Somebody ought to stock a few of every tire, sell them over the phone, and ship
them, thought Mike Joines when he had trouble finding the right performance tires
for his sports coupe.
Joines approached his father-in-law, Peter Veldman and help him open a retail tire
store. After seven years, they were making so may phone orders; they closed the
store and added phone lines.
Veldman now is president and patriarch of Tire Rack, a family-owned Internet and
mail-order tire retailer. His wife, four of their six children and two son-in-law also
work for Tire Rack.
Tire Rack sells name-brand tires to consumers and to other retailers. For
consumers, Tire Rack ships to its network for recommended installers, or to their
homes, or to the service shop of their choice.
Customer service is Tire Rack’s priority. Joines says the goal is offering the “best
product at the right price in the shortest amount of time”
The company, which has more than a million square feet of warehouse space in
four locations, says it sells more than 2 million tires a year or a set for every 100
people who buy tires. Its website gets 2.4 million visitors a month, more than any
other tire company and more than many automakers, according to Alexa Internet,
an Amazon.com company that ranks Web traffic.
They are really a private family. None has been profiled in the media, and the
privately held company refuses to release financial information.
(O’Donnell, 2003, p. 3B)
2.1 How does Tire Rack sell its products?
Tire Rack sells its product such as tires, wheels, springs, etc through internet
and mail-order (http://www.tirerack.com/about/whytirerack.jsp). They are selling
multiple brands, not pushing only one brand; therefore, customers have many
choices to choose the most suitable product for their needs.
Customer service is Tire Rack's priority. Its goal is offering the best product and
the right price in the shortest amount of time to customer.
They understand that by buying though internet or mail-order, their customer
cannot touch products, so they have to be knowledgeable to be convincing
enough to sell their products. Tire Rack’s sales staffs always test different
tires with varying states of wear on water, ice, or dry pavement to better help
2.2 Human Resource Management in Tire Rack
The family members who work at Tire Rack live within five miles of each other.
And all important positions in the company are hold by family members including
Veldman, his wife, daughters, and son-in-law.
Beside family members, there are about other 400 employees working in Tire
Rack. According to Mr. Matt Edmonds, marketing vice president, the working
relationship is almost “impossibly pleasant”. Creating a good environment is an
effective method to retain employees in the company.
2.3 Why is management succession so important in a family firm?
Succession planning involves deciding who will lead the company in the next
generation. Unfortunately, less than one-third of family-owned business survive
the transition from the first generation of ownership to the second, and only 13
percent of family businesses remain in the family over 60 years (Hillstrom, K.,
Hillstrom, L.C., 2002, p. 490).
Many small business owners concern about passing the business on to their
children when they prepare the succession planning for the business in the future.
There are two reasons for their concerns:
Firstly, the next generation not only needs the ability to operate the business but
also needs the education, talent, certifications and desire to carry on the service
(Megginson, Byrd, and Megginson, 2005, p. 40)
Secondly, most small business owner meet difficulties when they have more than
one child. That is how to treat all children fairly. Some owners groom one child
from an early age...