Mid-term Management Plan 2007
Tokyo (October 22, 2007) - Bridgestone Corporation has formulated a mid-term management plan covering from 2008 to 2012.
1. Management Goal and Composition of Mid-term Management Plan
The goal of the Bridgestone Group (Bridgestone) is to establish the status of being the undisputed world No. 1 tire and rubber company both in name and reality. Bridgestone has created four fundamental management policies to realize this goal.
In formulating mid-term management plan, each SBU (strategic business unit) has created a plan to maximize use of all the global business resources for realizing the goal, while the GMP (global management platform) aims to provide a strong support to SBUs.
2. Key Strategies (based on the Four Fundamental Management Policies)
(1) To always aim for “the higher level”
a. Enhance resources for tire strategic products
Bridgestone will enhance business domain both with the growing tire market and by leveraging competitive advantages. This will consist of: (1) reinforcing products where Bridgestone has preceded its competitors; and (2) securing overwhelming competency to ensure long-term superiority. In case of the former, Bridgestone will increase added value to tires that include strategic product groups such as runflat tires*1, ultrahigh performance (UHP) tires and winter tires for passenger cars as well as GREATEC*2 and low-profile tires for trucks and buses. Bridgestone will achieve the latter objective through radial tires for large off-the-road, aircrafts and motorcycles. In the Diversified products business, Bridgestone seeks to enhance profitability, primarily through “concentrated business”, while efforts will be made to enhance Eco-friendly products and businesses, as strategic products and businesses from the standpoint of corporate social responsibility (CSR).
b. Pursue a solutions business through the retread business
Bridgestone will make full use of Bridgestone Bandag, LLC with which Bridgestone Americas Holding, Inc., the U.S. subsidiary of Bridgestone Corporation, completed its cash merger in May 31, 2007, to provide package solutions to customers in the truck and bus tire business while making a significant contribution to environmental protection and resource conservation.
c. Reinforce the fundamental competence
Bridgestone seeks to enhance competitiveness and aim for “the higher level” in raw materials development and manufacturing technology. While continuing to enhance quality demanded by the market, Bridgestone will improve the material expense scenario to cope with rising raw material prices, and bolster competitiveness in manufacturing technology.
d. Enhance Corporate Governance Structure and CSR System
Bridgestone aims to enhance quality in its corporate governance and CSR activities, and will further develop its corporate governance structure so that the objectives of management and operational execution can be effectively carried out. As a means to strengthen CSR activities, Bridgestone has described an action plan for their implementation in a mid-term management plan.
e. Improve Environmental Management
A concrete action plan will be established so that Bridgestone conducts comprehensive eco-activities covering the global, regional and working environments.
(2) To clarify the long-term strategy and to proceed with the integration and expansion of business domain
In order to establish the optimum supply chain configuration and provide society with high quality products and services, Bridgestone will emphasize uniformity in all resources held within Bridgestone and strengthen and effectively utilize “vertical integration”.
(3) To aim to be a real global corporation, adopting SBU organization
Bridgestone intends to aggressively expand sales in the overseas and specialty tire markets aimed at raising consolidated net sales by around 20%. Through efforts to expand sales of strategic products and to rationalize operations, Bridgestone aims to increase operating income by around 80%, or 1.8 times. A supply system will be expanded to support this.
(4) To aim for the optimum management for the entire group, utilizing the Mid-term Management Plan
In order to realize the planned performances, Bridgestone will enhance resources and execute initiatives, consistent with key strategies. In strengthening resources, Bridgestone will shift away from its current resource model with an eye on becoming “Lean and Strategic”.
3. MTP Financial Target Performance
(1) Financial target: Achieve consolidated ROA of 6% by 2012
Through the deployment of the four fundamental management policies, Bridgestone will promote higher quality, continuingly profitable management and more efficient asset utilization. Bridgestone has set as its key financial target under its mid-term management plan ROA of 6% by 2012.
(2) Net sales: Approximately ¥4 trillion in 2012
Bridgestone plans to achieve around ¥4 trillion in net sales in 2012, which increases by slightly less than 20%, compared with the amount forecast for 2007.
1. Management Goal and Composition of Mid-term Management Plan
The goal of the Bridgestone Group (Bridgestone) is to establish the status of being the undisputed world No. 1 tire and rubber company both in name and reality. Bridgestone has created four fundamental management policies to realize this goal.
In formulating mid-term management plan, each SBU (strategic business unit) has created a plan to maximize use of all the global business resources for realizing the goal, while the GMP (global management platform) aims to provide a strong support to SBUs.
2. Key Strategies (based on the Four Fundamental Management Policies)
(1) To always aim for “the higher level”
a. Enhance resources for tire strategic products
Bridgestone will enhance business domain both with the growing tire market and by leveraging competitive advantages. This will consist of: (1) reinforcing products where Bridgestone has preceded its competitors; and (2) securing overwhelming competency to ensure long-term superiority. In case of the former, Bridgestone will increase added value to tires that include strategic product groups such as runflat tires*1, ultrahigh performance (UHP) tires and winter tires for passenger cars as well as GREATEC*2 and low-profile tires for trucks and buses. Bridgestone will achieve the latter objective through radial tires for large off-the-road, aircrafts and motorcycles. In the Diversified products business, Bridgestone seeks to enhance profitability, primarily through “concentrated business”, while efforts will be made to enhance Eco-friendly products and businesses, as strategic products and businesses from the standpoint of corporate social responsibility (CSR).
b. Pursue a solutions business through the retread business
Bridgestone will make full use of Bridgestone Bandag, LLC with which Bridgestone Americas Holding, Inc., the U.S. subsidiary of Bridgestone Corporation, completed its cash merger in May 31, 2007, to provide package solutions to customers in the truck and bus tire business while making a significant contribution to environmental protection and resource conservation.
c. Reinforce the fundamental competence
Bridgestone seeks to enhance competitiveness and aim for “the higher level” in raw materials development and manufacturing technology. While continuing to enhance quality demanded by the market, Bridgestone will improve the material expense scenario to cope with rising raw material prices, and bolster competitiveness in manufacturing technology.
d. Enhance Corporate Governance Structure and CSR System
Bridgestone aims to enhance quality in its corporate governance and CSR activities, and will further develop its corporate governance structure so that the objectives of management and operational execution can be effectively carried out. As a means to strengthen CSR activities, Bridgestone has described an action plan for their implementation in a mid-term management plan.
e. Improve Environmental Management
A concrete action plan will be established so that Bridgestone conducts comprehensive eco-activities covering the global, regional and working environments.
(2) To clarify the long-term strategy and to proceed with the integration and expansion of business domain
In order to establish the optimum supply chain configuration and provide society with high quality products and services, Bridgestone will emphasize uniformity in all resources held within Bridgestone and strengthen and effectively utilize “vertical integration”.
(3) To aim to be a real global corporation, adopting SBU organization
Bridgestone intends to aggressively expand sales in the overseas and specialty tire markets aimed at raising consolidated net sales by around 20%. Through efforts to expand sales of strategic products and to rationalize operations, Bridgestone aims to increase operating income by around 80%, or 1.8 times. A supply system will be expanded to support this.
(4) To aim for the optimum management for the entire group, utilizing the Mid-term Management Plan
In order to realize the planned performances, Bridgestone will enhance resources and execute initiatives, consistent with key strategies. In strengthening resources, Bridgestone will shift away from its current resource model with an eye on becoming “Lean and Strategic”.
3. MTP Financial Target Performance
(1) Financial target: Achieve consolidated ROA of 6% by 2012
Through the deployment of the four fundamental management policies, Bridgestone will promote higher quality, continuingly profitable management and more efficient asset utilization. Bridgestone has set as its key financial target under its mid-term management plan ROA of 6% by 2012.
(2) Net sales: Approximately ¥4 trillion in 2012
Bridgestone plans to achieve around ¥4 trillion in net sales in 2012, which increases by slightly less than 20%, compared with the amount forecast for 2007.
Notes:
*1. Runflat tires continue to function safely at a specified speed for a specified mileage after losing air pressure under normal conditions at 0kPa air pressure. Runflats have been developed for the purpose of ensuring safety in the event of a sudden loss of pressure as with a puncture. In addition, runflats eliminate the need for carrying a spare tire. This contributes to fuel economy through weight-savings, and it gives automakers greater latitude in designing vehicles. Eliminating the spare tire also reduces rubber consumption and rubber scrap. Bridgestone's runflat tires are installable on conventional wheels.
*2. GREATEC tires have an ultralow aspect ratio and allow for replacing dual-tire configurations on trucks and buses with single-tire configurations. The overall weight of the tire and rim is less than the aggregate weight of two conventional tires and rims. That improves fuel economy and also helps accommodate heavier loads. It reduces the amount of scrap rubber, too, which lessens environmental impact. In addition, a GREATEC tire occupies less lateral space under a vehicle than two conventional tires. In a bus, GREATEC's streamlined configuration increases the interior space available for the aisle or seating.
Bridgestone Corporation, headquartered in Tokyo, is the world’s largest tire and rubber company. In addition to tires for use in wide variety of applications, it manufactures a broad range of diversified products, which include industrial rubber and chemical products and sporting goods. Its products are sold in over 150 nations and territories around the world.