Goodyear: The

Aquatread launch

Group B3

SWOT Analysis
Chapter title

Strengths

Weaknesses

Brand equity

Low Pofitability

Loyal
independent
dealers

Channel
Leakage

Absence in
Market leaders in
certain
replacement tires
Distribution
channels
Strong inage
among priceconstrained and
commodity
buyers

Chapter title

Threats

Opportunities

Winter Olympics
Rapid
Skimming

Easy replication
of the technology

Patented
technology

Foreign
competitors

Decreasing
dealer bargain
First mover
Higher
advantage in wet
dependence on
traction tires
independent
dealers

Product Analysis

Points of
Parity
State of the art
Radials
Precision Handling

Points of
Differentiati
on
Safety (Lowest
stopping distance)
Innovative and
unique design
Longer Life

Market Analysis
Customer
Price Constrained Buyers, Value Oriented Buyers, Quality Buyers,
Commodity Buyers
Increasing Value-Oriented buyers
Decreasing Price-Oriented buyers
Stronger image among price constrained buyers and commodity
Cost
buyers
Increasing costs due to rise in oil prices
Lower Margin Consumer Power

Convenience
Good network of over 4400 stores
Independent stores and Manufacturer Outlets

Communication
Goodyear trains its dealers to deliver a uniform communication to its
customers

Replacement Segment Comparision

Year
1975
1981
1986
1991

Replacement Industry
(million of
Growth
tyres)
(%)
137
-123
-10
144
17
152
6

Industry
Performance
160
140
120
100
80
60
40
20
0
1976

Year
1975
1980
1985
1991

GoodYear's
share in US
market (%)
14
14
15.5
15

GoodYear's GoodYear'
sale (million s Growth
of tyres)
(%)
19
-17
-10
22
30
23
2

GoodYears
Performance

Industry
GoodYear

1981

1986

1991

OEM Segment Comparision

Year
1976
1981
1986
1991

Industry
OEM (million Growth
of tyres)
(%)
50

37
-26
54
46
43
-20

Year
1975
1980
1985
1991

GoodYear's
share in US
market (%)
35
28
32
38

Industry
Performance
60

GoodYear's GoodYear'
sale (million s Growth
of tyres)
(%)
18

10
-41
17
67
16
-5

GoodYears
Performance

50
40
Industry
GoodYear

30
20
10
0
1976

1981

1986

1991

Channels Evaluation in Replacement Market

Channel
Type
Independent
Dealers
Manufacturer
Owned
Outlets
Franchised
Dealers
Government
Agencies

Number
Sales
of
Revenue
Outlets
(%)

Revenue from
Channel (1991 Revenue (million)
$8,600 millions)
/Outlet

4,400

50

4300

1.24

1,047

27

2322

2.81

600

688

1.45

--

15

1290

--

Highest revenue per outlet generated by

Goodyears own outlets as compared to other
channel types.
However, higher management and training costs
incurred.
Declining percentage (from 70% to 50%) of
exclusive independent dealers selling Goodyear

Reasons to launch
Aquatred

Strategic Implications for battle against

Michelin:
Increasing share in Value-Oriented and
Quality Segment
Satisfying
the second most important consumer need
wet traction
POP on tread life (60,000 miles warranty)
POD on wet traction through anti-hydroplaning

Competitors ready with similar product

(Aqua Contact, 1993)
Higher Contribution Margin of 10% as
compared to Invicta GS

Brand-oriented
Prestige Buyers
Outlet-oriented
Comfortable
Conservatives

Prestige Buyers Value-Oriented

Upscale, well-informed,
high-involvement (with
65% buying major
Comfortable
brands)
Conservatives
higher influence of
channel
quatreds Targeted intermediaries
ValueOriented
Segment(s)
Predisposed
to major

Selected Channel(s)
Current distribution channels of independent dealers, Goodyear-owned
stores & franchises.

Must focus on improving Channel Power within existing distribution

framework (diminishing due to NTDRA)

Must devote resources to ensure intermediary capacity building.

(training, services, promotions, etc.)

Ensure standardized pricing and promotion as well as ensuring

Aquatreds key product attributes are communicated effectively.
(Exhibit 9 and 10 the mystery customer)
Refrain from entering Mass merchandizers, warehouse clubs, etc. as
targeted segments are high-end premium consumers who are driven by
safety and not discounts.