Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Organizational Development
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo
Toyota is one the most successful car companies in the world. The company set the ambitious growth goal of a 15% share of the global markets by 2010 (up from 11% in 2005). For this, the European market is becoming of strategic importance. The case outlines Toyota's global strategy before focusing on the European market in particular. Sales in Europe increased by over 50% between 2000 and 2005. In the process, Toyota's European manufacturing capacities more than tripled to over 600,000 units over the same period. Although Toyota was on the growth path, the launch of the Aygo posed many challenges. The segment was very price-sensitive and production cost had to be tightly controlled. Toyota decided to enter a joint venture with PSA, the maker of Peugeot/ CitroA?n. The case shows how cost reduction was the overriding principle and explains how both companies worked together. But selling a car with 93% parts commonality also posed many challenges on the marketing side: Toyota wanted to target younger customers in order to lower the average age of customers. Toyota had no experience in this segment and hence had to go new ways. The case takes readers through the various steps Toyota took in order to promote the Aygo. Learning objectives: Toyota is a latecomer to the European minicar segment. The case analyzes how Toyota changed the business system in order to deal with the various intricacies of this segment. On the manufacturing side, Toyota entered a joint venture with Peugeot/CitroA?n and built a new plant in the Czech Republic. The cars rolling off this assembly line had a parts commonality of 93%. But the innovations did not stop at the factory gate. Toyota invested in a massive Internet presence, meeting potential customers at locations of their preference and sponsorship of concerts etc. The case is a good platform for discussing Toyota's changes to the existing business system, both upstream and downstream.
Swot Analysis of "Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo" written by Kazuo Ichijo, George Radler includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Toyota Toyota's facing as an external strategic factors. Some of the topics covered in Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo case study are - Strategic Management Strategies, Joint ventures and Organizational Development.
Some of the macro environment factors that can be used to understand the Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo casestudy better are - – supply chains are disrupted by pandemic , banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing household debt because of falling income levels, geopolitical disruptions, increasing inequality as vast percentage of new income is going to the top 1%, central banks are concerned over increasing inflation, cloud computing is disrupting traditional business models,
increasing transportation and logistics costs, technology disruption, etc
Introduction to SWOT Analysis of Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Toyota Toyota's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Toyota Toyota's operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo can be done for the following purposes –
1. Strategic planning using facts provided in Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo case study
2. Improving business portfolio management of Toyota Toyota's
3. Assessing feasibility of the new initiative in Organizational Development field.
4. Making a Organizational Development topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Toyota Toyota's
Strengths Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Toyota Toyota's in Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo Harvard Business Review case study are -
Successful track record of launching new products
– Toyota Toyota's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Toyota Toyota's has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Diverse revenue streams
– Toyota Toyota's is present in almost all the verticals within the industry. This has provided firm in Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Toyota Toyota's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Toyota Toyota's has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Analytics focus
– Toyota Toyota's is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Kazuo Ichijo, George Radler can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Strong track record of project management
– Toyota Toyota's is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Innovation driven organization
– Toyota Toyota's is one of the most innovative firm in sector. Manager in Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Organizational Resilience of Toyota Toyota's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Toyota Toyota's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Organizational Development field
– Toyota Toyota's is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Toyota Toyota's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Effective Research and Development (R&D)
– Toyota Toyota's has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to recruit top talent
– Toyota Toyota's is one of the leading recruiters in the industry. Managers in the Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Training and development
– Toyota Toyota's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Highly skilled collaborators
– Toyota Toyota's has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo, it seems that the employees of Toyota Toyota's don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Aligning sales with marketing
– It come across in the case study Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo can leverage the sales team experience to cultivate customer relationships as Toyota Toyota's is planning to shift buying processes online.
Skills based hiring
– The stress on hiring functional specialists at Toyota Toyota's has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Need for greater diversity
– Toyota Toyota's has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Products dominated business model
– Even though Toyota Toyota's has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo should strive to include more intangible value offerings along with its core products and services.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Toyota Toyota's is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Slow decision making process
– As mentioned earlier in the report, Toyota Toyota's has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Toyota Toyota's even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Toyota Toyota's has relatively successful track record of launching new products.
Slow to strategic competitive environment developments
– As Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo HBR case study mentions - Toyota Toyota's takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
No frontier risks strategy
– After analyzing the HBR case study Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo, it seems that company is thinking about the frontier risks that can impact Organizational Development strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Increasing silos among functional specialists
– The organizational structure of Toyota Toyota's is dominated by functional specialists. It is not different from other players in the Organizational Development segment. Toyota Toyota's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Toyota Toyota's to focus more on services rather than just following the product oriented approach.
Opportunities Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Toyota Toyota's is facing challenges because of the dominance of functional experts in the organization. Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Developing new processes and practices
– Toyota Toyota's can develop new processes and procedures in Organizational Development industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Toyota Toyota's in the consumer business. Now Toyota Toyota's can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Toyota Toyota's has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Leveraging digital technologies
– Toyota Toyota's can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Toyota Toyota's in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Organizational Development segment, and it will provide faster access to the consumers.
Building a culture of innovation
– managers at Toyota Toyota's can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Organizational Development segment.
Low interest rates
– Even though inflation is raising its head in most developed economies, Toyota Toyota's can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Toyota Toyota's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Toyota Toyota's to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Organizational Development industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Toyota Toyota's can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Toyota Toyota's can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Learning at scale
– Online learning technologies has now opened space for Toyota Toyota's to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Better consumer reach
– The expansion of the 5G network will help Toyota Toyota's to increase its market reach. Toyota Toyota's will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Threats Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo are -
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Toyota Toyota's in the Organizational Development sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Toyota Toyota's high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Environmental challenges
– Toyota Toyota's needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Toyota Toyota's can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
Consumer confidence and its impact on Toyota Toyota's demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo, Toyota Toyota's may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Organizational Development .
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Increasing wage structure of Toyota Toyota's
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Toyota Toyota's.
Regulatory challenges
– Toyota Toyota's needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Organizational Development industry regulations.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Toyota Toyota's needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Technology acceleration in Forth Industrial Revolution
– Toyota Toyota's has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Toyota Toyota's needs to keep up with the evolution of technology in the Organizational Development sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Toyota Toyota's with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Toyota Toyota's business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Toyota Toyota's needs to make to build a sustainable competitive advantage.