This 5 page paper considers a case study where Goodyear are faced with a difficult decision. The company need to increase sales, but the most obvious strategy is one that may alienate existing retailers and could reduce the overall sales. The writer considers the different strategies available and recommends an alternative strategy. The case study was supplied by the student. The bibliography cites 3 sources.
Name of Research Paper File: TS14_TEgoodyr.rtf
Unformatted Sample Text from the Research Paper:
market it has managed a leader position. The company has a wide range of tyres, and also two subsidiary companies that produce their own tyres and private label tyres.
The market split for Goodyear is 40% of unit sales on the new market to automotive manufacturers and 60% of units being sold
in the replacement market. The new market has always been competitive, and now the replacement market is seeing increased competition from mass retailers entering and expanding in the market and
reducing to overall profit margins. The less profitable margin of the new car market has been pursued in the strong belief that buyers are more likely to repurchase the same
brand tyre when it needs to be renewed. Goodyear has had a strong strategy which has involved distribution to retailers, many of whom have been with the company for
many years. This is supported with a large advertising budget, second only in size to Michelin. There are distributions made to 8,000 outlets in the US and 25,000 outlets world
wide. It is these outlets that account for the majority of sales. Now Goodyear have to consider changing their distribution strategy. The number one manufacturer is Michelin, with 15,000 outlets
in the US, and their follower in third place is Firestone that has retail outlets as well as agreement with services stations affiliated to Exxon, Amoco and Chevron. Problem
Definition The market has become more competitive, tyres are lasting longer and brand loyalty has decreased. This has lead to a reduction in tyre sales for Goodyear, a reduction of
3.2% which is equal to lost sales of 4.9 million. With the decrease in loyalty and the increase in the mass retailers