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 - – competitive advantages are harder to sustain because of technology dispersion, geopolitical disruptions, central banks are concerned over increasing inflation, increasing government debt because of Covid-19 spendings, supply chains are disrupted by pandemic , customer relationship management is fast transforming because of increasing concerns over data privacy, there is backlash against globalization,
cloud computing is disrupting traditional business models, there is increasing trade war between United States & China, 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 -
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.
Diverse revenue streams
– Toyota Europe is present in almost all the verticals within the industry. This has provided firm in Toyota: Repositioning the Brand in Europe (A) 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.
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.
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.
Operational resilience
– The operational resilience strategy in the Toyota: Repositioning the Brand in Europe (A) Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
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.
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.
Effective Research and Development (R&D)
– Toyota Europe 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: Repositioning the Brand in Europe (A) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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.
Ability to recruit top talent
– Toyota Europe is one of the leading recruiters in the industry. Managers in the Toyota: Repositioning the Brand in Europe (A) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
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.
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.
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 -
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.
Products dominated business model
– Even though Toyota Europe 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: Repositioning the Brand in Europe (A) should strive to include more intangible value offerings along with its core products and services.
Slow to strategic competitive environment developments
– As Toyota: Repositioning the Brand in Europe (A) HBR case study mentions - Toyota Europe 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Toyota Europe needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Toyota: Repositioning the Brand in Europe (A), is just above the industry average. Toyota Europe needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Skills based hiring
– The stress on hiring functional specialists at Toyota Europe 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.
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.
Interest costs
– Compare to the competition, Toyota Europe has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
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.
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.
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.
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 -
Learning at scale
– Online learning technologies has now opened space for Toyota Europe 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.
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.
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 Europe 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.
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.
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.
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.
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.
Building a culture of innovation
– managers at Toyota Europe 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 Sales & Marketing segment.
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.
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.
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.
Buying journey improvements
– Toyota Europe can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Toyota: Repositioning the Brand in Europe (A) suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Toyota Europe in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
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 -
High dependence on third party suppliers
– Toyota Europe 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.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Toyota Europe.
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.
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.
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.
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Toyota Europe can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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.
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) .
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.
Shortening product life cycle
– it is one of the major threat that Toyota Europe is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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.
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.