Goodyear Tire Case Study

GoodYear Executive Summary

The following is an executive summary of The Goodyear Tire Corporation. This case analysis will include a company background followed by a five forces model of the industry competition and SWOT analysis. The summary will also include a financial analysis of the corporation along with Goodyears corporate level strategies and objectives. Finally, alternatives will be addressed, recommendations will be made, and implementation and control will be discussed.

By 1986, Goodyear had a debt of $3.7 billion dollars. From 1982-1986 Goodyear’s principal business was development, distribution, and sales of times for most applications. Gooyear was a multi-product, diversified conglomerate. Goodyear’s approach to becoming a global company was having only one single global strategy, instead of tailoring products and distribution to each national market.

THE FIVE FORCES MODEL OF INDUSTRY COMPETITION

The market is at a mature stage, but the entry level is fairly low.

• The degree of rivalry is high. Tires are sold almost everywhere.

• The companies are interdependent, the competitive actions of one company directly affect the profitability of the others in the industry.

• The bargaining power of the suppliers is high. Tires are a necessity.

• The bargaining power of the buyers is relatively low. With the nature of the competition in the industry, the top firms are doing everything possible to get advertising space from retailers.

• The threat of substitutes is high. There are many tire companies to choose from. You can purchase tires from many different stores from Sears to Wal-mart.

-When Gualt became CEO he implemented a flatter structure with fewer layers and changing the culture involving everyone in the organization and returning to the basic concepts of reducing costs, identifying corporate assets to sell in order to reduce the 3.7 billion dollar debt and going to customer-oriented tire manufacturing operation.

-Gualt being very “involved” came in and turned the company around in about four years after coming to Goodyear in 1991.

-Gault divested assets not related to the tire business to reduce costs also removing light bulbs from his office and selling the corporate aircraft, Goodyear’s New York apartment and laying off thousands of “associates” shows his commitment to reducing the cost and debt, which is another strength we found at Goodyear.

-Gualt would not allow shoddy merchandise and expects the best quality in the industry. The global company is committed to quality in every aspect of the operation and satisfying their customers.

-When Gault first took over the company he realized the need for major change within the company that