Custom «Automotive Industry» Essay Paper
Toyota is one of the fastest growing companies and has been ranked as second largest automotive company with a lot of opportunities at its disposal. Toyota has a very good reputation being the manufacture of vehicles which are environment friendly. This is due to adaption of brand new technologies, which have been developed by the company and which has led to the increase in the demand for hybrid vehicles like Prius.
There are numerous opportunities for Toyota in the urban youth market. This is because the launch of the Aygo, which targeted the youth market and the DJ culture, has made the company to have a competitive advantage in the automotive industry. The vehicle is considered to be a unique convertible for a narrow segment. This is not beneficial for its margins which are very low and which makes branding to be extremely difficult.
The company is being favored by the depreciation of the dollar which has a very positive impact on the increasing sales within the US. It is a great opportunity for the company since it significantly helps in the reduction of the production costs. This reduction in production costs can lead to the increase in the profit margins of the company if it is properly used.
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Toyota Company faces quite a number of threats which can affect its business operations. Product recalls in Toyota company have become a major threat to the company in the competitive automotive industry where the company had to recall faulty cars either because of faulty gas pedals or faulty suspension systems. This recall of the faulty cars has caused the loss of customers and damage to company's reputation since no customer is willing to purchase faulty vehicles.
Competition in the automotive industry is very high and has been noted to increase each day because it has no limitations to new entrants into the market. The increasing competitiveness of the automotive industry has posed a very great threat to the company. Therefore for the company to be able to survive in the competitive industry it is important to come up with good strategies which can sustain the competitive advantage of the company (LeBeau, 2010).
The increase in global fuel price is another threa that Toyota company is facing. It is because of its negative effects on the demand and sales of the fuel guzzlers since consumers often reject them purchasing the vehicles which are fuel efficient. This has caused an economic slowdown, since it is a problem which is affecting the whole world and all the automotive companies (Mankiw, 2004).
The tightening of emission standards and environmental laws also impose a great threat to the company. Emission of pollutant waste is very costly and this can affect operations of the company since the relocation of company’s operations to areas, where these regulations require low is very costly (LeBeau, 2010).
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Toyota is an automotive company which operates in a global automotive industry. For the company to be able to compose a strategy which is very successful, it is necessary to be able to come up with practices which are accountable in the global automotive environment. In order for Toyota to be able to meet these environmental requirements, it has come up with hybrid cars which is a new form of technology highly dependent on the economical, social, regulatory and environmental factors. The company adapted the dominance of the internal combustion engine on the basis of the social and technological forces. The adaption of hybrid cars by executives of Toyota Company, like other previous decisions and actions, was mainly determined in the social context (Phillip & Fazleena, 2011).
This adaption of hybrid vehicles was a very good strategic move by the executives of the Toyota company. It was a great success because the introduction of the Prius by Toyota instigated the use of hybrid technologies by other companies as well. The continuous increase in prices increases awareness about the environmental contingencies. These hybrid cars are very friendly to the environment since they produce less pollution and the demand for them is very high, which is a great opportunity for the company.
I think Toyota should take a great advantage of all the opportunities that the company has. The opportunities give it a chance to become a very well established brand in the market niche. The executives of Toyota should come up with strategies which are aimed at maximizing all the opportunities of the company and make them part of the strengths. This can give a sustainable competitive advantage and ensure the survival of the company in the competitive environment through the reduction of threats to the company (Cullen, 2010). Toyota should recognize all the opportunities which are available and grasp them as soon as they arise. These opportunities often arise from the competition, the government, technology, and even the market. Through this, it is possible to build on the company’s strengths and profitability.
Threats, which the company is facing can affect the normal operations if they are not addressed by leaders, who are the main decision makers. What the company can do to address these threats is to adapt new technologies and new production modes. The company should come up with new strategies which are aimed at the production of fuel-efficient cars since the demand for them is still very high. This is a very big opportunity for the company. The company should also try to come up with modes of production, which are less pollutant and also try to recycle the wastes and make a good use of them (LeBeau, 2010).
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What I have learned is that threats and opportunities are usually a part of the SWOT analysis (strengths, weaknesses, threats, and opportunities) of a company and conducting the analysis of a company or business is essential to the decision making process. This is because it enables the leaders to come up with good strategies for the improvement of the company and its future endeavors. The opportunities to a company are usually the advantages, which are external and in most cases, they accrue to the company depending on all the stakeholders and economy. The threats to a company usually affect the company due to its direct involvement with other key players in the same industry which may pose a great risk for the company in the competitive industry.
This identification of opportunities and threats of a company is very useful in helping a business to summarize and clarify major key issues which face it. It also helps the business to set its aims and objectives which is very helpful to maximize company’s strengths. It can also help the business to come up with new strategies, and spot new business opportunities to fully use them.
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