Goodyear Tyres is a leading tyre manufacturer based out of the USA. Goodyear manufactures, distributes and sells tyres for trucks, buses, two-wheelers, cars, agricultural vehicles, and airplanes. With close to 64,000 employees the company has operations in 48 facilities across 22 countries. The company also manufactures rubber based chemicals for a variety of commercial and industrial applications.
The company registered an annual turnover of 16 billion USD in the year 2016 and predicts a growth rate of over 12 percent in the next few years. The company envisages to focus on the premium tyre market which is expected to grow in the next few years. The company markets its tyres to almost all countries in the world and its primary focus is on US and Europe where it gets most of its business from. Goodyear also has the credit of being the highest suppliers of tyres for the popular motor racing event Formula 1.
Strengths in The SWOT analysis of Goodyear Tyres
Strengths are defined as what each business does best in its gamut of operations which can give it an upper hand over its competitors. The following are the strengths of Goodyear:
- Focus on high growth segments: Goodyear has aligned their product portfolio such asEagle F1 All-Season, Wrangler SRA and the Assurance Fuel Max to high growth segments which are profitable for them. This is ensuring a consistent return on investment.
- Alignment with a strong vision: Goodyear aligns their products and service to a vision that involves the creation of a strong and sustainable brand, innovation in all its products, targeting the precise segments and lending total commitment to all its stakeholders be it customers, retailers or OEM’s.
- Seamless integration of segments: All their segments right from the NASCAR segment to the commercial tyres work in complete synergy with each other. Their consumer and commercial businesses are in perfect sync and they have a separate tyre and service network for each of their segments.
- Deep understanding of customer needs: The positioning of Goodyear is backed by a deep customer research. Goodyear has always been focused towards listening to the customer’s voice and most of their products are tailormade for the customer requirements. They have also understood the demand from each market and develop tyres to suit individual market needs.
- Focus on new products: Goodyear plans to invest in new products and focus on the premium segment which 17 inches and above. The company plans to launch the Goodyear Assurance Weather Ready Tyres which are high grip and high traction tires suitable for all roads and all weathers.
- Association with racing events: The tyre brand has always been associated with top racing events such as Formula 1 and Nascar and the tyres are preferred in the racing circuit which is one of their biggest businesses.
Weaknesses in The SWOT analysis of Goodyear Tyres
Weaknesses are used to refer to areas where the business or the brand needs improvement. Some of the key weaknesses of Goodyear:
- Inventory control: With fluctuations in costs, Goodyear has been trying to curb costs and manage inventory.Both these initiatives are acting on the pricing and quality of Goodyear products and may eventually affect the branding strategy significantly.
- Huge size: Goodyear is currently the largest company in the world with around 64,000 employees and 52 facilities for manufacturing. With the growing financial instabilities across the world sustaining the momentum for such a high empire will prove to be a costly affair for the company.
- Pricing: Most of the raw material used in the manufacturing of tyres are oil-based derivatives and the fluctuations in oil prices are affecting the costing of these. Thus managing the pricing of the tyres considering that customers already consider Goodyear to be a premium tire brand will be a huge issue in the future.
Opportunities in The SWOT analysis of Goodyear Tyres
Opportunities refer to those avenues in the environment that surrounds the business on which it can capitalize to increase its returns. Some of the opportunities include:
- High market potential for luxury tires: In Europe and USA there is a surge in the demand for luxury tyres in the 17 inch and above category. The customer survey reveals that they prefer high value-added tyres both from a performance and style perspective.This could be a potential area for luxury tyre makers to prospect.
- Increase in demand in emerging markets: There is a demand for tyres in the emerging economies as the market for cars and two-wheelers are on an increase there. Research also indicates that there will be a boom in replacement tires market in these countries which is something that Good year can capitalize on.
Threats in The SWOT analysis of Goodyear Tyres
Threats are those factors in the environment which can be detrimental to the growth of the business. Some of the threats include:
- Competition: The company faces stiff competition from Bridgestone, Michelin, and Cooper as well as local players in each regional market they operate in.
- Fluctuations in costs: The raw material costs for tyres which include costs for synthetic rubber, carbon black, chemical solvents etc are all highly volatile and this creates huge challenges for tyre companies.