The manufacturing subsidiaries to be sold are Bridgestone Metalpha Italia S. As part of this transaction, Bridgestone has entered into a long-term tire cord supply agreement with Bekaert, which will ensure a stable supply of quality cord and will enhance the on-going relationship of two companies which are leaders in their respective industries. The parties will complete the transactions once all applicable governmental and regulatory approvals are received.
Through the reformation, the company aims to enhance its business portfolio management in terms of its ability to adapt to changes in the business environment. By rebuilding the expense and cost structure, Bridgestone hopes to enhance strategic growth investments alongside growing exploratory business. Bridgestone Products. They produce two wheeler, four wheeler, off road, air planes tyres and have moved into more than just tires.
But the shift is still around the same area of expertise of tires. Now it has evolved into conveyer belt, pipe conveyer belt, readymade belt etc. In the tire business, the company operates fully integrated development, production and sales facilities, which cover all stages of tire production, including natural rubber, synthetic rubber, carbon black and steel cord. The company also is solidifying its captive retail distribution networks in North America, Europe and Japan.
This includes carbon black, steel and textile cord, and natural and synthetic rubber in addition to their production of tyres Davis, Positive aspect of vertical integration for the company are that it gives more control over the business with their own manufacturing and outlets as well. Another aspect is that there are positive differentiation as they have more varieties to offer as compared to their counter parts.
It also reduces cost and increases quality of the products. Disadvantages are also present in vertical integration. With more requirement of capital it costly and with more varieties of production, marketing and sales may also sometimes cause confusion.
The same variety may be being produced by another company and so people may not trust new produces as compared to old brands that have strong roots in the market. These are how Bridgestone Tires has been able to vertically integrate its products and some of the advantages and disadvantage that it has to overcome. Looking at its vertical integration Bridgestone has however been able to do well in the market and hold competitive advantage over its rivals in the market.
March Michelin company profile edition 1: Competitor Analysis. Bromsgrove: Aroq Limited. Davis, B. Bridgestone sees opportunities abounding. Bridgestone Corporation is one of the biggest auto and trucks parts manufacturing company which is situated in Tokyo, Japan. It was first established in by the late Shojiro Ishibash, the company is not only popular in auto parts only, it is also popular in yen, Tires manufacturing units.
They are global manufacturer of tires for big vehicles like trucks and other automobiles. From its annual report , we found that the total revenue was 3. The company has 15 thousand plus employees bridgestone, They are well known brand in market. As per my observation and analysis. Bridgestone corporation is vertically integrated when an industry consolidates and become matures, most of firms in that industry would have reached the limits of growth using vertical and horizontal integration growth strategy Zhang, Under the vertical growth strategy, two firms producing complementary product and one acquire or merge and form a big firm or form a complete firm, such as acquire between lather producing firm and shoe manufacturing company Grant, There is a great interdependence among inputs and a strong need to establish tight relationships in order to ensure that production and marketing continue to flow in any industry.
Within the tire manufacturing industry vertical integration is the concentration of multiple stages of production. The tire industry and each firm within that industry tends to be highly vertically integrated for many own and operate their own distribution centers and currently purchasing of rubber manufacturers to keep cost low.
Currently the demands with the tire industry are changing; the cost and production of raw materials are changing as well as the social requirements. With that being said, the tire industries are trying to gain control over cost of their raw materials. In the tire business, the company operates fully integrated development, production and sales facilities, which cover all stages of tire production, including natural rubber, synthetic rubber, carbon black and steel cord.
The company also owns integrated development, production and sales operations in other diversified businesses. With the establishment of a solely owned rubber manufacturing plant, the company expects to strengthen its ability to provide stable supplies of raw materials.
As a part of its geographic expansion programs, Bridgestone is also focused on setting up manufacturing sites in the low-cost but high-growth potential regions to enhance their competitiveness throughout their supply chain.
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