Bridgestone aims for consolidated ROA of 6%
Bridgestone Corp. CEO and President Shoshi Arakawa released the company's "Fundamental Mid-term Management Philosophy" from 2007 to 2011 earlier today, which includes return on assets (ROA) of more than 5% by 2011.
Here is an outline of Bridgestone's goals and strategies.
I. Goal and Management Stance
The goal of Bridgestone is to establish the status of being the undisputed number one tire and rubber company both in name and reality. Bridgestone's management stance towards achieving this goal can be divided into four parts: (1) to always bear in mind business Basics and Principles; (2) to keep "Philosophy" and "Spirit" since the corporate establishment and to follow the "Bridgestone Way"; (3) to solidify footing in domestic (Japanese) business; and (4) proceed with group and global business development on top of the strong Japanese business.
II. Fundamental Management Policy and Key Strategy
Based on the aforementioned management stance, Bridgestone has established four fundamental management policies and key strategies to achieve these:
1. to always aim for "the higher level" and to be the best in the world in all of our products and services. With the objective of always seeking to reach the higher level, Bridgestone will promote the following three strategies: (a) strengthen its business domain both with growing tire market and competitive advantages; (b) boost responsiveness to rising raw material prices and develop production technology that contributes to enhanced global production competency; and (c) enhance and build upon its corporate governance structure and CSR system that ensure fulfillment of social responsibility.
2. to clarify long-term strategy and proceed with the integration and expansion of business. Bridgestone is advancing efforts on leveraging development and production asset of the raw material fields, developing and manufacturing production equipment and maximizing the retail network - all areas that Bridgestone says it commands a significant competitive advantage. Bridgestone also will push forward with the development of a business model that combines final products with services in peripheral areas in order to deliver a diverse array of solutions to customers.
3. to aim to be a real global corporation, adopting a strategic business unit (SBU) organization. Bridgestone will strive to realize an optimal group/global management structure that can swiftly identify and respond to market and customer needs worldwide. (Bridgestone has adopted an SBU structure that consists of eight SBUs in all: six regional SBUs, a special tire business SBU and a diversified products business SBU. Meanwhile, a global headquarters determines management direction, and a global management platform has been elucidated to support each SBU's activities.)
4. to aim for the optimum management for the entire group, utilizing the Mid-term Management Plan. Bridgestone has implemented a group-wide Mid-term Management Plan to enable precise and speedy response to sudden changes in a dynamic business environment.
III. Management Goal
Bridgestone will establish and reinforce a structure that can maximize a profit-making capability, and promote the effective utilization of investment capital. The Bridgestone Group has set as its key financial target under its mid-term management plan a consolidated ROA of 6%. Bridgestone also has set midstream targets -- ROA of 5% by 2010 and ROA of over 5% by 2011.