Summary of Case Analysis: Goodyear Tire and Rubber Company Essay

Summary of Case Analysis Goodyear weary and meritless Company1.INTRODUCTION GOODYEAR TIRE AND RUBBER COMPANYGoodyear Tire and gum elastic Company, was founded in 1898 and was the world die production leader until November 1990 when Groupe Michelin took over subsequently merging with Uniroyal Goodrich Tire Company.Goodyears 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 million with corporate wide earnings of $96.9 million. It has its owned Goodyear elevator car Service Centers and franchised Goodyear Tire Dealers in supporting its distribution and sale of tires in US. Goodyear controls 20 portion of the worlds tire manufacturing capacity and 37 percent of US tire-making capacity and sales outside US represent 42 % of participation revenues. Table 1 V Worldwide Market Share, 1990In betimes 1992, Sears, Roebuck and Company (Sears), owner of Auto Centers proposed to sell Goodyears normal make tire, Eagle. This has raised Goodyears management consideration due to the following facts(i)Goodyear patsy tires has declined 3.2 % in mart circumstances (4.9 million units) for passenger cars between 1987 to 1991(ii)2 million worn-out Goodyear tires were replaced with other brands at 850 Sears Auto Centers.2.THE ISSUEThe declining of Goodyear market share was believed due to the growth of warehouse membership club and the dissolve tire retail. See Table 2 and 3 below. In plus to that, about 2 million Goodyear tires were replaced by other brands at Sears Auto Centers in the Replacement Tire Market.Table 2 V US Market Share of Tire Replacement by sell passingType of Retail Outlet1982 (%)1992 (%)Traditional multibrand independent dealers4444Discount multibrand independent dealers715Chain stores, department stores2014Tire company stores109Service move118Warehouse clubs06Others84Total100100Table 3 V Pie graph of US Market Share of Tire Replacement by Retail Outlet The Goodyears management is considering Sears proposal to sell its Goodyears popular brand i.e. Eagle which basically affect it distribution policy.In summary, the preceding(prenominal) factors l... ...(b)Pricea.To offer high incentive in terms of stir of price to the franchise dealers and standard incentive to Sears Auto Centers.(c)Advertising and publicitya.Strategize the advertising to notify and educate customers of the new and additional channels of Goodyear tire products in the TV and newspaper(d)Distribution and Salesa.To check the alert franchise contracts with the franchise dealers and provide more marketing support to both franchise dealers and Sears.b.To restrict distribution of tires, ie. Channels (franchise and Sears) will only be able to obtain distribution from authorized distributors and not directly from manufacturer, as this will ensure price stability. 7.CONCLUSIONThe recommendation is to proceed with the review of distribut ion policy in order to allow Sears to sell Goodyear tires and set off the franchise dealers business to include the on-stop-service centers. This decision will re-gain market share from the warehouse club and discount independent dealers and outgrowth sales of 2 million tires annually as the distribution channels have increase and able to tap loyalty customers of Sears.