Good Year Tire and Rubber Company Case Anaylsis

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Goodyear Tire and Rubber Company – Case Analysis

1. Introduction/Background:
Goodyear Tire and Rubber Company, headquartered in Akron, Ohio, was founded by Frank and Charles Seiberling in 1898. Goodyear’s principal business is the development, manufacture, distribution and sale of tires throughout the world. In addition to Goodyear brands tires, the company owns the Kelly-Springfield Tire Company, Lee Tire and Rubber Company, Delta Tire and they manufacture private-label tires. Goodyear was the world leader in tire production until November, 1990, when Groupe Michelin acquired the Uniroyal Goodrich Tire Company.
Goodyear controls 20 to 25 percent of the world’s tire manufacturing capacity and about 37 percent of the U.S. tire-making capacity. The Goodyear brand is the market share leader in North America and Latin America, number two in Asia outside Japan behind Bridgestone, and third in market share in Europe behind Michelin and Pirelli.
World tire production in 1991 was approximately 850 million tires, of which 29 percent were produced in North America, 28 percent in Asia, and 23 percent in Western Europe. Ten tire manufacturers’ account for 75 percent of worldwide production. The three largest tire manufacturers account for almost 60 percent of all tires sold worldwide. Groupe Michelin, headquartered in France, is the world’s largest producer, Goodyear is the second-largest producer and Bridgestone Corporation, a Japanese firm, is the third-largest tire producer.
The tire industry is divided into two end-use markets:
1) The Original Equipment Tire Market. The original equipment tire is sold by the tire manufacturers directly to the automobile and truck manufacturers and account for 25 to 30 percent of the tire unit production volume each year. Demand for original equipment tires is derived; it is directly related to automobile and truck…...

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