In 2025, our world will have considerably changed. We already have strong evidence of this: In fact, mobility markets are growing fast; urbanization, with all of its related challenges, is developing rapidly; powerful environmental pressures translate into increasingly strong regulations; social pressures continue to make companies like ours a real reference for people; the digital revolution is accelerating, potentially creating new competitors that we may not even expect today; markets are increasingly volatile, complex, uncertain and fast-changing because of the acceleration in knowledge, itself driven by new technologies.
Michelin is in a position of strength to meet these challenges. We have everything we need to win, provided that we immediately start adapting our behaviors to this new situation while upholding our values of respect.
That’s why I want to share with you our vision for the Michelin of tomorrow.
This future is already becoming our daily reality. It’s more important than ever for us to be clear about who we are, why we are here together and what our strategy is.
It gives meaning to our actions, day after day. We believe in mobility as a driver of progress, we believe in innovation that inspires us and differentiates us, we believe in the uncompromising quality of our products and services, and we believe in providing everyone the opportunity to express their talent. Our strategy follows. Its aim is to sustainably enhance our customers’ mobility while incorporating our Michelin Performance and Responsibility ambitions. It will be deployed in four areas.
1 - Provide our customers with tires that truly meet their needs
Our goal is to achieve a 20% increase in revenue from our tire business by 2020.
Thanks to our capacity for innovation and our understanding of tire usage, we are able to bring to market products that are closely aligned with our customers’ expectations. We know how to do it. We have delivered this across all product lines. The MICHELIN Premier, the MICHELIN CrossClimate, the MICHELIN X Line Energy and the MICHELIN XDR250 are just a few examples of this approach. At the same time, we have substantially improved time to market, which played a key role in our growth in 2015. These efforts must continue.
We anticipate changes in the automobile market. Regardless of propulsion systems, which are increasingly electric, and regardless of the vehicle’s level of autonomy (we know that autonomous vehicle technology is already available), these changes are driving us to achieve excellence and they help increasingly showcase our energy-efficiency technologies. Tire performance is becoming a key component of overall vehicle performance. All carmaker executives are confirming it...
In this context, we need to ensure that the information that “connected” tires provide to new mobility ecosystems is leveraged by the technological systems that we, at Michelin, will be the first to master.
2 - Tire-related services and solutions that further enhance mobility
Our goal is to double revenue in our services and solutions business by 2020.
Service has been part of Michelin’s DNA for 125 years, and we intend to leverage the digital revolution, which provides us with new opportunities. The Effitire™, Effifuel™ and Effitrailer™ offers deployed by Michelin solutions, as well as the MICHELIN TIRE CARE offer for trucks, provide our customers with tools that optimize tire management while also enhancing safety, increasing productivity and lowering costs. These solutions also respect the environment.
We all understand that in this area, we also need to effectively use digital tools because they help manage a fantastic amount of data, which, in turn will provide our customers with new value-creation opportunities. But there is a real risk of eliminating the market’s middleman. New competitors may emerge and capture the value of a customer relationship that we would no longer control, and this would push us down to a second-tier supplier position. We’ve learned a lot thanks to the acquisition of Sascar in Brazil. Most importantly, we’ve learned how to effectively deploy the technological platform that supports its business. We must build our presence in this market faster.
3 - All the activities that enable our customers to enjoy unique mobility experiences
Our goal is to triple the revenue generated by these mobility experience businesses by 2020.
These experiences rely on an incredibly rich heritage, stemming from our maps and guides, which were created more than 100 years ago by the Michelin brothers to assist customers on the road. These experiences raise the awareness of the MICHELIN brand. They also present an incredible opportunity to establish a close relationship with customers by offering services that assist them before, during and after their travel.
Simply put, we want to become a distributor of choice in terms of mobility experiences!
It’s up to us to develop this business with the objective of making it profitable. The potential is significant. That was the reason for acquiring BookaTable and for developing ViaMichelin. By effectively using digital tools and by carefully integrating them into broader mobility ecosystems that enhance the value of all of our offers, we can ensure its profitability.
4 - leverages our expertise in high-technology materials – in particular those involving elastomers
We will be proactive and assert our technological leadership in the area of high technology materials, which we can also provide to other actors in the mobility sector.
Along with our vast expertise in tire architecture, our exceptional knowledge in materials is currently applied mainly to tire development because it differentiates our products from those of our competitors.
By focusing on customers we have helped stimulate and accelerate our capacity for innovation. In this respect, let’s mention the important developments we have made in synthetic and natural rubber as well as in molds, cables and textiles. I would also like to mention our research leadership in biomaterials and our ability to manage state-of-the-art production processes, such as the 3D metal additive production or the process that has enabled us to create the Tweel, a perfect example of a product based on technological materials. While it may not be sufficiently profitable just yet, the Tweel has already found a market.
With this in mind, to deploy our strategy in a powerful manner, we must transform our operating modes and quickly adapt our behaviors while upholding our purpose and our values.
That’s the objective of the four progress initiatives launched in late 2015. Each of us must be convinced, that the success of our transformation will be achieved by putting the customer at the heart of our business, leveraging the digital transformation, simplying our structures and processes, and empowering employees.
4 progress initiatives :
- Putting the customer at the heart of our business.
- Leveraging the digital revolution.
- Simplifying our structures and processes.
- Finally, empowering employees.
Yes, Michelin is changing but Michelin remains true to its purpose and to its core values.
Implementing this strategy and the major improvement paths that support this strategy, doesn’t mean we can ignore our core values. First among our values is respect for people. That is the link that binds us and ensures our unity.
Extract of Jean-Dominique Senard’s speech, CEO, at the International Bib Forum 2016