Michelin fleet solutions case study answers

MICHELIN CASE STUDY 1 MICHELIN CASE STUDY DRAFT SUBMISSION 2 Michelin Case Study 10 - 12 page I. Compare and contrast Michelin Fleet Solutions with Michelin's traditional tire-selling business model. Identify and describe the impact to Michelin's bottom line. The Michelin company is not a stranger to innovation, and their journey started back in 1895 when the company moved from bicycle tires to a car. The Michelin Brothers install the first air-filled tires on their race car Lightning and was also the first company to introduce the concept of a spare tire for cars back in 1913. Moving forward to 2014, The EverGrip™ technology was introduced which allows a tire to evolve as it is being used, performing even when it’s worn. This “safe worn tire” has the ability to grips even on wet roads (Michelinman.com, 2018). The Michelin company operated as a traditional tire company. The company pioneered in the tire manufacturing industry and was completely focused on manufacturing and selling tires. This business model was a great success at the time and was a basic straight forward path for the company. The company performance was mainly measured by the quantity of the tires sold and the customer was responsible to pay all the cost upfront and in case the custemer needed a new tire, they would need to buy a whole new one. Back In 2000, Michelin launch the Michelin Fleet Solutions, and by doing so, the company moved from solely manufacturing tires and selling them, to also renting the tires. By becoming a service provider, Michelin started to share the risk and cost associated with operating a fleet with their customers for a monthly fee. II. What was Michelin's rationale in moving toward solutions? Outline at least three internal and external drivers that led Michelin to offer solution services. MICHELIN CASE STUDY DRAFT SUBMISSION 3 From a strategic point of view services are a source of enduring competitive advantage, because they necessitate a complex internal organization and a special business model than competitors will find difficult to replicate • The market potential ,they can get bigger part from the market. As they satisfied the costumers they can build the loyalty and costumers will willing to pay more III. Why would customers use MFS? MFS is an energy-efficient tire fleet solution that provides customized tire lease programs from Michelin. This program is designed to save the customer fuel, maintenance, and operating costs. MFS price per mile rates, allows the customer to spend as little as possible while keeping their fleet running flawlessly, with quality tires and reduced risk and cost (michelintruck.com, 2018) IV. What causes the difficulties encountered by Michelin in deploying its solution offer? The project was unsuccessful due to the company’s failure to communicate the value proposition of the added service (better maintained tires last longer), and its inability to align internal incentives. For instance, the sales team felt that by selling MFS, they would be undermining their primary KPI of new tire sales. Moreover, the company struggled to manage the complexity of the cost structure associated with the provision of this service (Michelinman.com, 2018) V. Would you recommend pursuing, repackaging, or abandoning Michelin's solution offer? MICHELIN CASE STUDY DRAFT SUBMISSION 4 MICHELIN CASE STUDY DRAFT SUBMISSION References Michelinman.com. (2018). 125 years of improving mobility. Retrieved from https://www.michelinman.com/US/en/why-michelin/innovation.html michelintruck.com. (2018). Michelin Fleet Solutions. Retrieved from https://www.michelintruck.com/services-and-programs/michelin-fleet-solutions/ 5 Running Head: MICHELIN FLEET SOLUTIONS: FROM SELLING TIRES TO SESLLING KILOMETERS Abstract In this assignment we take a look at the Michelin Fleet Solution (MSF) Case. Describe what lead the company towards being the service provider. Examine the problems what the Michelin Company needs to handle or face to during the process while it became service 1 MICHELING FLEET SOLUTIONS: FROM SELLING TIRES TO SELLING KILOMETERS 2 provider from product provider.