International Business Strategies of Goodyear Indonesia

This report discusses the international business strategies of Goodyear Indonesia, a subsidiary of The Goodyear Tire & Rubber Company. It covers the organisational structure, D'Cruz and Rugman flagship model, roles and responsibilities of the subsidiary, and sources of finance.

Strategy And International
Business

Contents
Introduction......................................................................................................................................3
Main Body.......................................................................................................................................3
Answer to Q1...............................................................................................................................3
Answer to Q2...............................................................................................................................4
Answer to Q3...............................................................................................................................5
Answer to Q4...............................................................................................................................6
Answer to Q5...............................................................................................................................6
..........................................................................................................................................................8
..........................................................................................................................................................8
Conclusion.......................................................................................................................................9
References......................................................................................................................................10

Introduction
Globalisation is a process that is used to influence the world through the different
techniques used by the firms which would make the firm globally open to the new market. The
company must use the different international marketing strategies that would enable them to
achieve the objective of being global. The firms that use this types of strategies are often
headquartered in the origin of their country. The company that has been taken for the
consideration of the business is Goodyear Indonesia, Pt Tbk which is the subsidiary company of
the parent firm The Goodyear tire & Rubber Company (United States) this company was
incorporated in the year August 29, 1898. This report is based on the international business
strategies that the company wants to follow and to implement to achieve the globalisation. In this
report the characteristics of organisational structure is given. At last the brief description of the
roles and responsibilities of the subsidiary business is defined.
Main Body
Answer to Q1
A close look at the strategies that are taken by the Goodyear over the past recent year
gives some success for the firms as they developed some strategies to achieve the success in the
market. They used the strategies such as integration and responsiveness so as to make the
company a market leader in the global sense. The integration and the responsiveness of the
company involves the strategies that helps them to achieve the target of maximising the sales and
making their product global in the global market (Chang, 2013). They have used the PESTEL
approach so as to make its product and brand meet the customer’s requirement. It is the strategy
of the company to identify the nature and the economy of the country so as to see how the
environment of the country is, is the legal structure of the country is milled or it is rigid. This
should be checked by the company so as to achieve the target of making its brand global.
As identified in the question the company is seeing the economic as well as the national
responsiveness of the country so as to enter into new market and to maintain the business in the
current origin country (Ferreira, and et. al., 2014). The strategies that are framed by the company

are diversified and it includes the drivers of economic integration as well as the drivers of local
responsiveness. The company would be put in the cell of Transnational as the company has a
high economic integration as well as high national responsiveness. As the company is having the
different subsidiary in the different country so it is put in the cell 3 the transnational MNE with
transnational strategy.
The company is put into this cell because its certain functions are centralised as regards
to the R&D that are done by them also they have the a matrix organisational structure which
leads them to make into the cell 3 (Ghemawat, 2013). For example the driver that gives the
integration to the strategies of the company is cost of product development as they are having
high cost of product development for the tyres that they make. And in case of national
responsiveness they are having the host country development of its products.
Answer to Q2
The organisational structure for the company that has been identified in the parent
company is Matrix structure. As there are different departments that look after the different
functions of the company. The new organisational structure of the company is structures to
accelerate the growth and to minimize the cost of the product that they develop so as to achieve
the customers in the market (Hamel and Prahalad, 2014). The
strategy include the combination of North America and Latin America as this will give them to
achieve maximum profits and new customer base. The Goodyear tyre company has both the
projective organisation structure as well as functional structure which reports to the managers of
the company. The company’s organisational structure is best and has a positive support from its
employees. All the organisational functions are balanced in a way so that company performs in
best way. This includes the organisational power and authority are shared between the functional
managers of the company and the project managers (Hill, 2015). Also the company has the highly
capable and highly skilled resources that helps the company to function unit and the project,
permitting more open message lines which helps distribution the respected knowledge within the
establishment.

Answer to Q3
The D'Cruz and Rugman flagship model is based on the expansion of joint associations
Between chief performers in a business organisation (Tamer, 2013). Its focus is on jointly
strengthening policies. By their actual nature, such relations tend to raise and depend upon a joint
long-term alignment between the parties concerned. Therefore, it forms an significant smoothing
instrument for the improvement of enduring competitiveness.
The organisation has two key features: one, the presence of a leading firm, which appeals
the setup organized and provides management for the planned organisation of the network as a
whole second the presence of organizations that have recognized key associations with that
leading.
The five-partner model of a corporate setup inspires financial discussion among partner
associations through co-operative, non-equity associations; specifically, the associates include: A
principal `flagship firm', which is the MNC; key contractors; consumers and the first-class
players; and the non-business organization (Jain, 2013). The company has taken into
consideration the flagship relationship between the bridgestone so that the company can achieve
the objective of getting the targeted market. They have partnered with the bridgstone to sell their
products as they have the flagship network strategy as they have one central MNE and a web of
selected partners. In this the bridgstone act as a leader in terms of strategic vision and
coordination of complementary skills with the goal to lead the entire network through successful
international expansion plans. The company has also partnered with Leaseplan which provides
the service of fleet management to Goodyear Indonesia. The company is overall market leader in
the fleet management in the world and has a work experience of around 50 years in the different
parts of world.
Answer to Q4
The subsidiary that has been identified in the south East Asian country is the PT
goodyear Indonesia Tbk which is the subsidiary of goodyear company United states. The roles
and the functions that the company has to perform in this market is to capture the most part of
the market and to achieve the success. The company manufactures, distributes and export the
tires for the automobiles, airplanes and the related components in Indonesia. The company has
identified the areas as same as its parent company has identified (evy and Newell, 2012). The

subsidiary is also having the transnational strategy as they are also having the research and
development department in the origin country and the national responsiveness is occurred
through taking the staffs from the local resources that are available to them. For example, the
company is having the economic integrational in the country which it has achieved through
responding to the competition in the current market. Also they have achieved the target of
converging the consumer needs as well as the universal needs through social media and the cross
border reach in the East Asian country. Also the company has followed the national
responsiveness through hosting the countries legal structure and responding to the local
competition through the pricing policy.
Answer to Q5
Finance is an act of which provides the financial support to the firm so as to carry on its
operations this provides the financial support to the firms and money that is required by the
firms. This word is used as the internal reserves so as to satisfy cash need of the company this is
also used to acquire the capital from the external sources so that the company is able to achieve
its expansion services(McDougal Shane and Oviatt, 2014). Notwithstanding all the changes among
the thousands of corporations in the world across various commerce sectors, there are only a few
sources of funds available to all firms.
Retained Earnings: Corporations aims to make a revenue by marketing the products or
service at more than it expenditures to produce profit out of it. This is the simple foundation of
resources for any corporation and it is the best technique that generates revenue for the company
which is called as retained earnings (Peng and Khoury 20012). These resources can be used to
compensate stockholders in the form of extra payments, and are also used to capitalise in plans
and expand the commerce. The Indonesian subsidiary of Goodyear follows this to fund raise and
utilise the maximum profit to operate its business.
Debt Capital: it is the process of raising money from the market sources. It can be
privately done through different sources which is bank loans, or this can be made through a debt
issue. The debt issues are also known as debenture which allows a higher number of investors to
become bond holder of the company (Peng, 2014). The disadvantage of taking the money is the
interest that must be paid to the giver of the loan, if failure to pay the interest or principle by the

company would result in default or bankruptcy. So this is the better source for the company to
raise money or to get finance from the outside sources.
Equity Capital: A corporation can produce money by vending part of its shareholding in
the form of shares to shareholders, which is known as equity financing or raising money through
shares. The benefit of this is that shareholders does not demand interest payments like debenture
holders (Roth, Schweiger and Morrison, 2015). The drawback is that profits are divided among
all shareholders. This is the good source of fund raising for the subsidiary through its local
resources and the amount of money that would be raised would be greater.

Conclusion
From the above report it has been concluded that there is different matrix in which the
company is organising its business. It has been identified from the report that the company is in
the transnational matrix and wants to integrate the economic integration and the national
reference. The company is working through its flagship partners which helps them in achieving

the success to capture the global world. Company subsidiary has different sources which allows
them to raise funds for its operations.

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