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Detailed SWOT Analysis of Michelin – One Of The World’s Leading Tyre Manufacturer

by | Case Studies | 0 comments

In our previous blog, we had done a complete SWOT Analysis of India’s largest tyre manufacturer, MRF Tyres. In this article, we are going to break down the SWOT analysis of Michelin – One of the World’s leading tyre manufacturers.

The history started way back in 1889 by the Michelin brothers named Édouard Michelin and André Michelin from manufacturing tyres for bicycles and horse-driven carriages to manufacturing tyres for space shuttles. And it has now created a benchmark and is the world’s second-largest tyre manufacturer.

Furthermore, for a brand to be recognised and to be in the market every company spends some money on effective marketing methods. And in the current trend digital marketing is one of the best ways where the brands are being so active, and if you’re interested to know about digital marketing check out our Free MasterClass on Digital Marketing 101 by Karan Shah, CEO, and Founder of IIDE.

If you want to learn more about how Michelin becomes a successful brand. In this blog, we will learn the SWOT analysis of Michelin and try to find what you are looking for. Before that let us learn more about the Michelin brand, founding, products, financial status and competitors.

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About Michelin

SWOT Analysis of Michelin - Founder - The Michelin Brothers
(Founder – The Michelin Brothers, Source: Michelin.com) 

Whenever you want to travel,  what you expect is comfort and luxury and Michelin is one of them which provides comfort on roads and withstands any situations for the passengers inside the vehicle. 

Till now Michelin has produced 166 million tyres including space shuttles, aircraft, automobiles, heavy equipment, motorcycles, and bicycles, through its 117 manufacturing facilities which are located all over 26 countries.

Most MotoGP fans have seen and heard the name of Michelin as it is the official tyre supplier in the MotoGP. This shows the people their market presence and it was not easy for a company to sponsor for a MotoGP League. Being one of the largest and leading tyre manufacturers, they also marked their presence in lifestyle and travel through Tabel Hotels.

Quick Stats on Michelin
Founder Édouard Michelin and André Michelin
Year Founded 1889
Origin Clermont-Ferrand, France
No. of Employees 124,000+
Company Type Public
Market Cap $30.81 Billion (2021)
Annual Revenue €20.47 Billion (2020)
Net Income/ Profit €625 Million (2020)

 

SWOT Analysis of Michelin - Michelin Tyres


Products & Services by Michelin

  • Tyres
  • Michelin-Lifestyle
  • Travel Guide -Tablet Hotels


Competitors of Michelin

  • Bridgestone
  • Goodyear
  • Yokohama
  • Pirelli
  • Apollo Tyres


Now that we understand the company’s core business, let’s delve into the SWOT Analysis of Michelin.


SWOT Analysis of Michelin 

Talking about Michelin’s business, let’s understand how this corporation can cater to different individuals using SWOT analysis. The SWOT analysis of Michelin helps us to understand companies through the lens of internal and external factors. Strength and weakness are based on internal factors whereas opportunities and threats rely on external factors of the bank.

SWOT Analysis of Michelin - SWOT Infographics of Michelin

Below is a step-by-step detailed guide to help you with the SWOT analysis of Michelin.

Strengths of Michelin

Michelin has numerous strengths that help it to thrive in the marketplace. These strengths not only help it to protect the market share in existing markets but also help in penetrating new markets. Some of the strengths of Michelin are 

  • A Global Footprint: With 9 R&D hubs around the globe, 117 manufacturing sites in 26 nations, a retail presence in 170 nations and 124,000 workers worldwide, the Michelin Group is currently present on every mainland.
  • Quality Products & Features: Michelin is a customer-centric organization, they believe in providing uncompromising quality to their customers. Michelin never compensates with the high priority features like grip, fuel efficiency, durability, endurance, noise control.
  • Innovation: Michelin invests largely in their R&D and they research more innovative features which mainly focuses on the endurance factor. They are innovating passionately to make it securer, more efficient and more environmentally friendly.
  • Customer Needs: Michelin focuses on customer needs and it has various segments for all types of vehicles which drives the business from a global and local perspective.
  • Motorsport: Michelin is famous for its participation as a sponsor and installing Michelin tyres in cars of various motorsports such as from 1972 to 2008 in MotoGP, F1 races, endurance racing and rallying. Official tyre supplier and world’s championship winner shows the durability of Michelin tyres and a strong financial groundwork.
  • Business Beyond Tyres: Michelin has started exploring the market and entering in other products beyond tyres such as tour guides, Michelin road maps, tabel hotels etc. This tells us that Michelin is earning from its focus business – tyres, which is why it can explore other businesses too.     


Weaknesses of Michelin

Weakness is the area where Michelin can improve upon. Some of the weaknesses of Michelin are

  • The Lack of Flexibility: Michelin has built good recognition in the past but in recent years Michelin has been struggling to market their products at the same wavelength as before. Their quality of tyres is still maintaining its standards but they’re not able to keep up with the recent trends which have led to their competitors seizing the market share.
  • Quite Expensive: As cost is one of the important factors for the lower and middle-class families, it can try to reduce the cost in marketing strategies and focus on cost-reduction, so that the products can get affordable for every income segment.   
  • Lack of Strong Presence in Some Markets: Michelin focuses mainly on Europe and USA which in turn fails in capturing the emerging market and later it feels difficult to show their presence in capturing the emerging markets like India.
  • Product Failures: In the near past Michelin faced some product failure issues which were reported by many companies. Some brands have tied up with Goodyear due to the product failures which affected Michelin very badly. 


Opportunities for Michelin

Opportunities are potential areas of focus for a company to improve results, increase sales, and ultimately profit.

  • Achieving External Growth: Through a dedicated group of recognized experts, lawyers and tax specialists, Michelin should achieve external growth, particularly in the form of mergers & acquisitions. Doing this will help Michelin build value and develop growth across its activities. 
  • Increase in Vehicle Sales: The developing countries are the most lucrative markets for most of the car manufacturers which increase the sales of cars. The need for automobile parts does not seem to end as of which tyre manufacturers can benefit from it. 
  • Sustainable Development: The growth and development of people, monetary and operational performance, and the favourable contribution of the group’s activities to the planet and its inhabitants will help establish the image of Michelin as a sustainable corporation.
  • Innovation Strategy: Michelin is continuously working on the innovation of sustainable solutions to fully meet the needs of customers. Such dedicated innovations will surpass the competitors like Bridgestone and ensure Michelin’s long-term success.
  • Growth in EV Industry: We see a tremendous change in the market that everyone is adapting to the change which increases the sales for Electric Vehicle and tyre manufacturers are directly going to benefit from it which increases the growth of the company and healthy competition in the market.


Threats to Michelin

It is an environmental factor that can be harmful to a company’s growth. Some of the threats to Michelin are 

  • Heavy Competition: The number of players entering the tyre manufacturing industry is increasing rapidly so there is heavy competition in the market. In the recent decade, Bridgestone has been outperforming Michelin and such a heavy competitor is a threat for Michelin.  
  • Cheaper Product Availability: Many individuals look for a cheaper option for any product or service. Although the quality of the product is great the consumer is ready to compromise it if a cheaper option is available. If Michelin doesn’t go with value-based advertising they could lose the market share to cheap rip-offs.
  • Cost of Raw materials: Rubber is the key raw material in manufacturing tyres; if the cost of the raw material increases it could lead to great loss for the company. Mainly the production of tyres could come to a standstill leading to lack of sales.


Thus we came to the end of our complete SWOT analysis of Michelin. Let us conclude what we have seen.

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To Conclude

Overall the automotive sector is one of the biggest and growing sectors and people might change from non-renewable sources to renewable sources but some of the main components in a vehicle are not going to change.

Michelin, one of the largest and leading manufacturers needs many stores and a digital presence to capture the other markets. Michelin is one of the oldest tyre manufacturing companies which has gone through many ups and downs in its 132 years of journey and still withstands and dominates in many markets. There are some challenges, which it can overcome to capture the global market.

One way to overcome challenges is increasing digital marketing presence. By tapping into the digital era and creating a social media presence on several platforms it can grow its market. Many brands are looking for people who are well-versed in digital marketing. So, If you want to learn and improve your skills in the field of digital marketing, check out IIDE’s 3 Month Advanced Online Digital Marketing Course to know more.

We hope this blog on the SWOT Analysis of Michelin has given you a good insight into the company’s strengths, weaknesses, opportunities and threats. You can also read our comprehensive study on the SWOT Analysis of JP Morgan Chase.

If you enjoy in-depth company research just like the SWOT analysis of Michelin, check out our IIDE Knowledge portal for more fascinating case studies.

Thank you for taking the time to read this, and do share your thoughts on this case study of the SWOT analysis of Michelin in the comments section below.

Lead Trainer & Head of Learning & Development at IIDE

Leads the Learning & Development segment at IIDE. He is a Content Marketing Expert and has trained 6000+ students and working professionals on various topics of Digital Marketing. He has been a guest speaker at prominent colleges in India including IIMs......[Read full bio]

Aditya Shastri

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