The Travails of Rubber: Goodyear or Badyear? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of The Travails of Rubber: Goodyear or Badyear?
Explores the reason why Charles Goodyear, inventor of rubber vulcanization, was unable to profit from his discovery despite securing international property rights over his invention through a patent in 1844. Considers the utility of patents as an incentive for innovators in light of international industrial espionage associated with Goodyear's idea and international differences in patent laws. Also examines commercialization strategies based on Goodyear's choice between developing the innovation himself and licensing to third parties.
Swot Analysis of "The Travails of Rubber: Goodyear or Badyear?" written by Tom Nicholas includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Goodyear's Goodyear facing as an external strategic factors. Some of the topics covered in The Travails of Rubber: Goodyear or Badyear? case study are - Strategic Management Strategies, and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the The Travails of Rubber: Goodyear or Badyear? casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies, cloud computing is disrupting traditional business models, increasing transportation and logistics costs, digital marketing is dominated by two big players Facebook and Google, competitive advantages are harder to sustain because of technology dispersion,
talent flight as more people leaving formal jobs, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of The Travails of Rubber: Goodyear or Badyear?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The Travails of Rubber: Goodyear or Badyear? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Goodyear's Goodyear, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Goodyear's Goodyear 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 The Travails of Rubber: Goodyear or Badyear? can be done for the following purposes –
1. Strategic planning using facts provided in The Travails of Rubber: Goodyear or Badyear? case study
2. Improving business portfolio management of Goodyear's Goodyear
3. Assessing feasibility of the new initiative in Innovation & Entrepreneurship field.
4. Making a Innovation & Entrepreneurship topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Goodyear's Goodyear
Strengths The Travails of Rubber: Goodyear or Badyear? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Goodyear's Goodyear in The Travails of Rubber: Goodyear or Badyear? Harvard Business Review case study are -
Analytics focus
– Goodyear's Goodyear is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Tom Nicholas can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
High brand equity
– Goodyear's Goodyear has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Goodyear's Goodyear to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Cross disciplinary teams
– Horizontal connected teams at the Goodyear's Goodyear 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.
Superior customer experience
– The customer experience strategy of Goodyear's Goodyear in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Goodyear's Goodyear digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Goodyear's Goodyear 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.
Ability to recruit top talent
– Goodyear's Goodyear is one of the leading recruiters in the industry. Managers in the The Travails of Rubber: Goodyear or Badyear? are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Ability to lead change in Innovation & Entrepreneurship field
– Goodyear's Goodyear 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 Goodyear's Goodyear in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– Goodyear's Goodyear 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 The Travails of Rubber: Goodyear or Badyear? HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Goodyear's Goodyear 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.
Diverse revenue streams
– Goodyear's Goodyear is present in almost all the verticals within the industry. This has provided firm in The Travails of Rubber: Goodyear or Badyear? 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.
Innovation driven organization
– Goodyear's Goodyear is one of the most innovative firm in sector. Manager in The Travails of Rubber: Goodyear or Badyear? Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Successful track record of launching new products
– Goodyear's Goodyear has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Goodyear's Goodyear 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.
Weaknesses The Travails of Rubber: Goodyear or Badyear? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The Travails of Rubber: Goodyear or Badyear? are -
No frontier risks strategy
– After analyzing the HBR case study The Travails of Rubber: Goodyear or Badyear?, it seems that company is thinking about the frontier risks that can impact Innovation & Entrepreneurship strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
High cash cycle compare to competitors
Goodyear's Goodyear 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.
Interest costs
– Compare to the competition, Goodyear's Goodyear 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Tom Nicholas suggests that, Goodyear's Goodyear 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.
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 Goodyear's Goodyear supply chain. Even after few cautionary changes mentioned in the HBR case study - The Travails of Rubber: Goodyear or Badyear?, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Goodyear's Goodyear vulnerable to further global disruptions in South East Asia.
Workers concerns about automation
– As automation is fast increasing in the segment, Goodyear's Goodyear 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.
Low market penetration in new markets
– Outside its home market of Goodyear's Goodyear, firm in the HBR case study The Travails of Rubber: Goodyear or Badyear? 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 The Travails of Rubber: Goodyear or Badyear?, in the dynamic environment Goodyear's Goodyear has struggled to respond to the nimble upstart competition. Goodyear's Goodyear has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the The Travails of Rubber: Goodyear or Badyear? 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 Goodyear's Goodyear has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of Goodyear's Goodyear is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Goodyear's Goodyear needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Goodyear's Goodyear to focus more on services rather than just following the product oriented approach.
High operating costs
– Compare to the competitors, firm in the HBR case study The Travails of Rubber: Goodyear or Badyear? 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 Goodyear's Goodyear 's lucrative customers.
Opportunities The Travails of Rubber: Goodyear or Badyear? | 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 The Travails of Rubber: Goodyear or Badyear? are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Goodyear's Goodyear can use these opportunities to build new business models that can help the communities that Goodyear's Goodyear operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
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 Goodyear's Goodyear 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.
Manufacturing automation
– Goodyear's Goodyear can use the latest technology developments to improve its manufacturing and designing process in Innovation & Entrepreneurship 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.
Using analytics as competitive advantage
– Goodyear's Goodyear 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 The Travails of Rubber: Goodyear or Badyear? - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Goodyear's Goodyear to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Creating value in data economy
– The success of analytics program of Goodyear's Goodyear has opened avenues for new revenue streams for the organization in the industry. This can help Goodyear's Goodyear to build a more holistic ecosystem as suggested in the The Travails of Rubber: Goodyear or Badyear? case study. Goodyear's Goodyear can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Goodyear's Goodyear can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. The Travails of Rubber: Goodyear or Badyear? 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Goodyear's Goodyear 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.
Leveraging digital technologies
– Goodyear's Goodyear can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Learning at scale
– Online learning technologies has now opened space for Goodyear's Goodyear 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Goodyear's Goodyear 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, The Travails of Rubber: Goodyear or Badyear?, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Developing new processes and practices
– Goodyear's Goodyear can develop new processes and procedures in Innovation & Entrepreneurship 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Goodyear's Goodyear in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Innovation & Entrepreneurship segment, and it will provide faster access to the consumers.
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 Goodyear's Goodyear in the consumer business. Now Goodyear's Goodyear can target international markets with far fewer capital restrictions requirements than the existing system.
Threats The Travails of Rubber: Goodyear or Badyear? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The Travails of Rubber: Goodyear or Badyear? are -
Increasing wage structure of Goodyear's Goodyear
– 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 Goodyear's Goodyear.
Consumer confidence and its impact on Goodyear's Goodyear 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
– Goodyear's Goodyear has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Goodyear's Goodyear needs to keep up with the evolution of technology in the Innovation & Entrepreneurship 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.
Shortening product life cycle
– it is one of the major threat that Goodyear's Goodyear is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Easy access to finance
– Easy access to finance in Innovation & Entrepreneurship field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Goodyear's Goodyear can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Goodyear's Goodyear in the Innovation & Entrepreneurship industry. The Innovation & Entrepreneurship 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.
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.
Regulatory challenges
– Goodyear's Goodyear 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 Innovation & Entrepreneurship industry regulations.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Goodyear's Goodyear 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 The Travails of Rubber: Goodyear or Badyear? .
Stagnating economy with rate increase
– Goodyear's Goodyear 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.
Environmental challenges
– Goodyear's Goodyear 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. Goodyear's Goodyear can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
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.
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 Goodyear's Goodyear in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Weighted SWOT Analysis of The Travails of Rubber: Goodyear or Badyear? 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 The Travails of Rubber: Goodyear or Badyear? 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 The Travails of Rubber: Goodyear or Badyear? 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 The Travails of Rubber: Goodyear or Badyear? 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 The Travails of Rubber: Goodyear or Badyear? 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 Goodyear's Goodyear needs to make to build a sustainable competitive advantage.
