Strategic Implementation and Control IIIB (MNG3702)
Hochschule
University Of South Africa (Unisa)
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Practising Strategy - A Southern African Context 3e
MNG3702 Assignment 2 Semester 2 2024 | Due August 2024. All questions answered with references.
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MNG3701 ASSIGNEMNT 1 SEMESTER 2 2024 vodacom case study Use examples from the case study to explain the concept of sustainability Discuss Vodacom’s Commitment towards the SDGs. Your discussion sh...
MNG3702 Assignment 1 (COMPLETE ANSWERS) Semester 2 2024 (605474) - DUE 25 July 2024
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Read the Michelin case study provide thoroughly to answer the questions that follow. All the
questions are based on the case study.
Michelin is a leading French brand and manufacturer of tires and rubber products.The company was
founded in 1888 by two Michelin brothers and grew to one of the largest tyre manufacturers in the
world, with a market share of 14.8% in 2023. Oddly enough, the company also sells popular travel
guides and road maps. They can make or break chefs by the number of Michelin stars they award to
their restaurants. Michelin stars are a rating system used by the red Michelin Guide to grade
restaurants on their quality and excellence. Restaurants can be awarded one, two or three stars, based
on various criteria, such as quality of their ingredients used, the harmony of flavours in their dishes,
the mastery of various techniques, the personality of the chef, and the consistency of the menu. The
Michelin Man (Bibendum) is known word wide.
The history of the Michelin Guide
The Michelin Guide is considered by many to be the hallmark of global fine dining and quality
cuisine. It has immense power over chefs, restaurateurs, and foodies world wide. It may divide
opinions across the food service industry, but its influence is undeniable. French chef Paul Bocuse, a
pioneer of nouvelle cuisine (a modern French style of preparing dishes that avoids rich, heavy foods,
rather emphasizing the freshness of the ingriedients used in prepring the dishes and the presentation
thereof), once said, “Michelin is the only guide that counts.” The birth of the famous little red book is
a very interesting story.
When the Michelin tire company was established in 1888 by brothers André and Édouard Michelin, it
was a time when driving was perceived as a novelty to most. There were less than 3 000 cars in France
at the time. However, the brothers were quick to recognize driving and mobility as a lasting trend. To
encourage more road travel, and hence boost tire sales, they decided to create a comprehensive
guidebook for motorists which catalogued hotels, restaurants, mechanics, and gas stations. In 1900, the
very first edition of the Michelin Guide was published, and 35 000 copies were given out for free.
As the tire company grew, so did the Michelin Guide. Country-specific editions were published
throughout Europe, starting with Belgium in 1904. A charge was introduced for the first time in 1920
when André Michelin walked into a garage and saw copies of the guidebook being used to support a
workbench. Realising that “Man only truly respects what he pays for,” the company started charging 7
francs for the guides.
By that time, the restaurant section of the Michelin Guide had become so popular that the company
started to recruit anonymous inspectors to visit and review restaurants. Six years later in 1926, the
Michelin star system was born. There were other notable changes as well, namely listing restaurants by
specific categories, the debut of hotel listings and the abandonment of paid-for advertisements.
The single-star restaurant review system also expanded to the present a three-star system in 1931:
* “A very good restaurant in its category.”
** “Excellent cooking, worth a detour.”
*** “Exceptional cuisine, worth a special journey.”
, In 1957, the Michelin Guide began awarding accolades to restaurants that provided “good meals at
moderate prices,” a feature now called Bib Gourmand. The Bib Gourmand symbol—the image of
Bibendum or the Michelin Man licking his lips—debuted in the Michelin Guide in 1997.
What began as a promotional device for the Michelin brothers’ tire business at the turn of the 20th
century has grown into an authority on global fine dining. Since its first publication in 1900, more than
30 million copies of the Michelin Guide have been sold across the globe. It presently rates over 40,000
establishments in over 25 countries across four continents.
Performance, strategy, and structure
Michelin has a rich history of a company that started by manufacturing tires for bicycles and
horse-drawn carriages. Then, they introduced pneumatic tires (rubber tires inflated with air) for
automobiles in the 1980s. Michelin was reorganised as a holding company in 1951, with interests in
tires, other rubber products and synthetic rubber. Over the years, Michelin's worldwide revenue
increased, despite frequent fluctuations in the market. The lowest point for the company occurred in
2009, which coud be attributed to workers and managers in the tyre factories having different points of
view regarding better use of technology with new projects which was not going according to plan. The
world was changing, but Michelin was stuck with a pyramidal management structure better suited for a
company operating during the first industrial revolution than operating in the digital age. It was
imperative for the company to create a new organisational structure.
In May 2012, Michelin appointed Jean-Dominique Senard, a French industrialist in the automobile
industry as chief executive officer. Senard was the first non-family member ever in this position. In
2015, he embarked on a restructuring process and transformed the company's culture by focusing on
empowerment, responsibility and accountability. The focus was to create more autonomy for
employees, allowing them to perform managerial responsibilities without waiting for managers to tell
them what to do. Before this initiative, employees viewed themselves as order takers from the
bureaucrats above them, who made all the decisions. In this environment, managers were expected to
know everything, and they had complete control over operations and performance. Communication
was often seen as the start of disciplinary action. This led to lower productivity, declining safety
records, more wasted time and wasted materials.
The changes CEO Senard affected to the organisational culture made a huge difference to how work
was scheduled and performed at the company. Workers could plan production schedules a week in
advance, decide on the targets they had to meet, divide responsibilities for jobs among themselves, and
manage employee absenteeism more effectively. Some of the immediate benefits of this change in
culture were improved safety records and reduced waste. Employees were now responsible for
meeting their own targets. With managers and employees striving to attain the same targets, the image
of managers changed subtly from being bosses to coaches. Shop floor managers were seen as guiding
their teams through unpredictable order cycles, qualifying the decisions the teams took and developing
the potential of each team member. Employees with stronger potential than others to become team
leaders were identified in this new environment. Eventually, teams were given the freedom to make
their own decisions. The structure of the company changed from a bureaucracy and pyramidal
structure to a flat and lean company.
The company's old model of command and control was abandoned and replaced by a collaborative
model based on trust and confidence. Michelin's annual gross profit increased with approximately 38%
from 2009 to 2021, demonstrating the company's financial growth and stability in the tire industry.
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