Bridgestone

1. Describe the market of tire by segment.

Bridgestone manufactured tire in most sort of market segments; Consumer/Non-Consumer (Military), First market/Second market, Automotive/Airplane etc, Brand/OEM market, etc. However, Bridgestone did neglect regional market segment, Domestic/International market; the firm focused mostly on domestic market.

2. What were the reasons behind Bridgestone’s acquisition of Firestone? Do you support the decision? Why?

Enjoying tastes of dominant position in domestic market, Bridgestone seemed not to have an incentive to expand toward overseas markets. However, the company had to respond to a changing environment that Japanese auto maker shifted exports to overseas productions and increased amount of tire supply from foreign makers in order to soothe critics for unparallel trades and to reduce bargaining power of the supplier. Yet, Bridgestone had not built strong sales and production footholds in overseas markets at that time. Bridgestone should build internationalized sales and production capabilities in order to defend against probable threats and solidify its market position in a short period of time. The company originally intended to negotiate a joint venture with Firestone. Yet, due to intervention by Pirelli, Bridgestone decided to purchase Firestone without a thorough acquisition plan. Due to weak stands in overseas market and then needs for urgent reinforcement in international market, either strategic alliances or M&As with foreign companies was necessary. However, Bridgestone should execute with well-planned strategies.

3. Why didn’t Bridgestone have a larger export ratio to the US?

Lack of enough technology forced Bridgestone to focus on OEM production contract with more technologically developed foreign firms, a Goodyear so that, structurally, Bridgestone could not aggressively penetrate into the US markets with its own brand. In addition, Bridgestone’s dominance in domestic industry discouraged...