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Case MSK:

Cooper Tire & Rubber


Company in 2014:
Competing in a Highly
Competitive Market for
Replacement Tires
Q Ahmada
Studi Kasus Arifin
atas Penggunaan Conceptual Framework
dalam
Pelaporan Keuangan
Dinda
Nurlatifah
Fawzia
Kinanthi Yurnalis

COMPANY HISTORY

19141915

Schaefer & Hart purchased M&M


Manufacturing Company, producer
of tire patches, tire cement, and tire
repair kits and acquired Giant Tire &
Rubber Company of Akron, a tire
rebuilding business in 1915.

19201930

Repositioned as a tire manufacturer. In 1930


Giant Tire & Rubber merged with Falls Rubber
Company and Cooper Corporation Master
Tire and Rubber Company

1946-1960

1946: Changed name to Cooper Tire & Rubber


Company
1960: Became a public listed company on New
York Stock Exchange

19801999

1983: Joined the ranks of Fortune 500


Companies
1985: Made first foreign acquisition in Mexico,
named one of the 100 best performing
companies in America
1997: Acquired British based Avon Tyres, made
strategic alliances with Pirelli Tyres of Milan,
which involved contractual arrangements in
sales commission

1999: Cooper Tire had 50 manufacturing facilities


across America and hired additional 10,000 employees.

2004: Divest the automotive business, Cooper Tire &


Rubber-Standard Automotive.

2005: Formed a new commercial division Oliver


Rubber Company and commercial tires, obtain 51%
ownership in Chinas 3rd largest tire manufacturer and
entered a joint venture with Resilient Technologies.

2008: Acquired 38% percent ownership of Mexican tire


manufacturing plant (2nd largest in Mexico) and continue
to acquired its shares up to 58% in 2011.

2012: Generated a net sales of $4.2 billion and profit of


$379 million which was the companys best record.

2014: Cooper Tire & Rubber already had > 65


manufacturing, sales, and design facilities located in 11
countries.

Q1: How strong are the


competitive forces
confronting Cooper Tire in the
global automotive tire
industry? Do a five-forces
analysis to support your
answer Ancaman Pesaing
Ancaman Produk Substitusi
Ancaman Pendatang Baru
Daya Tawar Pembeli
Daya Tawar Penjual

Q2: What do you see as the


key success factors in the
global automotive tire
industry?
1. Strategi yang menarik minat pembeli
2. Sumber daya dan kemampuan kompetitif

Q3: What does a SWOT


Analysis reveal about the
overall attractiveness of
Cooper Tires situation?
Strenghts
Weaknesses
Opportunities
Threats

Q4: What are the primary


components of Cooper Tires
value chain?
Menjaga biaya produksi yang rendah
Menjaga kualitas dengan menulis nama
pekerjanya pada setiap produk yang dihasilkan

Q5: What are the key elements


of Cooper Tires strategy? Which
one of the five generic
competitive strategies most
closely approximates the
competitive approach that
Cooper Tire is employing?
Biaya produksi yang rendah
Kualitas yang baik
Menjual dengan harga terbaik, tidak
berusaha menjual produk dengan
harga yang paling rendah, tapi tetap
dapat bersaing dan memuaskan
konsumen

Best cost
provider
strategy

Q6: What do the data in


Exhibit 1 reveal about Cooper
Tires financial and operating
performance?

Exhibit 1
Summary of Cooper Tire & Rubber Company's Financial and Operating Performance
2009-2013 (dollar amounts in millions, except per share data)

2013

2012

2011

2010

2009

Net Sales
Cost of Products Sold

3,439.20
-2,923.00

4,200.80
-3,546.60

3,907.80
-3,562.80

3,342.70
-2,940.30

2,778.90
-2,359.90

Gross Profit
Selling, General & Administrative
Impairment of Goodwill
Restructuring

516.20
- 275.50
-

654.20
- 257.30
-

345.00
- 181.70
-

402.40
- 193.40
- 20.60

419.00
- 207.00
- 48.70

Operating Profit Before Taxes


Interest Expense
Interest Income
Other Income-Expense

240.70
27.90
0.80
0.60
-

396.90
29.50
2.60
1.50
-

Income (loss) before income taxes


Provision (benefit) for income taxes

213.00
79.40

368.50
- 116.00

Income (loss) from continued operations


Noncontrolling shareholders' interests

133.60
22.60

Income (loss) from operations attributable to


Cooper Tire & Rubber stockholders

111.00

252.50
32.10

220.40

163.30
36.20
3.20
3.80

188.40
36.60
5.20
2.80

156.30
47.20
5.20
1.30

134.10
135.50

159.80
20.10

115.50
0.20

269.60
16.10

139.70
23.40

115.30
31.90

253.50

116.30

83.40

Exhibit 1
Summary of Cooper Tire & Rubber Company's Financial and Operating Performance
2009-2013 (dollar amounts in millions, except per share data)

2013

2012

2011

2010

2009

Net earnings (loss) per share:


Basic

1.75

3.52

4.08

1.90

1.57

Diluted

1.73

3.49

4.02

1.86

1.54

Dividends declared per share

0.42

0.42

0.42

0.42

0.42

Percentage of net earnings to net sales

3.2%

5.3%

6.5%

4.2%

1.9%

Return on average stockholders' equity

9.6%

24.3%

36.3%

26.8%

11.2%

Capital Expenditures

180.40

187.30

155.40

119.70

79.30

Depreciation & Amortization

134.80

128.90

122.90

123.70

123.50

Cash, Cash Equivalents

397.70

351.80

233.70

413.40

427.00

1,454.80

1,449.70

1,264.00

1,340.20

1,131.80

Current Liabilities

564.60

655.10

651.00

694.20

636.30

Working Capital

890.20

794.60

613.00

646.00

495.50

Current Assets

Q7: What 3-4 top priority


issues do CEO Roy Armes and
Cooper Tire management
need to address?

Kelangkaan karet
alami (natural
rubber) sebagai
bahan baku
pembuatan ban.
Pergeseran tren
permintaan terhadap
ban cadangan (tire
replacement)
Meningkatnya
kompetisi di dalam
industri ban dari
belahan dunia lain

Q8: What recommendations


would you make to Cooper
Tire CEO Roy Armes?

Memfokuskan pada R&D untuk mencari


bahan baku yang berkualitas sejenis
dengan karet alami

Cooper Tire perlu memasuki pasar OriginalEquipment Market dan memasarkan


produk ban cadangannya secara eksklusif.

Cooper Tire perlu membuat produk baru


dengan kualitas yang lebih rendah
dibandingkan dengan produk utamanya,
untuk kelas konsumen menengah