Goodyear Tire and Rubber Company

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Goodyear Tire and Rubber Company With the competitiveness of the US tire industry in 1992, Goodyear Tire and Rubber Company is reconsidering a proposal from the department store Sears to carry Goodyear Eagle brand tires. With a $38 million loss in 1990 and a change in top-level management in 1991, the Sears proposal from 1989 was being looked at again. These new top-level managers have two decisions to make: whether Sears should carry only the Goodyear Eagle brand or all of Goodyear’s tire line. Goodyear will have to look at their distribution policy and the potential backlash that could come from their independent franchised dealers. Key factors in competition of the US tire industry Price plays a large factor in the tire industry. Many consumers purchase their tires based on the price, due to the fact that they know little about tires and are more focused on getting a good price in comparison to a better quality tire. Customers who know more about tires or automobiles look for quality of the tires for their vehicles. At the retail level, salesmen are pushed to sell the private label tires of a store before any other one. This is difficult to do when a customer has a brand loyalty. To be competitive in the tire industry in the United States you must have a variety of offerings. Tire companies must have a strong portfolio offering mix to remain competitive within the industry. The United States has many different climates, with both extremes of rain to ice. By having an extensive product line, you will be able to satisfy more customers in each demographic. Branding and reputation is another huge factor in the US tire industry. When trying to create a competitive advantage within the tire industry, branding and prod... ... middle of paper ... ...are generally uneducated about tires and their different characteristics. Pros/Cons for Franchised Tire Dealers PRO -This change in channel selection by Goodyear allows for the franchised dealers to start carrying private label brands and create a larger. -Goodyear will most likely have to subsidize a loss of sales with increased support in promotion, and lower their prices. -Overall branding will improve for Goodyear, as there are more offerings available to the public. CON -Offerings may be cannibalized from their own sales and shifted towards Sears. -Lack of supply may also become a Goodyear production cannot meet the demand of both the franchised dealers and Sears Auto Centers. -The offerings of the entire Goodyear line-up by the franchised dealers may seem overpriced if Goodyear manufacturers a lower and cheaper level of tires exclusively for Sears.

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