Challenges Facing Goodyear Essay

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Challenges Facing Goodyear Problem Statement There are several challenges facing Goodyear in the current environment. Our sales have leveled off in the past few years and we need to increase our market share in order to improve these numbers. Our debt is high and our interest payments are eating away at our profiles so we need to get more income to pay down this debt. The more immediate question is if Goodyear should launch its new line of Aquatred tires. The trend has been toward higher mileage tires and the Aquatred tire is not in line with this trend, being more of a higher end tire. Additionally, if we do determine that we are going to launch the Aquatred, do we start the advertising during the Olympics when we don’t…show more content…
Again, to capture this buyer, we would have to get our tires to the preferred store and have aggressive pricing at all stores. Since our product is higher priced, we probably will not get many Commodity buyers purchasing the Aquatred tire. Market size and trends The Aquatred is going to be sold as a strictly replacement tire, as the automakers have a long lead-time for their purchases and changes in products. The market for replacement tires for the tire industry is almost 3 times the number of units to OEMs so the potential here is huge for the Aquatred. Goodyear has traditionally had a much higher percentage of OEM tires sold versus replacement tires so an aggressive campaign could help these numbers for us. The problem that we have here is that we are not as strong in the replacement tire market so we will have to be more aggressive than our competitors. Automobiles are being driven longer and longer with the increase in reliability over the years, so the market for replacement tires should be expected to grow at a higher rate than OEMs. Aquatred is considered a broad-line tire and not a performance tire. The trend is toward broad-line tires with higher mileage warranties. The Aquatred tire only has a 60,000-mile warranty so this presents a possible challenge to us since there are tires with 80,000-mile warranties on the market and
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