MICHELIN
MICHELIN
Summary
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Strategic mix
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Management Strategy
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Product
Communication
International Strategy
International Markets
Organisation
Funders
Financial aspects
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Michelin’s stock share
Financial analysis & Key figures
Financial strategy
Profile of Michelin Group
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The leader of the world tire market with 19,6% of the
market
International Staff based in Europe, the United States
and Asia
Commercial Facilities in over 170 countries
Production sites close to markets, 74 production sites
in 18 countries with an annual output of 190 million
tires and 22 million maps and guide
A passion of racing, over 120 World driver and
constructor championship titles since 1973
Products
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Tires and systems for every market :
• Passengers cars and light trucks
• Trucks
• Agricultural vehicules
• Earthmover and handling equipment
• Subway trains
• Aircraft
• 2-wheel
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Ground-chassis liaison and pressure surveillance systems
Products
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Integrated distribution and services networks
• Euromaster in Europe
• Tire Centers LLC in the United States
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Mobility assistance services
• Roads Maps
• Accommodation/restaurant and travel guides
• Michelin Euro assist
• Michelin Fleet Solutions in Europe
• Michelin Business Solutions in the United States
• Michelin Lifestyle
• Tire Advisor
• ViaMichelin
Innovations
Michelin’s innovations have marked the development of the transport industry…
 1891
: The removal Tires
It is with the bicycle that one will see appearing the first tire.
A new age in land transportation had begun.
 1937
: The Metallic
After years of research Michelin succeeds in developing a tire
that can combine both rubber and metal.
The "Metalic" is the first tire for heavy vehicles. It is a milestone
in the development of the future radial tire.
 1946
: The radial revolution
Avant-garde achitecture makes its mark on the industry
The radial architecture consists in a carcass ply formed by
textile arcs running from one bead to the other.
The thickness of the crown and sidewall plies is different so that
the work of each part of the tire is more specialized.
Innovations
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1992 :
Green X
Energy saving technology.
The "low rolling resistance" technology developed by
Michelin cuts fuel consumption while maintaining all
essential tire performance characteristics.
Rolling resistance is on average 20% lower than in equivalent
standard tires.
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1998 :
Pax System
With the Pax System, Michelin has once again succeeded in
extending tire performance limits, just as it did with both the
radial and the green tire. The new technology involves an
inseparable assembly.
Much more than a tire, it is a complete system. It is comprised
of a tire with an entirely new architecture, a wheel, an internal
support ring and a run-flat detector.
Innovations
And to prepare your travel, to find a hotel, a restaurant…
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1900 :
The first edition of Michelin Red Guide
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1904 :
The international guides came out
covering Europe, North Africa,Egypt and
other countries.
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1912 :
Michelin's campaigns in favor of numbering and
signposting French roads leads to the adoption of the
first"crossroads markers". This is a first for France.
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1926 :
Création of the first tourist Guide and the Good
Food Star Classification for the provinces
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2000 :
Bibendum elected « Best Worlwide logo of the
century »
Communication
The communication of Michelin is organized around
two axes:
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The institutional communication :
www.
.com and objects
communication (derivated products)
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The communication on the Michelin products and
services.
www.
.fr
www.
.com
International Production in 4 steps
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It all started in France
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1906 : Beginning of global expansion
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1925 : Producing it’s own raw material
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From then
International Strategy
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Strategy choices
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Growth strategy
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The Multi-Brand strategy
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Uniroyal example in North America
International Markets
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Here below are some graphs and figures about international markets
Europe + North America = 2/3 of the total market
The customers :
International Markets
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All the main markets are regularly growing
Notoriety and quality: Michelin is No. 1
Tires Makers market shares
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In Europe
In North America
Asian Markets
Japan still represents half of the Asian market and ¾
with the export sales
Michelin must pay attention to chinese
car makers : The growth forecast are
massive (x3 !!!)
MANAGEMENT STRATEGY
1906 :The beginings of global expansion
Michelin very quickly began to establish itself industrially not far from the major carmakingin Europe and North America. In parrallel with its vigorous promotion of
car transport, the company pay attention to a recent invention with a brilliant
future : aviation.
The first factory outside of France is built in Turin in 1906.
Between 1955 and 1969 :
To cope with the constant growth in tire market demand, Michelin undertook
considerable industrial investissement over these 15 years.
This major industrial thrust was necessitated by the astonishing growth of its
commercial outlets :Michelin companies were now selling their products in over
140 countries.
Since 1891 : New areas of activity :
The compagnies in the Michelin Group moved into new poles of economic activity;
they continued their development in South America, North America, Asia and
Europe and strengthened their research capabilities by purchasing a Cray
supercomputer in 1988.
Innovation began to accelerate in all tire categories.
ORGANISATION
In order to apprehend its markets with precision and to work out the best
strategy to satisfy and anticipate the needs for its customers, Michelin
obtained an organization in lines produced. Each one dedicated to a
perimeter of activity and having average marketing, development, production
and commercialization.
The lines produced are based
on 11 services groups. At the
regional level, the coherence
and the synergy of the group
are ensured within structures
established in 5 geographical
areas. The center of
Technology is in load of
research and dévelopement.
Two structures of distribution
of the products (Euromaster
and Tire Centers) come to
supplement this organization.
ORGANISATION
The direction is made up of 2 managers:Edouard Michelin and René
Zingraff, surrounded of the executif Council (10 persons in charge for
various units). These persons in charge are gathered within the College
for the directors cash 31 members.
Within the Michelin group, more than 126 000 people work with the
service of the customer, on all the continents.
Financials aspects
The Financial Statements of the Compagnie Générale des
Etablissements Michelin (CGEM) for the 2002 fiscal year
show a profit of 332.4 million euros.
During the General Shareholders’ Meeting, the company will
propose to pay a dividend of 0.93 euro per share, net, before
fiscal credit on May 20, 2003. The dividend paid
for the 2001 fiscal year was 0.85 euro per share.
This 9% increase compared to 5% the previous year, shows
the Group’s confidence in its ability to further improve its
performance in an uncertain economic situation.
Michelin shares are traded on the
Paris Stock Exchange.
Trend for the Michelin Share and the CAC 40 Index
2002 Financial analysis
Michelin strengthens its “all terrain” capability:
• Strong performance improvement in still challenging
markets in 2002
• Financial robustness strengthened
• In 2003, while the geopolitical environment renders
inappropriate the disclosure of any income target, Michelin
intends to further improve its performance.
Key figures
• Volumes sold: +2.8%
• Operating income: +18%
• Net income: +96%
• Free cash-flow: +107%
• Net debt: - 1 billion
Financial Strategy
• In a gloomy economic environment,
Michelin improves its financial
performance: positive FCF, operating
margin is up. Net debt and working
capital are down. Gearing ratio
improves.
Financial Strategy
PORTER’s matrix
New competitors :
Brand distributors
Customers : Car
manufacturers & Car
centers
Self supplied of
rubber production
Substitute products :
Train & boats
SWOT matrix
Michelin is prepared
to flood the Chinese
market
Russia tends to be an
important market in
which Michelin
seems to stay out
Michelin is present in Not ready in case of
Africa, with old
bilateral conflicts with
French colonies
USA and France
although it’s not
profitable
BCG matrix