Tire Industry Capstone Project Marketing Essay

glance over manufacture Capst 1 Project Marketing EssayThe reveal examines the international devolve industry. the industry is ruled by 10 firms controlling 95 of the ball-shaped grocery store. First, the report analyses the fundamentals of the industry followed by an analysis of all(prenominal) of the clubs mathematical operation. The report later analyses the key supremacy divisors and indicators for the industry and grounds recommendations as to the way forward. presentmentThe have on industry is a large-scale commercialise that produces high property original and replacement tires with the use of natural and celluloid rubber. These tires produced from natural materials and synthetic rubber is greatly utilized by motorcycles, trucks, cars, earthmoving equipment, aircrafts, bicycles, and scooters. The tire industry is sh atomic number 18d out into different sections that take America, the Asia-Pacific, and Europe. This constitutes about 95% of the worlds market . Our list of ten selected ordinary companies has their headquarters represented among these markets, and thus the part of their sales per market varies. in spite of a global recession, a number of these tire firms has demonstrated a strong performance, and the recovery has especially been pronounced in the Europe and markets of Canada, united States and Mexico. The contents leave behind reveal in what atomic number 18as these ten public firms argon particularly delivered, and some ways in which they are still struggling, or fool room for some improvement. While the growth has traditionally been viewed in the West, the emerging markets in Asia much(prenominal) as China prove to be a battleground for revenue and sales growth of the future. The comparative leadership in this industry are Michelin and Goodtwelvemonth, with the lowest performing firms as Kumho and Yokohama. or so of the firms decisions have determined them in a favor open position to dominate opportunities ar ound the globe, age others have an overwhelming amount of disadvantage in meeting much(prenominal)(prenominal) goals.Performance requirements such as high-speed test, fortitude test, low pressure test, road hazard impact test, bead unseating test, and accelerate aging test. The endurance test show that the test results accession linearly in stringency based on the number of tire failure. However, the run performing firm is the Michelin meeting the performance criteria with over 90% in all the criteria. Michelin is technologically a better tire company compared to the rest, while Kumho is the least performing tire company.List of the Ten Public soused in the jade IndustryThe vellicate ten tire firms imply1. Bridgestone Corpo dimensionn2. Compagnie Gnrale des tablissements Michelin3. Good year Tire and coat Company4. Continental AG5. Pirelli C. S.p.A.6. Sumitomo Rubber Industries Ltd.7. Yokohama Rubber Company, Limited8. Hankook Tire9. Cooper Tire Rubber Company10. Kumho Tire Co. LtdKey Success Factors and Key Success IndicatorsFor the purposes of this research paper, we provide psychoanalyze three key success factors namely the financial factors, human resource and customer satisfaction. For each of the KSF set for analysis, there are at least three key success indicators as listed belowCustomer contentmentCustomer average rating as given through company annual surveysAwards for crucial success perplex among top 20 in the countryHuman resource Employee count growth Proportion of workers who have higher education Revenue per workerKey Financial factors slip away on equityReturn on assetLeverage ratioGross margin ratioAnnual sales growthThe capacity to adapt to new technologyInvestment in ITIn-house staff provisionBPR change initiativesCustomer satisfactionAverage scoreAwards receivedPosition in top 20Sustainability indices as reported in the several(prenominal) companies sustainability report for the last year.Percentage of material reusedPe rcentage of material recycled simplification in material useIn their similar research work, Ghosh, et al. (2001) came up with a distinctive formula for awarding the weights to individual critical success indicators. For the purpose of this paper, Ghosh, et als weightings on the respective KSI are adopted. The scores of these tree diagram factors are given tinct weight at 33.3% due to their comprehend equal grandness in the industry. However, the key success indicators in each of the three categories are given different weights as per their perceived importance in the realization of the respective KSF. All the KSF along with their associated KSI are scored in the excel sheet and weighted totals calculated.Some of the key KSFs that we have identified include sustainable practices, public perceptions, consumer responsibility, the economy, in addition to environmental stances and practices. The KSIs include the market share that each firm possesses, the number of countries in which th ey operate, the percentage of business generated to tires, as well as the number of employees per dollar sign of revenue and diversification of the board in terms of country of origin. These KSF and KSI were selected to in effect evaluate the relationship that between other external factors that will make tire production in the industries thrive. A key success factor could also include dealer or brand loyalty, and how well companys butt end retain their customer basis.It is believed that sustainable practices of how the wages and benefits exist will greatly promote the success of tire production, in addition to how the merchant mesh topology or tire distribution is handled considering the fact that production is in a flash controlled or is dispensed out on a franchise basis. When it comes to public perception, this deals with whether the brands from a specific region are favored, due to their ascribed value. In addition, the devotion to publicise in terms of dollars on a by-re gion basis would be an evoke KSI under the KSF of public perception. Consumer responsibility is how they respond to incentive programs offered by merchants, or where they turn to purchase whether they go in store or put over to online shopping.One other interesting KSF that we are concerned with is the environment. What this means in terms of a KSI is the method and rate of scrap tire disposal. In addition, interest is the consumption levels of electricity, water, fuels or others necessary for disposal and manufacturing. However, it is anticipated that this KSF will majorly determine the long term success of tire firms. When it comes to the KSF of the economy, differentiating it from the internal pay of companies is not certain, using the KSI and KSF to assess and analyze performance in the tire industry is justified.Factors Driving ProfitabilityThe shammers in the tire manufacturing industry are operated out of a number of major centers, and in order for them to acquire and m aintain a profit, they must ultimately transact with corporate or smaller-consumers. Analyzing the growth rate and operating margins of the firms reveals that just as they are spread in where their boardrooms, headquarters, plants, and branches are located they likewise differ on where such revenue and sales are captured. To further complicate factors, some of the weaknesses saluteing these firms are regionally based, while others have a global reach and be the whole of their trading operations. Thus, the mixture of strengths and weaknesses go about the firms is ripe of both extreme differences in addition to some unavoidable similarities.Undoubtedly, one of the major factors that seem to light upon all the participants is the increase of costs of untoughened materials. In this context are staring(a) oil, rubber, and other inputs to the manufacturing process. While it is deserving of a separate discussion altogether, the price of one barrel of crude oil has been on the ris e amidst global conflict, uncertainty, and other issues. This is a necessary input in the manufacturing of tires and it is not comfortably replaceable. A direct result of this factor that drives (or threatens) profitability is that the price of products tends to increase as the surge in cost of raw materials is passed on the consumers. some other factor driving profitability then is the sheath of market segments on which the tire manufacturer focuses on. For example, some of the firms such as Kumho and Yokohama have laid much dedication towards niche markets such as construction, or others, that may be willing to fork over more money for a higher character product.Due to the diverse approach of these tire manufacturers we placed much emphasis on the financials aspect. More than the fact that these figures were, on the whole, flourishing to locate, they are closely connected with a phenomenon that will soon confront the industry. This issue in the horizon is that of so-called u nfunded pension and retreat benefits. As a result of this impending crisis, we determined that the financial conditions of firms would be closely related to how they may overcome such.One other intellectual we determined that this was a crucial factor of performance was that the baby boomer generation concept would imply that a large group of regular workers would, at the same time, attempt to cash out on such benefits. It means that firms with a high debt-to-equity ratio have less supplement to move around funds to overcome a shortfall when it comes to paying out employees on a mass-scale. Likewise, those with relatively lower revenues would have a particularly challenging time to maintain their operations and to fund such retirees.Some other key performance indicators we determined had signifi standce was the relative market share of each firm, in addition to the number of countries where operations existed. We figured these were grave given that some of the more successful firms such as Bridgestone are more diversified geographically. The reason this is important can also be understood in the context of global economics. If one is operating a firm such as Kumho or Yokohama and the Korean or Japanese region respectively endures some domestic market turmoil, it is marvelous that the average hack of sales from international markets will be able to keep them from reporting negative financials, or even facing insolvency.A damaging annual period will not moreover weaken a firms reputation or brand image, but will also cause the company to struggle to keep the support of investors potentially coming with major consequences. On the other hand, as Bridgestones record demonstrates, having equal or at least some level of balanced archetype across the globe means that the only way they will importantly suffer is if there is a financial crisis or some type of market volatility on a global scale. Even so, it is unlikely that such a disaster would have equal ef fects in each continent or country, or that it would occur simultaneously. It means that in the wake of disaster, a firm that is well-spread across the globe would be able to earn a profit in some areas, while losing in others, and be able to maintain its existence.A further key performance indicator of interest is the customer segments facing the tire manufacturing industry. For example, there has been the trend for companies teaming up and pooling their productive resources in order to transact with high-ticket market segments such as the airline industry. We determined that this key performance indicator is derived out of the Porter force of bargaining power of buyers. It is also directly connected and can help firms individually, and overall, to overcome the struggles that come from increasing raw material and commodity prices, globally. If carefully constructed, such agreements between rivals can back up in overcoming their mutual threats, and allow them to devote more resourc es and attention to important fields such as research and development, or creativity. Subsequently, more expedient technologies and more desirable products will be churned out, in a in return (or internationally) beneficial manner that will allow each industry player to maximize their own chosen attribute of differentiation. For example, some firms may devote much energy towards passenger cars, while another focuses on non-highway equipment, or high performance tires. If working together can help to help the hurdle of increasing input prices in the manufacturing process, there will be a net benefit on the industry in the quality and the number of products disseminated to the market segments.BibliographyDatamonitor Compagnie Generale des Etablissements Michelin. Company Profile. effect project 5 Aug 2011.Datamonitor The Yokohoma Rubber Co., Ltd. Company Profile. Publication Date 24 Feb 2012.Datamonitor Bridgestone Corporation. Company Profile. Publication Date 29 Jul 2011.Ghosh, B. Liang, T., Meng, T., Chan, B. (2001). The key success factors, distinctive capabilities, and strategic thrusts of top SMEs inSingapore. Journal of Business Research. Vol. 51(3) 209Marketline Kumho Tire Co. Inc. Company Profile. Publication Date 31 May 2012.Porter, M. E. The Five Competitive Forces That Shape Strategy. Harvard Business Review, January 2008. addition and exhibitsTire IndustryNAICS Code 326211Top Ten Companies1. Bridgestone Corporation2. Compagnie Gnrale des tablissements Michelin3. Goodyear Tire and Rubber Company4. Continental AG5. Pirelli C. S.p.A.6. Sumitomo Rubber Industries Ltd.7. Yokohama Rubber Company, Limited8. Hankook Tire9. Cooper Tire Rubber Company10. Kumho Tire Co. Ltd