Bridgestone outlines tyre SBU consolidation in 2013MTP
Every year, Bridgestone releases a new Mid-Term Management Plan. Each covers a five-year period and incorporates rolling changes. In announcing its 2013MTP, Bridgestone says the latest plan reflects changes in the operating environment since the formulation of the 2012 mid-term plan and incorporates revisions and additional strategies and actions “as deemed necessary.” Amongst the themes covered by the new plan is the restructuring of Bridgestone’s tyre business strategic business units (SBUs).
In relation to changes planned for the Europe SBU, Bridgestone says the first step involves restructuring the European business and restructuring the Middle East and Africa business, followed by a second step of expanding the European SBU to include the Middle East and Africa SBU, Turkey and Russia. The company views the restructuring of the European tyre business as necessary as it, compared with other regions, falls far short of the ten per cent operating profit it targets for the 2014 to 2018 period.
Bridgestone will also prepare the China and the Asia Pacific SBUs for integration, and then as a second step integrate management structure. These and the European measures will reduce the number of regional SBUs from six to four – Japan, the Americas, Europe and Asia. No changes will be made to the specialty tyres SBU.
Other aims stated in the 2013 mid-term plan are the expansion of Bridgestone’s diversified products business, alterations to the company’s global management structure and establishing a clearer bond/linkage between and amongst the various parts of the company. Brand strategy, which Bridgestone views as currently featuring insufficient cooperation between the tyre and diversified products groups, will be more heavily integrated.
Financial goals for the years between 2014 and 2018 continue to include a return on asset target of at least six per cent – in 2011 this figure was just 3.8 per cent – and, as mentioned above, an operating profit target of ten per cent. The company plans to “consistently deliver” this level of result during the period covered, and further says it intends to “exceed industry average growth.”
Bridgestone’s Mid-Term Management Plan 2013 is available for download here.