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Case Study: Good Year

1962 words - 8 pages

Background:Goodyear is one of the world’s leading tire brands, with their brand being marketed in all major continents and markets. Goodyear produces a vast array of tires ranging from racing tires to luxury tires to heavy-duty tires, along with high performance engineering and manufacturing products. Goodyear has over 60 manufacturing facilities in 25 countries and employs around 70,000 people. It has recently been named in Forbes magazine as the most admired motor vehicle parts company, as well as one of the trustworthiest companies in America.History:Goodyear first came into operation on the year of 1898, when the first Goodyear factory opened in Akron, Ohio. Production originally consisted of bicycle and carriage tires, rubber horseshoe pads, and poker chips. But this was merely a modest beginning for what would become the world’s largest tire company. By 1926 it had become the world’s largest tire company producing tires for all types of motor vehicles and airplanes, and by the 1950’s was posting turnover of over $1 billion. 1984 saw sales reach $10 billion. This however preceded a tumultuous few years, which saw a takeover attempt and resulted in massive restructuring of the company. The 2000’s saw a period of decline for Goodyear, however the last couple of years have seen a reinvigorated Goodyear re-establish itself as one of the leading tire manufacturers in the world.Specific Global Pressures For Change:Goodyear has faced escalating costs for raw materials in its production of its goods, and so has been forced to look at ways to increase efficiency in its production to make up for the increase of costs for its goods. The price for rubber has risen by on third over the past year alone, posing a fair few problems for Goodyear. This has forced Goodyear into looking for ways to create more efficient production procedures that will be able counter-act the rise in costs of materials in production. Goodyear has acted by closing down high cost maintenance facilities and begun the modernization of existing facilities, as well as moving some production into areas that are more economical such as Eastern Europe and Asia.One of Goodyear’s main competitors in Bridgestone has been making serious inroads into markets that were formerly controlled by Goodyear, specifically in North America, on the back of cheap labour in Asia. This has allowed them to produce cheaper products that Goodyear, as well as other tire manufacturers such as Michelin, has been struggling to stay competitive with. Goodyear’s problems have been exacerbated by labour troubles with unions and workers over pay disputes and job security. While the latter has been resolved, it put Goodyear on the back foot and they still an uphill battle in staying competitive and maintaining their market share.Another major pressure on Goodyear has been the focus on reducing carbon emissions and becoming more environmentally friendly. Goodyear has taken this on...

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