Michelin Fleet Solutions Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

SUMMARY

Michelin is the leader in the tire industry around the globe. Michelin launched a comprehensive tire-management solution for large European transportation companies and it was named as Michelin Fleet Solution (MFS). With this new introduction the company aimed on selling not just tires but selling kilometers. This innovation opened the gates for new dimensions for the company and enabled the company towards entering several opportunity grounds for offering services and solutions.

The adaptation is new to the market and it has allowed Michelin for capitalizing on a different opportunity for diversifying its business operations. The company will be able to differentiate itself from the tire business only.

Michelin Fleet Solution is a good initiative taken by the company’s top level management. The decision of the management is caused by the changed dynamics of the market; a high level of favorability exists for such a business. Michelin is already the market leader in supplying tires but the offered products are priced very aggressively and are very expensive. The service market in Europe has shown good prospects however the MFS is not able to reap them efficiently. It is a good offer that the company is making for its customers and is more likely to attract competitor’s customers increasing their own market share for Michelin. The offer by MFS is that if the tire bought from Michelin wears out, then it would be repaired in low cost,which means that they would not need to buy a new one, instead for a considerably lower price it can get it repaired which would be just like a new tire.

Communication plays a vital role in the process of MFS as the employees and staff need to transfer the information efficiently. Firstly, the message is not effectively passed to the employees due to untrained staff. The coordination level among other departments in the company is also not up to the standards due to the change of operations under their hand. The company was previously involved in selling tires only, but now the company has started offering their services as well. This change is proving to be complex for the company employees and they are finding it hard to digest it.

Various departments of the organization are worried due to the unpredictability of this initiative as they are not sure about the future sales of the company. The long life and replacement of the tires might negatively affect the sales of the company. MFS was not able to have a clear idea about the functionality of MFS, and it would be able to improve its market share in the industry in upcoming future.

Michelin faces serious threats from its competitors in the tire market. Its major competitors are Bridgestone and Goodyear. The competitors of the organization had their eyes on every move of Michelin as MFS was a new initiative taken by the company. This initiative was not only new but enabled the company for providing services. It had the advantage of being the first mover competitor advantage and only the company had the opportunity of capitalizing the potential present in the respective market. The competitors would soon realize the availability of potential in the market that can be capitalized with the help of such services. Competitors might also take measures to cater such offering to the market. Therefore,it should decisions not only quickly, but efficiently. The decision-making process of the company had to be efficient enough to sustain the competitive advantage.

The company was not only worried about the internal factors but the company had to think about their decision of outsourcing of operations. The distributors are not confirming the contractual agreements with the company, which is causing trouble in decision-making process of the company. The company’s services might be perceived as non-standard services, as the costs will also increase for the company due to increased cost per tire as they might be totally out of order while they are repairing them. The outsourced companies also required an adequate amount of training for meeting the guidelines set by the company for maintaining the standards. The company had to train the distributors for the treatment of their tires.

Michelin Fleet Solutions Case Solution

Only if the Key Performance Indicators (KPI) were kept in accordance with the standards, it would add an additional life of 2-5 years of extra life. The location of the tire also plays an important role in the services of the company and if the tire is not in the ideal location it will add extra costs for the company. These indicators were to be followed by the distributors or the service provider in order to go according to Key Performance Indicators (KPI).

PROBLEM STATEMENT

” Michelin Fleet Solutions is currently facing problems that are being caused by internal factors rather than external factors. As the same employees who have been sales persons for company’s tires are now reporting to the Director of Michelson Fleet Solutions. “

ANALYSIS

SWOT

Strengths:

The operations of the company have expanded on several parts of the globe. Michelin is the market leader and has been securing the highest volume of sales. A major part of the tire market is with Michelin. Michelin is one of the largest manufacturers of tires in the world. The manufacturing facilities of Michelin are located in more than 15 countries and it is sold in more than 170 countries. The operations of the company allow it to cater to a larger number of customers directly increasing the number of sales and revenues for the company. Increased numbers of sales have been supporting the operations of the company over the years and the company has been able to sustain their market share through further expansion.

The brand equity of the company is excellent. The performance of the company has been efficient over the years and the company has been able to secure a major part of the market through its quality product...........................

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