Internationalization process: Michelin

Résumé du document

The Michelin Company was founded in 1889 in Clermont-Ferrand (France) by Edouard Michelin. Initially, Michelin employed 52 persons in a plant spread over 32 acres. Edouard Michelin benefited of his brother's (André Michelin) support. The two brothers were complementary: André was an innovator, and Edouard a charismatic leader. This family orientation is a key element for understanding the Michelin Company. The company has been led as one of the largest family businesses, which explains the tensions caused by relocation, or the uncertainty that followed Edouard's sudden death. Indeed, Edouard Michelin's disappearance from the firm was a veritable tragedy for the company. His father, François Michelin, was engaged with the international development of the company. Very early, François handed the reins of the company to his son Edouard. At the time of Edouard's death he was the youngest CEO on the CAC 40 (Paris Stock Index), at only 42 years old. After this tragic accident, Michelin's stock was going down and the future seemed uncertain. Now, for the first time, the reins of the company passed into the hands of a person who was not a member of the Michelin family. With the appointment of Michel Roullier, Michelin began to lose its old family structure (delocalization issue), and the company had to readjust its image to its values.

Extraits

[...] As mentioned, the geographical focus of the expansion was on Europe. An exception was the USA, because it was and is the second most important market in this industry[10]. Michelin dared to take the brave step of going abroad to North America very early, opening their first plant outside Europe in Milton, New Jersey in 1907. Until this decade, the concept of a decentralized production with existing plants for each regional market, and the production for every specific area was recognizable. [...]

[...] Takeover's In 1964 they took over the French company Pneu Laurent, and in 1972 the Wolber Company became part of the Michelin group. In 1981 Michelin became the majority shareholder of Kléber. Takeover of other firms followed, with the acquisition of Uniroyal-Goodrich Tire Company USA (1990), the Polish company Stamil-Olsztyn (1995), the Hungarian firm Taurus (1996) and the Colombian enterprise Icollantas (1998). Additionally, Michelin became a major stakeholder in Kronprinz G.A. These actions facilitated the entry into these foreign markets. Expansion in other regions Gradually, the company also expanded to other countries or regions outside Europe and North America. [...]

[...] It was created in 1898. The idea was born in 1894 during the Universal and Colonial Exhibition in Lyon. The Michelin stand was decorated with two columns of tire and Edouard Michelin exclaimed “Give it some arms and legs and it would look like a O'Galop, a French illustrator, put the idea on paper, and the Michelin Man was invented. Today, the Bibendum is one of the world's most recognized brands. Environment of Michelin: The World Market The tire market is a very competitive, but expanding sector. [...]

[...] A production unit in a foreign market is established when demands are rising and exports no longer satisfy the market. The phase of exporting to a specific foreign market is, in each case, very short, as you can see in the above mentioned history. Therefore the production units were built very early. In comparison to the network approach or the internationalization approach, the establishment of a chain seems to best explain the internationalization process of the Michelin Company. However, there are also single steps are not followed one by one, and cannot be identified clearly. [...]

[...] Michelin has been very successful in its internationalization process. Nowadays, Michelin and its largest competitor Bridgestone are the leading companies in the market. It is a head to head race for the first position. The Michelin group was initially sluggish with its enlargement in emerging countries, which are now the fastest growing markets, with the biggest future. Michelin is strong in the largest markets in Europe and the US but these markets are now almost saturated. This is a problem for Michelin, and leads to a better starting position for Bridgestone in emerging countries like India, China or South America. [...]