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    Toyota: SWOT Analysis, BCG Matrix: Strategy of Toyota Growth Strategy

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    Umar Asghar
    Toyota is a global automobile manufacturer established in 1937. It has achieved record sales of 9 million cars across 5 continents. [To critically evaluate Toyota's strategy, the document performs a SWOT analysis and a BCG matrix analysis.] The SWOT analysis identifies Toyota's strengths as its global reputation and brand recognition, and weaknesses as its production being located only in Japan and the US. Opportunities include expanding into new markets and segments, while threats include intense competition and declining car sales during recessions. [The BCG matrix analysis finds the Toyota Prius to be a "star" product with a large market share in the fast-growing hybrid car market.]

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    Toyota: SWOT Analysis, BCG Matrix: Strategy of Toyota Growth Strategy

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    Umar Asghar
    71 views4 pages
    Toyota is a global automobile manufacturer established in 1937. It has achieved record sales of 9 million cars across 5 continents. [To critically evaluate Toyota's strategy, the document performs a SWOT analysis and a BCG matrix analysis.] The SWOT analysis identifies Toyota's strengths as its global reputation and brand recognition, and weaknesses as its production being located only in Japan and the US. Opportunities include expanding into new markets and segments, while threats include intense competition and declining car sales during recessions. [The BCG matrix analysis finds the Toyota Prius to be a "star" product with a large market share in the fast-growing hybrid car market.]

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    Toyota is a global automobile manufacturer established in 1937. It has achieved record sales of 9 million cars across 5 continents. [To critically evaluate Toyota's strategy, the document performs a SWOT analysis and a BCG matrix analysis.] The SWOT analysis identifies Toyota's strengths as its global reputation and brand recognition, and weaknesses as its production being located only in Japan and the US. Opportunities include expanding into new markets and segments, while threats include intense competition and declining car sales during recessions. [The BCG matrix analysis finds the Toyota Prius to be a "star" product with a large market share in the fast-growing hybrid car market.]

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    Download as pdf or txt
    71 views4 pages

    Toyota: SWOT Analysis, BCG Matrix: Strategy of Toyota Growth Strategy

    Uploaded by

    Umar Asghar
    Toyota is a global automobile manufacturer established in 1937. It has achieved record sales of 9 million cars across 5 continents. [To critically evaluate Toyota's strategy, the document performs a SWOT analysis and a BCG matrix analysis.] The SWOT analysis identifies Toyota's strengths as its global reputation and brand recognition, and weaknesses as its production being located only in Japan and the US. Opportunities include expanding into new markets and segments, while threats include intense competition and declining car sales during recessions. [The BCG matrix analysis finds the Toyota Prius to be a "star" product with a large market share in the fast-growing hybrid car market.]

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    Assignment-03

    Toyota: SWOT Analysis, BCG Matrix


    Toyota is a Japan based company which was established in 1937 by Sakichi Toyoda and is the world
    biggest automobile manufacturers, Toyota has achieved a record sale of 9 million cars in five continents.
    Toyota is also ranked in the top ten 500² companies. Toyota is one the world’s most renowned auto
    manufacturers and they are proud of this accomplishment and they believe it is only because that their
    customers are satisfied by them.

    Strategy of Toyota
    Different strategies of Toyota are explained as under

    Growth Strategy
    In order to achieve an outstanding growth strategy, company must find, evaluate and
    select a strategy to enter and to capture a market. Toyota entered in American market in
    1967 along with a range of cars and after that Toyota launched other brands such as
    lexus and scion. Toyota became a successful car manufacturer company mainly because
    of an effective and diverse marketing process which has enabled them to attract
    customers and enlarge its product range to other market segments.

    One of the other main reason why Toyota managed to do very well in America is
    because of 1973 oil crisis. When Toyota entered in American market it was not
    considered a threat because everyone use to say that Toyota cars do not appeal
    American people. But due to the oil crisis people realized that Toyota cars are highly fuel
    efficient and much more reliable.

    Marketing Strategy of Toyota


    Toyota is a global brand and the economic crisis which started in 2009 has hit Toyota.
    Therefore, Toyota is now marketing and making fuel efficient cars such as the new Auris
    hybrid and others. On top of that Toyota is very heavily marketing there 1 litre cars such
    as Toyota iq and aygo and this happened due to the the economic crunch that now
    people don’t have much spending power.

    Environmental strategy
    In modern era, all the developed and under developed countries are more concern with
    the environment and are trying their best to promote cars which are more environment
    friendly and throw less co2 emission out. As a global car manufacturer Toyota is playing
    its role in minimising the co2 effect on the environment of the world. This is the reason
    Toyota has launched hybrid cars, the ultimate eco car, electric vehicles, plug in hybrid,

    Umar Asghar-70076360
    Assignment-03

    fuel cell vehicle cars which consume less fuel and also discharge less co2 emission. So
    basically, Toyota is making cars which are user friendly and also environment
    friendly.www.toyota.com

    To critically evaluate the strategy of Toyota, some analysis of internal and external
    analysis required to be done and they are explained as under.

    SWOT analysis
    This analysis is a great tool for doing an audit of an organisation and its environment. It
    is the first step for marketers to take to focus on key issues. Swot stands for strengths,
    weaknesses, opportunities and threats. Strengths and weaknesses examine the internal
    factors of a company whereas the opportunities and threats are the analysis of external
    factors.

    SWOT analysis of Toyota


    Strengths of Toyota
     Toyota is global organisation, which enjoys great repute among its customers and
    possesses a very strong international position in 170 countries.
     Financial side of this company is extremely strong in 1997 company managed a sales
    turnover of £131,511 million and growth of the company was 29.3%.
     Due to its high quality, an environment friendly product Toyota has a very strong brand
    recognition.
     Toyota has managed successfully penetrate into the main markets of the world which
    includes USA, China and Middle east countries.

    Weakness of Toyota
     The production plants of Toyota are located in US and Japan due to which they are not
    in a very favourable position to take advantage from global efficiency gains.
     The company has suffered a lot of criticism due to the re-call made in 2005 and 2010.

    Opportunities for Toyota


     Toyota was the first company to develop a hybrid car (hybrid- vehicle runs on gas and
    electric) which was the Prius model. At that time oil prices were at their extreme so at
    that time Toyota has given something to the market.

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    Assignment-03

     Toyota is looking forward to expand belligerently into new segments of existing markets
    for example by the launch of Toyota Aygo the company is targeting the youth of the
    world.
     Another opportunity for Toyota is to produce small city cars which will be more fuel
    efficient and also easy to drive plus will produce less c02 emission because now a day
    governments of all under developed and developed countries are showing great concern
    about the environment.
     Toyota enjoys good market share in Europe, UK and America the company should target
    developing countries such as Pakistan, India and Srilanka where demand is very high for
    great fuel efficient cars.

    Threats to Toyota
     Toyota faces very high competition by Honda and by other German car manufacturers.
    Especially in today’s global market the trend of intense marketing campaign is increasing
    which will simply increase pressure on Toyota.
     The position of US dollar is very consistent so the exchange rates are playing a major
    role in the profit and loss of the company.
     The recession that has hit the world almost a couple of years ago have caused major
    issues for Toyota because car sales have declined rapidly ever since the recession started.
     Market trend is changing for example the trend of large families coming to an end and
    with it the need of large cars.
     Consistent increase in fuel prices has also bought a significant decline the car sales of
    Toyota Company.

    BCG Matrix
    The Boston consultancy group matrix is a chat which was created by Peter Henderson in
    1970. The purpose of this design is to help companies with the manufacturing units and
    product lines. The base of this tool in the product life cycle theory and it helps
    companies to decide on which areas they should prioritize.

    BCG Matrix for Toyota Prius


    This tool can also be used to analyze the launch of a product in the market. In this
    matrix two factors determine the success of a product. Market share and market growth
    are explained individually in the diagram. With the help of this tool an outstanding
    marketing strategy can easily be determined.

    Market Growth of Prius


    The Toyota prius was launched in Japan in 1997 and it was made available to the world
    in 2001. By the end of 2003, a new model of the car was launched and due to its

    Umar Asghar-70076360
    Assignment-03

    modern hybrid technology it was sold 160,000 times throughout the world. It was
    mainly because at that time the prius was the only hybrid car and Toyota made
    maximum profit out of that. Up till now Toyota has managed to sell around 1 million
    hybrid cars and most of them are prius.

    To analyze the market growth of this product, given below is the monthly sales figure of
    U.S from 2000 to 2007.

    From the table above, we can clearly see that prius sales have increased dramatically
    over thye years. In 2000 number of cars sold was just 5,562 whereas the cars sold in
    2007 excluding the month of December were 167,010 which is almost 30 times more the
    number of cars sold in 2000.

    The table given above, we can clearly view that Toyota prius was the best selling car in
    US with a great margin. Toyota has just 5.3% more sales than September 2007 but it has
    overall 50.7% more sales then the last year October. We can also see an outstanding
    growth in the market of hybrid cars which is almost 30% which means that it is a very
    fast growing market.

    Market Share of Toyota Prius


    If we look at the market share of Prius, it comes on top of the hybrid car market share.
    The prius has a massive 53.7% market share and this is because Toyota has sold three
    times more cars than the runner up. This is the reason why prius was the market leader
    in 2007. The prius has sold approximately 190,000 cars which comes up to a market
    share of 57% and this is a clear proof that prius is a market leader even on yearly basis.

    Conclusion
    After this detailed bcg analysis it is concluded that prius is a star product. It has a
    booming market share in the high demand market of hybrid cars. All this makes prius a
    star product and a product which has a lot of potential in the future years. In the BCG
    matrix chart the prius have its position in the top left because it has an outstanding
    market share in a dynamic and fast growing market. Therefore, prius is a star product.

    This information can be used by Toyota to set up a plan for business and thus the investment
    the company make in the product can also turn into a cash cow.

    Umar Asghar-70076360

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