Michelin in the Land of the Maharajahs (A): Note on the Tire Industry in India SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Michelin in the Land of the Maharajahs (A): Note on the Tire Industry in India
As opposed to other emerging countries, the tire market in India was almost exclusively dominated by local players: 90% of all tires on the Indian market were made and sold by local Indian companies. It is important to note that the big names of the world tire industry--Michelin, Bridgestone, Goodyear, and Continental--were hardly visible in India. Michelin was absent from the Indian tire market and it is very surprising that the world leader of the tire industry had neither a production facility nor a distribution network in India. Why such an absence? Why did Michelin have so little presence in Asian emerging countries and especially in India? Presents the main features of the tire industry in India and allows students to carry out a comprehensive strategic evaluation of the industry's attractiveness as well as an in-depth analysis of the structure of competition. They will also conduct performance analysis for each company.
Swot Analysis of "Michelin in the Land of the Maharajahs (A): Note on the Tire Industry in India" written by Pierre-Xavier Meschi includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Tire Michelin facing as an external strategic factors. Some of the topics covered in Michelin in the Land of the Maharajahs (A): Note on the Tire Industry in India case study are - Strategic Management Strategies, Strategy and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Michelin in the Land of the Maharajahs (A): Note on the Tire Industry in India casestudy better are - – increasing transportation and logistics costs, there is increasing trade war between United States & China, there is backlash against globalization, technology disruption, banking and financial system is disrupted by Bitcoin and other crypto currencies, wage bills are increasing, competitive advantages are harder to sustain because of technology dispersion,
increasing commodity prices, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Michelin in the Land of the Maharajahs (A): Note on the Tire Industry in India
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Michelin in the Land of the Maharajahs (A): Note on the Tire Industry in India case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Tire Michelin, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Tire Michelin operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Michelin in the Land of the Maharajahs (A): Note on the Tire Industry in India can be done for the following purposes –
1. Strategic planning using facts provided in Michelin in the Land of the Maharajahs (A): Note on the Tire Industry in India case study
2. Improving business portfolio management of Tire Michelin
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Tire Michelin
Strengths Michelin in the Land of the Maharajahs (A): Note on the Tire Industry in India | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Tire Michelin in Michelin in the Land of the Maharajahs (A): Note on the Tire Industry in India Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Tire Michelin in the sector have low bargaining power. Michelin in the Land of the Maharajahs (A): Note on the Tire Industry in India has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Tire Michelin to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Tire Michelin is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Tire Michelin is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Michelin in the Land of the Maharajahs (A): Note on the Tire Industry in India Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– Tire Michelin has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Michelin in the Land of the Maharajahs (A): Note on the Tire Industry in India HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Superior customer experience
– The customer experience strategy of Tire Michelin in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Effective Research and Development (R&D)
– Tire Michelin has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Michelin in the Land of the Maharajahs (A): Note on the Tire Industry in India - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Innovation driven organization
– Tire Michelin is one of the most innovative firm in sector. Manager in Michelin in the Land of the Maharajahs (A): Note on the Tire Industry in India Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Successful track record of launching new products
– Tire Michelin has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Tire Michelin has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Cross disciplinary teams
– Horizontal connected teams at the Tire Michelin are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Diverse revenue streams
– Tire Michelin is present in almost all the verticals within the industry. This has provided firm in Michelin in the Land of the Maharajahs (A): Note on the Tire Industry in India case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Training and development
– Tire Michelin has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Michelin in the Land of the Maharajahs (A): Note on the Tire Industry in India Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Operational resilience
– The operational resilience strategy in the Michelin in the Land of the Maharajahs (A): Note on the Tire Industry in India Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Tire Michelin digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Tire Michelin has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Weaknesses Michelin in the Land of the Maharajahs (A): Note on the Tire Industry in India | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Michelin in the Land of the Maharajahs (A): Note on the Tire Industry in India are -
High bargaining power of channel partners
– Because of the regulatory requirements, Pierre-Xavier Meschi suggests that, Tire Michelin is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Slow decision making process
– As mentioned earlier in the report, Tire Michelin has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Tire Michelin even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Slow to strategic competitive environment developments
– As Michelin in the Land of the Maharajahs (A): Note on the Tire Industry in India HBR case study mentions - Tire Michelin takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Michelin in the Land of the Maharajahs (A): Note on the Tire Industry in India, is just above the industry average. Tire Michelin needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Tire Michelin is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Michelin in the Land of the Maharajahs (A): Note on the Tire Industry in India can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Low market penetration in new markets
– Outside its home market of Tire Michelin, firm in the HBR case study Michelin in the Land of the Maharajahs (A): Note on the Tire Industry in India needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Aligning sales with marketing
– It come across in the case study Michelin in the Land of the Maharajahs (A): Note on the Tire Industry in India that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Michelin in the Land of the Maharajahs (A): Note on the Tire Industry in India can leverage the sales team experience to cultivate customer relationships as Tire Michelin is planning to shift buying processes online.
Skills based hiring
– The stress on hiring functional specialists at Tire Michelin has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Michelin in the Land of the Maharajahs (A): Note on the Tire Industry in India, it seems that the employees of Tire Michelin don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Need for greater diversity
– Tire Michelin has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Capital Spending Reduction
– Even during the low interest decade, Tire Michelin has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Opportunities Michelin in the Land of the Maharajahs (A): Note on the Tire Industry in India | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Michelin in the Land of the Maharajahs (A): Note on the Tire Industry in India are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Tire Michelin can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Michelin in the Land of the Maharajahs (A): Note on the Tire Industry in India, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Leveraging digital technologies
– Tire Michelin can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Tire Michelin to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Tire Michelin to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Tire Michelin to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Tire Michelin has opened avenues for new revenue streams for the organization in the industry. This can help Tire Michelin to build a more holistic ecosystem as suggested in the Michelin in the Land of the Maharajahs (A): Note on the Tire Industry in India case study. Tire Michelin can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at Tire Michelin can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Tire Michelin can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Tire Michelin can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Tire Michelin can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Tire Michelin in the consumer business. Now Tire Michelin can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Tire Michelin has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Using analytics as competitive advantage
– Tire Michelin has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Michelin in the Land of the Maharajahs (A): Note on the Tire Industry in India - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Tire Michelin to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Low interest rates
– Even though inflation is raising its head in most developed economies, Tire Michelin can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Learning at scale
– Online learning technologies has now opened space for Tire Michelin to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Threats Michelin in the Land of the Maharajahs (A): Note on the Tire Industry in India External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Michelin in the Land of the Maharajahs (A): Note on the Tire Industry in India are -
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Tire Michelin business can come under increasing regulations regarding data privacy, data security, etc.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Tire Michelin will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Tire Michelin in the Strategy & Execution sector and impact the bottomline of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Michelin in the Land of the Maharajahs (A): Note on the Tire Industry in India, Tire Michelin may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Stagnating economy with rate increase
– Tire Michelin can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
High dependence on third party suppliers
– Tire Michelin high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Regulatory challenges
– Tire Michelin needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Tire Michelin in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Tire Michelin can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Tire Michelin can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Michelin in the Land of the Maharajahs (A): Note on the Tire Industry in India .
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Tire Michelin.
Weighted SWOT Analysis of Michelin in the Land of the Maharajahs (A): Note on the Tire Industry in India Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Michelin in the Land of the Maharajahs (A): Note on the Tire Industry in India needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Michelin in the Land of the Maharajahs (A): Note on the Tire Industry in India is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Michelin in the Land of the Maharajahs (A): Note on the Tire Industry in India is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Michelin in the Land of the Maharajahs (A): Note on the Tire Industry in India is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Tire Michelin needs to make to build a sustainable competitive advantage.