“The aim of strategic management is to ensure that an organisation achives a
competitive advantage and sustains its competitive advantage over
competitors.” Apply the process perspective of strategic management process
to the Michelin company, focusing on the ‘History of the Michelin Guide’. In
your answer, you need to explain each stage in the process perspective of
strategic management and apply it to Michelin and the development of the
Michelin Guide as an effort of the company to sustain its competitive
advantage. (21 marks, of which 7 marks will be awarded to each of the stages
correctly explained and applied to the case)
1. Analysis
Explanation: This stage involves a thorough examination of the company’s
environment to identify key factors that influence its operations. SWOT
analysis, PESTEL analysis, and market research are critical tools used to
gather insights.
Application to Michelin: In the late 19th and early 20th centuries, Michelin
analyzed the growing automobile market and identified the need for reliable
travel information. The company recognized that drivers needed guidance on
where to find services, places to eat, and stay during their travels. This
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, analysis highlighted an opportunity to support the burgeoning automotive
culture while promoting their core product: tires.
2. Formulation
Explanation: Formulation is about creating strategies that leverage insights
from the analysis stage. It involves setting goals, determining strategic
initiatives, and outlining plans to achieve these goals.
Application to Michelin: Michelin’s strategy formulation led to the creation of
the Michelin Guide. The guide aimed to provide valuable travel information to
motorists, thus encouraging more travel and, consequently, more tire sales.
Michelin set clear goals to produce a high-quality, comprehensive guide that
would be trusted by travelers. The company decided to include detailed
reviews and ratings of restaurants and hotels, setting a high standard of
editorial independence to ensure credibility.
3. Implementation
Explanation: This stage translates strategic plans into actions. It involves
resource allocation, establishing timelines, and ensuring that the
organization's activities align with the strategic goals.
Application to Michelin: Michelin implemented its strategy by producing and
distributing the first Michelin Guide in 1900. The guide was initially free,
packed with practical information to aid motorists. Over time, Michelin refined
the guide, introducing the star rating system in 1926, which became a
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