GOODYEAR : THE AQUATRED LAUNCH In 1991, Goodyear operated 41 plants in the United States, 43 plants in 25 other countries, six rubber plantations, and more than 2,000 distribution outlets worldwide. ranked third in worldwide sales of new tires behind Michelin and Bridgestone, respectively.
COMPETITORS tires producers in the U.S market: Bridgestone, Firestone, Michelin, private labels…but the main competitor is Michelin. Channels Independent dealer- earn 50% of sales revenue. Franchises , dealers & govt. agencies-20% of sales revenue.
Manufacturer owned stores-30% of sales revenue. In addition to these retailers, there are the Goodyear owned outlets and. new retail formats like “Just tires”, which only sell and install tires
STRENGTH • Goodyear invested a lot to produce radials. • Strong track in launching innovative new products. • Present in all market segments with different products (B2B – B2C). • Strong distribution strategy: The Company relied in 3 types of outlets. 1st the small independent dealer (50% of sales revenues), 2nd the manufacturer owned outlets (30% of sales) and 3rd the franchise dealers and government agencies; they are testing a new retail format “Just Tires”.
WEAKNESS• Problems on its distribution structure for example financing flow problems. “Most complaints from independent dealers involved relatively minor billing problems”• Availability of its products at unauthorized dealers at low prices.• Low availability in many outlets forced consumers to buy other brands.
OPPORTUNITY• In 1991, 50% of independent dealers sold only Goodyear tires. Therefore, it has to take into consideration this opportunity and strengthen its relationship with them to generate more flows.• New technological breakthrough. (Aquatred) • Absence of wet condition tires and high durability/distance tires in the market. (Opportunity to introduce Aquatred via product development).
THREATS • Possibility of competitors launching products in the same segment. • Michelin has stronger value oriented, quality oriented buyers and customer loyalty. • Independent dealers are complaining about the competition of company-owned outlets and mass merchandisers
DISTRIBUTION Goodyear should focus on selling its Aquatred in specific targeted area, such as, heavy rainfall cities in the US. However, Goodyear should still maintain the current distribution channel and guarantee the interests of its 2500 independent dealers. Moreover, the company could offer more training program for independent dealer’s employees to strengthen their relationships and increase sales.
DECISION • Launching the Aquatred Tire is a great opportunity for Goodyear. • It will allow the company to sustain its innovation oriented strategy. • This new tires offer bettertraction under wet conditions, more safety, reliability and give convenient warranty (up to80,000 miles).