Market Strategy Case Study Goodyear Tire And Rubber Company Autosaved 2
Goodyear Tire and Rubber
Company
Kate Rego
Nicole Montanaro
Outline of presentation
Overview
• Goodyear was founded in Akron, Ohio in 1898 by Frank and
Charles Seiberling.
• In 1992 Goodyear Tire and Rubber Company were reconsidering a proposal from Sears, initially denied in 1989, to sell their Eagle brand tires.
• Two factors contributed to the reconsideration of the sears proposal – decline in market share
– Goodyear brand tires were being replaced annually at
Sears Auto Centers.
Industry Summary
• Tire production of 850 world wide
• Ten tire manufacturers account for 75% of world wide production
• 3 largest account for 60%
• Two types of markets
– Original equipment tire market (20% -25%)
– Replacement tire market (70%-75%)
Problem:
Should Goodyear accept the proposal from sears to sell their tires?
Secondary Problems
• Selling Goodyear tires through sears will represent a significant change in distribution policy and create conflict with franchise dealers
• If they accept the proposal, should they sell only the
Goodyear Eagle brand or multiple Goodyear brand tires through Sears?
• Possible cannibalization of company owned Goodyear Auto
Service Center and Franchised Goodyear Tire Dealers
SWOT Analysis
Strengths
• Broadest line of tire products of any tire manufacturer. • They are the second largest producer of tires in the world.
• Market share leader in U.S. for original equipment tires and replacement tires.
• They are one of the leading national advertisers in the U.S.
Weaknesses
• Goodyear has not sold through a mass merchandiser since the 1920’s.
• Sears customers will buy the eagle brand rather than the Goodyear brand due to being more price-sesative Opportunities
• Tire dealers run frequent price promotion ads in the local newspapers.
• The growing want for full service stations by consumers. • Growth of discount multi brand independent dealers increased from 7 percent in 1982 to 15 percent in 1992
Threats
• Independent tire dealers carry
Company
Kate Rego
Nicole Montanaro
Outline of presentation
Overview
• Goodyear was founded in Akron, Ohio in 1898 by Frank and
Charles Seiberling.
• In 1992 Goodyear Tire and Rubber Company were reconsidering a proposal from Sears, initially denied in 1989, to sell their Eagle brand tires.
• Two factors contributed to the reconsideration of the sears proposal – decline in market share
– Goodyear brand tires were being replaced annually at
Sears Auto Centers.
Industry Summary
• Tire production of 850 world wide
• Ten tire manufacturers account for 75% of world wide production
• 3 largest account for 60%
• Two types of markets
– Original equipment tire market (20% -25%)
– Replacement tire market (70%-75%)
Problem:
Should Goodyear accept the proposal from sears to sell their tires?
Secondary Problems
• Selling Goodyear tires through sears will represent a significant change in distribution policy and create conflict with franchise dealers
• If they accept the proposal, should they sell only the
Goodyear Eagle brand or multiple Goodyear brand tires through Sears?
• Possible cannibalization of company owned Goodyear Auto
Service Center and Franchised Goodyear Tire Dealers
SWOT Analysis
Strengths
• Broadest line of tire products of any tire manufacturer. • They are the second largest producer of tires in the world.
• Market share leader in U.S. for original equipment tires and replacement tires.
• They are one of the leading national advertisers in the U.S.
Weaknesses
• Goodyear has not sold through a mass merchandiser since the 1920’s.
• Sears customers will buy the eagle brand rather than the Goodyear brand due to being more price-sesative Opportunities
• Tire dealers run frequent price promotion ads in the local newspapers.
• The growing want for full service stations by consumers. • Growth of discount multi brand independent dealers increased from 7 percent in 1982 to 15 percent in 1992
Threats
• Independent tire dealers carry