Michelin in the land of the maharajahs: case study

Résumé du document

When segmenting the (Indian tyre) market three things need to be considered; products, technologies and clients.

Products in the Indian tyre market are commercial tyres, car tyres, two wheeler tyres, three wheeler tyres, agricultural tyres, off the road tyres and LCV tyres. To limit the number of market segments few similar product categories can be combined into four main categories. The four main product categories are car tyres, commercial and LCV tyres, two and three wheeler tyres and agricultural and off the road tyres. The reason to combine some product categories is the similarity of the market (size, growth and clients) and also the similarity of the products.
There are two main technologies in Indian market; the old cross-ply technology (diagonal technology) and the new radial technology. The Radial technology includes the new innovative tubeless technology.

There are three different client groups in Indian market; the car manufacturers, the replacement industry (including garages, small retailers and tyre distributors) and export markets. Since we are interested in the domestic Indian markets export can be left out. To sum up, there are two main client groups in the market, namely manufacturers and replacement industry.

Extraits

[...] MRF has of the market shares and of ROI. The second leader of the market is TVS with 21% of the market shares and of ROI, and in third position goes to Falcon Tyres with of the market shares. That's why we chose to place the segment 3 in the middle of the volume system. Moreover, there is no competitive technology whereas this segment has a better ROI than segment 1 and 2. Segment specialized This segment is mainly dominated by JK Industries: 85% of the market shares, thanks to the brand. [...]

[...] Regarding the strategy, Michelin, as the radial technology inventor, has to invest in these sectors, because cross-fly tyres tend to disappear in India, and with innovation, some niche appeared recently, represented by Tubeless tyres, whose perspective of growth and profitability are quite important (almost 20% of growth rate for this type of tyre). Moreover, Michelin won't have difficulties to establish its position among its competitors due to its expertise in as the key success factors in these segments are based on company's ability to be innovative. Finally, we could conclude by highlighting the fact that it was a mistake of Michelin to take a long time to consider the opportunity to enter the Indian market. [...]

[...] There are two main technologies in Indian market; the old cross-ply technology (diagonal technology) and the new radial technology. The Radial technology includes the new innovative tubeless technology. There are three different client groups in Indian market; the car manufacturers, the replacement industry (including garages, small retailers and tyre distributors) and export markets. Since we are interested in the domestic Indian markets export can be left out. To sum up, there are two main client groups in the market, namely manufacturers and replacement industry. [...]

[...] Consequently, this segment is in the Volume part in the matrix. The market share does not seem to be durable and significant. The users are more concerned because of the oil price and other specifications. They may use more radical technologies, but nowadays, it is not always in good proportion. That is the reason why the market is still surviving subsequently, the market is more solid than the segment 1. Segment In this segment the main key successful factor is the Price. [...]

[...] Including the customer aspect would have doubled the amount of segments and not added any specific benefit to the analysis. And also customers are not sensitive to the brand name so it is not crucial to have partnerships with the OEM. When putting the products and the technology in the cross matrix, six segments can be formed. These segments are (see table 1. Car tyres and cross-ply technology 2. Commercial and LCV tyres and cross-ply technology 3. Two and three wheeler tyres and cross-ply technology 4. Car tyres and radial technology 5. [...]