We have analyzed Porter’s Five Forces of Toyota and PESTEL Model of Toyota. Thus in this post, I will list the SWOT of Toyota. 1. Opportunities -Recovery of auto industry: The automotive industry showed the signs of recovery, which is predicted to be gradual. The market will reach a volume of 129. 9 million units in 2013 (Durbin, and Krisher, 2010). This provides positive information to the automotive manufacturers and stimulation to the investors. -Hybrid electric vehicles: The increasing energy costs and stringent emission regulations enhance the demand of the hybrid electric vehicles because of its high fuel efficiency.
It is estimated it will reach 4. 0 million units by 2015. Besides US, Western Europe and Japan, China is estimated to be next large market. -Opportunities in Asian market: The Asian automotive market became the main increasing point and is estimated to increase in the following several years. Thus, the automotive corporations should concentrate on the Asian markets, such as China, and India. 2. Threats -Competition in the global automotive market: The worldwide automotive market is highly competitive, and becomes stronger due to the globalization, which is involved into every factor of automotive.
The competition may lead to reduce the automobile unit sales, which may influence the company’s financial condition. -Tightening emission standards: The tightening emission standards adopted by the EU increase the additional costs for product development, testing and manufacturing operations for the automotive manufactures. 3. Strengths -Leading brand recognition: Toyota is one of the leading automotive brands in the world. And its brand Lexus values around $3. 1 billion.
The other brands Corolla, Camry, Sienna, Prius and Scion are popular.
The leading brand image gives it significant competitive advantage and charge premium prices. -Focus on R&D activities: Toyota strongly focuses on R&D to expand its product. The company’s strong focus on R&D allows it to uphold the technological leadership in most of its product segments. It has also enabled Toyota to develop innovative products, leading to strong sales. -Strong distribution network: The company has a strong distribution network. Strong distribution network helps Toyota to improve its sales and to strengthen its market position all over the world.
-Toyota production system: The Just-in-Time and Jidoka Production System will help Toyota to build quality with the low defects and costs. 4. Weaknesses -Lapses in product quality: Toyota announced two recalls recently that cover some of its most popular models, and recalled about 10 million vehicles across the world. These recalls not only reduce the share prices, but also impact the brand image and the consumer confidence. -The unfunded pension: In 2009, there was about $6537. 7 million unfunded for the projected pension and post-retirement benefit. There are some unfunded retirement pensions in Toyota, which may influence the cash flows.
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