Swot Analysis of Toyota

TOYOTA - Keeping Up With the Challenge

Introduction:

SWOT analysis refers to the approach utilized by firms or companies to evaluate the Strengths, Weaknesses, Opportunities, and Threats engaged in a project or in a business enterprise. It involves denoting the objective of the enterprise and ascertaining the internal and external factors that are positive and negative to achieve that objective (Humphrey, 1968). It is rather essential for a business enterprise or a project to incorporate the SWOT analysis into its strategic planning techniques.

Additionally, the Internal Analysis of strengths and weaknesses focuses on internal factors that give an enterprise certain advantages and disadvantages in meeting the needs of its target market. Strengths refer to core competencies that give the firm an advantage in meeting the needs of its target markets, hence market oriented since strengths are only meaningful when they aid the business address customer needs. Weaknesses refer to any limitations a company faces in developing or implementing a strategy, hence customer perspective because customers often perceive weaknesses that a company cannot see (My Strategic Plan, 2010).

The thesis of this paper will be to establish how well Toyota, a multinational automaker, maneuvers in order to capitalize on its strengths to meet threats and how it takes advantage of opportunities to surmount its weaknesses. Besides, the paper will address the internal factors that render Toyota certain merits and demerits in tackling the needs of its target market. In addition, a critical assessment on the major strengths and weaknesses facing Toyota and how they aid and abet the company in maximizing on opportunities and mitigating threats will be reviewed.

Internal Analysis:

Toyota is a multinational automaker with its headquarters in Toyota City, Aichi, Japan. Toyota also provides financial services thorough its Toyota Financial Services division and also builds robots. According to a Toyota Internal Document (Liker, 2004) titled "The Total Way 2001", conduct guidelines and expression of values for all the employees of Toyota were instituted. These guidelines were based on the principles of Challenge, Improvement (Kaizen), Go and See (Genchi Genbutsu), Respect and Teamwork. Within 8 years since the dissemination of these principles, Toyota became the largest automobile maker for the year 2008 and assumed the titled of the most profitable automobile maker along with increased sales globally.

The resource-based view of Toyota's Annual Report (Toyota Company online library, 2009) illustrates that as a multinational automobile maker, Toyota has a competitive advantage in accessing regional and international markets effectively and efficiently. This in turn equips the company with a vast market portfolio hence economies of scale are optimized. In addition, the diversification of the products that Toyota manufactures endows the automobile maker with the propensity to satiate various segments of its consumers.

Whilst the above constitute as some of the advantages of enjoyed by Toyota, the expansion of Toyota globally gives rise to a vulnerability that is apparent in the wake of global catastrophes such as the global financial crisis witnessed in 2008. Besides, Toyota's colossal investments in the expansion and diversification impinge heavily on the financial position of the company since such ventures impel the company to

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