MICHELIN MFS CASE STUDY

It employs more than , people worldwide, has 70 industrial sites in 18 countries and a sales presence in more than coun- tries. The importance of door-to-door and just-in-time services further reinforces this competitive advantage. If they recommended pursuing the MFS Program, how could the current turmoil be overcome? From Selling Tires to Selling Kilometers costs. These are the questions we have to discuss today!

Replacement is the other avenue for the TB tire market. However, low-cost Asian firms are increasingly gaining traction. MFS gives us all a headache, and hurts the profit of our division. What was to be done? However, it was acknowledged that Goodyear and Bridgestone would soon enter the market with com- petitive offers. With MFS, Michelin had moved from its traditional business of manufacturing and selling tires toward the new world of service, i.

michelin mfs case study

Upfront investment is necessary to generate the long-term benefit. The shift is intuitively appealing, and it provides Michelin with an opportunity to differentiate itself in the tyre business.

michelin mfs case study

Defining, Designing and Delivering Customer Solutions. The deal would offer customers a number of peace-of-mind benefits including better cost control, fewer breakdowns and less administration. If you investigate our past success, Michelin employees in the field play a critical role. MFS is a great solution to create the competitive advantage of the tires in the consolidated market.

Our administrative people are overwhelmed with MFS invoices coming from the service providers.

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This radical move was initiated in with promising growth prospects. IMD provides leadership training such as: We expect 3 percent growth a year for road freight transport. My account New to The Case Centre? Log In Sign Up. Creating value Michelin leaned that having a superior technical product does not suffice.

However, three years later, the pic- ture had become much darker: Go to advanced search. A customer could decide to contract only a part of its fleet with MFS, thus granting Michelin exclu- sivity for the equipment of these vehicles.

Jonas and Jean were bewildered at the financial implication of such a figure. With MFS, Michelin had moved from its traditional business of manufacturing and selling tires toward the new world of service, i. This is the structure of the tire. This would result in a very complex process to ensure the company makes appropriate profit. Should the company keep on developing this solution business?

MFS, Lipstick on a Pig? B2B companies want to sell profitable customer solutions, rather than focusing on selling products and services only. We bring new business at no cost. However, it leads to the dependence on the third party to optimize the cost structure and the quality of the service provided.

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Some of his MFS team members had also reported they felt looked down upon by colleagues. Relationships between MFS teams and service support were always complicated because of their specific needs. Learning Objective This case investigates the difficulties that industrial groups face when they transition from selling products to providing service. Payment upon invoicing per driven kms 3.

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Business Model Innovation: Michelin Fleet Solutions – From Selling Tires To Selling Kilometers

MFS offered large European fleets initially fleets with more than vehicles the complete management of their tire assets during a three to five year-period. New tread wear is applied on cade casing.

Or should it simply michslin abandoned? Failing to exploit one single mm of rubber means adding 6 to 7 percent on their cost. Therefore, I am not sure we should focus so much on the sales stage only. Additionally they see different down- sides in this offer such as higher upfront cost, increased dependence, or high switching.

After substantial investments, MFS had never been profitable once in three-years time!

michelin mfs case study

It does this by calculating a whole range of factors, such as what tires the fleet is running on and their condition.