
Customer Orientation:
Michelin has created this product in order to answer a demand for drivers located in all regions where winter roads are in general wet (about 80% of the time) and less regularly icy or snow-covered (20%).
Companies which center of attention on customer needs are called as market orientated. Change is recognized as dynamic and adaptation is considered as Darwin condition of survival. Thus the changing environment provides new market opportunities for current companies.
Within the product and services of the company the current demand and latent markets are adapted to offer new products and to capture the customers towards it. (Jobber page 6 & 7, 2007)
Michelin Marketing Concept is mainly into satisfying customers which they states in their philosophy “We want to ensure that road mobility helps to drive economic and social development by aligning its future with the major challenges facing our society”
(Sources: By Michel Rollier Vice President, Finance and Legal Affairs in the 2009 annual and sustainable development report)
So this is the philosophy Michelin is following for product orientation that is introducing many new technologies to the market after understanding the market thoroughly. The some of the product of this group and which achieved great success NAME A PRODUCT
PRODUCT ORIENTATION
Another Competing philosophy is product orientation. Product orientation means management mainly concentrates on cost for production, expense of employee and so on. So to attain economies of scale it produces a limited range of products in the form of reducing production cost.
Customers
Aggressive Sales Effort
Manufacture Product
Production capabilities
Fig: Production Orientation (Source Jobber 2007)
Product orientation purpose is to manufacture products and aggressively sell them to unsuspecting customers (Jobber, page 6, 2007), which leads the organization in to wrong direction of decline stage. That is selling product to customers without understanding their needs may lead to danger situation. Product orientation should be in such a way that the manufactured products should be sold to customers aggressively if the new product is launched with new technology understanding the customer needs and doing proper research prior to product manufacture then only the company can survive for long time.
Michelin values
Reducing the environmental impact of operations: To do it, Michelin uses three ways by.
Developing sustainable energy sources
Preserving raw materials
Securing natural rubber production
Michelin Mission
Over 120 years later, Michelin teams have still leveraged their creativity and skills and devotion to bring to market new, superior, longer lasting solutions aligned with consumers needs, year after year. A new Michelin’s patent was set on the market. Nowadays, the Michelin’s corporate mission is to improve the mobility of people and goods, which is a key factor in economic and social development. By their products and services, Michelin try to reach continuously improving its tires, to make them safer, and more fuel efficient while using smaller quantity raw materials more durable. That show us they don’t ready to stop its innovations and uses still lot of energies in research. Indeed, regarding the research and development, Michelin spends a considerable budget for it. When you visit the web site f Michelin, on the top, we can see in the real time, the full saved and the CO2 Emission reduced since 1992 made thanks to Michelin. Indeed, the budget allocated for the R&D is around 3% of sales (3.40 % in 2009; 3.00% in 2008 and 3.30 % in 2007).
MARKETING ORIENTATION
From the beginning, the company goal was to allow to cyclers to have a high quality tires for their tournament. So Michelin has innovated in order to answer the demand, and in the same time, to be represented as a revolutionary brand for the cyclist world.
Companies which focus on customer needs are called as market orientated. Change is recognized as dynamic and adjustment is considered as Darwin condition of survival. Consequently the changing environment provides new market opportunities for existing companies.
Within the product and services of the company the current demand and latent markets are adapted to offer new products and to capture the customers towards it. (Jobber page 6 & 7, 2007)
Customers
Product & Services
Customer Needs
Potential market Opportunity
Fig: Marketing Orientation (Source Jobber 2007)
Dedicated organization to lead the innovation and changing environment in the world. Aim is to build innovative technology that create new market for efficient process and enrich people’s life and to make Michelin a trusted market leader.
Listening to its customers: Effectively, Michelin explores new markets, develops a long-term vision of sustainable road mobility and other Michelin products in order to forward to the needs of customers. . In this case of Michelin, we can talk about “technology push”.
That allows Michelin to get a competitive advantage
http://en.wikipedia.org/wiki/Push%E2%80%93pull_strategy
Developing High tech technology: As I already said above, to fit with our world undergoing profound change, Michelin uses around 3% of its year sales to research and to develop news High tech items. In this case of Michelin, we can talk about “technology push”. .
That allows Michelin to get a competitive advantage
Source: http://www.michelin.com/corporate/finance/facts-figures
Michelin, in 1998, has been the first most important tire brand competitor in the word. It is following by Bridgestone and it is just after Good year.
Source: http://www.michelin.com/corporate/finance/facts-figures
Michelin has seen decrease its market share this last decade that is certainly explain of the new entrance by Chinese competitors in the tire market. Moreover, the Michelin Pricing is high, and the actual economical crisis was affected the car market that is directly impacted on the tire market (less car sales it means less tire sales).
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