Begin with Strengths Lets examine the problems faced by Michelin Fleet Solutions.

Service providers represent the most important aspect of the MFS contract. Service providers are responsible for tire maintenance and upkeep and are the most frequent contact point with the end users. Not only are they responsible for executing service at a high level but they also contribute to Michelins cost structure. If tires are not serviced properly, both the customers as well as Michelin experience higher costs. This aspect of the MFS contract also represents a high level of risk for Michelin. Trust is placed in service providers to execute the service appropriately and if this is done improperly the result can be reduced customer satisfaction. Another aspect of the risk experienced with MFS contracts is that in order for the contracts to be successful, Michelin must invest in developing its service providers. This means that, as you transition away from a product focus to a service focus, you could be investing in developing your competitor. Thus, it will be very important to focus on developing strong relationships with service providers to build a mutually beneficial relationship. Internal competition is another major challenge faced by MFS. The performance of the sales force is measured by number of tires sold. In the eyes of the sales force, MFS represents competition to them. They believe that it will be much more difficult to acquire new customers if the focus of the company is shifted to optimizing the life cycle of tires. This is a toxic dynamic and will not allow MFS to be successful. What is lost with the current design of MFS is the encouragement of collaboratively innovating in regard to retaining and acquiring new customers. If these separate teams begin to work together, each will gain insight about their customers. The sales force will learn what services make customers happy and can highlight these aspects when selling the product. The MFS employees will learn more about what new customers expect from service providers. As leaders, you must morph these departments from competitors into collaborators. Another problem which goes hand in hand with this internal competition is that customers are not sold on the benefits of a MFS agreement. They do not understand the benefits of this program and only see the increased upfront costs, increased dependence and high switching costs. If salespeople are not threatened by MFS then they will not encourage new customers to enter into an MFS contract. In fact, it is likely that salespeople will discourage customers from doing so. In order to sell customers on the benefits of entering into a MFS contract it is of utmost importance to have a sales team who is motivated and rewarded based on the success of MFS. Salespeople are finding it hard to communicate the benefit of the service. This demonstrates a problem with employee training and support. The service must be clearly outlined in terms of the benefits to end users.