This paper analyses internal and external environment for Toyota and Ford Company. The two Companies are major in the global Motor industry; they are facing a number of challenges and opportunities. The paper also provides strategies for addressing major problems facing these Companies.
SWOT Analysis
| Issues | Toyota | Ford |
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Strengths Legal issues Product issues Economic issues Social issues Structural issues Manufacturing facilities Distribution System Human resources |
Brand reputation and recognition Wide geographic presence and large market share globally Highly innovative Efficient production technology and facilities Stable long term automotive industry Best working relationship with dealers in the industry |
Wide geographic presence and large market share globally Brand reputation and recognition Advanced technology and facilities for product development and innovation Strong portfolio of high quality products Highly motivated employees through trainings, incentives and wages |
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Weaknesses Competition Current economy Customer demands Ecological issues Cost issues Alternative fuel vehicles |
Mass recall leading to loss of trust and loyalty, raised red flag on quality and reputation of TMC (The Hufftington Post, 2010). Declining sales due to competition and loss of loyal customers Criminal and congressional probe into safety problems Very bureaucratic and inefficient management structure in some sections De-motivated employees, job mobility is minimal and pay is relatively poor Low talent middle and senior management to provide good advice (Toyota Motor Corporation, 2010). |
Frequent recall of products Increased expenditures and declining return on investment Declining market share and profit margin High production costs hence low profit margins High debts put the company at financial risks. Competition from Hybrid cars from other firms Worried investors due to recessionary economy and slumping sales Declining market in US, Europe and Japan due to global recession Increased volatility as new cars loose market in a span of 2 years |
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Opportunities Competition Current economy Customer demands Ecological issues Alternative fuel vehicles |
High market potential in emerging nations Rising middle class in China and Asian nations increase the demand for cars Increased demand for eco friendly and fuel efficient vehicles Developing technology for use in making eco friendly and electronic cars Restructuring of company operations |
Reduced taxes on new cars in China has potential for increased market Rising middle class in China and Asian nations increase the demand for cars. High prospects in emerging economies of Asian Outlook for electronic and hybrid vehicles Increased demand for eco friendly and fuel efficient vehicles Restructured operations in the Ford company reduces bureaucracy |
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Threats Competition Current economy Customer demands Ecological issues Cost issues Alternative fuel vehicles |
Intense competition from reorganized GM, Ford and Chrysler Declining global market share and reputation Volatility in exchange rates in US and Europe will impact on financial performance Global economic slowdown reduces the demand for luxury goods and services |
Economic slowdown in Europe and US reduced demand for cars Intense competition from GM and Chrysler Layoffs due to declining production worries employees Safety and eco friendly laws in the US and Europe Increased choices for customers than before (Ford, 2012). |
Strategic implementation, Ramification and Evaluation
The problem of declining sales due to loss of trust in company products at TMC is the major strategic problem. This could be addressed by engaging in CSR activities to redeem the lost reputation. CSR strategy should address the relationship between the company and stakeholders. These include customers, business partners, employees, shareholders, local communities and global society. CSR strategy should portray the company as highly ethical and responsible to people and the environment by observing safety standards and procedures. Ford is faced with problem of stiff competition from other motor companies such as reorganized GM and Chrysler. The company should use product development strategy to develop highly innovative products that suits the changing market demands. The company should manufacture hybrid, electronic, eco friendly and fuel efficient vehicles that are demanded in the growing markets of Asia. This will be possible using advanced technology in motor industry and financial base from borrowed capital for use in research and development (Kotler, 2003).
