Toyota Motors SWOT Analysis

Strengths

• A Motivated and extremely productive work force.

• Low cost, high quality factory operations guided by just in time.

• Long-term partnerships with suppliers.

• Careful market research and short design to show room cycles so as to keep models closely aligned with market demand.

• Custom order production and superior customer service.

• Being the undisputed quality leader in automotive manufacturing.

• Having outstanding labor relations.

• Informal contact among employees at all levels of the company.

• Strong employment relationship.

• Every worker is adding value to the car.

• Long-term relationship with supplier.

Weaknesses

• Less market share as compare to General Motors and Ford

• Customers not segmented

• Production operation not very good as the product needs to be reworked

• Customers are not being involved in the process

• Limited Research and Development done as compare to competitors

• High level of responsibility on employees shoulders

• Lack of flexibility in the company

• Lack of a proper sales force

• Few layers in Organizational hierarchy, resulting in less opportunity for promotions.

• Continuous stress on employees due to kaizen (Continuous improvement).

Opportunities

• The government pursued two major initiatives to promote automobile self-sufficiency in the quasi-closed economy. First, the ministry of international trade and industry limited imports to about 1 % of the Japanese market. Second, a plan was proposed to “rationalize” the auto industry through mergers and specialization.

• Additional government measures to strengthen and protect the ability of the industry to compete included protective tariffs, restrictions on foreign capital participation and loans, accelerated depreciation, special import arrangements for machinery and technology, and long term, low interest loans for the auto parts industry.

• Quota imposed by US government is beneficial for Toyota in the sense that it enabled Toyota to charge a premium price and to replace its inexpensive one, which were loaded with many options.

• After US market, Western Europe has emerged as largest market for new car sales in the world. Although Toyota faces fierce competition form Nissan in Europe but its present market leader status in Finland, Denmark, Norway and Ireland can be more beneficial if the trade barriers among European countries are eased.

Threats

• Rising gasoline prices triggered by decisions of the OPEC oil cartel to hike crude oil prices substantially.

• Declining economic growth on a global scale.

• Continuing trade frictions due to trade imbalances between Japan and other countries and the lack openness of the Japanese market to import.

• Declining exports due to import restrictions in the United Sates and Europe and strict domestic content laws in other countries.

• Continuing appreciation of the yen.

• Expanding demand in the Japanese auto market.

• Escalating competition in the low priced car market by the entrance of several newly industrialized countries.

• Increasing sales of imports.