Goodyear and the Threat of Government Tire Grading SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Goodyear and the Threat of Government Tire Grading
In the spring of 1977, Goodyear CEO Charles J. Pilliod Jr. was looking at an internal report on government and legal events relevant to the tire industry. Two items caught his attention. First, he noticed that an industry suit to block the government's proposed system to rate tires on tread wear, traction, and temperature resistance had been rebuffed by a U.S. appeals court. Although the court found fault with the government's proposals, the ruling could mean that the tire grading system was close to becoming a reality. Second, Joan Claybrook, a former Nader consumer interest group lobbyist, had just become head of the National Highway Traffic Safety Administration, the agency within the government that was in charge of producing the rating system. Pilliod wondered if the regulatory events might affect Goodyear's ability to maintain its world leadership in the tire industry.
Authors :: Felix Oberholzer-Gee, Dennis Yao, Elizabeth A. Raabe
Swot Analysis of "Goodyear and the Threat of Government Tire Grading" written by Felix Oberholzer-Gee, Dennis Yao, Elizabeth A. Raabe includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Tire Pilliod facing as an external strategic factors. Some of the topics covered in Goodyear and the Threat of Government Tire Grading case study are - Strategic Management Strategies, and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Goodyear and the Threat of Government Tire Grading casestudy better are - – wage bills are increasing, increasing commodity prices, digital marketing is dominated by two big players Facebook and Google, increasing energy prices, increasing government debt because of Covid-19 spendings, technology disruption, talent flight as more people leaving formal jobs,
there is backlash against globalization, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Goodyear and the Threat of Government Tire Grading
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Goodyear and the Threat of Government Tire Grading case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Tire Pilliod, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Tire Pilliod operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Goodyear and the Threat of Government Tire Grading can be done for the following purposes –
1. Strategic planning using facts provided in Goodyear and the Threat of Government Tire Grading case study
2. Improving business portfolio management of Tire Pilliod
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Tire Pilliod
Strengths Goodyear and the Threat of Government Tire Grading | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Tire Pilliod in Goodyear and the Threat of Government Tire Grading Harvard Business Review case study are -
Ability to lead change in Strategy & Execution field
– Tire Pilliod is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Tire Pilliod in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Tire Pilliod in the sector have low bargaining power. Goodyear and the Threat of Government Tire Grading has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Tire Pilliod to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Tire Pilliod is present in almost all the verticals within the industry. This has provided firm in Goodyear and the Threat of Government Tire Grading case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Highly skilled collaborators
– Tire Pilliod has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Goodyear and the Threat of Government Tire Grading HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Operational resilience
– The operational resilience strategy in the Goodyear and the Threat of Government Tire Grading Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Innovation driven organization
– Tire Pilliod is one of the most innovative firm in sector. Manager in Goodyear and the Threat of Government Tire Grading Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Sustainable margins compare to other players in Strategy & Execution industry
– Goodyear and the Threat of Government Tire Grading firm has clearly differentiated products in the market place. This has enabled Tire Pilliod to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Tire Pilliod to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Tire Pilliod has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Tire Pilliod has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Ability to recruit top talent
– Tire Pilliod is one of the leading recruiters in the industry. Managers in the Goodyear and the Threat of Government Tire Grading are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Organizational Resilience of Tire Pilliod
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Tire Pilliod does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Superior customer experience
– The customer experience strategy of Tire Pilliod in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High brand equity
– Tire Pilliod has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Tire Pilliod to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Goodyear and the Threat of Government Tire Grading | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Goodyear and the Threat of Government Tire Grading are -
Interest costs
– Compare to the competition, Tire Pilliod has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Capital Spending Reduction
– Even during the low interest decade, Tire Pilliod has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Goodyear and the Threat of Government Tire Grading HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Tire Pilliod has relatively successful track record of launching new products.
High cash cycle compare to competitors
Tire Pilliod has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High bargaining power of channel partners
– Because of the regulatory requirements, Felix Oberholzer-Gee, Dennis Yao, Elizabeth A. Raabe suggests that, Tire Pilliod is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Low market penetration in new markets
– Outside its home market of Tire Pilliod, firm in the HBR case study Goodyear and the Threat of Government Tire Grading needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Tire Pilliod is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Goodyear and the Threat of Government Tire Grading can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Slow decision making process
– As mentioned earlier in the report, Tire Pilliod has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Tire Pilliod even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Goodyear and the Threat of Government Tire Grading, it seems that the employees of Tire Pilliod don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
High operating costs
– Compare to the competitors, firm in the HBR case study Goodyear and the Threat of Government Tire Grading has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Tire Pilliod 's lucrative customers.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Tire Pilliod supply chain. Even after few cautionary changes mentioned in the HBR case study - Goodyear and the Threat of Government Tire Grading, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Tire Pilliod vulnerable to further global disruptions in South East Asia.
Opportunities Goodyear and the Threat of Government Tire Grading | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Goodyear and the Threat of Government Tire Grading are -
Better consumer reach
– The expansion of the 5G network will help Tire Pilliod to increase its market reach. Tire Pilliod will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Tire Pilliod can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Using analytics as competitive advantage
– Tire Pilliod has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Goodyear and the Threat of Government Tire Grading - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Tire Pilliod to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Tire Pilliod in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Tire Pilliod can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Tire Pilliod can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Loyalty marketing
– Tire Pilliod has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Tire Pilliod can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Goodyear and the Threat of Government Tire Grading, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Tire Pilliod to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Building a culture of innovation
– managers at Tire Pilliod can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Tire Pilliod can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Tire Pilliod to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Tire Pilliod to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Tire Pilliod can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Tire Pilliod in the consumer business. Now Tire Pilliod can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Goodyear and the Threat of Government Tire Grading External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Goodyear and the Threat of Government Tire Grading are -
High dependence on third party suppliers
– Tire Pilliod high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Stagnating economy with rate increase
– Tire Pilliod can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Tire Pilliod will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Shortening product life cycle
– it is one of the major threat that Tire Pilliod is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Tire Pilliod business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Tire Pilliod
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Tire Pilliod.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Tire Pilliod in the Strategy & Execution sector and impact the bottomline of the organization.
Consumer confidence and its impact on Tire Pilliod demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Technology acceleration in Forth Industrial Revolution
– Tire Pilliod has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Tire Pilliod needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Regulatory challenges
– Tire Pilliod needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Tire Pilliod with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Tire Pilliod in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Weighted SWOT Analysis of Goodyear and the Threat of Government Tire Grading Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Goodyear and the Threat of Government Tire Grading needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Goodyear and the Threat of Government Tire Grading is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Goodyear and the Threat of Government Tire Grading is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Goodyear and the Threat of Government Tire Grading is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Tire Pilliod needs to make to build a sustainable competitive advantage.