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Toyota Company’s SWOT Analysis and Trends

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.