Bridgestone is renowned for its manufacturing of tires and hold 80% of the production line. 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.
"Bridgestone’s key operational strength is its vertical integration. 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. In addition, Bridgestone also boasts of one of the world’s largest company-owned and franchised tire retail networks (Anonymous, March 2007).”
The company also is solidifying its captive retail distribution networks in North America, Europe and Japan. Bridgestone’s competitors in the market such as Goodyear and Groupe Michelin have not done what Bridgestone has in their vertical integration plan. This includes carbon black, steel and textile cord, and natural and synthetic rubber in addition to their production of tyres (Davis, 2012).
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.
Davis, B. (2012, November 15). Bridgestone sees opportunities abounding. Retrieved from Rubber and Plastic News : rubbernews.com/article/20050906/NE...
For further actions, you may consider blocking this person and/or reporting abuse
We're a place where students share, stay up-to-date, learn and grow.
Bridgestone is renowned for its manufacturing of tires and hold 80% of the production line. 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.
"Bridgestone’s key operational strength is its vertical integration. 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. In addition, Bridgestone also boasts of one of the world’s largest company-owned and franchised tire retail networks (Anonymous, March 2007).”
The company also is solidifying its captive retail distribution networks in North America, Europe and Japan. Bridgestone’s competitors in the market such as Goodyear and Groupe Michelin have not done what Bridgestone has in their vertical integration plan. This includes carbon black, steel and textile cord, and natural and synthetic rubber in addition to their production of tyres (Davis, 2012).
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.
References
Anonymous. (March 2007). Michelin 2007 company profile edition 1: Competitor Analysis. Bromsgrove: Aroq Limited.
Davis, B. (2012, November 15). Bridgestone sees opportunities abounding. Retrieved from Rubber and Plastic News : rubbernews.com/article/20050906/NE...