Goodyear Tire and Rubber Company Marketing AnalysisGoodyear Tire and Rubber Company Marketing AnalysisSUMMARY OF CASE ANALYSIS: ЎVGOODYEAR TIRE AND RUBBER COMPANYINTRODUCTION ЎVGOODYEAR TIRE AND RUBBER COMPANYGoodyear 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.
GoodyearЎ¦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 the worldЎ¦s tire manufacturing capacity and 37 percent of US tire-making capacity and sales outside US represent 42 % of company revenues.
Table 1 ЎV Worldwide Market Share, 1990In early 1992, Sears, Roebuck and Company (Sears), owner of Auto Centers proposed to sell GoodyearЎ¦s popular brand tire, Eagle. This has raised GoodyearЎ¦s management consideration due to the following facts:
Goodyear brand tires has declined 3.2 % in market share (4.9 million units) for passenger cars between 1987 to 1991;2 million worn-out Goodyear tires were replaced with other brands at 850 Sears Auto Centers.THE ISSUEThe declining of Goodyear market share was believed due to the growth of warehouse membership club and the discount tire retail. See Table 2 and 3 below. In addition to that, about 2 million Goodyear tires were replaced by other brands at Sears Auto Centers in the Replacement Tire Market.
Table 2 ЎV US Market Share of Tire Replacement by Retail OutletType of Retail Outlet1982 (%)1992 (%)Traditional multibrand independent dealersDiscount multibrand independent dealersChain stores, department storesTire company storesService stationsWarehouse clubsOthersTotalTable 3 ЎV Pie chart of US Market Share of Tire Replacement by Retail OutletThe GoodyearЎ¦s management is considering Sears proposal to sell its GoodyearЎ¦s popular brand i.e. Eagle which basically affect it distribution policy.
In summary, the above factors lead to a question that need to be addressed by GoodyearЎ¦s management namely, Ў§Should Goodyear review its distribution and retails policy in order to re-gain market share and increase its revenue?ЎЁ
SITUATION ANALYSISWe need to consider a number of relevant information prior to making the decision. The information that needs to be considered is:What are GoodyearЎ¦s situation, its strength, weaknesses, opportunities and threat?Table 4 ЎVSWOT Analysis on GoodyearStrengthWeaknesses94 years of experience37% of US tire-making capacity60% in the Tire Replacement market (Top Ten in US)40% in the Original Equipment Manufacturer marketMarket leader in North AmericaBroadest line of productBroad market brand names with 11 brand namesPremium quality brandsA leading national advertiser8000 retails point of sale1000 company owned Goodyear Auto Service Centers2500 franchised Tire Dealersexclusive distribution policylack of customer serviceOpportunitiesThreatAdditional 850 retails channels
Sets of BesteverSketches on GoodyearЎ¦s performance and the potential of it
Sets containing all of the above were analyzed:Average of:
Sets from:
VFWM SITUATION A- A, B, C, D&E, FMV, AMV, AMV2, MAV, MV, MCAT, MVSA, MCA, MARS, MCA6, MDA, MCAO, and MCAU.
CODES
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