The Goodyear Company Research Analysis
Introduction
The Goodyear Tire and Rubber Company is a multinational tire manufacturing company, founded in 1898. The company manufactures and distributes its products with over 96 manufacturing facilities in 28 countries. The Goodyear company possesses a top mark on the global market of replacement tires, displaying confident attitude even on the foreign markets. In addition to the tire manufacturing, the company is engaged in the development of tire-related products and rubber-related chemicals ("Goodyear Corporate | Home", 2017).
Market Structure
The Goodyear Tire and Rubber Company operates in the highly competitive market, among several other global companies, such as Michelin, Cooper Tire & Rubber Company, Bridgestone Corporation and else. The following table presents the comparison of main industry competitors:
Company Comparison in FY2010
Company
Net Profit Margin
Operating Margin
EBITD Margin
Return on Average Assets
Employees
Goodyear
(-0.87%)
0.04%
5.97%
(1.09%)
72
Michelin
5.86%
9.47%
14.81%
5.80%
105,057
Bridgestone
3.67%
3.60%
11.56%
3.81%
139,822
Source: ("Tire Manufacturing in the US Market Research | IBISWorld", 2017)
In fact, the company dominates the global market for Replacement Tires, with 73.6% of market share. In addition, Goodyear is a supplier of automobile manufacturing industry subjects, possessing 26.4% of total tire sales ("Stock:Goodyear Tire & Rubber Company (GT)", 2017). In fact, tire manufacturing industry is perceived as an industry with relatively low barriers to entry- due to low licensing requirements, lack of government regulations regarding tire merchandise turnover and due to low resource constraints. Due to the above factors, the industry became highly attractive to new entrants, since the biggest barrier to establishing a business is capital. This, in turn, caused Chinese tire manufacturers to emerge on the global market, thus imposing a serious threat to market leaders.
Macroeconomic analysis
One of the important factors for business development is the state of the national economy. The US economy is believed to be currently in the state of expansion (Jain, 2016). However, such economic state is less beneficial for Goodyear company, since economic expansion attracts imports of foreign goods, including cheap Chinese tires.
The following graph presents GDP of the United States for the last 10 years:
Source: ("United States GDP | 1960-2017 | Data | Chart | Calendar | Forecast | News", 2017)
The following graph presents CPI of the US:
Controversially enough, Goodyear company would only benefit from the economic growth of the countries it operates in since consumers would be capable of purchasing more products.
Demand trends
While the consumers demand on tires fluctuates each year, Goodyear company started to improve the demand for its services by forming alliances with the US Department of Energy’s Sandia National Laboratories. Cooperation was planned to be mutually profitable, since allowed Goodyear to develop new computational analysis tools, thus improving manufacturing …
