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Toyota Case Study: External Analysis of the Automotive Industry

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External Analysis of the Automotive Industry

Toyota operates in a complex global industry, and in order to develop and execute a successful strategy, the company must take into account the global automotive environment.

What are the current opportunities for Toyota, what threats are they facing, and what actions are they taking to respond to these environmental contingencies?

Solution Instructions:

Step One. Return to Toyota's annual report, and read what the chairman and the president say in their introductory messages are the biggest external threat and opportunity facing Toyota. Then read what some independent analysts are saying:

(n.a.) (2010) TrueCar Forecasts April Auto Sales and Incentives Spending :Industry Sales Up 23%; Toyota Incentives Reach Record Highs. (22 April). PR Newswire, Retrieved May 17, 2010, from ABI/INFORM Dateline http://proquest.umi.com/pqdweb?did=2015705341&Fmt=3&clientId=29440&RQT=309&VName=PQD

(n.a.) (2010) The Industry Handbood: Automobiles. Investopedia. Retrieved from http://www.investopedia.com/features/industryhandbook/automobile.asp

Hitokoto, T. (2010, May 13). Big carmakers back on the road. Yomiuri Shimbun (Japan), Retrieved from Newspaper Source database. http://wf2dnvr8.webfeat.org/qNuDO19781/url=http://web.ebscohost.com/ehost/detail?vid=1&hid=13&sid=3af53e13-5e08-4a5e-a939-23adc5df2be7%40sessionmgr11&bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#db=nfh&AN=2W63667972997

Step Two. Identify two main threats and two major opportunities facing the automobile industry. Do the executives at Toyota and the independent analyst agree?

Step Three. Locate ways that Toyota is addressing these threats and opportunities.


1. Your assessment of the major threats and opportunities facing Toyota as a company. Using a SWOT analysis: Strengths, Weaknesses, Opportunities, and Threats.

2. What Toyota is doing (if anything) to meet these threats and opportunities. Are they successful?

(5 pages, 716 words, a SWOT chart and 7 references)

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Solution Preview

Thank you for using Brainmass. I have completed your response which consists of 5 pages, 716 words, a SWOT chart, and 7 references in APA format.

Toyota Corporation is an organization that manufactures quality vehicles at a low price; together with marketing skills and brand recognition to utilize premium-pricing policies. Yet, Toyota is not without its share of corporate weaknesses and threats, which continually risk its competitive advantage.
Toyota is a massive enterprise, and being this large comes with even larger problems. Currently the global automobile market, due to the recession, is in a state of oversupply; automobiles must be manufactured to meet the demand of the consumers; they must be the models the customer desires. The Toyota Corporation markets the majority of its products to Japan and US markets; exposing itself to fluctuating political, economic and socio-cultural conditions within those markets. Inflation and exchange rate movements could see the current narrow limitations, being even more reduced; which create weaknesses for Toyota. Maybe that is the reason Toyota is starting to reallocate its strategic growth towards China's emerging markets (Kar, 2010).
In order for Toyota to maintain its operational efficiencies, it must continue producing vehicles. Automobile manufacturing facilities characterize massive investments in costly fixed ...

Solution Summary

External analysis of the automotive industry is examined.