Bridgestone Report
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Executive Summary
This report proposes that Bridgestone concentrates on the German market, in order to increase it European market share as this is where Bridgestone has the lowest market share at 5 %. We have analysed and made suggestions for the competitive, distribution and communication strategies.
WORD COUNT – 44
1.0 Introduction
This report is directed to Shigeo Wattanbe, chairman of Bridgestone tyres for Bridgestone Corporation. This report contains a proposed marketing strategy to increase Bridgestones position within the European market from 10% to 15%. These strategies include competitive strategies, distribution strategies and communication strategies. Furthermore, a well-reasoned proposal is presented in the report using a screening process.
Bridgestones current position shows that they are amongst the largest tyre manufactures in the world and hope to increase their company brand awareness within markets where they are less well known. However, to do this they have to compete with the market leaders within this sector such as Michelin, Continental and Goodyear.
2.0 Competitive strategies of Michelin, Goodyear and Continental
2.1 Michelin
Michelin is a French tyre manufacturer that has the highest percentage share at 32% within the European tyre market. It is a very large company employing over 100,000 people within, 67 factories spread throughout 13 different countries. They also provide services within 170 countries. Michelin have increased their amount of associated brands which has added to their success, giving them an overall span of different types of tyres used for different industries. In terms of products Michelin have a strong presence within the market as it manufactures 3,500 different types of tyres which give them a broad product range within that market. They also provide tourism services such as maps and guide books.
To strengthen Michelins European position they should continue their adaptive approach to different markets, which has and will give them an opportunity to dominate markets on different continents of the world for example, America which is their largest market.
Michelins ability to adapt different tyres for different purposes such as aircraft tyres and earthmover tyres are how they have been able to apply their brand strategy in so many different ways. Michelin provide innovative solutions for a variety of different vehicles that need tyres. This is what differentiates themselves from their competitors as they have such a wide range of tyres in particular to offer, which is something that other companies cannot provide. To strengthen this particular area of their business they must make sure all of their work continues to be done efficiently as maintaining the Michelin brand name is essential at their stage.
To maintain their European market position, Michelins strategy has been to acquire MRF in the Philippines and also the Columbian manufacture Icollantas. This has lead to the expansion and growth of Michelin outside Europe however, increasing their economy of scale, cheaper labour costs and competitive prices.
Michelin is an example of a company that has used the acquiring of joint mergers to their advantage and to strengthen their current position they should maybe look at joint ventures in other areas that they have not fully entered yet to spread their market range.
Michelins ability to provide brand quality throughout all of their markets can be seen as a competitive advantage. They hope to continue to maintain their market position, with innovative advertising and promotion schemes which will add to the development of their already high brand awareness within the tyre market.
In relation to Porters Generic Strategy it is thought that Michelin has a strategy based on differentiation as their product range and amount of services are second to none throughout the world. The ability to provide tyres to different countries that have entirely different needs is efficient. For example, providing tyres for the American market where there is a fashionable status around their cars. Another example would be how Michelin provide tyres for the Asian market, where the cars that they drive and the environment that they drive in require different tyres which encourages Michelin to adapt to all of these markets.
Differentiation is a key factor and is used to provide Michelin with a competitive edge over their rivals.
2.2 Goodyear
Goodyear currently maintains an 18.2% market share, behind Michelin and Bridgestone. Although the company is the second largest tyre maker in Europe, in order to maintain and strengthen this position, in 1998 Goodyear pursued an alliance with Sunitomo Rubber Industries. This was a good strategy, as it allowed Goodyear to take control of the Dunlop brand in both Europe and North America. This may provide Goodyear with the advantage of eventually taking complete ownership of Dunlops tyre activities, a move which would strengthen Goodyears control over its product range, promotion and pricing strategy.
Goodyears product range includes many innovative and continually developing tyres, including the 3 in 1 Performance tyre. This is a revolutionary tyre that can provide Goodyear with a competitive advantage over its competitors and may be used to promote in Europe in order to strengthen its presence their.
For the second successive year in the UK, Goodyear has produced TV advertisements focusing on the companys strength of innovation, from the first tyre to land on the moon to their present day innovations, i.e. Run on Flat tyres. This is an effective strategy for Goodyear to use and although, Goodyear has an 11.3% market share in Europe, it is not as successful in both France and Spain, therefore the companys European Strategies need to be targeted more so in these countries.
In order to achieve its aims of producing a cost leadership strategy,