SWOT ANALYSIS 1 Essay Example

Strategic Management: Toyota’s SWOT Analysis

Introduction

Toyota Motor Corporation is a Japanese automotive manufacture that as its headquarters I Aichi. It employees more than 338,000 people and is among the largest companies in the world. The company produces more than 10 million cars annually and it is the world leading company that produces and sales hybrid electric vehicles and produces a variety of models in response to the requirements of the consumers. The paper discusses the strengths, weaknesses, opportunities and threats of Toyota Motor Corporation.

Strengths

The strengths of Toyota indicates the company can continue maintaining its top position as top auto manufactures in the world. Some of the main strengths of Toyota include rapid innovation capacities, global supply chain and strong brand name. Toyota has the strongest name brand when it comes to motor vehicle industry (Doz & Prahalad, 2013). The Toyota sign brand is recognizable easily and consumers can associate with Toyota product. Toyota’s global supply chain is designed is a way that enables marker based risk and resilience minimization (Lee & Carter, 2012). Moreover, Toyota organizational culture encourages rapid innovation and development, which translates to competitive advantage (Shinkle & Spencer, 2012). In addition, the argument that Toyota is among the largest car manufacturers in the world contributes to expand on the strengths of Toyota.

Weaknesses

There are numerous inefficiencies in the organization, which is an obstacle to business growth. Some of these weaknesses associated with the organization includes negative effects of product recalls, secrecy in organizational culture, and hierarchical organizational structure (Kapferer, 2012). The hierarchal organizational structure limits the capacities of Toyota to be flexible in regional operations while the secrecy culture reduces and it is a weakness in addressing emerging problems (Epstein & Buhovac, 2014). It may have contributed to the huge product recall starting in 2009. These numerous products recalls affects the business in that the company does not focus on production rather readjusting the production distribution chain to address the concerns (Shim & Steers, 2012). If Toyota improves or adjusts the organizational culture and structure, Toyota would be in a position to address the recall problems and complications.

Opportunities

The opportunities to Toyota lies on economic and technological trends. The opportunities are the external variables, factors and resources that Toyota can utilize to improve the business practices (Epstein & Buhovac, 2014). Some of these opportunities include weak Japanese Yen, which translates to favorable export business (Shinkle & Spencer, 2012). Growing interest in electronics focused vehicles and rising demand for vehicles that are fuel efficient. In addition, the developing countries requires more cars, which may translate in Toyota selling more cars (Doz & Prahalad, 2013). Toyota can penetrate the developing markets and can increase revenues through the process. In addition, the focus in increasing interest in fuel efficiency models and associated advanced electronics offers opportunity for Toyota to continue embracing innovation (Shim & Steers, 2012). The changing economics in Japan including the weakening of the Yen means that the Toyota products become competitive. These analysis indicates that Toyota has to continue focusing in market penetration and exploitation of innovation to continue developing new products.

The threats affecting Toyota are competitive in nature. Threats are the external strategic factor that reduces the performance of Toyota (Fujimoto, 2012). Some of the threats include rapid innovation of competitors, and the growing low cost competitors in addition to environmental friendly products and services (Shinkle & Spencer, 2012). Low cost automobiles from India, Chinese, and Korean manufacturers is a major threat for Toyota (Doz & Prahalad, 2013). These companies targets the same market that Toyota targets meaning that the competition continues to become fierce. Rapid innovation of companies such as Ford, Honda, and GM continues to weaken the position of Toyota in the market. To address these problems, Toyota should continue improving the innovation framework (Epstein & Buhovac, 2014). In addition, the products should focus on sustainability in that environmental friendly products and services can be develop to advance the awareness of environment protection.

Conclusion and Recommendations

The SWOT analysis enables identification of the internal and external factors that affects the company. The strengths and opportunities can be used to counter weaknesses and threats in that Toyota can focus on research and development to advance competitive advantage. In addition, Toyota should adjust the structure and culture to optimize the flexibility of problem solving and decision making. Toyota is a strong global automobile manufacturer and distribute but faces issues related to corporate culture, organizational structure and competition that has to be addressed.

References

Doz, Y., & Prahalad, C. K. (2013, January). Quality of management: An emerging source of global competitive advantage? In Strategies in Global Competition (RLE International Business): Selected Papers from the Prince Bertil Symposium at the Institute of International Business, Routledge (pp. 345-368).

Epstein, M. J., & Buhovac, A. R. (2014). Making sustainability work: Best practices in managing and measuring corporate social, environmental, and economic impacts. Berrett-Koehler Publishers.

Fujimoto, T. (2012). The Evolution of Production Systems. Annals of Business Administrative Science, 11, 25-44.

Kapferer, J. N. (2012). The new strategic brand management: Advanced insights and strategic thinking. Kogan page publishers.

Lee, K., & Carter, S. (2012). Global marketing management. Oxford University Press.

Shim, W. S., & Steers, R. M. (2012). Symmetric and asymmetric leadership cultures: A comparative study of leadership and organizational culture at Hyundai and Toyota. Journal of World Business, 47(4), 581-591.

Shinkle, G. A., & Spencer, J. W. (2012). The social construction of global corporate citizenship: Sustainability reports of automotive corporations. Journal of World Business, 47(1), 123-133.