Our society is experiencing many crises: economic crisis (oil shocks), financial (financial crisis), technological crisis etc. Yet these crises are not unique to the macroeconomic sphere. They affect businesses at a micro level. This was the case with many companies, like Buffalo Grill in 2002, Michelin and more recently the Formula 1 Grand Prix in Indianapolis.
One of the aspects for concern during a crisis is communication. This is to interact with the parties involved and concerned. It can guide the direction it takes a crisis: the threat or opportunity for the company is what we'll look through this case, by looking more specifically at the case of Michelin.
In 2005, Michelin had to cope with a crisis during the Formula 1 Grand Prix at Indianapolis in the United States. Indeed, after a miscalculation, Michelin had to make choices impacting its image in an emergency. Being a major French tire abroad, this crisis had an impact on its brand image.
Michelin is a multinational OEMs tires from France and currently holds more than 20% of the global market share, placing itself in a leadership position. The company produces all type of tires, for passenger cars, airplanes, racing cars.
The consequence in terms of crisis management is no less for a company with a good strong reputation any crisis is quickly linked to its image. In addition, a crisis in one of these market segments may have repercussions on all the products and its brand image.
The problem of the withdrawal of 14 teams at the start of the Formula 1 Grand Prix in Indianapolis spread rapidly across the globe. The impact of the proposed solution to this crisis by Michelin was different.
Across the world, including the United States in 2000, Michelin was the third brand name mentioned spontaneously after Coco Cola and McDonalds. The Americans were committed to the company and it was difficult to envisage any imperfections. The Michelin tires were seen at the forefront of technology and the Americans were big customers accounting to 30% of sales.
During the Grand Prix Formula 1 on the Indianapolis Motor Speedway the storage space that were equipped with the Michelin tires encountered problems in connection with their tires on the corner number 13.
These problems which could to lead to very dangerous for the drivers were analyzed by Michelin. This analysis took time and the issues raised were not good. To preserve its brand image and understand the risk to the race drivers was rigid.
There were various solutions offered by Michelin to remedy the problems encountered. Finally, the communication from Michelin was honest, fast and transparent. The fact that the company cared about the security of the drivers at the expense of money and competition was a credit to the company. Michelin maintained consistency and its values throughout the year by this communication
Telling the truth, acknowledge the faults, consistency of messages and support from its partners, despite the sanctions promised, were factors for a successful crisis communication by Michelin
Tags: Michelin, analysis of crisis, crisis communication
[...] Conclusion: A transparency for the benefit of Michelin Increasingly, markets are demanding more transparency in the accounts, as well as during crisis situations, which is not always easy to respect, due to the complexity and speed of decision making. What can be noted in this case is the choice of Michelin to keep its course of action and communication on one of its major values "security". Thus the image of security, both from a legal standpoint, and business or image standpoint is very important on the tire market; not only in the U.S. but also worldwide. [...]
[...] - The ability to change tires at regular intervals during the race. This solution was rejected because it reflected a lack of security from Michelin. Indeed, this alternative is allowed only when security problems are found and therefore did not represent the image of the material that is to say material quality and safety. - The possible solution for Michelin was to slow its drivers in the "banking", a solution considered too dangerous. - The installation of a chicane at turn 13 ยบ. [...]
[...] How will Michelin handle this crisis? 1.2 A leadership position • Michelin, the world leader in its field Michelin is a multinational specializing in tires, which originated in France. It currently holds 20% of the world market, ranking as the leader. The company produces all types of tires, from passenger cars, to airplanes or racing cars. In terms of crisis management this does not have any consequence. In fact as it enjoys a great reputation, any crisis is quickly linked to its image. [...]
[...] • The principle of prevention in order to prevent risks. This principle involves taking preventive measures in order to assess the risks the company may face. This principle allows us to anticipate risks. • A crisis could have been set up, since the problem has not been adequately anticipated and Michelin has sufficient resources (financial and human) in order to encompass all the problems and run a good organization so that its team may fight the crisis without letting it grow. [...]
[...] Possible solutions The Michelin Group expresses its willingness to contribute to the advancement of mobility. It thus combines its unique expertise, skills, resources, a credit of trust and constantly changing technological expertise. That is why we think Michelin has adopted the correct strategy by refusing proposals so as not to lose credibility and remain consistent with its positioning. However being a consistent company in Michelin could have put in place other strategies such as: • A timing strategy in order to be assured at all times of any risk whatsoever and to reduce the vulnerability of the crisis by responding quickly and properly if problems surfaced. [...]
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