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Michelin SWOT & PESTLE Analysis

ID : 52131653| Sep 2020| 18 pages

COMPANY PROFILE -Michelin

Business Sector :Automobile, Tires

Operating Geography :Europe, France, Global

About Michelin :

Michelin is a French tire manufacturer headquartered in Clermont-Ferrand, France. It was founded in 1889. It is among the three largest tire manufacturers in the world. Michelin is known for its innovative removable tires, pneurail (tire meant for rails) and radial tires. Michelin makes tires for aircrafts, motorcycles, bicycles and space shuttles. Apart from tires Michelin also makes tour guides, it has published two guidebook series. Michelin also publishes a variety of road maps, mostly of France but also of other European countries, Africa, Thailand and the United States. It has presence in 170 countries and operates 68 production facilities. It has been ranked on Number 1 spot by Forbes Magazine Annual survey 2018 on “America’s best large employers”.

Michelin mission is to “enhance its clients’ mobility, sustainably; designing and distributing the most suitable tires, services and solutions for its clients’ needs; providing digital services, maps and guides to help enrich trips and travels and make them unique experiences; and developing high-technology materials that serve the mobility industry”.

Michelin Revenue :


€ 21,960 million – FY ending December 31, 2017 (year-on-year growth of 5.03%)
€ 20,907million – FY ending December 31, 2016

Competitive Analysis of Michelin

SWOT
PESTLE
The SWOT analysis for Michelin is presented below:
Strengths
Weaknesses
1. One of the largest manufacturers of tires globally
2. Strong Brand Equity and high market share
3. Strong R&D Teams with culture of innovation
4. Solid global footprint
1. Sluggish Replacement volumes
2. High operational costs
Opportunities
Threats
1. Potential of capturing demand for electric vehicle tires through strategic partnerships
2. High growth opportunities in passenger cars light commercial vehicle segment
3. Opportunity to become market leader through M&A
1. Volatility in raw material prices
2. Fierce competition from global players
3. Tire Industry overcapacity and pricing pressure
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Detailed SWOT Analysis of Michelin

 

Strength

1. One of the largest manufacturers of tires globally: Michelin produces over 184 million tires in 68 production facilities in 17 countries. Michelin contributes to social and economic activity in 170 countries. It has 4,150 dealerships and service centers. It is world leader in energy efficient tires, and leader in Europe for maps, guides and digital-travel support services. The sustained market share gain in 18-inch and larger tires increased brand sales by 19% in a segment up by 13%), due to price positioning. New product launches led to strong sales of all-season tires firm throughout the year, with strong growth of 4% in Europe. Passenger car/Light truck tires & related distribution grew by 12.4% & truck tires & related distribution rose by 8.1% in 2017.

2. Strong Brand Equity and high market share: Rich legacy of Michelin built over time has led to very strong brand equity in the tire segment and has enabled it to influence the industry as a market leader. Its market share is amongst the top three players in the industry.The brand sales grew to 19% in larger tire segment which was up by 13%. The brand equity boosted its technological leadership which grew by 2.6% and record high net income of €1,693 million despite the challenging market conditions. They also have scope to expand their business in industries different from automobile original equipment to businesses for end market by leveraging the brand value it has built through quality and safe products which have neither been recalled nor shown any major defect for several years in a row. It had 14% market share in 2016 (13.8% in 2015) which was the second highest after Bridgestone.

3. Strong R&D Teams with culture of innovation: The Michelin Technology Centre, in charge of Research and Development, benefits from a worldwide network. Its teams and infrastructures are based in Europe, the Americas and Asia. 3,300 people work at Michelin's Research and Development Centre in Clermont-Ferrand. Over the period up to 2019, the Group will spend around €270 million on completely renovating the center to boost its innovation facilities and reduce time-to-market for innovative tires and services. As many as 37,000 tests per year are performed for Michelin as well as for its carmaker customers and equipment-manufacturer partners. It spent €641 million in 2017 on R&D.

4. Solid global footprint: Michelin’s excellent financial results even in an uneven market environment attest to the structural improvement in its performance and the solid global presence. It manufactures over 187 million tires in 68 production facilities in 17 countries. It has presence in 170 countries which gives it scale and competitive advantage due to early entry and broad sales networks. There was a 2% overall growth in demand for original equipment in Asia (excluding India) in 2017, 2% in China due to growth in SUV and luxury car sales. Demand was up by 5% in Japan and stable in South Korea. The domestic and export sales steered 20% upturn in South American markets. The strong replacement demand led to a 4% growth in tires by 4% with 7% growth in China. Global footprint supports long term sustainable growth and profitability as they have diversified business globally.

Weakness

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Opportunity

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Threat

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Major Competitors :

Major Brands :

  • Michelin
  • BFGoodrich
  • Kleber
  • Riken
  • Kormoran
  • Tigar
  • Uniroyal (United States)

Key Business Segments / Diversification :

Michelin
Mobility Experiences Automotive B2C Global Brands Automotive B2C Regional Brands Aircraft
Automotive Original Equipment Off Highway Transportation High Tech Materials Mining
Urban TransportationTwo Wheelers Motorsport Distribution
Services & Solutions Long Distance Transportation

Recent Acquisition / Mergers / Alliance / Joint Ventures / Divestitures :

Open Table Preview
Name
Business Segment
Year
Type
Objective/Synergy Achieved
Fenner PlcIndustrial belting and polymer-based products2018AcquisitionThe deal will help Michelin's engineered materials division and enable the company to provide a comprehensive offering to its mining customers
Lehigh TechnologiesSpecialty materials2017AcquisitionThe deal will help Michelin expertise in materials to markets that extend beyond tires, especially the use of advanced rubber recycled materials
PTGPressure control systems2017AcquisitionThe PTG deal will help Michelin to become a leading provider of central tire inflation systems (CTIS)
Source: Company website and other reliable sources. The detailed table is available in the Complete Report.
SWOT & PESTLE (combined)
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Check Out Analysis of Other Relevant Companies

TABLE OF CONTENTS
DELIVERY AND FORMAT
WHY CHOOSE US?
References used in Michelin Analysis Report
1. Michelin, Facilities: https://www.michelin.com/eng/michelin-group/organization/facilities

2. Michelin: https://www.michelin.in/IN/en/homepage.html

3. Michelin, Investor Analyst: https://www.michelin.com/eng/Investor-Analyst

4. Michelin, Annual Results 2015: https://www.michelin.com/eng/finance/financial-results/2015-annual-results

5. Michelin, Market Trends: https://www.michelin.com/eng/finance/key-figures-indicators/market-trends

6. Michelin, Brand Innovation: https://www.michelin.in/IN/en/why-michelin/more-on-brand-innovation.html

7. Michelin, Organization: https://www.michelin.com/eng/michelin-group/organization/organizational-structure

8. Michelin, Innovation: https://www.michelin.com/eng/innovation/research-and-development/global-technology-center

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Michelin SWOT & PESTLE Analysis - SWOT & PESTLE.COM

SWOT & PESTLE.com (2020). Michelin SWOT & PESTLE Analysis - SWOT & PESTLE.com. [online] Available at: https://www.swotandpestle.com/michelin/ [Accessed 26 Nov, 2020].

In-text: (SWOT & PESTLE.com, 2020)

Copyrights and Disclaimer

Michelin SWOT and PESTLE analysis has been conducted by Kanupriya Sheopuri and reviewed by senior analysts from Barakaat Consulting.

Copyright of Michelin SWOT and PESTLE Analysis is the property of Barakaat Consulting. Please refer to the Terms and Conditions and Disclaimer for usage guidelines.

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Michelin SWOT & PESTLE Analysis
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