Why do successful companies fail? A case study of the decline of Dunlop

This article examines the internal and external factors that contributed to the decline of Dunlop. For much of its history Dunlop operated in a protected home market or instigated strategies to restrict competition. This enabled Dunlop to dominate the British tyre industry. The complacency and inert...

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Bibliographic Details
Published in:	Business history 2007-11, Vol.49 (6), p.886-907
Main Author:	McGovern, Tom
Format:	Article
Language:	eng
Subjects:	Company business management Competition Corporate management Divestments Dunlop Economic aspects Management Organizational Decline Studies Tire industry Tyre Industry
Online Access:	Get full text
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Summary:	This article examines the internal and external factors that contributed to the decline of Dunlop. For much of its history Dunlop operated in a protected home market or instigated strategies to restrict competition. This enabled Dunlop to dominate the British tyre industry. The complacency and inertia of management was exposed by a number of external jolts that produced radical environmental changes. Management failed to develop appropriate strategies which led to large losses in an industry suffering from overcapacity. Plant closures and the divestment of the European tyre operations were implemented to reduce company debt. This turnaround strategy proved to be a temporary respite as Dunlop was acquired by BTR.
ISSN:	0007-6791 1743-7938