After a quick handshake, he immediately jumped to his main concern: Pierre Dupuis was however not at ease with such a quick conclusion. With this new business model, the company ven- tured into selling kilometers — instead of selling tires. The first answer for this issue is clarifying each department objectives. Whatever our ability to optimize costs, it will never be profitable with such low fees! Or should it simply be abandoned?
This seemed such a good idea to begin with. As a consequence, distributors often have a complementary service business, performing some tire maintenance activities. We also face real problems in pricing: Download the case and teaching note Educators can login to view a free educator preview copy of this case and its teaching note. IMD provides leadership training such as: Jean had not even mentioned the specific key perfor- mance indicators MFS people kept asking for. Quality control process with the service provider To facilitate geographical expansion, Michelin decided to rely on service provider networks to deliver the service to customer.
This increased confusion and complexity. From Selling Tires to Selling Kilometers us with. Enter the email address you signed up with and we’ll email you a reset link. It enables participants to reflect on the following issues: For micjelin, determining when exactly a tire needs retreading requires expertise and strong logistical command. If they recommended pursuing the MFS Program, how could the current turmoil be overcome?
Because this market accounted for 21 percent of sales in Europe, it was very important to succeed there. Enter the email address you signed up with and we’ll email you a reset link. At this stage, Michelin should not worry about them become their competitors as their size is not sufficient to provide tire management service to big clients. This can make quite a difference, as one can leave a lot of millimeters of rubber on the road.
With global revenues of One does not need to be a tire expert to jump into the case discussion, and the lessons learned apply to businesses of all sizes in a wide variety of industries.
Pierre knew that this argument would sutdy brought up at some point.
Business Model Innovation: Michelin Fleet Solutions – From Selling Tires To Selling Kilometers
Jonas provided some insight from his operational experience: To facilitate geographical expansion, the company adopted a new approach to service operations: On this segment, transportation companies play an important prescriptive role as they decide what tire brands should be installed on their trucks.
The consultancy had found more than 72 different contract versions, each greatly varying in content. What was to be done? Absorb obstacle shock Tires undergo great tension. They fear that the development of managed fleets will lead to sales decline in the replacement market.
We cae new business at no cost. This solution offer is really very complex to sell! We will have to reconfigure everything, and this will take time. In this respect, capitalizing so much on service provid- ers may be dangerous: Vehicle fare per driven kilometer was contractually agreed upon and annually revised.
The case was written as a basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation.
This is the flesh of the tire. To facilitate geographical expansion, the company adopted a new approach to service operations: One does not need to be a tire expert to jump into the case discussion, and the lessons learned apply to businesses of all sizes in a wide variety of industries.
(DOC) Michelin Group 3 | Thomas Nguyen –
Upfront investment is necessary to generate the long-term benefit. Remember me on this computer. They are complex and sophisticated products. As one sales manager recalled: The situation had deteriorated so much that a well-known consulting firm had been employed to help fix the problems. It does this by calculating a whole range of factors, such as what tires the fleet is running on and their condition.