Business Management



Business Management

To what extent is the company vertically integrated?

Bridgestone Corporation has been in the business of tires and related rubber products. Established in the year 1931, the company has earned itself global reputation that not only made way to create and establish a strong footing in the industry.

Being an important name and belonging to Japanese origin, the company understands as a team and a unique team proposition that not only make way for the challenges that not only make way for progress, but also comes across a strong establishment involved in the improvement and development of the society altogether.

Bridgestone believes and understands the depletion of natural resources that exist and are present in the environment where humans work. Not only does it make way for challenging and portraying the problems and situations that have risen with the constant depletion of resources. Hence, it is with this long-term vision, Bridgestone has adopted the principle of vertical integration.

Vertical Integration implies the movement of the company from purchasing multiple product components and raw material and undertaking an entire transformation, which would cover all components and being produced by one country altogether. In 2005, the company opted for purchasing an astounding 95% of the Goodyear Sumatra Production, taking over most of its factories and manufacturing facilities, for an estimated $62 million.

This attempt, although a part of backward integration on the company's part, but was otherwise undertaken in order to increase the in-house supply of rubber and therefore increasing production without any delays that might be experienced and ensuring optimum efficiency. Another attempt to prove its vertical integration was the establishment of a new plant in the Mexico to manufacture carbon black, which ensured and guaranteed its strategy as a quality- and efficiency-embedded production center.

What segments of the vertical chain ...