2012 plan outlines Bridgestone’s aim to be ‘undisputed no.1’
Bridgestone Corporation’s 2012 Mid-Term Management Plan (MTP2012) leaves little scope for misinterpreting the company’s aim. In its latest plan, announced 18 October, the Japanese firm states that its ultimate goal is to become the “undisputed world number one tyre and rubber company in both name and reality.” The plan covers the five years from the start of 2013 to the end of 2017, and Bridgestone says MTP2012 reflects “changes in the operating environment” since the formulation of MTP2011.”
To facilitate its aims of being a “truly global corporate group,” Bridgestone says it has reformed its organisational structure, formulated mid-term management plans and refined its corporate philosophy. Moreover, the company reports making “strong progress” toward accomplishing its immediate management goal of achieving a six per cent return on assets in 2012.
As mentioned above, Bridgestone took changes in its operating environment into account when developing MTP2012, and the company says it “identified the current operating environment as critical time to advance further management reforms.” Following on from initial reforms made to the group’s governance and operations, which began in 2006, the next round of management reforms to be implemented constitute what Bridgestone calls “second phase” transformational reforms.
“In order to effectively address the challenges of the current environment, and the challenges that will be faced in the future, the group will implement reforms centred on the principles of flexibly responding to economic fluctuations and creating new value for customers,” explained Bridgestone in a statement. “Through these efforts, our goal is to become the absolute and clear leader – in Japanese, ‘dantotsu’ – in all our industries.” The word dantotsu can be approximately translated as meaning ‘better than the best’.
Bridgestone adds that one particular area of focus will be leveraging the benefits to be realised through vertical and horizontal expansion. “We will add further depth to the initiatives implemented last year, and accelerate our progress in these areas through a commitment to technology and business model innovation.”
Specific aims include innovation in technologies related to raw materials, products and services. The first of these includes the diversification of natural rubber production, a shift from fossil resources to renewable resources; in regards to products, Bridgestone aims for the “enhancement and expansion of strategic products that demonstrate technological superiority,” such as the air-free concept tyre; services refers to items such as Bridgestone’s tyre printing technology, and the company says it also intends to implement tyre technology that provides drivers with real-time information regarding road surface conditions. MTP2012 also addresses Bridgestone’s business model. The company aims to further its fleet solution packages, combining new tyres, retreads and maintenance services. It also intends to create “new customer value” by combining Bridgestone products and services in the mining sector.
A return on assets of more than six per cent and to “improve further” is one of the goals outlined in MTP2012. Furthermore, the plan calls for net sales to increase by more than five per cent annually and to achieve an operating income ratio of ten per cent “as early as possible”, with “improve further” the wider target. An average of 250 billion yen (£1.97 billion) is to be set aside for capital expenditure, with approximately half this amount directed to strategic tyre sector projects.