Toyota Motor Corporation

Toyota Motor Corporation

Introduction

Toyota Motor Corporation became the largest automobile manufacturer in the world in the year 2008 (Magee, 2008). The company has nearly 600 subsidiaries, which are all involved in automobile production, commercial vehicles, industrial vehicles, and automobile parts (Magee, 2008). The company is Japan-based headquartered in Toyota City, Nagoya. The company started in 1933, founded by Toyoda Sakichi. The company produced its first car in 1936 (Magee, 2008). The company later faced an economic downturn as a result of the Second World War, and it was forced to suspend some of its automotive production. In the 1950s, the company came back to work and had been growing since then. In the 21^st century, the company has experienced significant growth owed to its innovations such as Lexus (1989), a luxury car and Prius (1997), a hybrid-powered vehicle (Magee, 2008). For Toyota to excel in the market, it has utilized several globalization and growth strategies. Global strategy is a strategy a company takes to compete internationally. A growth strategy is the action plan created for helping a business gain a larger share of the market.

One advantage of SWOT analysis application in Toyota Company is the support it offers to the company objectives. Toyota Company has a strong focus on research and development, thus reaching most of the most innovative moves in the world (Chen & Kodono, 2012, November). Creative culture is a crucial strength in Toyota. The company aims at being ahead in the market by bringing along some of the most innovative cars in the market. For instance, SWOT enables the company in the production of the most environmentally friendly vehicles, information technology, and vehicle safety. To achieve this, it utilizes some of the best strategies for its innovative strength. It runs one of the largest research facility network aimed at making the best results in the R&D. It has a total of 15 research facilities hosted in eight different countries, including China, Japan, Australia, Belgium, the United States, France, and Germany.

Toyota spends 3.6% of its total revenue to fund its R&D facility (Chen & Kodono, 2012, November). It focuses on product development, basic research on vehicle technology, and the development of the newest technologies in the market. Toyota has been able to gain a competitive advantage through its efficient R&D spending. The significant limitation of SWOT analysis is poor quality control, which leads to faulty products. For instance, Toyota was forced to recall 2.9 million vehicles due to defective airbags in 2017 (Chen & Kodono, 2012, November). Earlier, the company also had to remind more products based on the same issue. This aspect brought about a negative image of the company.

The second strategy used by Toyota is Joint ventures, which, as a couple of advantages and disadvantages to the company. The essential advantage of this method is that it offers a sense of security to the company (Harrigan, 2017). Both companies share the risks and costs involved. Just in case the project fails, the company will not be alone in owning the loss. Besides, the partner in a foreign country has experience doing business in the country in question. This makes it easy for Toyota to conduct business. Such an instance of a joint venture strategy is a joint venture in China (Harrigan, 2017). Through agreeing to share risks and losses, the companies end up supporting each other fully. The critical disadvantage of joint ventures to Toyota is the lack of equal involvement in the business. The two companies working together may share equal pay, but then it cannot be possible to share the responsibilities equally.

Toyota Company has various stakeholders who include the employees, customers, investors, environment, and community (Klefsjö et al. 2008). Employees need job security, fair employment practices, and career development. SWOT analysis, through the identification of strengths, weaknesses, opportunities, and threats, helps the employees to achieve this. The joint venture also creates more opportunities for employees in the company. The interests of customers in Toyota include reasonable pricing in line with high-quality products. Through strengths and opportunities identification, the customers are well served.  Also, customers’ needs vary based on different geographical locations. Thus joint ventures help customers located in various areas to be adequately addressed. Investors, on the other hand, are interested in business profitability (Klefsjö et al. 2008). The company addresses this need through an emphasis on the company’s strengths. Through collaboration with companies in the target market, growth in the expected revenues is possible.  The final stakeholder in Toyota is the environment. Business sustainability and environmental conservation is a crucial need which the company has to focus on. Through strengths, the company emphasizes corporate social responsibility. Joint ventures help Toyota company extend its corporate social responsibility in other geographical locations.

Conclusion

In conclusion, Toyota Corporation has utilized SWOT analysis and Joint ventures to expand its business to its global presence at the time. The key advantages of these strategies to Toyota Company include giving the company an intense focus on research and development and offering a sense of security to the company. The disadvantages of the two strategies include lack of equal involvement in business and poor quality control resulting in faulty products. Also, Toyota stakeholders, like customers, employees, investors, and the environment, are affected in various ways by these growth strategies, as discussed above.

References

Magee, D. (2008). How Toyota became# 1: leadership lessons from the world’s most significant car company. Penguin Books India.

Chen, F., & Kodono, Y. (2012, November). SWOT analysis and five competitive forces of Chery automobile company. In The 6th International Conference on Soft Computing and Intelligent Systems, and The 13th International Symposium on Advanced Intelligence Systems (pp. 1959-1962). IEEE.

Harrigan, K. R. (2017). Joint ventures and global strategies. In International Business (pp. 329-338). Routledge.

Klefsjö, B., Bergquist, B., & Garvare, R. (2008). Quality management and business excellence, customers, and stakeholders: do we agree on what we are talking about, and does it matter?. The TQM Journal, 20(2), 120-129.