OMAHA, Neb.-Shortly after Iraq invaded Kuwait, back in 1990, Omaha-based Tires Inc. found itself involved in its own war. Western Auto Supply Co. had blasted its way into the retail tire dealership's established market by opening five Western Auto and two National Tire Warehouse stores within five years. Then came Wal-Mart Stores Inc. Then came Sam's Club.
Refusing to give ground, Tires Inc. fought back. The Nebraska city became an intense tire retailing battlefield. A number of independent dealerships were lost in the fray. But more often than not, the primary casualties were prices and margins.
Tires Inc. owner Jerry Hoberman, at the helm of the dealership since 1969, drew up a new battle plan: Operation Rubber Shield.
``We panicked,'' Mr. Hoberman said candidly, explaining Tires Inc. had to find a way to pull itself out of a price war that was forcing the company to sell tires below cost.
At 6 a.m. one day, Operation Rubber Shield went into action. The company's store managers met for an initial meeting, rented a number of vehicles and drove off to separate Western Auto and NTW outlets.
They bought tires, had them installed and quietly examined how the stores operated. A short while later they returned to base for a debriefing session.
``We realized we're not going to beat them on price. Whatever price we put out there, they'd go lower; there was no bottom,'' Mr. Hoberman said.
The managers also examined the outlets' personnel and how they treated customers.
``When you walk into a national chain..., the customer is sometimes an intrusion, you have to look around to find someone to help you,'' Mr. Hoberman added.
After nearly two years, Tires Inc. simply quit fighting the war.
``We started to ignore what (the national chains) were doing,'' Mr. Hoberman said.
Of course most major battle plans are a little more complex than that. The same holds true for Mr. Hoberman's strategy.
Tires Inc. decided to reduce its reliance on low-margin tire sales while boosting the amount of automotive service work by highlighting service in its advertising, redefining the focus of its employees and upgrading its shop equipment.
The retail dealership, which operates 10 locations in the Omaha area and one each in Lincoln and Fremont, Neb., has boosted its emphasis on automotive service-substantially-from 15 percent of total sales a number of years ago to about 45 percent today.
``The company, financially, has never been stronger,'' he asserted. ``Our bottom line has never looked better.'' Mr. Hoberman declined to release sales figures.
And the company has retained its position as the No. 1 retailer in the area in terms of market share, Mr. Hoberman said, quoting a local newspaper survey, though its market share percentage has dropped due to the number of places now selling tires.
Emphasizing automotive service is an effective strategy in battling discounters and mass merchandisers, Mr. Hoberman contended, because today's customers are searching for retailers they can trust-especially in the automotive industry.
``If I work on your car, and you trust me, you'll drive across town to come to me. I've built loyalty,'' Mr. Hoberman theorized. ``The difference with a tire:...if their price is $8 less than mine, you really have no motivation to give me an extra $8.''
To boost its emphasis on automotive service, the company has doubled the amount of money it spends on advertising, including newspaper and television spots, focusing on service.
The added visibility helps consumers understand Tires Inc. is a customer-oriented ``service'' facility, he said.
To that end, the company moved its main Omaha location into a 7,500-sq.-ft., 10-bay facility, boosting its service area by about 30 percent. The move also gave Tires Inc. a location with service bays ``clearly visible from the street''-unlike the former outlet.
The independent dealership now emphasizes training its employees with the National Institute for Automotive Service Excellence (ASE) certification program and turned its assistant store managers, previously concerned primarily with tire sales, into service managers more focused on mechanical work.
Service managers now are gleaned from applicants with service industry experience and trained through Tires Inc.'s own program as well as supplier seminars, Mr. Hoberman said.
``We found it's easier to teach someone tires than conversely trying to teach someone the service industry,'' he explained.
Tires Inc. also has upgraded its equipment to handle air conditioning and brake work, a move intended to capture additional business as other independent dealerships quit offering those services due to high equipment costs.
And the battle continues, Mr. Hoberman said. Tires Inc. plans on opening its 13th outlet in Omaha in June and two ``new concept'' stores in 1996. He declined to discuss how the new stores would differ from current outlets, lest the plans fall into enemy hands.