Case Study-Cooper Tire and Rubber Company

Essay by ingiB, March 2005

download word file, 9 pages 5.0

Downloaded 109 times


"Cooper Tire & Rubber Company, founded in 1914, specializes in the manufacturing and marketing of rubber products for consumers. Products include automobile, truck and motorcycle tires, inner tubes, NVH control systems, automotive sealing, and fluid delivery systems." (

The case study on Cooper mainly concentrates on the tire industry, and

Therefore the following analysis will be based on this.

Cooper Tire & Rubber co. has enjoyed much growth and strong returns. However, with intense competition and developments in new technology, Cooper must follow suite to maintain competitive advantage by balancing efficiency with cost specifically in the Replacement Tire Industry. To set the right strategies it is important for Cooper to first analyse the external environment, both on a macro and micro basis, and then assess the resources and capabilities/competences in order to get a detailed overview of the company.

The External Environment

The Macro environment; PEST framework

Political/Legal Analysis

The introduction of NAFTA and GATT has created new opportunities for tire manufacturers for the supply of cheap labour.

Companies can reduce their costs by producing their tires in low-cost labour countries such as Mexico.

The foreign trade sub zone status, which reduces the company's duty payments on imported raw materials, benefit smaller companies like Cooper greatly as it allows them to compete on an international level with relatively smaller budgets.

The tire market is a heavily unionised industry, by URW the industry's union. Over the last years the union has won, after long strikes, increased wages and benefits for workers.


The industry as a whole is influenced by the economic demand for vehicles, this is characterised by the strength of the economy and the disposable incomes of the consumers.

The early 90's recession had a major effect on the industry. The decline in the car industry meant that...