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Goodyear Tire

In: Business and Management

Submitted By shugakone
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Goodyear Tire and Rubber Company

Goodyear is one of the world's leading tire companies. This strategic plan for Goodyear will focus on their passenger vehicle. The plan will focus on ways to strengthen the internal and external methods to ensure that products remain at the best they can be for consumers. In doing this, we will concentrate on pricing, product placement, positioning, and most importantly promotion. Promotion has continued to drive the business and this plan will focus on it continuing to do so for years to come.

Company Background & Milestones:
It all began in 1898. Goodyear’s founder, Frank A. Seiberling, purchased the company’s first plant with a $3,500 down payment. With just 13 employees, Goodyear production began with a product line of bicycle and carriage tires, and horseshoe pads. Since the first bicycle tire in 1898, Goodyear pedaled its way toward becoming the world’s largest tire company, a title it earned in 1916 when it adopted the slogan "More people ride on Goodyear tires than on any other kind," becoming the world’s largest rubber company in 1926.
Today, Goodyear measures sales of nearly $20 billion. Goodyear is currently the No. 1 tiremaker in North America and Latin America. Goodyear is also Europe's second largest tiremaker. In 2011, Goodyear posted net sales of $22.8 billion, up 21% over 2010. Net income available to common shareholders was $321 million in 2011. Goodyear operates 53 plants in 22 countries. Together with its subsidiaries and joint ventures, Goodyear develops markets and sells tires for most applications.


Mission Statement: Constant improvement in our products and services to exceed the expectations of our customers and people.
Vision Statement: Become a market-focused tire company providing superior products and services to end-users and to our channel partners, leading to superior returns for our shareholders.
For me the vision statement and mission statement stand out in the best simplistic way possible. I would not change anything about the mission statement because it is clear on their objectives of who they are, and why they do what they do. Their prime focus in the vision statement, as I will discuss in this paper, is to focus on marketing. Being market-focused takes lots of research and development to be planned and executed well.
Values: “Protect Our Good Name” For the better part of a century, Goodyear's corporate values have been centered on the phrase, "Protect Our Good Name." Today, this is brought to life through developing a culture in which a committed and competitive team of associates can excel. These values are also manifested through our commitment to the products we sell and the consumers that rely on our products to help them in their daily journeys.
I personally feel the values statement is unnecessary to add to the Goodyear brand. The mission and value statement are enough for their strategic plans. Business information and the Annual Report define more into what they represent. Adding more info to read can just add to confusion and/or water down the importance of the mission and vision statements.
Description of Business: Goodyear is one of the world’s leading tire companies, with operations in most regions of the world. Together with its U.S. and international subsidiaries and joint ventures, Goodyear develops, manufactures, markets and distributes tires for most applications. It also manufactures and markets rubber-related chemicals for various applications. Goodyear is one of the world’s largest operators of commercial truck service and tire retreading centers. In addition, it operates approximately 1,400 tire and auto service center outlets where it offers its products for retail sale and provides automotive repair and other services. It has marketing operations in almost every country around the world.
The products this plan will focus on are the passenger vehicle tires as one. Passenger vehicle tires are one of the top contributors in monetary value to the Goodyear tire brand. Goodyear has a categorized family of tires: Assurance, Eagle, Fortera, Ultra Grip, Wrangler, Integrity, Efficient, and Excellence.

Target Market / Customer Profile
Goodyear proposes for the future that they will have the best products and the best supply chain to serve our customers and help them grow their businesses. Around the world they will invest in making more of the high-value tires that customers want to sell and end-users want to buy. They aim to be the supplier of choice, and will continue to innovate and produce more award-winning tires.
The leader in their targeted market segments detailed: We will have the right brands, channels and customers selling premium products. Our focus is on growing profitably, not growing volume for volume’s sake. We will focus on segments, geographies, customers and channels that offer the highest long-term profit potential. Our targeted segments will be those in which Goodyear’s innovation and technology differentiates our products from the competition.

From a more focused and strategic viewpoint – the passenger vehicle tires should be targeted to specific customers. Indeed their selling will be to retailers, and wholesalers alike – but who are the end users of the product. As it is not defined in the ARP or on their corporate site – I can deduce that with my plan the customers are those that: 1. Live in rural communities (not much other means of transportation other than driving – these people drive more than any other community) 2. Live in urban communities (tough roads, lots of wear and tear – although they do not drive as much, their vehicles go through rough streets) 3. Used car companies (their customers purchase used cars but need great tires)

Business locations are scattered throughout the world. Corporate Headquarters are located in Akron, Ohio. However, they operate throughout North America, Europe, Middle East and Africa, Latin America, and Asia Pacific.
As I noticed in their Annual Report and Key Strategies outline – they are focusing on expanding in Asia markets. This makes sense being that they are already number one. I think they should also expand manufacturing in North America. This would boost corporate responsibility, along with the expansion of jobs, and lesser taxes on distribution of tires. Especially with the expansion of car companies establishing facilities in North America – this would only make a great marriage.

Business Model (how does the company operate and make money?)
Goodyear’s principal business is the development, manufacture, distribution and sale of tires and related products and services worldwide. They manufacture and market numerous lines of rubber tires for: • Automobiles, trucks, buses, aviation, motorcycles, earthmoving and mining, equipment, industrial equipment, and various other applications
In each case, their tires are offered for sale to vehicle manufacturers for mounting as original equipment and for replacement worldwide. They manufacture and sell tires under the Goodyear, Dunlop, Kelly, Fulda, Debica and Sava brands and various other Goodyear owned “house” brands, and the private-label brands of certain customers.
In this new strategic plan I would like to see more focus towards the sale for replacement tires. Reason being the average “new age” consumer is always trying to find a way to save money. Many consumers will try to buy a used vehicle as opposed to a newer one just to save some money. These consumers will most likely need new tires so that their vehicle runs efficiently, saves them mileage, and can last for years.
In certain geographic areas they also: • retread truck, aviation and off-the-road, or OTR, tires, • manufacture and sell farm tires • manufacture and sell tread rubber and other tire retreading materials, • provide automotive repair services and miscellaneous other products and services, and • manufacture and sell flaps for truck tires and other types of tires
Their principal products are new tires for most applications. Approximately 87.1% of sales in 2008 were for new tires, which is consistent with 88.6% in both 2007 and 2006. This obviously shows that amongst all their products offered – tire sales are what drives the business forward.
Corporate: We must capitalize on the enormous opportunity in this high-growth and high-volume region. Over the past year, they continued to see the Goodyear brand grow at twice the pace of the industry in China. A new factory in Pulandian, China will serve the strong and growing demand for high-value-added Goodyear tires in the region.
Division: Vehicle manufacturers around the world are increasing the number of high-value tires across all their offerings. Increased technology and innovative features are now standard in virtually all new vehicles, and tires are no exception

Company Performance (Financial and Strategic)

With the newly implemented strategic plan, 2012 projections are stated below…

SWOT (Analysis of Strengths, Weaknesses, Opportunities, Threats):
Strengths: Industry for usage of cars is expected to grow. Because of this we know that the use of great tires will increase.
Weaknesses: Externally we cannot help that price of rubber may increase. And we also cannot help economic downturn (economic weakness) that affects our business.
Opportunities: Identify additional substitution opportunities, to reduce the amount of material required in each tire, and to pursue alternative raw materials including innovative bio-based materials.
Threats: Taxing will continue to threaten our profits.

Core Competencies and Competitive Advantage:
Engage internal and external Goodyear stakeholders, from associates to investors, in the elements of our path forward. The first element is the Strategy Roadmap, defining our key strategies, critical areas of execution, and long-term objectives. The second component was describing the seven “MegaTrends” that are shaping the tire industry over the next decade. Both elements provide clearer understanding of how the industry is growing, changing and evolving, and how we believe our strategic focus gives Goodyear a competitive advantage in that context. This would remain the same in the strategic plan.

Industry/Market Analysis - economy is up and down – but the sales remain consistent year to year - key success factors are the new green initiatives that save us money and keep us in line with corporate responsibility - continue to expand in the markets we are stronger in - any threats that come our way will be already assumed for, making sure we bargain well with our suppliers and consumers


We will be competitively advantaged in everything we do—We must set the industry standard in products, marketing, supply chain, and manufacturing. We must be operationally excellent and create an on-going competitive advantage with repeatable, efficient, and standardized processes that provide more of the right tires to our customers.

Product will be efficient, safe, long lasting.
Price will be in line with industry norms – but cheaper than the competitor.
Promotion will be expanded by 40% than last year. Promotion will be targeted towards used car owners, car owners with old vehicles, and customers with non gas friendly vehicles.
Places will be all over North America, Europe, Asia, and Latin America.

All projections under the new plan will increase substantially as projected earlier.


We record costs for rationalization actions implemented to reduce excess and high-cost manufacturing capacity, and to reduce associate headcount. Associate-related costs include severance, supplemental unemployment compensation and benefits, medical benefits, pension curtailments, postretirement benefits, and other termination benefits. For ongoing benefit arrangements, a liability is recognized when it is probable that employees will be entitled to benefits and the amount can be reasonably estimated. These conditions are generally met when the restructuring plan is approved by management. For one-time benefit arrangements, a liability is incurred and must be accrued at the date the plan is communicated to employees, unless they will be retained beyond a minimum retention period. Other costs generally include non-cancelable lease costs, contract terminations, and relocation costs. A liability for these costs is recognized in the period in which the liability is incurred.
We provide employees with defined benefit pension or defined contribution savings plans. Our principal U.S. hourly pension plans provide benefits based on length of service.…...

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