A few weeks ago the New York Times carried the headline, “Michelin Giving Up on PAX Run-Flat Tire.”
When the tire was first announced in 2005, a few of my colleagues and I were so taken with the concept — a tire that could run for as much as 120 miles with a flat, eliminating the need to store a spare tire — that we’ve used it in our classes as an example of how a company can innovate by eliminating features that some customer segments view as either negative (having to store a spare takes up space and costs more fuel) or a neutral (we don’t notice it and don’t care about it).
This was a big-bet innovation for Michelin, intended to overturn the industry in the same way that their introduction of steel-belted radial tires did nearly 60 years ago.
What went wrong?
While it isn’t fair to retroactively criticize the approach Michelin took to introducing this innovation, there were some trouble signs early on:
A BusinessWeek article from 2004 notes that the PAX tires don’t fit into conventionally designed vehicles. To use them, cars must be equipped with a specially designed chassis and wheels and, once converted, can’t take regular tires. What that means is that to get the tires replaced, customers must find an authorized PAX service center to repair or replace the tires.
The lack of compatibility with preexisting infrastructure also proved to be a contributor to the product’s undoing. Although the company enjoyed some success, including having PAX tires come standard on Honda’s 2005 Odyssey Touring minivan, other firms failed to adopt the practice. PAX, as it turned out, was not a huge advancement over other run-flat technologies; it required specialized equipment and systemic changes, and was launched into a category that turned out to be a niche. This situation was a far cry from the promise of a tire that would revolutionize driving habits and totally change the industry.
Frameworks could have helped anticipate obstacles
We always advise companies launching innovations to consider not just the technical performance of the product (or service) but the whole chain of experiences customers go through in the course of being customers. With a tool called the consumption chain, we suggest that companies work all the way through the total customer experience — from awareness of need all the way through search, selection of a provider, payment and so on through final disposal.
Clearly, the PAX system let customers down at some of these vital “links” in their consumption chains. They faced difficulty getting the tires replaced and repaired, and evidently the competitive separation between PAX and other run-flat tire designs didn’t overcome those problems.
Another tool to employ when thinking about the launch of new offerings is to consider all the factors that may cause delay or resistance. This involves systematically thinking through all the reasons that a customer might not be willing to adopt an innovation. One of the most serious of these roadblocks occurs when adoption requires changing expensive, embedded systems. (You can read more about this in a book I cowrote called Market Busters.)
The PAX tire shows once again that if a product is going to be incompatible and require specialized handling to repair or replace, it also better have earth-shattering benefits (think iPod). Otherwise, people will never overcome their reluctance to change away from the conventional.
More...
When the tire was first announced in 2005, a few of my colleagues and I were so taken with the concept — a tire that could run for as much as 120 miles with a flat, eliminating the need to store a spare tire — that we’ve used it in our classes as an example of how a company can innovate by eliminating features that some customer segments view as either negative (having to store a spare takes up space and costs more fuel) or a neutral (we don’t notice it and don’t care about it).
This was a big-bet innovation for Michelin, intended to overturn the industry in the same way that their introduction of steel-belted radial tires did nearly 60 years ago.
What went wrong?
While it isn’t fair to retroactively criticize the approach Michelin took to introducing this innovation, there were some trouble signs early on:
A BusinessWeek article from 2004 notes that the PAX tires don’t fit into conventionally designed vehicles. To use them, cars must be equipped with a specially designed chassis and wheels and, once converted, can’t take regular tires. What that means is that to get the tires replaced, customers must find an authorized PAX service center to repair or replace the tires.
The lack of compatibility with preexisting infrastructure also proved to be a contributor to the product’s undoing. Although the company enjoyed some success, including having PAX tires come standard on Honda’s 2005 Odyssey Touring minivan, other firms failed to adopt the practice. PAX, as it turned out, was not a huge advancement over other run-flat technologies; it required specialized equipment and systemic changes, and was launched into a category that turned out to be a niche. This situation was a far cry from the promise of a tire that would revolutionize driving habits and totally change the industry.
Frameworks could have helped anticipate obstacles
We always advise companies launching innovations to consider not just the technical performance of the product (or service) but the whole chain of experiences customers go through in the course of being customers. With a tool called the consumption chain, we suggest that companies work all the way through the total customer experience — from awareness of need all the way through search, selection of a provider, payment and so on through final disposal.
Clearly, the PAX system let customers down at some of these vital “links” in their consumption chains. They faced difficulty getting the tires replaced and repaired, and evidently the competitive separation between PAX and other run-flat tire designs didn’t overcome those problems.
Another tool to employ when thinking about the launch of new offerings is to consider all the factors that may cause delay or resistance. This involves systematically thinking through all the reasons that a customer might not be willing to adopt an innovation. One of the most serious of these roadblocks occurs when adoption requires changing expensive, embedded systems. (You can read more about this in a book I cowrote called Market Busters.)
The PAX tire shows once again that if a product is going to be incompatible and require specialized handling to repair or replace, it also better have earth-shattering benefits (think iPod). Otherwise, people will never overcome their reluctance to change away from the conventional.
More...