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 - – increasing transportation and logistics costs, there is increasing trade war between United States & China, increasing household debt because of falling income levels, increasing inequality as vast percentage of new income is going to the top 1%, cloud computing is disrupting traditional business models, geopolitical disruptions, challanges to central banks by blockchain based private currencies,
competitive advantages are harder to sustain because of technology dispersion, technology disruption, 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.
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.
Learning organization
- Tire Pilliod is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Tire Pilliod is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Goodyear and the Threat of Government Tire Grading Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Tire Pilliod digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Tire Pilliod has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
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.
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.
Cross disciplinary teams
– Horizontal connected teams at the Tire Pilliod are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in 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.
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.
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.
Training and development
– Tire Pilliod has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Goodyear and the Threat of Government Tire Grading Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
High switching costs
– The high switching costs that Tire Pilliod has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its 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 -
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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Goodyear and the Threat of Government Tire Grading, in the dynamic environment Tire Pilliod has struggled to respond to the nimble upstart competition. Tire Pilliod has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Goodyear and the Threat of Government Tire Grading, is just above the industry average. Tire Pilliod needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
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.
Slow to strategic competitive environment developments
– As Goodyear and the Threat of Government Tire Grading HBR case study mentions - Tire Pilliod takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Aligning sales with marketing
– It come across in the case study Goodyear and the Threat of Government Tire Grading that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Goodyear and the Threat of Government Tire Grading can leverage the sales team experience to cultivate customer relationships as Tire Pilliod is planning to shift buying processes online.
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.
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.
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.
Workers concerns about automation
– As automation is fast increasing in the segment, Tire Pilliod needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
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 -
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.
Creating value in data economy
– The success of analytics program of Tire Pilliod has opened avenues for new revenue streams for the organization in the industry. This can help Tire Pilliod to build a more holistic ecosystem as suggested in the Goodyear and the Threat of Government Tire Grading case study. Tire Pilliod can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Tire Pilliod can use these opportunities to build new business models that can help the communities that Tire Pilliod operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Low interest rates
– Even though inflation is raising its head in most developed economies, Tire Pilliod can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
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.
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.
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.
Developing new processes and practices
– Tire Pilliod can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Learning at scale
– Online learning technologies has now opened space for Tire Pilliod to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
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.
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.
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.
Buying journey improvements
– Tire Pilliod can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Goodyear and the Threat of Government Tire Grading suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
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 -
Environmental challenges
– Tire Pilliod needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Tire Pilliod can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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.
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.
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.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Tire Pilliod needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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.
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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Goodyear and the Threat of Government Tire Grading, Tire Pilliod may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Tire Pilliod can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Goodyear and the Threat of Government Tire Grading .
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
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.
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.
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.
