Analyse PESTEL For Michelin
Dimensions
Components
Impact on the strategy
Weak to strong
1
2
3
4
5
Political
1. Relationship with public authority
2. European construction
Economic
1. Construction of new economic spaces
2. Globalization
Societal
1. Lifestyle
Technological
1. Life cycle of technologies and innovations
2. Renewal of products and new use
Environmental
1. Long term risks
2. Social responsibility
Legal
1. Regulation/deregulation
Political: To protect consumers but also to protect the environment, governments provide for legislation on tires. These laws encourage companies to pay attention to the quality of their products.
Economic: The tire market knows no seasonality compared to the automotive market. This market is expanding, it depends on the mobility of consumers: their needs, their paths which are increasingly long. Indeed, there is an average increase of 2 to 3% per year due to odometer distances.
"The global fleet expected to increase by more than 500 million vehicles by 2030 [...] The distances traveled by car should grow by 65% over 2005 and 85% for freight."
The automotive industry has a high added value due to vehicles more upscale, the desire for comfort and safety of consumers. However, a low purchasing power leads to a decline in demand "automobile" which will play on the tire industry as there will be an impact indirectly.
Moreover the cost of raw materials continues to rise like the rubber for example. This is due to the dependence on oil.
The economic development of emerging countries changes the distribution of sales worldwide. For example, China and Japan account for over 18% of the global tire market.
Finally, there is a depreciation of the dollar against the euro. Indeed, changes in currency markets affect the tire industry, and therefore the falling dollar causes extra production costs for Michelin pays its suppliers in euros.
Societal: Consumer attitudes are changing. With the development of high-end, consumers prefer more
Components
Impact on the strategy
Weak to strong
1
2
3
4
5
Political
1. Relationship with public authority
2. European construction
Economic
1. Construction of new economic spaces
2. Globalization
Societal
1. Lifestyle
Technological
1. Life cycle of technologies and innovations
2. Renewal of products and new use
Environmental
1. Long term risks
2. Social responsibility
Legal
1. Regulation/deregulation
Political: To protect consumers but also to protect the environment, governments provide for legislation on tires. These laws encourage companies to pay attention to the quality of their products.
Economic: The tire market knows no seasonality compared to the automotive market. This market is expanding, it depends on the mobility of consumers: their needs, their paths which are increasingly long. Indeed, there is an average increase of 2 to 3% per year due to odometer distances.
"The global fleet expected to increase by more than 500 million vehicles by 2030 [...] The distances traveled by car should grow by 65% over 2005 and 85% for freight."
The automotive industry has a high added value due to vehicles more upscale, the desire for comfort and safety of consumers. However, a low purchasing power leads to a decline in demand "automobile" which will play on the tire industry as there will be an impact indirectly.
Moreover the cost of raw materials continues to rise like the rubber for example. This is due to the dependence on oil.
The economic development of emerging countries changes the distribution of sales worldwide. For example, China and Japan account for over 18% of the global tire market.
Finally, there is a depreciation of the dollar against the euro. Indeed, changes in currency markets affect the tire industry, and therefore the falling dollar causes extra production costs for Michelin pays its suppliers in euros.
Societal: Consumer attitudes are changing. With the development of high-end, consumers prefer more