Goodyear Case Analysis

Executive Summary

In order for Goodyear to partner with Sears and still maintain high revenue levels, our teams’ professional recommendation is to counter the original proposal made by Sears. We then propose for Goodyear to distribute the Aquatred, Decathlon, and T-Metric lines through the 850 retail points that Sears has.

Since Sears will be distributing the new Aquatred line, we will also be compiling educational packets to send to Sears representatives in order for the representatives to be better educated about the line and be able to recommend and upsell the Aquatred line where they can.

We have decided that Sears would not have exclusivity for any of the Goodyear lines. However, Goodyear franchises will have exclusivity to the Eagle line, which is our most popular line.

Problem

We’ve been faced with the issue whether to pursue wider distribution to a mass merchandiser, Sears. Sears has come to us offering a proposal, inquiring the sales of our Eagle brand tires. They would like to sell our Eagle brand tires in all 850 locations, but the real question is are we willing to give up the exclusivity factor Goodyear has created?

Our tires have not been sold in mass merchandise stores since the 1920’s. We’ve kept our distribution small, but within the past year we’ve suffered a 38 million dollar deficit. Pursuing the Sears’ deal would likely create friction and disputes between our distribution retailers and franchise dealers.

Last, we encountered the issue that Sears may not accept our counter offer. This is a problem we may have to look at just in case the small chance that Sears does not find our counter offer fit to them.

Decision

After much consideration, we would like to counter the Sears offer. We are interested in seeking distribution through Sears, but not with our Eagle brand tires. We would like to request an offer to distribute our new Aquatred, T-Metric, and Decathlon brand tires with Sears. We would like to maintain our exclusivity with the Eagle brand in our franchise stores, but offer Sears our newest top-of-the-line product, the Aquatred. Therefore, we believe this is a feasible decision.

Market

With our decision, we would like to place more focus on the replacement tire market. This market has proven to be more successful than the “original equipment” tire market. The replacement market has shown statistics of 70-75 percent tires sold annually, with passenger cars accounting for 75 percent of the annual sales.

Target Market

We realize the tire market is confusing and the average consumer is likely to be uneducated about the tires needed for their vehicle(s). With