Critique of Toyota Swot Analysis

Toyota Industries seems content with the idea of continuing to advance their hybrid technology and using their association with Toyota Motors to gain name brand strength. It seems however that while most of the SWOT analysis is planned with clever motives in mind, some parts of the analysis call for questionable actions. Toyota’s analysis does a very good job of recognizing their weaknesses and threats for each action they want to take and for general risks.

By recognizing threats such as the Kyoto Protocol, it gives us reason to believe that Toyota is very much looking into the future for how to expand. This analysis adds confidence to their endeavours. One of the key weaknesses they also look into is their overdependence on the Japanese market. In the analysis, they state that their profits dropped 20.6% in Japan over the fiscal year of 2009.

This is quite serious when 67.3% of their total revenue is made up from their Japanese market. Still, while Toyota realizes their fault in depending on mostly on Japan, the new areas they want to expand in bring questions. One place they listed for increasing focus is in India. This is a very risky move on Toyota’s part due to the new Tata Nano. The Nano is being released exclusively in India for the first few months and already has a high turnaround predicted. Even though India appears to be a very good market for expansion due to their low penetration ratio (eight per one thousand people), it’s hard to believe focusing on the Indian market will be worthwhile, especially since Tata Motors is headquartered in India.

Another area that seems odd for Toyota to try and expand is in China. China currently is still a very good spot for cheap costs on production. However, it is predicted that China will continue to increase its labour costs. These increasing costs will greatly diminish the attractiveness of expansion and focus in China. Toyota should rethink their plan when it comes to expanding into these areas because with current developments, it appears that this could end up being a lackluster expansion for Toyota. Toyota also explains that they want to make a move into the North American market.

This brings both some benefits due to their product, but also some risks that have developed over the last year. Toyota appears to want to market their hybrid lift trucks in North America, which is a good market to approach due to a lack of competition. With the addition of THMNA (Toyota Material Handling North America), there efficiency with materials and regional coordination would bring them more success. Still, over the last year Toyota has gained almost a low quality image in the eyes of many consumers. This stemmed from the issues Toyota cars had with their breaking systems.

The spread to North America could prove to be unsuccessful because of this. Lift trucks are usually something purchased by other companies to help move stock and because of the breaking system issues Toyota has had, they may view these fork lifts as low quality products when compared to one of Toyota’s competitors. Even approaching other hybrid vehicle options could prove to be risky due to the threat of Tata releasing the Nano in North America. With it being the cheapest car on the market, Toyota would have a hard time finding ways to out sell the Nano, especially if the poor breaking reputation sticks to Toyota.