Goodyear Position in the Tire Industry

Goodyear Aquatred

Position in the tire industry

1. From the early 1900s to 1970s, Goodyear was one of the 5 dominant players in the tire industry. In spite of the entry of foreign players in the US market with their sales increasing from 8% in 1972 to 22% in 1990, Goodyear has been able to hold to an extent in the market. Even in 1991 Goodyear ranks third in tire sales all over the world with new tire sales of $ 8.5 billion. The fact that Goodyear has been to retain its completely American character is an important issue of pride for it even as other firms have had to enter into collaborations. Thus Goodyear has shown resilience in surviving in the market and continues to remain among the top 3 in the world.

2. Perhaps Goodyear deservedly is called by the name of Gorilla, with its operation of 43 plants in 25 countries, six rubber plantations, more than 2000 distribution outlets with revenues of $ 10.91 billion and approximately 105,000 employees. Goodyear has also shown the ability to adapt to the market and is not hesitant in making investments and restructuring operations whenever necessary. Thus even though most of the US manufacturers did not make the transition to radial tires, Goodyear did so by making an investment of $ 1.5 billion.

3. Also, its American character seems to be very important for Goodyear. Thus it struggled to a great extent to see off the takeover threat by Sir James Goldsmith. Its profits declined from $ 770 million in 1987 to a loss of $ 38.3 million and a slight recovery in 1991 to $ 96.6 million. In the meanwhile it also had to reduce its workforce by 13% from 1987 to 1991. That inspite of being involved in such serious struggles for survival, Goodyear is able to conceptualize innovations like Aquatread, willing to work out strategies for distribution and promotion plans speaks volumes of its resilience.

4. The focus is now on moving away from assets not directly related to the business, new product development and bring in a management team that understands where the leadership is coming from. It is perhaps this ability to synchronize strategies and tactics throughout the organization, work to a plan and adapt to changes that has allowed Goodyear to retain a brand share of around 15% in the replacement market in US and a brand share of around 35% in the OEM market from 1975 to 1991. In terms of brand share its nearest competitor is far behind.

5. Goodyear is also a firm that attempts to anchor its operations with a marketing mindset and respond to consumer needs. It regularly conducts market surveys to understand consumer behaviour and consumer needs. Though about Aquatred itself, the question can be raised whether a recognized consumer need exists. In a grudge market, would there be scope for a distinguishable niche product? The current trend appears to be low price products and increasing mile guarantees.