Toyota Motor Company

Toyota Motor Company: Losing its Quality Edge?

ISSUES:

1. The recall of cars with sticky acceleration pedals and the media 2. Increasing maintenance costs of vehicles, rising risi ng fuel price and changing customer  preference are challenging threats

PROBLEMS:

1. Could Toyota regain its quality edge in the future? 2. Does the goal of becoming number one auto maker in the world have lost focus on quality?

SWOT ANALYSIS Strengths

1. Strong brand equity 2. Innovative culture 3. Long-term relationship with supplier 4. Environmentally safe, quality, durability, reliability, and value for money and convenient

Weakness

1. Customers not segmented 2. Customers are not being involved in the process 3. Limited Research and Development 4. Lack of a proper sales strength

Opportunities

1. Population Growth 2. World Trade Organization (WTA) 3. Globalization 4. Advance Technology

Threats

1. Political Risk 2. Declining economic growth on a global scale 3. Credit Unavailability 4. The recall of cars with sticky acceleration pedals and the media 5. Increasing maintenance costs of vehicles, rising fuel price and changing customer  preference are challenging threats

TOWS ANALYSIS

S

W

IFAS

1. Strong brand equity 2. Innovative culture 3. Long-term relationship with supplier 4. Environmentally safe, quality, durability, reliability, and value for money and convenient

EFAS

O

1. Population Growth 2. World Trade Organization (WTA) 3. Globalization 4. Advance Technology

T

1. Political Risk 2. Declining economic growth on a global scale 3. Credit Unavailability 4. The recall of cars with sticky acceleration pedals and the media attack 5. Increasing maintenance costs of vehicles, rising fuel  price and changing customer preference.

1. Customers not segmented 2. Customers are not  being involved in the  process 3. Limited Research and Development 4. Lack of a proper sales strength

SO

WO

S01: Market Development (S1,O1)

WO1: Joint venture with other (W3,O3)

SO2: Market Penetration (S2,O2)

WO2: Operation improvement process (W2,O4)

ST

WT

ST1: Product Development (S4,T5)

WT1: Liquidation (W4,T2)

ST2: Defensive Strategy (S1,T4)

WT2: Takeover by the others company (W4,T3)

STRATEGIC DIRECTION

SO Strategy Market Development

Being a strong market leader currently, Toyota has the benefit of increase in demand in the automotive sector in order to achieve more profit in sales. Market Penetration

Toyota with a strong global presence across the world can use its potential to invest in the emerging economies like Brazil, China to exploit more benefits these countries possess To penetrate existing markets is to offering innovative techniques and cust omer oriented  products WO Strategy Joint venture with other

Toyota can offering improved products in order to overcome the loss in sale s and negative impact on its brand image by overcome their research and development with other manufactures. Operation improvement process

As the demand for Toyota vehicles is increasing currentl y can give some support to Toyota, if the resources are being distributed equally and therefore will give less amount of time to work on manufacturing facilities specifically in those countries where they are considered to  be expensive.

ST Strategy Product Development

Offering innovation in products can prevent Toyota from increase in fuel prices and customers also will have several alternatives.

Defensive Strategy

Toyota’s most products are best known for its quality and innovation that can minimize any  bad impact on brand image against its competitors in the manufacturing sector.

WT Strategy Liquidation

The effect of market capacity can be reduced by focusing on some segments that is able to afford expensive manufacturing facilities and high standard products which will help Toyota to produce cars of its best quality Takeover by the others company

The best alternative is to shift some of the manufacturing operations in other countries company. That is less influenced by the Yen fluctuation and can improve its financial conditions affected by economical/political instability at the same time.

RECOMMENDATION

The best strategy to be recommended to Toyota Motor Company is defensive strategy  because the brand image of Toyota is been known for year for offering the high quality vehicles. The recall of the vehicles will end up to be positive as the company had taken responsibility for their fault. It shown that Toyota have been proactive b y taking responsibility and quality related to customer problems.