Businessmodel of Goodyear

Customer Segments

Goodyear has a mass market business model, with no significant differentiation between customer segments. The company targets its offerings at firms across industries and sizes.

Value Proposition

Goodyear offers four primary value propositions: accessibility, innovation, risk reduction, and brand/status.

The company creates accessibility by providing a wide variety of options. It produces a broad range of consumer tires under the brands Goodyear, Fulda, Dunlop tires, Sava, Kelly Tires, and Debica. It also manufactures a wide range of specialty tires, including aviation tires, commercial truck tires, off-the-road tires, racing tires, and RV tires. Its products are developed for numerous transportation categories, including automobiles, trucks, buses, aircraft, motorcycles, earthmoving and mining equipment, farm implements, industrial equipment, and other applications.

The company places a strong emphasis on innovation. In 2015 it was granted 669 new patents worldwide and introduced 44 new products. It develops many of its cutting-edge products at two Innovation Centers in Akron, Ohio, and Colmar-Berg, Luxembourg and two development centers in Hanau, Germany and Hebron, Ohio. Some of its recent innovations include the following:

• Air Maintenance Technology (AMT) – A self-inflating tire system that enables tires to remain inflated at the optimum pressure without the need for electronics, external pumps, or driver intervention.
• Rice Husk Ash Silica – Ash silica left over from the burning of rice husks that can be used to produce electricity, representing an eco-friendly source of silica for tires.
• Electric Vehicle Tire Technology – An electric vehicle concept tire that reduces noise.
• Multi-Piece Cushion – A cushion that contains three layers, including one that acts as a barrier that extends a product’s shelf life – a significant benefit for retreaders.
• Interlaced Strip Technology – Technology featuring an innovative belt reinforcement in the crown area of the tire that enables the tire to carry up to 10% more load.
• BioIsoprene– A bio-based alternative for petroleum-derived isoprene; it can be used for the production of synthetic rubber and other elastomers, reducing the tire industry’s dependence on oil-derived products. The company reduces risk by maintaining high quality standards. It has third parties audit its facilities to ensure they meet international quality standards, and has its internal functional experts conduct quality audits as well.

The company has established a powerful brand due to its success. It is one of the largest tire companies in the world, with annual sales of $16 billion and 66,000 employees.

Goodyear employs approximately 66,000 people and manufactures its products in 49 facilities in 22 countries around the world. It is also one of the largest operators of tire retreading and commercial truck service centers. Lastly, it has won many honors, including the following:

• Recognition as a Top 100 Global Innovator company by Thomson Reuters
• The “Creativity in Implementing Sustainable Practices” Award from the Suppliers Partnership for the Environment
• Recognition of its AMT innovation as one of the “Best Innovations of the Year” by Time and as the “Best Technology of the Year” by Auto Sport
• Recognition of its Multi-Piece Cushion technology as “Tire Manufacturing Innovation of the Year” by Tire Technology International
• The Top 20 Products Award from Heavy Duty Trucking magazine for its Fuel Max RSA ### Channels

Goodyear’s main channels are the over 1,100 tire and auto service center outlets that it owns and operates. The company promotes its offerings through website, social media pages, advertising, and participation in conferences.

Customer Relationships

Goodyear’s customer relationship is primarily of a self-service nature. Customers utilize its products while having limited interaction with employees.

Key Activities

Goodyear’s business model entails designing, developing, manufacturing, and distributing its products for customers.

Key Partners

Goodyear’s key partners are the suppliers that provide it with the raw materials and components it needs to manufacture its products. The main materials it uses are natural and synthetic rubber. Other items include steel cord, carbon black, fabrics, and petrochemical-based commodities.

Key Resources

Goodyear’s main resources are its human resources, who include the scientists and engineers that design, develop, and/or manufacture its products. It maintains important physical resources in the form of its two innovation centers (Ohio and Luxembourg), two development centers (Ohio and Germany), and 49 manufacturing facilities in 22 countries. The 49 facilities are as follows:

• 17 manufacturing facilities in North America (the United States and Canada)
• 17 manufacturing facilities in nine countries across Europe, the Middle East, and Africa
• 8 manufacturing facilities in six countries across the Asia-Pacific
• 7 manufacturing facilities in five countries across Latin America Lastly, the company places a high priority on intellectual property. As of December 2015 it owned 2,000 product, process, and equipment patents in the U.S. and 3,500 patents in various other countries. It also had 500 pending patents in the U.S. and 2,200 pending patents in other countries.

Cost Structure

Goodyear has a cost-driven structure, aiming to minimize expenses through significant automation and low-price value propositions. Its biggest cost driver is cost of goods sold, a variable expense. Other major drivers are in the areas of sales/marketing and administration, both fixed costs.

Revenue Streams

Goodyear has one revenue stream: revenues it generates from the sale of its tires and related products to customers.