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Bridgestone corporation's strategy - Assignment Example

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The corporation deals in a range of products and operations, including, tires and other diversified products. The company manufactures tires and tubes…
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Bridgestone corporations strategy
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Bridgestone’s Corporation Strategy Bridgestone’s Corporation Strategy The Bridgestone Corporation is a Tokyo-based company established in 1931and the current global leader in the global tire market. The corporation deals in a range of products and operations, including, tires and other diversified products. The company manufactures tires and tubes for passenger cars, construction and mining vehicles, trucks and buses, agricultural and industrial machinery, motorcycles, aircraft, among others.
One of the key competitive strategies for Bridgestone Corporation is vertical integration. Vertical integration relates to the ability of a firm to extend backwards into the sources and supplies of its strategic materials and/or forward into the supply chain outlets of the final product to the end users (Rudie, 2003). Bridgestone Corporation is one of the most vertically integrated companies in the tire manufacturing industry. The Corporation engages in backwards integration through internal manufacturing and production of key raw materials and intermediate materials used in the production and development of its strategic tire products. According to the 2014 Bridgestone data report, the corporation operates several plants around the globe, which engages in the manufacture and supply of raw materials and intermediate materials into the company’s tire manufacturing plants (Bridgestone Corporation, 2014). The corporation has a total of 18 raw materials plants distributed across America’s (7), Europe(1), Middle East/Africa/Russia(1), Asia Oceanic(7) and Japan (2). The Saga plant, based in Miyaki-gun, Saga, is the Corporation’s leading manufacturer and supplier of steel cord material used in the development of the tire products. Other raw material manufacturing plants held by the subsidiaries include Bridgestone BRM Co., Ltd., Bridgestone Tread System Co., Ltd., Japan Mould Industry Co., Ltd., Bridgestone Plant, Engineering Co., Ltd., and Asahi Carbon Co., Ltd (Bridgestone Corporation, 2014).
The backward vertical integration strategy assumed by Bridgestone Corporation has enabled it to gain a competitive advantage in the global tire manufacturing industry. Backward integration enables the Bridgestone Corporation to ensure stability in the supply of high quality steel cord materials (Rudie, 2003). In addition, vertical integration enables the Corporation to focus on developing innovative raw materials for the development of the strategic tire products, and ensuring smooth running of its operations. Lastly, vertical integration enables the Corporation to optimize its internal resources and create expansion of its business operations (Rudie, 2003). Nevertheless, backward vertical integration has three main setbacks (Rudie, 2003). Firstly, full investment into manufacturing of raw materials ties the company resources, thus increasing the business risks and limits the ability of Bridgestone to commit financial resources to significant investments. Secondly, focus on in-house manufacturing activities limits the Corporation’s response to customer demands for variety and product diversity. Thirdly, backward integration limits the manufacturing flexibility of the Corporation thus lengthening the new product development cycle.
References
Bridgestone Corporation (2014). Bridgestone Data 2014. Retrieved on August 2, 2014 from ` http://www.bridgestone.com/corporate/library/data_book/index.html
Rudie, K.H. (2003). Vertical Integration, Outsourcing, and Corporate Strategy. USA: Beard ` Books Read More
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