Toyota Swot Analysis

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Università della Svizzera Italiana

Coursework in Corporate Strategy Prof. Erik Larsen


 TOYOTA‐GOING
GREEN


Group Members: Kaloyan Blagoev Mariam Hayryan Robin Müller Dragana Stajic Immanuel Wüthrich Örs Zékany

Lugano, 17.12.2009

Summary
During the 1990s a global and strong emphasis has been put on the environmental issues worldwide, legally binding documents being signed by governments, obliging to adopt “green” policies. Manufacturers had to follow the governments. Toyota answered to the “green debate” challenge by introducing the first mass-produced hybrid car in 1997. Toyota, the pioneer of Japan’s automobile industry was established as an independent company in 1937. Since 1958 the company has been exporting and started to manufacturing abroad. In 1950 Toyota Motor Sales Company was established which merged into the Corporation in 1982. Managing a truck and four car companies and producing over 5.5 million vehicles per year, Toyota is today the largest automobile producer in the world. The two pillars of Toyota Production System are just-in-time and built-in quality. The Porter’s 5 forces analysis of the car industry for the late 1990s shows low threat of new entrants, as well as low bargaining power of both buyers and suppliers. The threat of substitutes and the competitive rivalry were high. The SWOT analysis for the period between 1990 and 2000 shows that the main challenges of the decade were caused by legal (tariff-barriers) and macro-economical factors (oil crisis 1990, economical crisis 1997 in Asia), while the environmental concern was both a threat and an opportunity for Toyota. Its main strengths were the experience in the “greener” car sector and the introduction of Prius, as well as the successful Toyota Production System. The fact that the company had to recall some cars due to quality defficiencies, was its main weakness. The SWOT analysis looking at Toyota in 2009, shows increasing demands for cars, active cooperation in production and “green image” in Europe among opportunities. The economic situation as well as the current and upcoming competition are threats Toyota faces. The strong international position and being both, leader of the car industry in general as well as in the hybrid automobile segment are listed under strengths. The main weaknesses are the production overcapacities. Forecast predicts yielding the leading position in the worldwide car market to Volkswagen Group, due to its rapid acquisition strategy, though Toyota is still in a strong position, especially with its leadership for hybrid cars. Toyota needs to fit the production capacities to the actual needs to keep the leadership in the environmental-friendly car segment, also in the coming decade.

1
 HISTORY
OF
TOYOTA
MOTOR
CORPORATION
 1.1
 1.2
 1.3
 1.4
 EARLY
DAYS,
PRE­WAR
AND
POST­WAR
DEVELOPMENT
 INTERNATIONALIZATION
AND
MODERN
DAYS
OF
TOYOTA
 DIVISIONS
AND
ACQUISITIONS
 THE
DEVELOPMENT
OF
THE
TOYOTA
PRODUCTION
SYSTEM


2
 2
 3
 4
 4
 6
 7
 7
 7
 7
 7
 8
 8
 8
 10
 12
 14
 14
 14
 15


2
 PORTER'S
5
FORCES
ANALYSIS
 2.1
 2.2
 2.3
 2.4
 2.5
 2.6
 THREAT
OF
NEW
ENTRANTS
 BUYERS’
BARGAINING
POWER
 THREAT
OF
SUBSTITUTES
 SUPPLIERS’
BARGAINING
POWER
LOW
 COMPETITIVE
RIVALRY
 MAIN
DRIVERS
TO
CHANGE


3
 SWOT­ANALYSIS
 3.1
 SWOT­ANALYSIS
OF
TOYOTA,
1990­2000
 3.2
 STRATEGIES
FOLLOWED
BY
TOYOTA
TO
FACE
THE
CHALLENGES
 3.3
 SWOT­ANALYSIS
OF
TOYOTA,
2009
 3.3.1
 OPPORTUNITIES
 3.3.2
 THREATS
 3.3.3
 STRENGTHS
 3.3.4
 WEAKNESSES


Introduction

“…We are striving to create a new automotive paradigm one that contributes to a bountiful society as it helps preserve the Earth’s environment”. Fujio Cho, Chairman Toyota Motor Corporation1

Global environmental problems are indeed among the major challenges of the 21st century and they became a crucial aspect of the corporate social responsibility of big manufacturers. Due to the UN Framework Convention on Climate Change treaty in 1992 and the Kyoto Protocol, which...
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