Product details

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Abstract

In 2003, the Michelin Group was the number one original equipment tyre manufacturer in the world, with a market share of 19.2%. The group, which pioneered the radial tyre, developed a new concept, the PAX system, in 1998. The PAX system was based on the run-flat technology, wherein the vehicle could move smoothly even if the tyre was flat. It could run up to 125 miles at a constant speed of 50 miles per hour. Michelin commercially launched the PAX system in Europe in 2002. It was first made available in the limited series of the Renault Scenic minivans. But as the sales of PAX equipped vehicles fell short of expectations Renault decided to discontinue using it. Having failed in the European market, Michelin was keen to extend its innovation in the US market. Honda Motor Company first adopted the PAX system on its Odyssey model. The case discusses the structure of the tyre industry and the scope of the original equipment and replacement equipment market. Product innovations in the tyre industry and the delayed entry of radial tyres in the US market are also discussed. The case then talks about Michelin''s product innovation and the various dimensions of the PAX system. The case can be used to discuss the following points: (1) the state of the tyre industry and the acceptance of innovations in the industry; (2) the role played by the other tyre manufacturers in making PAX innovation a worldwide product; (3) Michelin''s strategy of emphasising product innovation; (4) the success of the PAX system in comparison to successful radial tyres; and (5) will PAX have an edge over the radial, since PAX has been accepted in the US market at an early stage of its innovation?
Location:
Industry:
Other setting(s):
2004

About

Abstract

In 2003, the Michelin Group was the number one original equipment tyre manufacturer in the world, with a market share of 19.2%. The group, which pioneered the radial tyre, developed a new concept, the PAX system, in 1998. The PAX system was based on the run-flat technology, wherein the vehicle could move smoothly even if the tyre was flat. It could run up to 125 miles at a constant speed of 50 miles per hour. Michelin commercially launched the PAX system in Europe in 2002. It was first made available in the limited series of the Renault Scenic minivans. But as the sales of PAX equipped vehicles fell short of expectations Renault decided to discontinue using it. Having failed in the European market, Michelin was keen to extend its innovation in the US market. Honda Motor Company first adopted the PAX system on its Odyssey model. The case discusses the structure of the tyre industry and the scope of the original equipment and replacement equipment market. Product innovations in the tyre industry and the delayed entry of radial tyres in the US market are also discussed. The case then talks about Michelin''s product innovation and the various dimensions of the PAX system. The case can be used to discuss the following points: (1) the state of the tyre industry and the acceptance of innovations in the industry; (2) the role played by the other tyre manufacturers in making PAX innovation a worldwide product; (3) Michelin''s strategy of emphasising product innovation; (4) the success of the PAX system in comparison to successful radial tyres; and (5) will PAX have an edge over the radial, since PAX has been accepted in the US market at an early stage of its innovation?

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Location:
Industry:
Other setting(s):
2004

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