Value Chain Analysis of Michelin Group Essay Example | Topics and Well Written Essays - 750 words

Value Chain Analysis of Michelin Group - Essay Example As per Value Chain Analysis there are specific activities that cumulatively determine the position of the company. These are the primary and secondary activities. Primary activities include inbound logistics, Operations, Outbound logistics, Marketing and sales and Service. The Support activities are Procurement, Human Resource Management, Technology Development and Firm Infrastructure. (Roberts, 134-35) The Value Chain Analysis of Michelin would be based on these criteria. The position of Michelin in the tire industry is very well placed. The main aspect of the success story of Michelin is that they produce quality materials at an affordable price and is wonderfully backed by very efficient team of after sales service. In addition to that Michelin is helped in an extremely positive manner from the field of advertisements. The Michelin Man can be enumerated as a icon in not only the tire industry but the essence has reached beyond that. However, it can be mentioned that the inability to tap the heavy automobile industry in a full extent remains a greater weakness of the company. In this context it should be mentioned that the Annual Report 2006 promises to better this particular sector. In today's world market of tire business Michelin holds a very prominent presence. With the current market being a $100 billion industry the position of Michelin is noteworthy. These two leading figures were followed by Goodyear with 17.2% of the market share. (King, 122) The rest of the market segments were divided among other average sized manufacturers with a cumulative amount 28.8% of the market share. Further more, it was reported that an additional 17% of tire sales was instrumented by local producers. (Lock, 245-46) Thus being a huge player if the world tire industry the effective Value Chain Analysis of Michelin becomes more important. The Value Chain Analysis can be enumerated as below: Inbound logistics of Michelin shows that the raw materials and storage and handling c harges of materials increased by about 12% from 2005 to 2006. On the other hand it was found that the Operations relating to the production of products was almost at par with the last few years (2002-2006) with an increase of 6%. (Annual report: 2002, 201)The same cannot be said for the operations outbound segment and there was an increase of 5% on the valuation of production channeling. However the Marketing and sales indicated that the company showed an additional usage of 9.6% for the means of promotion and advertisements. The services sector under the determination of Value Chain Analysis showed that the total valuation was raised by about 3% reflecting the developing market structure in favor of the company. (Kar, 201-205) The support activities when taken into consideration also show a similar amount of development in terms of net valuation for the company. The procurement factor reflected the variables that enabled Michelin to get the best possible materials for the lowest pr ice and in this context it ca be summarized as a net gain of 15% in relation to 2005.