Goodyear Tire and Rubber CompanyWith the competitiveness of the American tire industry in 1992, Goodyear Tire and Rubber Company reconsidered a proposal from the Sears department store to carry Goodyear Eagle brand tires. With a loss of $38 million in 1990 and a change in management in 1991, Sears' 1989 proposal was once again revisited. These new top executives have two decisions to make: whether Sears should carry only the Goodyear Eagle brand or the entire line of Goodyear tires. Goodyear will need to examine its distribution policy and the potential negative reactions that could come from its independent franchise dealers. Key Competition Factors of the US Tire Industry Price plays an important role in the tire industry. Many consumers purchase their tires based on price because they have little knowledge about tires and are more focused on getting a good price compared to a better quality tire. Customers who know more about tires or automobiles look for quality tires for their vehicles. At the retail level, salespeople are pressured to sell one store's private label tires above all others. This is difficult to achieve when a customer is loyal to a brand. To be competitive in the U.S. tire industry, you need to have a variety of offerings. Tire manufacturers must have a strong portfolio of offerings to remain competitive within the industry. The United States experiences many different climates, with extremes ranging from rain to ice. By having an expanded product line, you will be able to satisfy more customers in every demographic. Brand image and reputation is another important factor in the American tire industry. When trying to create a competitive advantage within the tire industry, brand and production...... middle of paper ...... are generally poorly informed about tires and their various characteristics . Advantages/Disadvantages for Franchised Tire DealersPRO-This change Goodyear's channel selection allows franchised dealers to begin offering private labels and build a larger one. - Goodyear will most likely have to subsidize lost sales with increased promotional support and lower prices. - Overall brand image will improve for Goodyear because there are more deals available to the public.CON-Offers may be cannibalized from their own sales and moved to Sears.-Lack of supply may also become a Goodyear production that cannot meet the demand of franchised dealers and Sears auto centers. .-Deals across the Goodyear line from franchise dealers may seem overpriced if Goodyear makes a lower, cheaper level of tires exclusively for Sears..