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SWOT Honda Motors

STRENGTHS

Quality and customer satisfaction High R&D like Hybrid Technology Innovation Market share leadership Strong brand equity Unique products

WEAKNESSES

High Price (latest technology being used in Honda products it is difficult to keep the prices low.) Reputation for being underpowered.

OPPORTUNITIES

Progressing low emission vehicles and alternative power sources. Mid segment economical small Cars.

THREATS

Too many competitors in automotive industry. Lower cost competitors Economic slowdown Expanding market size of compact cars ( currently it is around 76% ) Regaining the lead of low emissions is a risky proposition as other companies are coming out with new and cost effective ideas of producing low emission vehicles. External changes (government, politics, taxes, Steel Prices etc)

TOYOTA

Toyota Motor Corporation Strengths


Global organization, with a strong international position in 170 countries worldwide. High financial strength (1997, sales turnover, 131,511 million), sales growth of 29.3%[1] Strong brand image based on quality, environmental friendly (greener), customized range. Industry leader in manufacturing and production. Maximizes profit through efficient lean manufacturing approaches (e.g. Total Quality Management) and JIT (Just in Time) manufacturing and first mover in car research and development[2]. Excellent penetration in key markets (US, China, EMEA) and now the second largest car manufacturer in the world, surpassing Ford.

Weakness

Japanese car manufacturer - seen as a foreign importer. Production capacity. Toyota produces most of its cars in US and Japan whereas competitors may be more strategically located worldwide to take advantage of global efficiency gains. Some criticism has been made due to large-scale re-call made in 2005, quality issues.

Opportunities

Innovation -first to develop commercial mass-produced hybrid gas-electric vehicles (gas and electric), e.g. Prius model. Based on advanced technologies and R&D activity. With oil prices at an all time high - this investment and widening of product portfolio fits consumers looking to alternative sources of fuels away from gas guzzling cars[3]. To expand more aggressively into new segments of the market. The launch of Aygo model by Toyota is intended to take market share in youth market. To produce cars which are more fuel efficient, have greater performance and less impact on the environment.

To develop new cars which respond to social and institutional needs and wants. The development of electric cars, hybrid fuels, and components reduces the impact on the environment. Toyotas Eco-Vehicle Assessment System (Eco-VAS) has helped in production, usage, and disposal[4]. Continued global expansion - especially in the emerging markets e.g. China and India, Russia, where population and demand is accelerating.

Threats

Saturation and increased competition, intense marketing campaigns increasing competitive pressures[5]. Shifts in the exchange rates affecting profits and cost of raw materials. Predictions of a downturn in the economy e.g. recession, will affect car purchases (especially new cars). As household budgets tighten - this could lead a decline in new car sales and possible rationalization of dealerships. Changing demographics e.g. number of large families is declining. Undermining the demand for large family cars[6]. Changing usage - families using the car less for taking children to schools. Home deliveries. Businesses - restricting business travel (tele-conferencing). Governments encouraging alternative forms of transport - cycling and incentives to use public transport across Europe. Rising oil prices (fuel costs) and the costs of maintaining cars. Increase in families who have chosen not to own a car, or decided to use their car less.[7]

Strengths

A Motivated and extremely productive work force. Low cost, high quality factory operations guided by just in time. Long-term partnerships with suppliers. Careful market research and short design to show room cycles so as to keep models closely aligned with market demand. Custom order production and superior customer service. Being the undisputed quality leader in automotive manufacturing. Having outstanding labor relations. Informal contact among employees at all levels of the company. Strong employment relationship. Every worker is adding value to the car.

Long-term relationship with supplier.


Weaknesses

Less market share as compare to General Motors and Ford Customers not segmented Production operation not very good as the product needs to be reworked Customers are not being involved in the process Limited Research and Development done as compare to competitors High level of responsibility on employees shoulders Lack of flexibility in the company Lack of a proper sales force Few layers in Organizational hierarchy, resulting in less opportunity for promotions. Continuous stress on employees due to kaizen (Continuous improvement).
Opportunities

The government pursued two major initiatives to promote automobile self-sufficiency in the quasi-closed economy. First, the ministry of international trade and industry limited imports to about 1 % of the Japanese market. Second, a plan was proposed to rationalize the auto industry through mergers and specialization. Additional government measures to strengthen and protect the ability of the industry to compete included protective tariffs, restrictions on foreign capital participation and loans, accelerated depreciation, special import arrangements for machinery and technology, and long term, low interest loans for the auto parts industry. Quota imposed by US government is beneficial for Toyota in the sense that it enabled Toyota to charge a premium price and to replace its inexpensive one, which were loaded with many options. After US market, Western Europe has emerged as largest market for new car sales in the world. Although Toyota faces fierce competition form Nissan in Europe but its present market leader status in Finland, Denmark, Norway and Ireland can be more beneficial if the trade barriers among European countries are eased.

Threats

Rising gasoline prices triggered by decisions of the OPEC oil cartel to hike crude oil prices substantially. Declining economic growth on a global scale. Continuing trade frictions due to trade imbalances between Japan and other countries and the lack openness of the Japanese market to import. Declining exports due to import restrictions in the United Sates and Europe and strict domestic content laws in other countries. Continuing appreciation of the yen. Expanding demand in the Japanese auto market. Escalating competition in the low priced car market by the entrance of several newly industrialized countries. Increasing sales of imports.