Tokyo – Bridgestone Corp. is considering plans to restructure its production footprint as part of a recently disclosed mid-long term business strategy, which aims to increase the group's profitability.
The Japanese tire & rubber group will look to reorganise the business, and carry out expense and cost reforms in its procurement and logistics to improve profit margins, Bridgestone said in a 7 Aug update of the mid-long term strategy.
“We are considering several possibilities with regards to the structure of global supply chain and competitive advantage,” said a Bridgestone spokesman in a 13 Aug written statement to ERJ.
Further details, he said, will be disclosed in due course.
The updated strategy also stipulates “strict selection of investments” in the coming years, to rebuild earning power.
Here, Bridgestone said it will concentrate resources on areas that have “solid profitability” and invest “intensively” in them.
These include the group’s core rubber & tire business as well as retread and webfleet solutions, according to the spokesman.
The move will allow Bridgestone to “maximise return on investment and cash generation” while improving profit base, the spokesman said, adding further details would be disclosed at an appropriate time.
In its updated version, the strategy calls for “operational excellence” in the group’s core business area, through maximum use of existing equipment and improving productivity.
In addition, Bridgestone will look to strengthen sales in its premium category through wholesale/retail price management and improving sales channels such as e-commerce.
The Japanese tire & rubber group unveiled its new “mid-long term” business strategy, billed as ‘third foundation’ or Bridgestone 3.0, earlier in July, to address the “deterioration of entire tire industry profit structure.”
The vision aims to see Bridgestone strong in its core tire & rubber business and in parallel “fundamentally change the playing field” by developing solutions and platforms.
To achieve this, the Japanese group said it will use its various service operations, including fleet management systems, Mobox subscription model, Toolbox tire database platform and Tirematics monitoring system.
In its business performance review, Bridgestone noted that its share in tire industry profit declined from 18.3% in 2015 to 15.7% in 2019.
Delivering “almost flat” sales during the four year period, the group said its profit decreased 37% from Yen517 billion in 2015 to Yen326 billion last year.