Michelin a Global Company

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Michelin 1 Michelin an Innovative, Global Corporation William Vinson MGT 330 Meredith Kiljan July 12, 2010 Michelin 2 The Michelin Corporation has been in business for many years. Although most famous for their place in the tire business, this fortune 500 corporation has it hands in a multitude of businesses from rubber manufacturing to fine dining and lodging. This corporation has grown from a small family company to one of the major superpower in the world market, through great management and savvy business decisions Michelin continues to stay at the forefront of all of its industries.

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Since the beginning of the company Michelin has been involved in a number of innovations that have revolutionized the tire business. Michelin was founded in 1888 by Edouard and Andre Michelin. These two brothers were the start of Michelin Corporations focus on innovation, and staying at the cutting edge of the industry, when they were the “first to patent a removable pneumatic bicycle tire which was used by Charles Terront to win the world’s first long distance cycle race, the 1891 Paris-Brest-Paris”(July, 2010).

Since this event there have been a multitude of other innovations:” the invention of the radial tire in 1946” (July, 2010), and the creation of specialty tires for any form of transportation imaginable on and off road. In the recent years Michelin research and development teams have pushed themselves to create more cost efficient, fuel efficient and safer products. The technology of the run-flat tire is one of the new innovations introduced to the market in recent years. “The more common design has sidewalls that are reinforced with extra layers of heat-resistant materials.

The thick sidewall is very stiff to resist flexing, and the wire-reinforced bead is also thicker and stiffer. This Michelin 3 tire can actually support the weight of the vehicle on the sidewall, but the tire is heavier and the stiffness produces a somewhat harsher ride” (November, 2005. pg. 136). This technology is widely available for many makes and models, the down fall is the sheer weight of these tires make them less fuel efficient and cost efficient due to the amount of materials need to make the tire. This has pushed these teams to improve their design, which brought about the PAX System.

The PAX System “does not feature oversized sidewalls. The thin walls and optimized structure in the PAX System ensures that the rolling resistance is reduced and the cars emissions, in return, lower” (November, 27 2005. pg. 1). The introduction of the “TWEEL” is another innovation of Michelin’s research team. This concept tire has no air or sidewall for that matter. The “TWEEL” is wheel and tire technology in one, “that replaces the need for air pressure while delivering performance previously only available from pneumatic tires.

The flexible spokes are fused with a flexible wheel that deforms to absorb shock and rebound. Without the air needed by conventional tires, TWEEL still delivers pneumatic-like performance in weight-carrying capacity, ride comfort, and the ability to “envelop” road hazards” (April, 2005. pg. 9). Expected to unveil in 2012 is the “Active Wheel” technology created by Michelin, this technology “includes in-wheel electric motors and a motorized suspension to free up space in the front and rear of the vehicle.

This model also eliminates the need for transmissions and exhaust system” (July 8, 2010). Another way to decrease emissions and fuel costs which are very important in this market where legislation is pushing manufactures to “go green”. Michelin 4 All of these innovations by Michelin have kept them at the top of market for many year years, and attractive to the “National Culture”, or “the set of values that a society considers important and the norms of behavior that are approved or sanctioned in that society” (2007. g. 150). Since the invention of the radial tire, and the first pneumatic tires, which will continue to run the market Michelin feels, but these new technologies are the future and will continue to keep the corporation ahead of the game. Michelin not only is in the tire and rubber business, for many years now Michelin has published the Michelin Red and Green Guides along with maps. The Red Guide is a guide book to hotels and restaurants, which in the beginning were just those located in France.

Now these guides are published grading food and lodging to multiple places across the world. The Green Guides are for tourism. Michelin also publishes maps of areas such as: “France, European countries, Africa, Thailand and the United States” (July 8, 2010). In Michelin created ViaMichelin “a digital mapping service that provides mapping and travel solutions for the internet, mobile and satellite navigation products with street level coverage of Europe, USA, Australia and parts of Asia and South America” (July 8, 2010).

Another way Michelin stays at the top of its market is globalization and variety. “Michelin is the world’s largest tire manufacturer” , it has production plants in” France, Germany, USA, United Kingdom, Canada , Brazil, Thailand, Japan, Italy and several other countries”(July, 2010). In correlation with their new tire production, Michelin also produces it own rubber for their new tire and retread facilities. Along with it vast span of countries it also Michelin 5 anufactures every possible type of tire for any form of transportation imaginable, “including airplanes, automobiles, bicycles, earthmovers, farm equipment, heavy-duty trucks, motorcycles and the space shuttle”(January 11, 2010). This enables Michelin to be profitable in multiple areas of the business, and adjust to the changing market at any time, and consistently push the competitors to keep up. For example after the events of September 11, air travel was greatly decreased due to the fear of another terrorist attack and increased security.

Airlines were losing money, and were forced to ground planes, in the mean time the United States military was gearing up to go to war. This was unexpected, not only by Michelin but by everyone in the world. In reaction to this Michelin increase their production of military tires and decrease the production of commercial airplane tire. This action would have been a tough transition had they not had the versatility that they do, by having they hands in all aspects of the market. This allowed them to still meet the demand of their clienteles and also still pull a profit in a tough market.

A companies’ ability to be global and provide a variety of products for their market, along with their ability to adapt to environmental and cultural changes is what can keep them cutting edge. This competitive advantage or “the ability of one organization to outperform other organizations because it produces desired goods or services more efficiently and effectively than its competitors” (2007. pg. 28) makes them more attractive to customers when dealing in contract negotiations and business mergers.

Along with their coverage of the global market and versatility, Michelin has a great marketing strategy that keeps them on top. In the tough economic market they are faced with today, Michelin has come up with a new Michelin 6 advertising campaign, “The right tire changes everything” (October 24, 2009. pg. 128). This new campaign is to “explain to customers the benefits of using it tires. Michelin tires simultaneously deliver enhanced braking power, greater longevity and superior fuel efficiency.

The campaign shows that by using the right tire, consumers can reduce fuel consumption, increase driving safety and extend tread life” (October 24, 2009. pg. 128). This creative marketing and great business strategy will trust Michelin into the future on top where they will continue to stay by using these innovative business practices. Michelin 7 References Anonymous. (2009, 24 October). Michelin; ‘The Right Tire Changes Everything’: Michelin’s First Global Advertising Campaign. Marketing Weekly News, pg. 128. Whitney, T. (2005, 4 March).

Michelin’s “Tweel” a tire breakthrough; [Final Edition]. Calgary Herald, pg. G. 9. Anonymous. (2005, April). Michelin Lets Air Out of Future Tire Innovation. S S G M, Service Station& Garage Management, Vol. 35 Iss. 4, pg. 9. Anonymous. (2005, 27 November). Michelin at the forfront. Businessline, pg. 1 Gordon, J. (2005 November). Run-Flat Tires. Motor Age, Vol. 35, Iss. 11, pg. 136 Michelin. (n. d. )In Wikipedia. Retrieved from https://en. wikipedia. org/wiki/Michelin Jones, G. , & George, J. (2007). Essentials of Contemporary Management. McGraw-Hill Companies.

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