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 - – talent flight as more people leaving formal jobs, there is backlash against globalization, supply chains are disrupted by pandemic , geopolitical disruptions, increasing transportation and logistics costs, increasing government debt because of Covid-19 spendings, challanges to central banks by blockchain based private currencies,
increasing household debt because of falling income levels, technology disruption, 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 -
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.
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.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– The Travails of Rubber: Goodyear or Badyear? firm has clearly differentiated products in the market place. This has enabled Goodyear's Goodyear to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Goodyear's Goodyear to invest into research and development (R&D) and innovation.
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.
Organizational Resilience of Goodyear's Goodyear
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Goodyear's Goodyear does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Goodyear's Goodyear 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 Goodyear's Goodyear is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in The Travails of Rubber: Goodyear or Badyear? Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– Goodyear's Goodyear has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study The Travails of Rubber: Goodyear or Badyear? - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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.
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.
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.
Operational resilience
– The operational resilience strategy in the The Travails of Rubber: Goodyear or Badyear? 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.
Low bargaining power of suppliers
– Suppliers of Goodyear's Goodyear in the sector have low bargaining power. The Travails of Rubber: Goodyear or Badyear? has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Goodyear's Goodyear to manage not only supply disruptions but also source products at highly competitive prices.
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 -
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.
Slow decision making process
– As mentioned earlier in the report, Goodyear's Goodyear 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. Goodyear's Goodyear 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.
Lack of clear differentiation of Goodyear's Goodyear products
– To increase the profitability and margins on the products, Goodyear's Goodyear needs to provide more differentiated products than what it is currently offering in the marketplace.
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.
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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Goodyear's Goodyear is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study The Travails of Rubber: Goodyear or Badyear? can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Products dominated business model
– Even though Goodyear's Goodyear has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - The Travails of Rubber: Goodyear or Badyear? should strive to include more intangible value offerings along with its core products and services.
Need for greater diversity
– Goodyear's Goodyear has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
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.
Slow to strategic competitive environment developments
– As The Travails of Rubber: Goodyear or Badyear? HBR case study mentions - Goodyear's Goodyear 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study The Travails of Rubber: Goodyear or Badyear?, is just above the industry average. Goodyear's Goodyear 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.
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 -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Goodyear's Goodyear 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
– 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Goodyear's Goodyear is facing challenges because of the dominance of functional experts in the organization. The Travails of Rubber: Goodyear or Badyear? case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Building a culture of innovation
– managers at Goodyear's Goodyear 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 Innovation & Entrepreneurship segment.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Innovation & Entrepreneurship industry, but it has also influenced the consumer preferences. Goodyear's Goodyear can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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.
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.
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.
Loyalty marketing
– Goodyear's Goodyear 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.
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.
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. Goodyear's Goodyear can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
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.
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 -
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.
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.
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. Goodyear's Goodyear 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
– 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.
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.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Goodyear's Goodyear.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Goodyear's Goodyear with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Goodyear's Goodyear business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– Goodyear's Goodyear 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.
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.
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. Goodyear's Goodyear needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
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.
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.