Toyota SWOT Analysis

SWOT analysis is a structured planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats. A SWOT analysis can be carried out for a product, place or industry. It involves specifying the objective of the business venture or project and identifying the internal and general factors that are favorable and unfavorable to achieving that objective. Recently, I watched a movie about cars. The car of the main character used is a Toyota car. So let’s take a look at this Japanese company.

For the strengths, Toyota has a strong brand portfolio. Toyota currently sells about 70 different models of cars under its namesake brand. This does not only increase brands awareness but also satisfies nearly every consumer group needs. Toyota’s flagship models are Corolla and Prius. They are the leader in “green” cars development. Toyota understands that environmental friendly cars are the necessity nowadays. Consumers are more selective in terms of CO2 emissions and fuel-efficiency of the cars they buy and Toyota’s early move towards selling hybrid and efficient cars is the strength few competitors can match.

In the weaknesses, they are weak presence in the emerging markets. Toyota’s main markets are Japan, US and Europe, while such emerging economies as China or India make only a small percentage of all Toyota’s sales.

Their opportunities are the increment of fuel prices. Increasing fuel prices open up large markets for Toyota’s hybrid cars as consumers shift towards efficient cars. They will change the customer needs. By introducing new car models, Toyota could satisfy varying consumers’ tastes and needs and access wider customer group such as young people and families.

To their threats, Toyota faces more intense competition from other auto manufacturers. Volkswagen group is strongly growing and GM steps up after its reorganization to become more competitive than ever. Also, rising raw material prices are especially important to automobiles manufacturers. The cost will be higher and affect their profit for Toyota because the raw metals are the main components in car manufacturing.

Our Neighbor---McDonald's

Globalization has affected almost every aspect of life in almost every country. From economic to social to culture, this widespread exchange of goods, services and ideas have influenced changes around the world. Food is one of the elements in defining culture.

In globalization, one of the most influential changes came with the introduction of fast food restaurants like McDonald’s into foreign countries. McDonald’s has become the best-known fast food brand in the world. It has 30,000 restaurants in over 120 countries.

McDonaldization is the term invented by George Ritzer to describe a sociological phenomenom. We may think it started with Ray Kroc in the 1950's when he bought his first hamburger restaurant, but actually it is much earlier than that. In fact, Henry Ford was the first McDonaldization pioneer with his vision of an assembly line for improving the production of automobiles. His revolutionary idea dramatically changed how many automobiles could be produced and was very efficient.

In essence, McDonaldization is the process of rationalization. The process of McDonaldization takes a task and breaks it down into smaller tasks. This is repeated until all tasks have been broken down to the smallest possible level. The resulting tasks are then rationalized to find the single most efficient method for completing each task. All other methods are then deemed inefficient and discarded. According to Ritzer, the four main dimensions of McDonaldization are efficiency, calculability, predictability, and control. In additional, there are some important areas that Ritzer had not mentioned, which are irrationality, deskilling, and consumer worker.

McDonald’s revolutionized the food industry, affecting the lives both of the people who produce food and the people who eat it. The McDonalds applied automation to food, just as Henry Ford had to car-manufacture. When McDonald’s Pushkin Square opened in Moscow on January 31, 1990, it broke all opening day records for customers served, and is still the busiest branch in the world.

Currently, the slogan of “I’m lovin’ it”, which is the new theme that McDonald’s has been promoting globally since 2003. It shows that they had changed their strategy to target the market group of youngsters from children and family consumers. They try to create a young and vibrant image, targeting at young people.

Moreover, we can see that how can they get into a new culture. In Italy, McDonald's serves Mediterranean salads, and teriyaki burgers are available in Japan. In Israel, there are several kosher McDonald's restaurants, and in Mexican outlets sell burritos. These are just a few examples of when McDonald's has actually changed itself to fit into the local culture. In India, the people in this country usually do not eat beef, but consumers can get McDonald's sandwiches made with mutton and chicken instead of beef, respecting their religion.

Lastly, under globalized environment, people always do not enough time to sit down and have a good meal due to the amount of work. Therefore, fast food is the only way to go. McDonald's has come up with all sorts of ideas to fit all sorts of people. They have a morning menu for those that wake up early and the "24hr" drive-thru strategy.

PESTEL to Nike

“Just do it”, we may see this in Nike’s advertisement. From the analysis of PESTLE, we can know that how Nike can become a well-known sportswear company in the global market. PESTLE analysis describes a framework of external environmental factors and component of strategic management.

For the political factor, Nike has been helped by the US policies which enable it to advance its products. The support accorded to Nike by the US government, particularly in the low interest rates, stable currency conditions and the international competitiveness of the tax system, help the growth of Nike. As USA is a powerful country, she can enjoy a larger bargaining between countries in the trading policies. This can provide more opportunities to Nike to enter different countries’ market.

In economical factor, the global economic recession will be the largest threat to Nike. During recession, Nike’s growth will be adversely affected. A weak Euro and an Asian recession could mean weak sales for Nike. Consumer purchases would be slowing down. Additionally, the labor costs and material prices are going up. For instance, the manufacturing costs are increasing in China, so they are started to find another country to produce in a lower cost.

From the social-culture factor, people are more concerned about their health nowadays. Diet and health are getting more prominence. Consequently, more sportswear wears, shoes and equipment are needed for doing exercise.

In the view of technical factor, the research and development for their products is important. Just like the shoes for running, they need to design and find a lighter material for making a pair of new running shoes.

For legal factors, whenever any company enters a new country, it has to worry about the existing laws and practices. Every time they have entered a new country, they have done so after checking the local laws in detail. For example, the government policies with regard to foreign investment and franchise business are different in the developed world and the under developed world. It mostly depends on the government that is friendly or strict with them.

With environmental factor, they need to take care of green issue and environmental policies of the corresponding countries. They should reduce the pollutants and lower the effects to the environment.