Toyota's strengths, weaknesses, and strategic opportunities analysis

Toyota Analysis: Part II

As detailed in Part one of the Toyota Motor Corporation case study the company faced exogenous threats to its continuing longstanding profitability: rigorous and growing competition in the automotive industry amidst a weak global economic recovery, and the hangover in trust and customer loyalty to the brand due to 10 million auto recalls since 2009 (CNNMoney.com. N.D.). Despite these threats the company has pushed forward in its quest to remain the world's largest automaker, with emphasis on seizing strategic opportunities in the emerging market economies of India, China, and Africa. Further, the company is pursuing "sustainable mobility" (Toyota Annual Report 2010) via alternative energy technologies which combine greater efficiency with environmental friendly options.

In conducting the traditional SWOT analysis it is crucial to analyze the ability of a company to capture its opportunities through its capitalizing on its internal strengths, while simultaneously mitigating potential risks through limiting the impact of organizational weakness. For Toyota its endogenous corporate strengths are its commitment to research and development, and a charge to continue abiding by its "founding principles in providing safe, high quality vehicles at affordable prices" (Toyota Annual Report 2010). However, the task will not be easy as the company has weakness in their corporate structure coupled with a supply chain and production gaffe which led to the recall debacle.

Weaknesses and Mitigation Strategies

As the world's largest automaker Toyota is a large-scale process organization which relies on the "methods of big corporations" (Toyota Annual Report. 2010). The company has been compared favorably or unfavorably depending on one's opinion to the former number one global automaker; "Toyota is big and bureaucratic but also highly effective, think of the company as a General Motors that works" (Ingrassia, P. January 5, 2009). The company over the past decade has grown insular in its management style relying on the inner circle of Japanese executives to manage an ever increasing global enterprise. This is evident in the statement of President Akio Toyoda in the 2010 Annual Report when he articulates that the company "was born as a venture business and that spirit has contributed to its growth over the years" (Toyota Annual Report. 2010). "One pressing need for Toyota is to develop a new generation of talented and trusted local leadership in the many countries where it operates" (Ingrassia, P. January 28, 2010) With changes to the management structure and diffusion of responsibility to its global chain of management the company can "reawaken the creative spirit in their employees and accept the challenges of facing a new future" (Toyota Annual Report. 2010).