Toyota Motor Corporation, the world leading car maker, has not been performing well over the recent past as it has been recalling some of its cars because of technical problems. This has been the company’s first car recall in 59 years and it led to an annual net loss (Takahashi, 2010).
However, the car maker was reported to be on the verge of making a 48% profit growth estimated at 310 billion yen (the equivalent of $3.32 billion) by March 2011 (Takahashi, 2010). This is a major breakthrough despite the fact that company had made losses in 2009 fiscal year.
The implication is that even after recalling 8.5 million cars, this would not deter it recovery process. The paper explores the Toyota’s SWOT analysis basically on it weaknesses and strengths and expounding how it has been able to capitalize them in meeting the threats and taking in the opportunities for competitive advantages. It also analyses whether the weaknesses identified will impede its recovery process.
Based on the 2009 annual report following strengths and weaknesses have been identified. The company has a well established marketing mix that incorporates the different marketing concepts like segmentation, targeting and positioning.
This has made it reach the different customers from different segmented markets (Ichimaru, 2009). For instance, the automotive operations are the major business segment which makes it a global competitor.
Also, it has segmented and positioned itself in different geographical markets over some of its competitors giving it a competitive advantage. Some of the differentiated markers are the emerging market like Asia, South and Central America, and China.
The company has diversified its products range which is aimed at targeting different customers depending on social class, geographical location, income and status quo among other factors.
The product-oriented management of Toyota has made it possible to make cars that meet the different customers’ needs in the different regions, at a customer satisfying price (Ichimaru, 2009). For instance, the company introduced Toyota Prius a hybrid that meets the current expectations of its customers.
On the other hand, there are weaknesses that have may be an impediment to the recovery growth of the company. Toyota main markets have been the U.S and Japan.
Dependence on the single markets has seen the company face the financial markets crisis and fluctuating prices that resulted to loss in 2009 fiscal year (Ichimaru, 2009). This coupled by the highly fluctuating interest rates and currency, have left adverse effects on the Toyota daily operations.
For Toyota to retain its operational efficiency, it has to rely on mass production (Marketing Teacher Ltd, 2011). When a down turn is experienced in the world market, the company may be exposed to over capacity.
Contrary, when an upturn is experienced in the world market, the company faces the potential sales because of under capacity (Marketing Teacher Ltd, 2011) because to accommodate either scenario takes time.
To remain relevant in the market, the company has to capitalize on the potential strengths to deal with the threats by taking advantage of the opportunities conveyed. The different segmented markets especially the emerging markets like China and Asia will help in retaining market share and lead to market expansion.
The different markets it operates from have different exchange rates and interest rates, so the investments in emerging markets have the capacity of enabling the market enjoy different market responses. China was not badly affected by the financial fluctuations, thus Toyota enjoyed high sales during this period in china.
Different segmentation, positioning, and targeting has made it possible for the company produce vehicles that meet the changing trends in preferences and test. For instance, the company launched a hybrid car in 2009 (Ichimaru, 2009) as well as Toyota Lexus hybrid that meets the expectation of the people (Takahashi, 2010).
Therefore, market diversification has made it possible for the company to utilize the opportunities like producing hybrid cars for different people. With focused targets, the company has been able to utilize this strength in manufacturing vehicles that target the urban youth like convertibles which represent a particular segment of the youth (Marketing Teacher Ltd, 2011).
Not all the weaknesses will hinder the recovery efforts of the company. The company has continued to invest in emerging markets like Asia and China (Ichimaru, 2009), which during the financial market economies and downturn were not significantly affected.
This has boosted its sales as they have become huge consumers of Toyota Motors Corporation differentiated products. Being a mass producer of vehicles is a weakness that has the capacity of ruining the company as it exposes it to competitive threats.
For instance, the company has been recalling cars since 2003 (Ichimaru, 2009). The latest car recalls have reduced the customers confidence although the company has set have a quality management to oversee the production of quality vehicles (Takahashi, 2010). This may hinder its efforts of recovering quickly if not addressed to.
Although Toyota has been facing some operational issues related to quality, it is still doing well. The recalling of vehicles and loss made in 2009 did not deter its recovery process as it increased its growth by 48%.
The identified strengths are the ability to use different marketing mix and concepts in expanding and maintaining its customers. It has also ensured that it produces different varieties that satisfy the needs of different customers.
The company has been targeting US and Japan as the major markets which have exposed it to financial market crisis and different exchange and currency rates. Lastly, it has faced with issue of mass production which may jeopardize the quality of its vehicles.
Reference List
Ichimaru, Y. (2009). Toyota Motor Corporation: Annual Report 2009. Web.
Marketing Teacher Ltd. (2011). SWOT Analysis Toyota. Web.
Takahashi, Y. (2010). Toyota Registers Surprise Profit. Wall Street Journal. Web.