Competitive Strategies & Government Policies

Corporate Introduction

Our learning team committee will be discussing the Goodyear Corporation. The committee has recognized the impact of changes in the real-world competitive environment and government policies on other industries and anticipates similar events occurring in the industry, we will be considering different points. These findings show the impact from other companies joining and leaving the market due to mergers, start-ups, and globalization. We plan to identify the type of merger recommended for the Goodyear Corporation and how it will impact global competition. The findings will show how the current and expected government policies and regulations, will impact the company. Lastly, the information provided will establish the what decisions should be made with regards to change in labor demand, supply, relations, unions, and the rules and regulations of Goodyear Corporation.

Global Market

Goodyear is a premier tire company that has been operating in the global market for over twenty years. Currently, Goodyear has a total of fifty-two plants, in more than twenty countries and still the company is looking to increase their global presence in even more countries. Goodyear stays very competitive by exporting their labor to some of these overseas manufacturing plants. With the labor demand higher in these other countries, Goodyear can save on labor costs and as a result, charge less per tire to the consumers. Since Goodyear sells their tires all over the world, it is a benefit to have manufacturers all over the world. This helps reduce shipping costs and has been a great asset for the company from a logistics standpoint.

Relationships are very important to the Goodyear Company, both in the United States and in the global market. To further emphasize this point, part of their mission statement includes, "Caring for our environment and communities, encouraging wellness and safety both on the job and away from work; this includes delivering the highest quality in all that we do" (Goodyear, 2013). Goodyear has been unionized for many years and the company makes a global effort to cooperate with the unions that are founded both within the United States and in the European countries. Global competition for Goodyear has increased over the last decade and this has put pressure on the company to cut corners within the manufacturing operations. The federal government has put regulations on American based tire and rubber companies for the protection of society, due to the fact that the majority of Americans drive automobiles. The federal organization that monitors this safety is the National Highway Traffic Safety Administration. Since Goodyear is constantly looking out for society, they historically have put out voluntary recalls on specific tires before the federal administration has demanded it from them. This helps the company continue to be a premier tire provider that cares about safety and it also helps them increase market share against their global competition.

Competition

"To be guaranteed a good seat at a restaurant, or at a music venue, consumers need to book in advance, or get there early - there is clearly a need to be competitive to secure the benefit of the good" ("Economics online", 2013, Rivalry). This economic principle of rivalry consists of companies always having to keep themselves current with technology and with their competition to ensure that their product will continue to sell. New companies entering and exiting the market has a large impact on Goodyear's numbers.

Every time that a new company enters into the market, customers will end up migrating to the new company, at least temporarily to 'check -it out.' Customers want to see if the new company has new product tiers from new technologies, as well as wanting to see if the new company has better pricing than the existing market. If the new company does not have any of these items to offer, then the customer will migrate back over to Goodyear, where they have been comfortable for the previous years. This idea of a new company does not only have to be an absolutely brand-new company, it could also be a merger.

Two companies could combine forces to allow for the companies to share ideas and technologies in an attempt to become a dominant force in the market. When a new company enters into the market, Goodyear is forced to adjust prices downward to keep current customers happy or they are forced to discover new technologies to keep up with competition.

Competitors leaving the market also have an impact of Goodyear's sales, as this usually will force the demand for the Goodyear tire to rise. When a percentage of the supply chain disappears, the demand is still present and is forced to spread over the current market share. At this time, Goodyear will run a strong promotion to 'reel-in' those new potential customers and