TRENCO is situated in a particular context. Main actor during almost 50 years in Egypt, the company was able to handle private and public markets. Being the principal interlocutor with the Egyptian Armed Force and the general public sector, TRENCO profited from a great portfolio of clients. Furthermore, private car assemblers and automotive services played as a security of sales, at least until the introduction of PIRELLI in 1999 as the first competitor with a good awareness.
But TRENCO passed through difficulties. In 2010, the company went to bankruptcy (TRENCO accumulated losses exceeded 11 times its paid-in capital). Regarding to the new competitors that entered into the market (mostly Chinese companies) TRENCO hasn't been able to handle the competition. Of course, the price war was a main factor but the brand positioning of TRENCO was not optimal. The culture of TRENCO was quite idyllic: “Exceed customers' expectations - Deliver value - the best service and the most reliable tires - Being a Responsible Corporate…” We can see here a first problem of positioning which we will analyze after.
Competition
As we said before, the first competitor that changed the market in Egypt was PIRELLI which bought out shares of Alexandria Tires Company (ATC Inc.) the second Egyptian tire manufacturer, and brought Italian standard qualities to ATC Inc. TRENCO has been impacted from this alliance and started to lose market shares.
When imported brand, mostly from Asia, came to Egypt (as KUMHO, TIREX, PIRELLI-Asia, MICHELIN-Asia, and BRIDGESTONE) TRENCO faced a strong competition that leads the company to a very difficult situation.
[...] because TRENCO is a company from the country. The best solution was to advertise on this basis of trust and awareness of the population needs. The company had developed specific tires answering to African roads specificities. TRENCO was the first provider for several ministries, proof of quality and trust for the consumer. If we look at the ad bellow we cannot see any visible advantages or anything that could have lead the consumer to identify the product to a major, trust worthy, non-expensive company. [...]
[...] So TRENCO developed licenses. Exclusive distribution agreement or partnership with a car assembler might have been a good solution to place products in a high value. Conclusion “The global tires and rubber market rebounded from market decline in 2009 to post a strong market growth of in 2010 generating total revenues of $ 124.7 billion”[1] TRENCO which was an Egyptian (government related) company has been bought out by the French Michelin because of its uncertain financial issues. The company went down because of a lack of innovation, with products but mostly because of their marketing strategy unchanged since 1956. [...]
[...] The different Marketing Mix Strategies for TRENCO. This includes the Product, Price, Marketing Communications, and Distribution Strategies. In this section we will offer one possible evolution of TRENCO's marketing mix and we will try to analyze the strengths and weaknesses that the company should have taken care of. Product TRENCO's products consist of both replacement and original equipment tires for cars, trucks etc. But there are too many products, or at least not enough differentiated. The result is confusion in the consumer mind. [...]
[...] Of course, the price war was a main factor but the brand positioning of TRENCO was not optimal. The culture of TRENCO was quite idyllic: “Exceed customers' expectations - Deliver value - the best service and the most reliable tires - Being a Responsible Corporate ” We can see here a first problem of positioning which we will analyze after. Competition As we said before, the first competitor that changed the market in Egypt was PIRELLI which bought out shares of Alexandria Tires Company (ATC Inc.) the second Egyptian tire manufacturer, and brought Italian standard qualities to ATC Inc. [...]
[...] - The pricing strategy must be aggressive to beat the competition. Indeed, Asian competitors are well armed on this matter, but the difference should have been to develop associated services where TRENCO had advantages regarding to the culture comprehension. - The advertising was, to my mind, the key of the first TRENCO's weakness. Leads were numerous, for example: o Egyptian made products o Knowledge and field of expertise for African roads specificities o Partnership with the ministries, proof of quality TRENCO is manufacturing tires, so speaking of SBUs we can only identify one business unit even if the company developed several models. [...]
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