The Michelin star ~ Sounds + Food 'n' Retail

The Michelin star

michelin stars.jpgCorporate strategy fascinates me, as do the twists and turns a brand can make. Michelin is known for at least two very different, yet strangely related things: it is a manufacturer of tires and it publishes the Michelin Guide, the latter of which is very relevant to the industry of my choosing and what I briefly want to write about.

Travel at its heart
From the company's history, you can see a clear passion for exploring new places, greatly facilitated by the most-used vehicle for exploration in the world: the automobile. As innovation lead to more and more cars, busses, and trucks being used worldwide, and thus more tired being sold, it was only a logical step to enrich people's lives with guides and maps, to share the quality places that were out there. The company could have chosen to remain a simple commodity, a manufacturer of the seemingly simple tire. Instead, it chose to glorify it, and I think many people's lives are better for it.

The Michelin star
This rating, given to restaurants, is probably the most well-known worldwide. Having or losing a star can make or break a restaurant, sometimes leading to 100,000s to millions of Euros more in a restaurant's annual revenue, or vice versa. Michelin, which publishes these ratings in their Michelin Guide, classifies restaurants as follows:

  • Bib gourmand: This is not a star, but an award for "serving a good meal at an affordable price."
  • Espoir: This is a new rating (since 2006), and indicates promising restaurants, which might be awarded a first or second star next year.
  • Restaurant *: One star means that it's a very good restaurant in its category.
  • Restaurant **: Two stars mean that it's a refined cuisine, worth a detour.
  • Restaurant ***: Three stars mean that it's an exemplary cuisine, worth a special journey.
Stars are awarded quite sparingly, which is one of the criticisms of the guide (more to be discussed in a second). For instance, in the UK, out of ca. 5500 restaurants, only 98 possess one star; 11 have two stars; and 3 have three stars. In the Netherlands, although I don't know how many restaurants there are in total, there are 70 one-star restaurants; 8 two-star ones; and 2 three-stars; as well as 70 bib gourmands.

In 2005, France had the most restaurants that were awarded stars (620); followed by the UK (230); and Italy (255). And, while I'm not sure it's very significant, Luxembourg has the most stars per million people (32.6); followed by Switzerland (15.7), Belgium (11.0), and France (10.5).

From Michelin's FAQ, I found out that their guide is based on the same principles as when it was founded in 1900, "because they are approved and supported by readers and travellers and are considered a benchmark of quality within the profession." These include:
  • Visits by anonymous inspectors, who are professionals with a background in the industry and are on the full-time Michelin payroll.
  • Offering a selection of the best hotels and restaurants in all categories of price and comfort, with no preconception or agenda other than to meet the expectations of readers.
  • Independence, meaning that inspectors always pay their own bills and the MICHELIN Guide is entirely independent of the hotel and restaurant industry.
  • And, that the guide is updated every year to guarantee the accuracy of the information in it.
Last, but not least, the guide has been criticised on several fronts over the years. One is that it is very slow to react to changes; that it is conservative in regards to awarding or taking away stars; that it is secretive in the way the testing is done; and that it is unreliable in regards to how it awards restaurants outside of France. It sells around a million guides around the world, and has most recently launched a New York guide.

For further reading, check:
Update: Final thoughts
So how does this three star system relate to FnR?

The restaurant-business clearly is very different from regular retail-businesses. More competitive perhaps, and certainly perfectionistic. But also very secretive, in the sense of a closed kitchen and sometimes the attitude that some of these restaurants portray.

The Michelin star completely falls within the vision of transparency that I have of a good business. While not perfect, it provides a service to both customers, by showing them where quality is, and to restaurant-owners, by forcing them to improve. In other words, I am a fan of such awards and competitions, as it ultimately brings an industry forward.

On a different note, I co-wrote a 55-page paper a few years ago on the internationalisation strategy of Michelin's Tire-business, compared to Bridgestone and Goodyear. I seem to remember we got an ok grade for it too. If you care for a copy, mail me and I'll see what I can do.


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