International Business Country Analysis Assignment
Faisal333
Assignment2-Example4-Bridgestone.pdf
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Table of Contents
Executive Summary .................................................................................................................... 3 Company Description ................................................................................................................. 3 Background ....................................................................................................... 3 Products ............................................................................................................. 4 Financial Situation ............................................................................................. 4 Latest News ........................................................................................................ 4 Community Involvement ................................................................................... 5
........................................................................................... 5 Current Strategy .................................................................................................. 5 Research and Development ................................................................................ 6 Competitors/Strengths/Weaknesses .................................................................... 6 Critics of Strategy ............................................................................................... 6
............................................................................................ 7 Distribution Strategy ........................................................................................... 7 Product Attributes ............................................................................................... 7 Communication Strategy ..................................................................................... 8
.............................................................................................. 8 Production Location/Country Factors ................................................................. 8 Technological Factors ......................................................................................... 9 Products Factors .................................................................................................. 9
........................................................ 9 Employees ........................................................................................................... 9 Staffing Policy ..................................................................................................... 9 Incentive Policy .................................................................................................. 10 HR Philosophy .................................................................................................... 10 Impact on Host Country ...................................................................................... 10 Analysis ...................................................................................................................................... 10 Risks/Costs ........................................................................................................... 10 Benefits ................................................................................................................. 11 Recommendation and Conclusion .......................................................................................... 11 Work Cited ............................................................................................................................... 12 Appendices ................................................................................................................................ 14 Appendix A .......................................................................................................... 14 Appendix B .......................................................................................................... 14 Appendix C .......................................................................................................... 15 Appendix D .......................................................................................................... 15 Appendix E .......................................................................................................... 16 Appendix F .......................................................................................................... 16 Appendix G .......................................................................................................... 17 Appendix H .......................................................................................................... 17
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Executive Summary
Bridgestone Corporation is one of the largest multinational auto and truck parts manufacturer
internationally. Since 2014, Bridgestone Corporations has shown steady financial performance.
Despite the development of a more expensive economy, the increase of demand in tire sales offsets
the effects of rising commodities. As per marketing strategy, it operates as a major concentrated
retailer with many locations carrying their products in America, Europe, Asia, Oceania, Middle
East and Africa that sells various automobile parts that often need little to moderate modification
due to vehicle standards. Their approach to logistics is using both a short channel supply chain
where they can directly sell their high weight to value products to consumers and a long channel
where they also sell to retailers. In their human resources management, they chose to have a
geocentric approach and are committed to utilizing their strengths and competencies to address
health, safety and education issues in their communities. Due to the success of Bridgestone
Corporation internationally, it is encouraged for a developing country to be open to the
opportunities this company may offer.
Company Description
Background: Bridgestone Tire Co., Ltd. was established in 1931 in Japan by Shojiro Ishibashi
who used an English translation of his family name for the name of the company. As Japan's
automobile industry grew, Bridgestone Corporation expanded its business internationally to
become Japan's largest tire manufacturer. Due to its exponential growth, Bridgestone Corporation
merged with Firestone Tire & Rubber Company (Bridgestone, 2019). Its headquarters are located
in Tokyo, Japan and Nashville, Tennessee. The company currently has a business presence in over
150 countries, about 158,214 employees in its workforce, a steady annual net sales of over 44
billion Canadian dollars (Bridgestone, 2019) which is portrayed in Appendix A, and owns 20% of
worldwide market share (Marked by Teachers, 2015).
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Products: The Bridgestone Group provides quality tires and a vast range of products and services
with innovative technologies (Bridgestone, 2019). They manufacture products for consumer and
commercial vehicles. Between 2005 and 2015, Bridgestone launched at least 10 new products into
the market, introducing improved production and efficiency of the products. Certain products
require moderate modification according to the type of geography of the country but there are also
automotive parts that require little to no modification since they follow a certain standard of safety
and specifications.
Financial Situation: Bridgestone was listed on the stock exchange in October 2, 1961. Since 1989,
its stock price reached an all-time high of 5,433JPY (54.82CAD) in 2017 and an all-time low of
847JPY (10.66CAD) in 2001 (Markets Insider, 2019). Refer to Appendix B. The company has
shown resilience and steady growth in recent years earning a low to moderate risk stock investment
reputation.
Bridgestone strives to live up to expectations of shareholders by issuing stable dividend
payments targeting a consolidated payout ratio of 20% to 40%. Since 2010, the dividend per share
has increased 800% from 10 yen (0.13CAD) per share to 80 yen (1.01CAD) per share
(Bridgestone, 2019). Appendix C shows the appreciation of dividend per share since 2010.
As previously mentioned, the company generates stable annual revenues of over 44 billion
Canadian dollars of which 83% of sales in their tire segment and 17% of sales in their diversified
products (Bridgestone, 2018). The company ranks first place in the automotive manufacturing
industry when analyzed as a whole firm (Owler, 2019). It is evident that the company is one of the
leading competitors in the market and hold a significant power in the industry.
Latest News: Bridgestone has always been mentioned in the media through a positive light. In
August 2019, their tire plant in Bloomington, Illinois was recently recertified for continued
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Program as a Star participant. The Star recertification is a testament [of their] commitment to
creating a safe work environment and is a shining example of [their] core commitment to safety
Achieving this recertification is a testament that all teammates embrace safety as a core value.
[Their] high level of commitment to safety is a common value among all teammates, so [they] can
provide [their] customers with high-quality, safe tires. (CSR Wire, 2019). This demonstrates a
positive example for all firms to follow.
Community Involvement: Bridgestone strives to be an outstanding corporate citizen as part of
their core strategic pillars. They believe it is important that the communities in which they work
are great places to live. Their recognizable through environmental
initiatives, teen driver safety programs and long-standing support of local non-profit organizations
such as their partnership with the Boys & Girls Clubs of America and Bridgestone is Driving Great
Futures. Bridgestone focuses a significant amount of efforts on Corporate Social Responsibility
and community development.
Current Strategy: Based on Bridgestone corporate philosophy, they desire to be
-Totsu (the absolute and clear leader) in the
automobile manufacturing industry. Since automotive parts are a moderate modification product,
quick response to the changing local necessities is needed. Further modifications to their products
according to its market means continuous research and development. The Bridgestone Group has
about 180 manufacturing plants and R&D facilities in 26 countries and sells products in more than
150 countries worldwide (Bridgestone, 2019). The company focuses its concentrations in the
North American, European and Japanese markets due to the popularity of automotive in their
countries. Their goal is to cater to all markets based on each
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Research and Development: The firm has 6 research centers located in Japan, USA, Italy, China
and Thailand (Bridgestone, 2019) where the technology proficiency is rich and skilled workers are
abundant. In addition, they have 10 development centers located in countries such as Japan, USA,
Mexico, Brazil, Italy, Thailand, Indonesia and China (Bridgestone, 2019) where a mix of
affordable labour and technology is available. A map of R&D centers is available in Appendix D.
Bridgestone takes advantages of cheap labour and technologically advanced countries to further
enhance their research and development segment.
Competitors/Strengths/Weaknesses:
Michelin and Continental. Goodyear thrives in the American market, Michelin is the top
manufacturer in the European market and Continental is most dependent on the German market
(World's of Advertising, 2011). Despite this, Bridgestone still has a strong presence in the
American, European and Japanese markets. See Appendix E for the breakdown of sales by market.
A SWOT analysis states its strengths are strong roots, stellar testimonies from big firms, diverse
products, sustainable and eco-friendly approaches, and a strong brand name (mbasKOOL, 2019).
It also states the they fall short when it comes to lowering costs for more affordable prices and that
the company still needs to acquire major market shares in specific countries (mbasKOOL, 2019).
All in all, it is still a top competitor due to its innovations, differentiation of products and great
value creation.
Critics of Strategy: In their short-term strategy, they should minimize their production costs in
order to lower their sales price, increasing demand and profits in the long run. This can be done by
a transnational approach which tries to simultaneously achieve low costs through location
economies, economies of scale, and learning effects, differentiate the product offering across
geographic markets to account for local differences, and foster a multidirectional flow of skills
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between different subsidiaries in the fir (Hill, 2013). As per their
long-term strategy, it is advised that they try to dominate the automotive manufacturing industry
as the top manufacturer, and this can be done by creating a strong brand name and presence with
consistent products at exceptional prices.
Compa
Distribution Strategy: Bridgestone has a strong global presence in more than 150 countries in
Europe, America, Asia, Middle East and Africa. As previously stated, the firm has about 180
manufacturing plants and R&D facilities in 26 countries and sells products in more than 150
countries worldwide (Bridgestone, 2019). Since Bridgestone functions as a concentrated retail
system, the tires can be purchased within a short channel, exclusively from Bridgestone factory by
automobile manufacturers or within a long channel, through retail purchase for consumers by
import agents, wholesale distributors and retail distributors. Bridgestone India
Private Limited sells its products in India through its authorized distributors and dealers so that
customers get genuine products and warranty. Bridgestone distributes to factories, agents, regional
centers and dealers across India. Tires are sold through dealers and agents, given the investment
in advertisement they prefer to sell through leadership (mbasKOOL, 2019)
Product Attributes: Bridgestone produces high quality products, catering to the ever-changing
markets. That includes polyurethane foam for automotive seats and interiors, water hoses and
retreated tires for aircraft (mbasKOOL, 2019). They also supply Multi-Rubber Bearings for
installing in foundations to protect buildings from countries prone to earthquakes. For countries
with harsher weather and road conditions, they customize the tires to withstand these situations.
For countries such as Japan, which favours smaller vehicles, they customize their components to
be smaller in size. Bridgestone does not only manufacture tires as they have diversified products
such as hoses, bicycles and golf equipment. Whether they change a product based on their size,
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colour or logistics, they make sure all their products are up to product, safety and technical
standards in order to preserve their reliability image.
Communication Strategy: Bridgestone Corporation uses a number of promotion strategies such
as partnering up with other organizations, inquiring automobile companies for their need of parts
or mass media saturation.
Just like Bridgestone Tires, NFL players are built differently - they are built to perform
(Bridgestone Tire, 2019). The popularity of the NFL contributes to the influence of consumers to
choose Bridgestone tires over other brands. seismic
isolation technology that will be installed in new permanent structures that will host swimming,
diving, artistic swimming, volleyball and wheelchair basketball to ensure earthquake-ready venues
for Olympic and Paralympic Games Tokyo 2020 (Bridgestone, 2019). Since automotive parts are
a specialty product, they use a push strategy where they contact retailers and automotive
manufacturers in order to promote their product. Another tactic they use is media presence.
Commercials air globally to promote their product so consumers can be persuaded right in their
own homes. A big company like Bridgestone will have to use different promotion and
communication strategies to reach out to as many consumers as they can.
Production Location/Country Factors: The Bridgestone owns more than 180 plants in 26
countries worldwide. Over 150 countries have official dealerships where consumers can choose
Bridgestone tires for their vehicles. Aside its home country Japan, the company is present in other
countries in Asia, as well as Europe, the Americas, the Middle East, Africa, and Oceania (uTires,
2017). Due to its international presence, the company will need to modify instructions to the
operating country, deal with social and cultural barriers between local employees and foreign
executives and be wary of the political and economic situations.
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Technological Factors: Since technology plays a large role in automotive parts, Bridgestone
Corporation located its research plants in countries with advanced technology such as Japan and
China. heir products, are
located in countries with low-cost labour where they can achieve minimum efficient scale such as
China and Mexico. Since the company has many manufacturing locations, it is assumed that their
fixed costs are relatively low and can serve the world market from many locations.
Products Factors: Due to the nature of automotive parts, being a moderate modification product,
it is recommended to construct manufacturing plants near the local market to be able to respond
products have a low value to weight ratio,
exporting would create significant costs for the firm, therefore, in order to reduce cost per product,
a decentralization of manufacturing approach should be present. Manufacturing facilities should
be operating in various locations to reduce the distance needed to be travelled to reach the markets.
Employees: As of December 31, 2018, Bridgestone has 143,509 consolidated employees and
14,075 unconsolidated employees (Bridgestone, 2019). As per Appendix F, 20% of consolidated
employees are from Japan, 41% from America, 12% from Europe, Russia, Middle East and Africa,
and 27% from China, Asia and Pacific. Bridgestone is still working on their male to female ratio
in top positions but has improved slightly since 2016 as seen in Appendix G.
Staffing Policy: Bridgestone Corporation believes that diverse experiences, viewpoints and styles
them an important competitive advantage in the
marketplace, but also contribute to a rich work environment where they can all learn from one
another (Bridgestone, 2019). They are committed to maintaining an inclusive culture where
diversity is embraced and celebrated, enabling all Bridgestone employees to thrive. According to
a list on their website, the Board of Directors and Executive Officers positions are filled with
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various nationalities. This approach corresponds with a geocentric view which creates a strong
unified culture and informal management network.
Incentive Policy: Bridgestone Corporation focuses on contributing to a safer society by building
safer communities through services, products, and company/individual initiatives, creating
accessible and inclusive education by expanding education and training opportunities in order to
develop job and life skills, and promoting healthier communities by promoting access to the
resources people need to lead healthier lives (Bridgestone, 2019). The company has countless
programs that are implemented for better communities for expatriates and local employees.
HR Philosophy: The Bridgeston
composed by an integrated corporate team-oriented culture, creative pioneering and innovation,
decision-making based on verified on-site observations and decisive action after thorough planning
(Bridgestone, 2019). A visual representation is available as per Appendix H.
Impact on Host Country: ntric view combined with an employee-
centered corporate culture and corporate social programs, the host country would benefit if
Bridgestone were to open a firm in the host country in question. A transfer of technology and
knowledge would develop a more skilled workforce. A skilled workforce can contribute to a
Analysis
Risks/Costs: Since Bridgestone Corporation is one of the top manufacturers of automotive parts,
it could hinder the success of local or new businesses that are in the same industry. Air pollution
or water pollution would also be a problem due to the production plants that would need to be built
when entering the foreign market. This could decrease the quality of air or destroy marine life.
There will always be risks when an entity enters a foreign market and for that reason, the host
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country should take the necessary steps to minimize the negative impacts of a possible failed global
expansion.
Benefits: A developing country would benefit if it were to allow Bridgestone Corporation to enter
-how and inclusive
employee culture will create jobs for the citizens and develop a more skilled workforce. Its
programs such as creating schools for better education, rescue teams for poverty and disaster-
stricken places, and health screenings will create a greater standard of living for locals. The country
can improve their automotive and IT industry, infrastructures and economy. Such a presence may
Recommendation and Conclusion
As outlined in the report, it is believed that there are more benefits than costs associated with the
entrance of Bridgestone Corporation into a developing country. It gives the country a chance to
increase employment rates, standards of li The construction of new plants
will open jobs and its impressive incentive programs will create a more educated and skilled
society. Though all the benefits may seem attractive to a developing country, it should still take
the necessary precautions to protect local businesses and possible failure of a foreign company
entering a developing nation.
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Works Cited
Bridgestone. (2018, May). Bridgestone: Your Jouney, Our Passion. Retrieved from Annual
Report 2017:
https://www.bridgestone.com/corporate/library/annual_report/pdf/bs_annual_2017_opera
tional.pdf
Bridgestone. (2019). A Global Dream. Retrieved from Bridgestone:
https://www.bridgestone.com/corporate/history/index.html
Bridgestone. (2019). About the Bridgestone Group. Retrieved from BRIDGESTONE DATA
2019: https://www.bridgestone.com/corporate/library/data_book/pdf/BSDATA2019.pdf
Bridgestone. (2019, June 18). Bridgestone Technology Helping Ensure Earthquake-Ready
Venues for Olympic and Paralympic Games Tokyo 2020. Retrieved from Bridgestone:
https://www.bridgestone.com/corporate/news/2019061801.html
Bridgestone. (2019). Code of Conduct. Retrieved from Bridgestone:
https://www.bridgestone.com/corporate/library/corporate_governance/pdf/Bridgestone_gl
obal_code_of_conduct.pdf
Bridgestone. (2019). Financial Data: Dividend. Retrieved from Bridgestone Investors:
https://www.bridgestone.com/ir/financialdata/dividend/index.html
Bridgestone. (2019). Locations. Retrieved from Bridgestone:
https://www.bridgestone.com/corporate/locations/index.html
Bridgestone. (2019). Our Headquarters. Retrieved from Bridgestone Americas, Inc.:
https://www.bridgestoneamericas.com/en/corporation/our-headquarters
Bridgestone. (2019). People. Retrieved from Bridgestone:
https://www.bridgestone.com/responsibilities/people/index.html
Bridgestone. (2019). Products and Innovation. Retrieved from Bridgestone :
https://www.bridgestone.com/products/index.html
Bridgestone. (2019). R&D Facilities. Retrieved from Bridgestone:
https://www.bridgestone.com/corporate/locations/rd/
Bridgestone. (2019). The Bridgestone Essence (Corporate Philosophy). Retrieved from
Bridgestone: https://www.bridgestone.com/corporate/philosophy/
Bridgestone Tire. (2019). OFFICIAL TIRE OF THE NFL. Retrieved from Bridgestone:
https://www.bridgestonetire.com/nfl
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CSR Wire. (2019, August 6). CSR News. Retrieved from The Corporate Social Resposibility
Newswire : https://www.csrwire.com/press_releases/42305-Bridgestone-Bloomington-
Plant-Recognized-for-Safety
Hill, C. W. (2013). International Business: Competing in the Global Marketplace. New York:
The McGraw-Hill Companies.
Marked by Teachers. (2015). Bridgestone internationalisation strategy. Retrieved from Marked
by Teachers: http://www.markedbyteachers.com/university-degree/business-and-
administrative-studies/bridgestone-internationalisation-strategy.html
Markets Insider. (2019). Bridgestone Stocks. Retrieved from Markets Insider:
https://markets.businessinsider.com/stocks/bridgestone-stock
mbasKOOL. (2019). Bridgestone Marketing Mix (4Ps) Strategy. Retrieved from Marketing Mix
of Companies: https://www.mbaskool.com/marketing-mix/products/17169-
bridgestone.html
mbasKOOL. (2019). Bridgestone SWOT Analysis, Competitors & USP. Retrieved from
Automobiles: https://www.mbaskool.com/brandguide/automobiles/3851-
bridgestone.html
Owler. (2019). Owler. Retrieved from Bridgestone's Competitors, Revenue, Number of
Employees, Funding and Acquisitions:
https://www.owler.com/company/bridgestone#competitors
uTires. (2017, December 10). Who Made Bridgestone Tires: The Founder, Global Presence,
Best Products. Retrieved from Tires.com: https://www.utires.com/articles/made-
bridgestone-tires-founder-global-presence-best-products/
World's of Advertising. (2011, November 30). Bridgestone Competitors. Retrieved from World's
of Advertising: https://shadynassour.wordpress.com/2011/11/30/bridgestone-competitors/
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Appendices
Appendix A: Net Sales of Bridgestone in Japanese Yen
https://www.bridgestone.com/corporate/history/index.html
Appendix B:
https://markets.businessinsider.com/stocks/bridgestone-stock
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Appendix C: Dividend per share measured in Japanese Yen
https://www.bridgestone.com/ir/financialdata/dividend/index.html
Appendix D: s
https://www.bridgestone.com/corporate/locations/rd/
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Appendix E:
https://www.bridgestone.com/ir/financialdata/segment/index.html
Appendix F: (2016-2018)
https://www.bridgestone.com/corporate/library/data_book/pdf/BSDATA2019.pdf
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Appendix G:
https://www.bridgestone.com/corporate/library/data_book/pdf/BSDATA2019.pdf
Appendix H: ssion and foundations
https://www.bridgestone.com/corporate/philosophy/index.html
