Summary of Case Analysis: Goodyear Tire and Rubber Company Essay

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Summary of Case Analysis: Goodyear Tire and Rubber Company

1. INTRODUCTION GOODYEAR TIRE AND RUBBER COMPANY

Goodyear Tire and Rubber Company, was founded in 1898 and was the world tire production leader until November 1990 when Groupe Michelin took over after merging with Uniroyal Goodrich Tire Company.

Goodyear¡¦s principal business is the development, manufacture, distribution, and sale of tires throughout the world. Its tires and tube sales represent 83 % of 1991 corporate sales of $10.9 billion with corporate wide earnings of $96.9 million. It has its owned Goodyear Auto Service Centers and franchised Goodyear Tire Dealers in supporting its distribution and sale of tires in US.

Goodyear controls 20 percent of
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SITUATION ANALYSIS

We need to consider a number of relevant information prior to making the decision. The information that needs to be considered is:

(a) What are Goodyear¡¦s situation, its strength, weaknesses, opportunities and threat?

Table 4 ¡VSWOT Analysis on Goodyear

Strength Weaknesses
„X 94 years of experience
„X 37% of US tire-making capacity
„X 60% in the Tire Replacement market (Top Ten in US)
„X 40% in the Original Equipment Manufacturer market
„X Market leader in North America
„X Broadest line of product
„X Broad market brand names with 11 brand names
„X Premium quality brands
„X A leading national advertiser
„X 8000 retails point of sale
„X 1000 company owned Goodyear Auto Service Centers
„X 2500 franchised Tire Dealers „X exclusive distribution policy
„X lack of customer service
Opportunities Threat
„X Additional 850 retails channels „X 2 million Goodyear brands were replace annually at Sears
„X growth of warehouse membership club stores and discount tire retails
„X customers loyalty to Sears

(b) What is the position of Goodyear in the Tire Industry?

There are 2 types of market in the tire industry, namely;

(i) Original Equipment Tire market;

Original equipment tires are sold by