Continental
Strategic Concepts & Mechanics
Primary Evidence
"Stiritz, however, saw that the prudent use of leverage could enhance shareholders’ returns significantly. He believed that businesses with predictable cash flows should employ debt to enhance shareholder returns, and he made active use of leverage to finance stock repurchases and acquisitions, including his two largest, Energizer and Continental."
"you’re a high roller with some airline, call your 1-800 telephone number to make a reservation. Try your web site. Stand in line to check in. Check a suitcase. Fly coach. Try to change a reservation. What do you think? Excited by your own stuff? Any sign of magical pizzazz there? Any reason anybody with a choice would do it again? And while you’re back there in coach, talk to people. Don’t limit your observations to fishing for what’s wrong, since that’s a shortfall in meeting their expectations. Important stuff, but cheng, not ch’i. You have to be much more subtle and creative. Somewhere there’s a spark, some “Eureka!” that will cause people to choose you over Continental or even Southwest and pay more to do it."
"François Michelin also knows that he still has much to do to consolidate the foundations of his own house. Everywhere in nearly all the markets that Bibendum has conquered through sheer effort, Bridgestone, the new Japanese tire giant, threatens to establish itself. The Japanese brand supplies half of the Japanese automobile production, which became the world’s largest in 1980 and 1981. In the United States, it quickly delivered to Michelin’s customers at a time when Michelin was out of stock. It plans to purchase the Firestone plant in Nashville, Tennessee, and increase its production capacity to 3,000 truck tires per day in 1983. In Europe, it is laying the groundwork, making contacts, and beginning to supply Scandinavia, Great Britain, and West Germany. It, too, is eyeing Formula 1. The result: a wild growth, as fast or faster than the French group over the past five years, with revenues of three billion dollars in 1980 (nearly seventy percent of which was from tires) achieved with only thirty-one thousand employees, gross self-financing margins of twenty-five percent, and a net profit nearly twice that of Michelin in 1980. Bridgestone, in recent years, has also surpassed General Tire, Uniroyal, BF Goodrich, Continental, Dunlop, and Pirelli to occupy the fourth place worldwide. A formidable challenger."