SWOT Analysis Of Toyota Company

Situational analysis

No policymaking need convincing that Toyota Company has become one of the largest firms because of the TPS. The unconventional trade system assists the Japanese automobile to makes the planet the best automobile at the low rate and to grow novel merchandise fast.   Not only have the closet opponents such as Ford, Chrysler, Daimler,  General Motors and Honda  advanced TPS-like System, but also postal and hospital services  have embraced its underlying  tools,  rules and conventions to become more efficient.

The Toyota corporation company was established in 1937 through the creativity of Kiichiro Toyoda.  Toyoda established the firm after attaining experience from his father’s firm.  Its headquarters are located in Japan and its processes are extensive across the globe. The company specialises in the planning and building different merchandises. The company assembles cars with one of the following elements; hybrid engines and combustions.  Additionally, the corporation produces spare parts. The typical mode of Toyota is Camry, Corolla and Land cruiser.  Apart from the above brand, the company creates luxury Lexus and the Tundra automobile.  By 2009, the company had 71,116 outlets in various sections across the globe.  According to the statista (2016), the company’s stake in the UK from 2014 to 2016 has been rotating around 2.73% and 4.17%. Therefore, it shows that it has steadily controlled a considerable unit of the United Kingdom vehicles marketplace. In the 2015, the corporation was among the best selling cars. UK automotive industry can be deliberated as a backbone of the UK economy and generally produced around the 50 billion euro yearly income, generating about 10 billion Euro in net value-added to the economy.  The UK automotive sectors hires nearly 730,000 workers in manufacturing, retail and aftermarket sectors with approximately 154,000 personnel directed enrolled in manufacturing.

Robust market point and brand awareness:  Toyota has a resilient marketplace rank in various topographies across the globe. The firm’s market share in Japan was 45.5% in FY 2012. Additionally, firm has market share of 13.4% in Asia, 12.2% in North America and 4.3% in Europe. Similarly, the corporation holds a 7% part of the Chinese market and a considerable market stake in Central and South America, Middle East, Africa and Oceania areas. Such a robust and resilient market situation permits the firm to gain competitive gain and also expands into the global markets. Additionally, Toyota embraces a collection of strong trademarks in the automotive business. Therefore, the firm’s sturdy marketplace position gives it substantial competitive benefit and assists it to record higher sales progress in international and domestics marketplaces.

Robust emphasis on the R&D:  Toyota has a strong attention on R&D to enlarge its assortment and expand the functionality, class, environmental and safety of its merchandise. The firms R&D exertions are steered at emerging novel merchandises, processes and refining the abilities of present produces.  The corporation conducts its R&D processes at the facility globally. Strong emphasis on R&D has assisted the firm in integrating newer structures to its current variety of products and also in conveying out newest technologies in the diverse zones.  The firm’s strong emphasis on R&D permits it to sustain the technological governance in most of its products parts.  It also facilitates Toyota to improve inventive merchandise leading to robust transactions.

SWOT analysis

Widespread production and delivery web:  the company has a broad distribution and production web. The firm and its associates produces vehicles and linked fragments through more than 50 manufacturing firm in 227 nations and areas besides. During the FY 2012, the firm produced 7,435,781 automobiles across all the manufacturing places. Additionally, Toyota has a widespread distribution net. Geographically, the business   has a well spread manufacture base diversification business perils, and its extensive supply networks offer a broader reach, thus backing the returns.

Production recall could influence the brand image:  the company has steered a number of merchandise recalls in the   past which would impact the brand appearance and general sales of the business. For example, in 2012, Toyota recalled 111,000 simulations of Lexus and Toyota brand due to the defect to components of the substrate and possible halt of the hybrid structure.  In addition, the company evoked 181, 00 cars in Japan in connection to anomalous noises and oil leak that may have stemmed from the loose of bolts in the sub transmission and the rear wheel gap.  In additional, the firm was involved in regime investigation connected to products recalls.

Deteriorating sales in key topographical locations:  the company experienced a drop in its sales in key geographical parts. In FY2012, the firm saw a reduction in trades across Europe, Asia and North America 

Poor distribution of resources as equated to the opponents:  the business return on assets and low return on equity equaled to rival firms. The firm’s players such as Nissan motors and Honda have more ROE when matched to the Toyota. Honda motors were 4.4%, while Nissan motors was 8% in FY 2012.  Contrary, Toyota ROE was 2.7% in FY2012.  Therefore, ROA and ROE linked to its peers signposts that the firm is not using the stakeholders cash effectively and that it is not building the high return for its stakeholders.

Rising international automotive sector:  the global automotive sector was extremely influenced by the economic slump, with a weakening in returns noted in 2008 and 2009.  In 2001, the company saw a resilient recover which has persisted up to 2012.  The salvage of the international automotive business offers Toyota an opportunity to advance more users and upsurge revenues.

Toyota poised to gain from the developing collaboration with BMW. Toyota and BMW assigned a memorandum of understanding meant at long-term planned partnership on technological arena.  Thus, the two businesses will partners for the dual growth of the architecture, improvement of a fuel cell system, constituents for sport cars, research and development on lightweight tools and collaboration on power-train electrification.  The joint effort will result in substantial cost saving, interactions and also boost the operative margins.

Robust viewpoint for the international novel car market:  the international novel vehicles have encountered   comparative growth.  But, estimates advocate this will increase to a solid double digit growth, thus the resilient viewpoint for the international new vehicles joined with the firm’s novel produces launches offers an advancement chance.

Extreme rivalry: the international automotive marketplace is greatly competitive in nature. The Toyota faces a robust competition from automotive producers in its diverse market.  The aspects impacting the rivalry comprise products feature and quality, the amount of time needed for the innovative and advancement, reliability, fuel economy, pricing, financial terms and customer services. Improved rivalry may also lead to lower vehicles unit sales and huge portfolio which leads in downwards rating force, thus, influencing the financial status and the results of operation of the firm.

Appreciation of Japanese Yen a main challenge:  the strengthening of the Japanese’s Yen against the US dollar and fluctuation in foreign exchange rates would have a material impact on the company’s operations results, which impact the company’s valuation.

Natural disasters could influence the production configuration: the business is subject to the distraction of production due to natural calamities such as floods and earth quakes.  In 2011, the company witnessed shocking volcanic activity in the past years which adversely upset the economy. In the same year, floods happened in Thailand in Thailand which stopped its processes and manufacture of about 150,000 Toyota cars.

The political firmness of main markets is a prospect for Toyota to advance with insignificant political stress. The free trade agreement encompassing Japan and other nations present chances for the imported market penetration. Additionally, the government support from the ecofriendly merchandise is an opportunity for the business to advances its product to satiate the ecological expectation.

Toyota has the prospect to advance from Japan grounded on the weakness of the Japanese Yen. Additionally, it has a chance to raise its trade in the US which is the company second largest market after Japan. Similarly, the rapid development of economies presents the prospect for the company to progress revenues centered on this market.

The company has the opportunity to offer more produces that fulfill the user ever escalating attention in electric and hybrid cars. But, the corporation ought to contemplate the widening wealth gap, which appears to be a threat because of decreasing middle class. Therefore, in this aspect of Toyota pestle analysis, the social external element of the broadening wealth gap is a major challenge.

Toyota Corporation has a prospect to advance its e-commerce abilities or to exploit third party e-commerce services provider for the transactions of some of its merchandise such as spare part. Also, the company has a chance to improve its mobile app to upsurge user engagement and devotion. But, the firm must communicate the risk of the cybercrime, counting the corporate cyber-espionage.

Toyota has a chance to offer ecological friendly merchandises such has electric car with higher field competence. The firm as a prospect to improve its sustainability routine through advancement in the business processes proficiency.

The company has opportunities to develop with minimised trepidations for the breach of its intellectual property right because the regime is functioning towards advancing intellectual right guard. The company also has a chance to offer higher quality merchandises that fulfill or surpass the needs centred on the ecological rules and guidelines.  Similarly, the firm can exploit the opportunity of providing secure and more satisfactory goods to satisfy or surpass the consumers’ laws.

Beside the long-term focused corporate philosophy, Toyota has become largest world successful automobile firm due to the Toyota production system (TPS). The key objective of TPS is to create goods synchronised to user needs, therefore designing out overload and discrepancy, and eradicating waste triggered by the overproduction and waiting times.  One of the utmost importance of TPS is its robust emphasise on lean manufacture. The process is intended at the eradication of waste in the section of creation including the product design, client relation, merchant networks and plant management.  Its objective is to incorporate less human exertion, less inventory and time to developed production.

Though, numerous Asia companies’ automobile factories have earned reputation to create high excellence cars, they have been incapable to overcome Toyota benefits in human resource management, suppliers systems and delivery systems in the greatly competitive markets. During the Second World War, the company established a highly effective production system called the lean invention to utilise human resource more proficiently. Toyota beliefs of motivating its employees are the fundamental of a human resources management scheme. It growth in innovation and creative by inspiring worker involvement conveys high level of work allegiance.

In-house manufacture has been reducing for a number of years.  GM continues to produce a high portion of elements in house.  In Japan, the Toyota supply chain is centred on web of collaboration and equity concentration. Asset focus and operation are stimulated, and antitrust prohibitions are far less obstructive than in the Europe and US.

The company has initiated and executed numerous highly efficient approaches. For instance, the firm invented just-in time, an inventory tactics that strives to advance a business return on investment by minimising in-process inventory and connected carriage cost.

 In addition, JIT and exemplary supply chain managing, the high efficiency of the manufacturing plants is due to the high level of standardisation. For the company, standardised processes and task are the basis for continuous development and workers enablement,

Core competency:  the Toyota motor corporation core competencies is its capability to prove automobile of great excellence at best values thus offering a worth for cash to the users.  This core proficiency of quality can be accredited to these inventive procedures. The  quality facet of Toyota’s process have revolutionised the vehicles in the past and nearly all other automobile  firms had to attempt and better the eminence of their merchandises.

Unique capability:  the company’s distinctive ability is its production scheme known as the Toyota production structure which is centred on the lean manufacturing framework. The framework comprises innovative process like six sigma, Kiazen, and just in time. This distinct ability has led to a competitive gain that has given Toyota a maintainable product name and a market leader’s spot.

According to analysis carried out by the statista, Toyota is one of the principal and largest automobile industries in the realm occupying “9.2% market share, followed by the Volkswagen with 7.2%, 6.5% ford, and then Honda having 5.5%. Specifically, the statistic illustrates the monthly UK market share values between January 2014 and March 2018 is 2.61 and 4.87%”. Consequently, managing it steadily controlled good part of the UK car market.  It is worth noting the company was among the top car brand in the UK from 2014 up to 2016.  In early January 2018, the company’s market share rose up to 4.87% in the UK, which is highest value during the described time. The statistics illustrate the number of employees from the fiscal year of 2012 to 2018. The company employed 369,124 individuals in the FY 2018. The company capital investment and research and development expenses rose from 2013 to 2016, with 22,064 Yen billion and 28,403 Yen billion respectively. However, in the year 2017, the value dropped up to 27,597 Yen billions. In the consolidated  units  production by region (8975 units),  in FY 2017,  Japan occupied   45.85%, 23% north America,  7.1% Europe, 18.7% Asia and 5.5 % in other regions. In the consolidated total vehicles sales by region (8971 units), Japan comprised  25.3%,  north America 31.6%,  Europe 10.3%,  Asia 17.7% and  other regions 15% in the FY 2017. Though the auto% truck producer industry saw revenue reduction just by -4.16%, Toyota motor announced -8.02% year on the year sales decline in the fourth quarter 2017 and underperformed in the  consumer discretionary sector by -3.51%.

Marketing segmentation denotes to the partition of market into various unit. This subdivision can be on the foundation of geographical, behavioral, or psychological features.  Psychographic division entails separating the market on the basis of customer’s outlooks and lifestyle.  Geographical subdivision is isolating on the foundation of diverse locations.   Demographic segmentation means dividing based on age, population gender, structure and population. Behavioral segmentation is dividing the market relying on the user’s consumption and shopping traits.

Toyota can optimise its trades by doing marketplace segmentation on the principle of the demographic. For instance, it was noted that ancient type of Corolla’s buyer were women and for customers who were at least 35 years old.  Therefore, beside the preferences and age, there is also a technique in which the Toyota can fragment UK market. The company has launched three diverse sorts that vary in price as well as structures.  Thus, Toyota must originate with the demand centered segmentation. Therefore, in this setting, the company can initiate the demands of the distinctive uses.  For example, if the gender based, the company necessity to design car in line with women admiration without disregarding what adult admires in the vehicles.  Additionally, segmentation can be conducted based on numerous income classes.  However, for the Toyota to maximise the profitability in UK market, it should concentrate in the geographical segmentation to address the constant deteriorating volumes of sales in the United Kingdom.

Once the company has segmented its market alongside with comprehending the presence chances, it can categorise the segments. The company can utilise multiple patterns such as one-segment, product, discriminatory, and market segmentation. Toyota can relate to the whole market attention also.  In the reference to the earlier corolla fashions joined with the demand-grounded specialisation, it is apparent that the business can fit new brand in the suitable market segment using market, product or discriminatory specialisation. In this association, females and old section of the populace have a distinct request for the novel cars.  The company can use discriminatory specialisation to target the marketplace.  In selecting a specific target market, it is probable for the company to locate its brand with the varying preference of its prior users.  Nonetheless, the target market for the Toyota is thin, thus, the managing need to communicate this subject by pointing a various market segments. For instance manufacture of car simulations than many UK young generation like.

To efficiently appeal users to acquire the Toyota car model such as corolla, it is crucial for the firm to use a well-organised differentiation and positioning tactic.  Thus, the corporation still requires its earlier model but this period giving it on the market in diverse technique.  The variance can be in terms of improved number of the structures with a minor variance to those being manufactured by its opponents in the market.  Most females like the collection of colors while young males love the latest model.  In response to the above, the company can position itself by producing car with different colors. Therefore, the company can lure users in contrast to its competitors.

In addition, positioning entails the facet of the company offering a merchandise design and generating a brand image which assists the firm to serve definite consumer desires in the marketplace.  A good product positioning enables company to be user-oriented.   In the Toyota Corporation, the positioning rotates around the corolla product.  Therefore, positioning can be realised by first constructing that purposes to disseminate to specific market.  Therefore, from above discussed points, Toyota Company should address the positioning issue by producing the latest model UK young fancy, variety of the top quality brand as well as fuel saving vehicles that has distinct colors.

The objectives of Toyota in the next 2 months are based on SMART objectives (Specific, Measurable, achievable, realistic and time-related).  According to the situational analysis of the Toyota, there are three objectives needs to achieve.

Objective: increase retailer in UK market up to 21% within the next one year.

Objective2:  increase brand awareness among 80% of potential customer in the next half a year.

Objective 3: improve the market share by the end of the year in UK

The objectives of the company in regard to the UK market are clear, specific and measurable. Similarly, these goals are realistic objectives because Toyota is a big company and also the oldest in the automotive industry.  They are eligible and possess resources to accomplish these objectives. With the escalating economic situation in UK and with company’s resources, these objectives can fully be realised within one year.  But, the company needs the specific forecast to monitor and make sure the plan implementation is in place.  Therefore, an effective strategy will assist the Toyota accomplish those goals.

It is apparent that the paper has recognised that Toyota Company is making the best companies in the global automobile sector.  Internationally, company has oriented itself with the regard to the customer’s requirements. In this report, it has been well-known that meeting the precise demands of users is the keystone of the company’s victory. In this link, Toyota has market alignment that builds the product that has a huge user. Thus, to efficiently attain the above  plan,  the report suggest the company  should section its market, concentrate on operation that  target a specific market and  generate target position through  creating of a good product image.   Rivalry is usual   in each and every marketplace.  Toyota faces rigid rivalry from its opponents like Ford and Audi motors.  Thus, to daze the competition, the firm should use more violent marketing approaches in contrast its opponents.

Conclusion

It is clear that Toyota organisation positioning and marketing mix is established from the viewpoint of its organisation principles. The firm continuously put the customer and quality first. Its marketing strategy, product growth, and aftersales services bear the signal of best user services.  Although the organisation cannot control the macro elements which can influence it at any period, the introduction of the hybrid technology has haul out a lot of venture from the firm. The balance between the price skimming and low pricing should be taken into consideration. The growing market in UK is one of the main chances for Toyota and can have big augmentation in their profitably if they can triumph in this market region.

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