Toyota Company’s SWOT Analysis and Trends

Topic: Business Words: 599 Pages: 3 Sep 27, 2021

Toyota is the leading distributor, assembler and manufacturer of automobiles in the world. It has an efficient management team that allows the company to achieve high performance. The company is regarded as a monopoly because it is the dominant market player with regard to the exportation of cars. It adopts a differentiation strategy that allows it to enjoy monopolistic presence in developing countries. The market structure of Toyota is also regarded as monopolistic because other key market players such as GM have attained a significant market share in the automobile market (Pride 12). However, Toyota is reacting to the actions that its competitors are adopting in order to ensure that it remains the market leader with regard to exportation of cars (Griffin 23). Therefore, the purpose of this paper is to discuss the SWOT analysis of Toyota in order to demonstrate the factors that have helped the company to emerge successful in the automobile industry. It will also discuss the challenges that the company faces while trying to maintain its market leadership position in the automobile industry.

SWOT Analysis

SWOT analysis comprises of internal and external factors. Internal factors originate from within a company whereas external factors are those factors that originate from outside a company. Internal factors include strengths and weaknesses whereas external factors include threats and opportunities.

Internal Factors

	Strengths	Weaknesses
Management	Toyota has a competent and experienced management team	The big size of the management team slows down the decision making process within the company thus reducing its chances of attaining its target market
Products	The company provides its customers with hybrid products that are friendly to them	The company experiences huge costs while trying to determine the right products for its customers (Griffin 25)
Marketing plan	The company has a wide range of channels that allows it to market its products in an efficient manner	The company incurs huge costs while looking for reliable distribution networks
Manufacturing	The company’s suppliers are reliable and they provide high quality products	The suppliers of the company have different interests which influence Toyota’s production efficiency negatively (Klein 12)

External Factors

	Opportunities	Threats
Social	The company projects that the upcoming markets in developing nations will be more stable	The low prices of the products that Toyota manufactures make the products to be regarded as of low quality
Competition	The company offers differentiated products thus making it to appear distinctive in the market	Toyotas competitors are producing high technology products thus threatening the profitability of the company (Rao and Rao 34)
Technological	The company has realized a break-through in technology adoption thus allowing it to produce high quality products (Afuah 6)
Economic	The large number of consumers has allowed the Toyota to increase its earnings thus boosting its competitiveness in the market (Rao and Rao 35)	Most people are opting for products from other companies because they have significant disposable income
Legal framework	There are significant regulatory measures in the market which ensure that there is fairness in the automobile industry thus safeguarding Toyota from exploitation by its competitors (Pride 45)

Trends

Toyota is embracing innovation in order to allow it to remain as the dominant market player in the automobile industry. However, most of the innovations that Toyota is embracing are costly to implement. The innovations that the company is embracing are outlined below.

Pricing Innovation

Merging of assembly points
Compression of production platforms

Product innovation

Designing low exhaust compression engines
Designing cars with air conditioning compressors
Incorporating DC-DC converters in order to enhance fuel efficiency

Distribution innovation

Opening up new factories in America and China
Facilitating logistical operations (Pride 54)

Works Cited

Afuah, Allan. Strategic Innovation: New Game Strategies for Competitive Advantage. New York: Taylor & Francis, 2009. Print.

Griffin, Ricky. Management. New York: Cengage Learning, 2010. Print.

Klein, Guenther. Strategic Marketing. London: GRIN Verlag, 2007. Print.

Pride, William. Marketing. New York: Cengage Learning, 2011. Print.

Rao , Appa and Parvathiswara Rao. Strategic Management and Business Policy. Mumbai: Excel Books India, 2009. Print.