SWOT Analysis
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Nazrul JewelSWOT Analysis
Uploaded by
Nazrul JewelSWOT Analysis
Strengths:
Strong market position and brand recognition: Toyota has a strong market position in different
geographies across the world. The company's market share for Toyota and Lexus brands, (excluding mini
vehicles) in Japan was 45.5% in FY2012. Similarly, Toyota has a market share of 12.2% in North
America, 13.4% market share in Asia (excluding Japan and China), and 4.3% market share in Europe. In
addition, the company holds a 7% share of the Chinese market and a significant market share in South
and Central America, Oceania, Africa and the Middle East regions. Such strong market position allows
the company to gain competitive advantage and also expand into international markets. In addition,
Toyota holds a portfolio of strong brands in the automotive industry. Thus, the company's strong market
position gives it significant competitive advantage and helps it to register higher sales growth in domestic
and international markets. 8
Strong focus on R&D: Toyota has a strong focus on R&D to expand its product portfolio and improve
the functionality, quality; safety and environmental compatibility of its products. The company's R&D
efforts are directed at developing new products and processes and improving the capabilities of existing
products. The company conducts its R&D operations at 14 facilities worldwide. Strong focus on R&D has
helped the company in incorporating newer features to its existing range of products and also in bringing
out latest technologies in the varied areas. The company's strong focus on R&D allows it to uphold the
technological leadership in most of its product segments. It also enables Toyota to develop innovative
products, leading to strong sales. 9
Extensive production and distribution network: Toyota has an extensive production and distribution
network. Toyota and its affiliates produce automobiles and related parts and components through more
than 50 manufacturing companies in 27 countries and regions besides Japan. During FY2012, the
company produced 7,435,781 vehicles, including 3,940,000 vehicles in Japan and 3,495,000 vehicles
across all other manufacturing locations. In addition, Toyota has an extensive distribution network. While
the company’s geographically well spread production base diversifies business risks, its extensive
distribution network provides a wider reach, thus boosting revenues. 10
Weaknesses:
Product recalls could affect brand image: Toyota has conducted a number of product recalls in the
recent past, which could affect the brand image and overall sales of the company. For instance, in 2011,
Toyota recalled 111,000 models of Toyota and Lexus brands’ vehicles due to the damage to elements of
the substrate and potential shutdown of the hybrid system. Further in the year, Toyota recalled 181,000
vehicles in Japan in relation to abnormal noise and oil leakage that