Assignment on Economic Strategy Analysis Toyota

Added on - 21 Apr 2020

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Running head: ECONOMIC STRATEGY ANALYSISEconomic Strategy AnalysisName of the StudentName of the UniversityAuthor’s Note
1ECONOMIC STRATEGY ANALYSISTable of ContentsSWOT Analysis...............................................................................................................................2PESTLE Analysis............................................................................................................................6Poster’s Five Force Analysis.........................................................................................................10References......................................................................................................................................13
2ECONOMIC STRATEGY ANALYSISSWOT AnalysisSWOT analysis is one of the major strategic tools that help the organizational managersin the identification of strengths and weaknesses of the companies along with the potentialopportunities and threats (Yuan 2013). There is not any exception of this fact in case of ToyotaMotors Corporation. Toyota Motor is considered as the world’s leading sellers of hybrid electricvehicles. It needs to be mentioned that Toyota has its presence almost all over the globe (toyota-global.com 2017). However, the company is based on Japan. The SWOT analysis of Toyota isshown below:StrengthsFocus on Research and Development (R&D):Toyota is famous all over the world for theirinnovative culture. It is one of the major strategies of Toyota to get the competitive edge byintroducing innovative vehicles in the market. Toyota has 17 research facilities in 8 differentcountries all over the world. The three major focus area of the R&D department of Toyota arebasic research, development of technology and development of product (toyota-global.com2017).Most Valuable Automotive Brand:According to the records of Forbes and Interbrand, Toyota isin the position of 6thand 5thmost valuable brand all over the world worth US$42.1 billion andUS$53.6 billion in the year 2016. Both of the reports state that Toyota is the no. 1 automotivebrand all over the world based on value (forbes.com 2017).Toyota Production System:The production system of Toyota is one of their major strengths ofthe corporation. The name of the production system developed by Toyota is Total ProductionSystem (TPS) and the main aim TPS is to increase the efficiency of production process byeliminating wastes. It has been seen that TPS is highly successful in Toyota’s production systemas it helps Toyota to increase its production efficiency by reducing manufacturing time and cost.
3ECONOMIC STRATEGY ANALYSISFigure 1: Toyota Production System(Source:lean.org 2017)Competence in the production of Hybrid Vehicles:Heavy investment of Toyota in the sector ofhybrid vehicle is considered as one of the major strengths of the corporation. In the year 1997,Toyota introduced their first hybrid vehicle called Toyota Prius. In the year 2016, Toyota hasbeen able to sell more 9 million of hybrid vehicles that is more than any other companies are. Allthe hybrid vehicles ofToyota are very much fuel-efficient. This helps Toyota to gain thecompetitive advantage.WeaknessesLack of Competence in Automobile Vehicle:The reluctance of the management of Toyota canbe seen in the long-term investment in automotive vehicle technology. The company hasinvested in the processes to reduce wastes, but Toyota has not taken any initiatives in theintroduction of fully autonomous vehicle in the future. This can be considered as the majorweakness of Toyota.Large Vehicle Recalls:The recall rates of Toyota is very high and these frequent recalls havebeen affecting the image of the company. In the year 2016, Toyota has recalled almost 5.8million vehicles due to faulty airbag. For this reason, Toyota had to cost US$3.4 billion ascompensation. It is a fact that these frequent recalls negatively affect the brand image of thecompany (fortune.com 2017).Weak Presence in China:China is considered as the world’s largest automobile market all overthe world with more than 25 million sold every year. In China, Toyota has to face majorcompetitors from the companies like General Motors, Volkswagen and others. As a result,Toyota has less presence in the vehicle market of China. Toyota only captured 4.5% marketshare in China. This is a major weakness of Toyota.
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