Toyota: Repositioning the Brand in Europe (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Toyota: Repositioning the Brand in Europe (A)
The year 1998 was an excellent one for Toyota in Europe: The company posted record sales in 10 European countries and had topped Nissan's sales in Europe for the first time ever. However, on a global scale, the European market was still a weak spot for Toyota. The market share in Western Europe stood at only 3%, whereas the company had secured over 10% in other international markets such as the United States. Early 1999 marked a turning point and Toyota publicly announced its goal to raise the European market share to 5% by the year 2005. However, many executives considered the different positioning and perception of the Toyota brand across Europe as a main obstacle to growth. The new president of Toyota Europe had to decide whether there was a need to reposition the brand. If yes, should he recommend a unified brand image within Europe. How could this be achieved? Provides data on the European market for automobiles, customer segments, and positioning of Toyota vs. the competition. Also outlines the intricacies of growing a business by making bold changes to the positioning of products and brands.
Authors :: Sean Meehan, Dominique Turpin, George Radler, Madoka Hokamura
Swot Analysis of "Toyota: Repositioning the Brand in Europe (A)" written by Sean Meehan, Dominique Turpin, George Radler, Madoka Hokamura includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Toyota Europe facing as an external strategic factors. Some of the topics covered in Toyota: Repositioning the Brand in Europe (A) case study are - Strategic Management Strategies, and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Toyota: Repositioning the Brand in Europe (A) casestudy better are - – challanges to central banks by blockchain based private currencies, competitive advantages are harder to sustain because of technology dispersion, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels, increasing inequality as vast percentage of new income is going to the top 1%, increasing transportation and logistics costs, there is increasing trade war between United States & China,
cloud computing is disrupting traditional business models, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Toyota: Repositioning the Brand in Europe (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Toyota: Repositioning the Brand in Europe (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Toyota Europe, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Toyota Europe 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: Repositioning the Brand in Europe (A) can be done for the following purposes –
1. Strategic planning using facts provided in Toyota: Repositioning the Brand in Europe (A) case study
2. Improving business portfolio management of Toyota Europe
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Toyota Europe
Strengths Toyota: Repositioning the Brand in Europe (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Toyota Europe in Toyota: Repositioning the Brand in Europe (A) Harvard Business Review case study are -
Organizational Resilience of Toyota Europe
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Toyota Europe does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Sustainable margins compare to other players in Sales & Marketing industry
– Toyota: Repositioning the Brand in Europe (A) firm has clearly differentiated products in the market place. This has enabled Toyota Europe to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Toyota Europe to invest into research and development (R&D) and innovation.
High brand equity
– Toyota Europe has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Toyota Europe to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of Toyota Europe in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– Toyota Europe 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: Repositioning the Brand in Europe (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Toyota Europe has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Innovation driven organization
– Toyota Europe is one of the most innovative firm in sector. Manager in Toyota: Repositioning the Brand in Europe (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Learning organization
- Toyota Europe is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Toyota Europe is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Toyota: Repositioning the Brand in Europe (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Strong track record of project management
– Toyota Europe is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Low bargaining power of suppliers
– Suppliers of Toyota Europe in the sector have low bargaining power. Toyota: Repositioning the Brand in Europe (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Toyota Europe to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Toyota Europe has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Toyota: Repositioning the Brand in Europe (A) 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.
Ability to lead change in Sales & Marketing field
– Toyota Europe 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 Europe in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Toyota: Repositioning the Brand in Europe (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Toyota: Repositioning the Brand in Europe (A) are -
Low market penetration in new markets
– Outside its home market of Toyota Europe, firm in the HBR case study Toyota: Repositioning the Brand in Europe (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High operating costs
– Compare to the competitors, firm in the HBR case study Toyota: Repositioning the Brand in Europe (A) has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Toyota Europe 's lucrative customers.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Toyota Europe supply chain. Even after few cautionary changes mentioned in the HBR case study - Toyota: Repositioning the Brand in Europe (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Toyota Europe vulnerable to further global disruptions in South East Asia.
High bargaining power of channel partners
– Because of the regulatory requirements, Sean Meehan, Dominique Turpin, George Radler, Madoka Hokamura suggests that, Toyota Europe is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Slow decision making process
– As mentioned earlier in the report, Toyota Europe 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 Europe 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 cash cycle compare to competitors
Toyota Europe has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Toyota: Repositioning the Brand in Europe (A), it seems that the employees of Toyota Europe 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.
Capital Spending Reduction
– Even during the low interest decade, Toyota Europe has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Lack of clear differentiation of Toyota Europe products
– To increase the profitability and margins on the products, Toyota Europe needs to provide more differentiated products than what it is currently offering in the marketplace.
No frontier risks strategy
– After analyzing the HBR case study Toyota: Repositioning the Brand in Europe (A), it seems that company is thinking about the frontier risks that can impact Sales & Marketing 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.
Aligning sales with marketing
– It come across in the case study Toyota: Repositioning the Brand in Europe (A) 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: Repositioning the Brand in Europe (A) can leverage the sales team experience to cultivate customer relationships as Toyota Europe is planning to shift buying processes online.
Opportunities Toyota: Repositioning the Brand in Europe (A) | 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: Repositioning the Brand in Europe (A) are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Toyota Europe can use these opportunities to build new business models that can help the communities that Toyota Europe operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
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 Europe in the consumer business. Now Toyota Europe can target international markets with far fewer capital restrictions requirements than the existing system.
Better consumer reach
– The expansion of the 5G network will help Toyota Europe to increase its market reach. Toyota Europe 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Toyota Europe to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Toyota Europe to hire the very best people irrespective of their geographical location.
Loyalty marketing
– Toyota Europe 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Toyota Europe is facing challenges because of the dominance of functional experts in the organization. Toyota: Repositioning the Brand in Europe (A) 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Toyota Europe can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Using analytics as competitive advantage
– Toyota Europe has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Toyota: Repositioning the Brand in Europe (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Toyota Europe to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Toyota Europe can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Low interest rates
– Even though inflation is raising its head in most developed economies, Toyota Europe 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.
Creating value in data economy
– The success of analytics program of Toyota Europe has opened avenues for new revenue streams for the organization in the industry. This can help Toyota Europe to build a more holistic ecosystem as suggested in the Toyota: Repositioning the Brand in Europe (A) case study. Toyota Europe can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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 Europe can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Manufacturing automation
– Toyota Europe can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Threats Toyota: Repositioning the Brand in Europe (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Toyota: Repositioning the Brand in Europe (A) are -
Consumer confidence and its impact on Toyota Europe 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.
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 Europe needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Toyota Europe can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Technology acceleration in Forth Industrial Revolution
– Toyota Europe has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Toyota Europe needs to keep up with the evolution of technology in the Sales & Marketing 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Toyota Europe can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Toyota: Repositioning the Brand in Europe (A) .
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 Europe business can come under increasing regulations regarding data privacy, data security, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Toyota Europe in the Sales & Marketing industry. The Sales & Marketing industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Regulatory challenges
– Toyota Europe 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 Sales & Marketing industry regulations.
Increasing wage structure of Toyota Europe
– 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 Europe.
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 Europe in the Sales & Marketing sector and impact the bottomline of the organization.
Environmental challenges
– Toyota Europe 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 Europe can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Toyota Europe with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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: Repositioning the Brand in Europe (A), Toyota Europe may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
Weighted SWOT Analysis of Toyota: Repositioning the Brand in Europe (A) 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: Repositioning the Brand in Europe (A) 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: Repositioning the Brand in Europe (A) 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: Repositioning the Brand in Europe (A) 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: Repositioning the Brand in Europe (A) 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 Europe needs to make to build a sustainable competitive advantage.