Goodyear Tire and Rubber Company
We enter this case at a time when Goodyear is considering distribution through Sears (chain department store). Goodyear has historically sold direct through company-owned dealers and franchised (hybrid of direct) dealers.
The behavior of consumers is changing; in terms of their tire decision process and points of purchase. We see these changes in channel shares between retailer types.
For Goodyear, what changes in distribution strategy should occur, given changes in consumer behavior? What are the implications for their current distribution model? The basic alternative relates to distribution through Sears, but variations of this alternative may be put forth for consideration (e.g., different line assortments for different channels).
This case concerns the domestic replacement tire market for the passenger segment. Quantitative analysis relates to market share and units sold. This analysis applies to retailer types, tire competitors, and specifically Goodyear and Sears volume. Start with overall market size in units. Quantitative analysis also applies to coverage: points of distribution and market share.
Qualitative analysis is very important in the case. Beyond consumer behavior, behavior at the retail level and that of franchisees, the role of intermediaries in tire distribution, and channel coordination and conflict are key issues.
For example, we are told that Goodyear franchisees have greater margins on service than tires. How does margin influence the behavior of franchisees? Is this even an issue? Will selling through Sears push franchisees to take on private label, therefore, redirecting selling effort away from Goodyear? Why is Sears interested in Goodyear?
You must picture the distribution and behavior at all channel levels. Imagine yourself in a store; the selling environment and behavior of both customers and sales personnel. Why do you see what you see?...
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