Abstract
TRENCO is situated in a particular context. Main actor during almost 50 years in Egypt, the company was able to handle private and public markets. Being the principal interlocutor with the Egyptian Armed Force and the general public sector, TRENCO profited from a great portfolio of clients. Furthermore, private car assemblers and automotive services played as a security of sales, at least until the introduction of PIRELLI in 1999 as the first competitor with a good awareness.
But TRENCO passed through difficulties. In 2010, the company went to bankruptcy (TRENCO accumulated losses exceeded 11 times its paid-in capital). Regarding to the new competitors that entered into the market (mostly Chinese companies) TRENCO hasn't been able to handle the competition. Of course, the price war was a main factor but the brand positioning of TRENCO was not optimal. The culture of TRENCO was quite idyllic: “Exceed customers' expectations - Deliver value - the best service and the most reliable tires - Being a Responsible Corporate…” We can see here a first problem of positioning which we will analyze after.
Competition
As we said before, the first competitor that changed the market in Egypt was PIRELLI which bought out shares of Alexandria Tires Company (ATC Inc.) the second Egyptian tire manufacturer, and brought Italian standard qualities to ATC Inc. TRENCO has been impacted from this alliance and started to lose market shares.
When imported brand, mostly from Asia, came to Egypt (as KUMHO, TIREX, PIRELLI-Asia, MICHELIN-Asia, and BRIDGESTONE) TRENCO faced a strong competition that leads the company to a very difficult situation.
