Topics: Automotive industry, Strategic management, Lean manufacturing Pages: 6 (1678 words) Published: August 3, 2013
1. SWOT analysis for Toyota Introduction Strengths, Weaknesses, Opportunities, and Threats (SWOT) is a popular concept for evaluating an organisation. Conducting SWOT analysis is a common practice that organisations adopt to assess themselves and the industry within which they operate. This is very important given the different forces that exist within the environment the organisation operates. SWOT analysis offers an organisation insights into the areas that needs attention and consequently taking measures to address relevant issues and also reaping or taking advantage of prospects. Toyota Corporation is one of the oldest and leading automotive manufacturing companies in the world. Like many other organisations, Toyota has experienced some heights and lows and below is a SWOT analysis of the Corporation:

Strengths Innovative - Toyota is one of the most innovative auto companies and has a strong culture that is focused on constant innovation. The company was the first to introduce Kaizen, Kanban and Total quality Management systems widely in their organization. The company was also mass-produces and sells hybrid vehicles. Brand reputation - Toyota’s brand is the most valued automotive brand in the world. The company is known for its environmentally friendly, safe and durable cars that are sold in more than 170 countries. Industry leader in production and sales - Toyota was the first company to introduce lean manufacturing and total quality management practices in manufacturing process. For some time, the company was the only practicing these and had the lowest manufacturing and production costs worldwide. Although many manufacturers were able to replicate Toyota’s lean manufacturing system, the company is still one of the most profitable manufacturers in the world. Strong brand portfolio -Toyota currently sells about 70 different models of cars under its namesake brand. This does not only increase brands awareness but also satisfies nearly every consumer group needs. Toyota’s flagship models are Corolla and Prius. The leader in “green” cars development - Toyota understands that environmental friendly cars are the necessity nowadays. Consumers are more selective in terms of CO2 emissions and fuel-efficiency of the cars they buy and Toyota’s early move towards selling hybrid and efficient cars is the strength few competitors can match.

Weaknesses Large-scale recalls. Toyota had quite a few large-scale vehicle recalls over the past few years. The company recalled 9 million vehicles in 2009-2010 and 7.43 million cars in 2012. Such recalls does not only hurt the firm financially but significantly damages firm’s brand.


Weak presence in the emerging markets. Toyota’s main markets are Japan, US and Europe, while such emerging economies as China or India make only a small percentage of all Toyota’s sales. Due to poor presence in the largest automobile market (China), Toyota will find it hard to compete with GM that has huge market share there.

Opportunities Positive attitude towards “green” vehicles -Today consumers are more aware of the negative effects (air pollution) caused by cars. Large quantities of CO2 emissions intensify greenhouse effect and negatively impact the life on earth. Thus, consumers are more likely to buy new hybrid and electric cars that emit less CO2. Increasing fuel prices - Increasing fuel prices open up large markets for Toyota’s hybrid cars as consumers shift towards efficient cars. Changing customer needs - By introducing new car models, Toyota could satisfy varying consumers’ tastes and needs and access wider customer group. Growth through acquisitions. Toyota has successfully acquired other car companies in the past and should continue doing so to grow, gain new skills, assets and access to new markets.

Threats Decreasing fuel prices - There is high possibility that future fuel prices will drop, as more shale gas will be extracted. For this reason, fuel-efficient hybrid and electric...
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