Situational Analysis

The situational analysis is one of the four elements in a strategic management process and is an important step in the success of a business. This paper will present a background history of Toyota and provide the company’s mission and vision statement and values. The paper will provide the environmental forces that affect the company and the potential for global expansion. An assessment of the automobile industry structure using Porters five forces. In addition, a SWOT analysis will be conducted to understand the strengths, weaknesses, opportunities, and threats of the company.

Company background Toyota Motor Corporation, commonly known as Toyota, is a Japanese multinational automobile manufacturer. Kiichiro Toyoda founded the company in 1937 as a spinoff from his fathers company Toyota Industries to create automobiles (Xtimeline, 2009). Before the company was founded, Kiichiros father, Sakichi Toyoda created a power-loom for spinning cloth and Toyoda Spinning and Weaving CO was founded in 1918. Toyoda later sold one of his patent rights and used the money to create an automobile department in Toyoda Automatic Loom works in 1933 (Brandsport, 2012).

The Type A engine was the first product produced in 1934. In 1936, the company produced the first passenger car called Toyota AA. The Toyota Motor Company was later established in 1937 and Toyoda opened several automobile and parts plants in Japan and later globally. Today, Toyota has its main headquarters in Achi and Tokyo in Japan. The company also creates robots besides automobiles and today recognized as one the leading automobile companies in the world (Brandsport, 2012).

The greatest legacies left by Kiichiro Toyoda is the Toyota production system known as the “just-in-time” production method. The system was intended to eliminate waste, inconsistencies resulting in improved productivity (Toyota, 2012). Mission, Vision, and Values The Mission of Toyota is to be the initial selected collaborator for clientele-seeking resources using solutions and to be broadly known for advanced services and goods, while possessing high regards for humanity. Toyota has a vision to assemble conviction and assurance with clientele by bringing exceptional worth services and goods, which includes genuine worth to the company.

The company, values the stakeholders, suppliers, and especially the employees throughout a by no means ending exploration to advance. Toyota has five main values placed in relation with everyday work. They include challenge, Kaizan, Genchi Genbutsu, respect, and teamwork. The challenge is to continue an extended image and make every effort to get together all challenges with the nerve and originality needed to achieve that vision. Kaizen pushes Toyota to improve the work that they do. Genchi Genbufsu is all about making the best decisions for the company and peruses all the goals set.

Toyota shows respect by building trust and understands relationships with its customers. Teamwork is all about growing individually and professionally within the company. Broad Environmental Forces and Port Five Forces Model Environmental threats consist of a person, group or organization outside the company that seek to reduce the level of business performance. Threats increase costs reduce the willingness of customers to buy products or services of the company. That is why organizations need to develop a model of environmental threats to help managers to be more effective in developing strategies to neutralize the threats.

This model is known as the Five Forces framework. Professor Michael Porter of Harvard Business School developed the model. This suggests the five attributes can be put up in some way to compromise the ability of the company to create or maintain competitive advantage. These five forces are: barriers to entry, the threat of competition, threat of substitutes, the threat of the threat of suppliers and buyers. Organizations need to incorporate the SWOT analysis into its strategic planning techniques (Barney 2007). Toyota expressed conduct guidelines and expression of values for all the employees of Toyota.

These guidelines were based on the principles of Challenge, Improvement, Respect, and Teamwork. Within eight since the dissemination of these principles, Toyota became the largest automobile maker for the year 2008 and assumed the titled of the most profitable automobile maker along with increased sales globally (Liker, 2004). The resource-based view of Toyota’s Annual Report (Toyota Company online library, 2009) illustrates as a multinational automobile maker, Toyota has a competitive advantage in accessing regional and international markets effectively.

This equips the company with a vast market portfolio to optimize the economies of scale. In addition, the diversification of the products Toyota manufactures endows the automobile maker with the propensity to satiate various segments of its consumers. SWOT Analysis The SWOT analysis examines Toyota’s organizational structure and will provide a summary of strengths, weaknesses, opportunities, and threats. Strengths Toyota Motor Corporation continues to be innovative with the product lines.

For example, the Camry this model was reinvented for 2012 and still maintained its number one position in sales for the tenth year in a row. The creation of the new Prius V attracted new customers to Toyota. Toyota created a strategy back in 2002, which put the customer first not the product. The strategy is known as “Innovation International Multi-purpose vehicle” (IMV), which focuses on ensuring products are optimizing for global manufacturing and supply system. Weakness The global recession affected Toyota because world sales dropped 2007 to 2008.

This was the first loss the company has recorded in 70 years. Toyota was impacted again when the company had to recall more than eight million trucks and cars worldwide because of production defects. The company finished with a market share loss of 1. 8%. Opportunities Hybrid cars created an opportunity for Toyota because the consumer demand was focused on fuel-efficient and less energy consumption. Toyota joined forces with automobile companies in the European market, enabling entry in those markets. Toyota has the opportunity to enter other markets such as robotics and aerospace.

Threats Environmental disasters disrupted the supply chain the tsunami in Japan, to a major earthquake and the Thai floods, which ultimately impacted earnings for Toyota in 2011 ("Table-Japan Automakers December Output, Exports", 2012). Competition in the car market is some thing Toyota faces daily. New competitors are coming from China, South Korea, and Eastern Europe. Raw materials such as rubber, steel, and fuel are potential threats if movement of products is delayed because of environmental, political, and government issues.

The analysis of the strengths and weaknesses Toyota depicts the company as highly placed to mitigate the threats palpable with the materialization of opportunities. It also illustrates that Toyota is susceptible to such threats; given instances such as the global financial crisis and the enormous number of recalls of some of its defective vehicles. Conclusion Toyota Motor Corporation, has an experienced many changes to from a weaving loom to automobiles. The company’s mission and vision statement, and values are the building blocks for the company.

The components ensure strong relations with customers to employees and business partners, and a continual focus on quality of products. Environmental forces consist of a person, or group, and organizations that seek to reduce the level of business performance. Organizations will need to identify what strategic environmental model that will help alleviate those threats. One model to follow would be the Porter five forces model, this helps Toyota to create and maintain a competitive advantage. Next step would be to do a SWOT analysis, which identifies the strengths, weaknesses, threats, and opportunities for Toyota.

This information can help Toyota to understand better what to do to alleviate any threats and stay competitive. References: Brandsport (2012). Toyota Parts and Accessories About Page. Retrieved January 28, 2012 from http://www. brandsport. com/toyotaandtrd. html Barney, J. B. (2007). Gaining and sustaining competitive advantage (3rd ed. ). New Jersey: Pearson-Prentice Hall. Liker, J. K. (2004). The Toyota way. : McGraw-Hill Professional. Mintzberg, H. , Lampel, J. , Quinn, J. B. , & Ghoshal, S. (2003). The strategy process: Concepts, contexts, cases (4th ed. ). New Jersey: Pearson-Prentice Hall. Pearce, J. A. , II, & Robinson, R. B.

, Jr. (2007). Strategic management: Formulation, TABLE-Japan automakers December output, exports. (2012). Retrieved from http://www. reuters. com/finance/stocks/companyNews? symbol=TM Toyota (2012). Just-in-Time —Philosophy of Complete Elimination of Waste. Retrieved January 28, 2012 from http://www. toyota-global. com/company/vision_philosophy/toyota_production_system/just-in-time. html Toyota (2012) Our Mission and Values. Retrieced January 29, 2012 from, http://www. toyota-forklifts. co. uk/EN/Careers/Pages/OurMissionandValues. aspx Xtimeline (2009). Toyota. Retrieved January 28, 2012 from http://www. xtimeline. com/timeline/Toyota