Toyota Has a Few Strengths on Which SWOT

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Toyota has a few strengths on which to build competitive advantage and exploit opportunities in the marketplace. The company has two strong brands in Toyota and Lexus that are internationally recognized, allowing Toyota significant leverage when entering new markets or even negotiating with suppliers. Another strength that Toyota has is a strong global distribution network. Takahashi (2010) notes that even as Japan and the U.S. saw weakness in 2010, the company's gains in China and India were sufficient that it delivered a surprise profit.

There are a number of weaknesses, however, that Toyota has. Its historically strong production processes had a poor year in 2010, and the cost associated with product recalls in that year was ¥170 billion - ¥180 billion. Another weakness that the company has is with its supply chain. Again, the supply chain has historically been considered one of the company's strengths, but it is concentrated in a single region of Japan. When the earthquake/tsunami of March 2011 hit this region, the result was considerable disruption of the company's supply chain for much of the rest of the year. Vehicle production in Japan was down 6% for the year and sales were down 11.5% in Japan for the year (Toyota 2011 Annual Report).

Prior to the earthquake and tsunami, Toyota built strengths in innovation and design, especially on the production side of the business, and used these to carve out a place in the global automobile industry.

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The Prius is the centerpiece of the company's innovation into more fuel-efficient vehicles and his been a strong product for the company since its introduction (Toyota 2011 Annual Report). The company during this time was faced with a difficult economic environment in Japan, and of course the global economic downturn that affected most other markets as well (Takahashi, 2010).

This analysis reveals that the company's current strategy for its supply chain management has left it vulnerable to known disaster risks in Japan. While the company boosted production elsewhere in an attempt to make up for the problems in Japan, the effort was insufficient. However, the company's global distribution network is an asset because it has allowed the company to experience strong growth in emerging markets. Non-Japan Asia grew 28% last year; Latin America grew 21.9% and the Middle East grew 22%, while all developed world markets declined in sales. The company's geographic diversification has to this point insulated it against the ongoing economic downturn.

There are two recommendations that could help Toyota to shore up its weaknesses. The supply chain is too reliant on a single region of Japan, and that is something that the company must address. It is important….....

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