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Toyota Motor Corp Heir Steers Carmaker Out Of Crisis Case Solution

Solution Id Length Case Author Case Publisher
1804 906 Words (6 Pages) Morten Bennedsen, Brian Henry, Yupana Wiwattanakantang INSEAD : IN1135
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The basic issue lies with the leadership at Toyota Motors that chose to prefer sales growth, a short-term indicator, at the expense of safety and the eventual goodwill of the company, a long-term phenomenon. The problem runs deeper than a few faulty cars triggering a recall. The issue is that Toyota's leadership must realize that consumer s are empowered through legislation and have plenty of choices now. This means that the company cannot leave anything to chance and quality control should be foolproof.

Following questions are answered in this case study solution

  1. Internal situational analysis

  2. External environmental analysis

  3. Issue identification

  4. Stakeholder Identification

  5. Alternatives

Case Analysis for Toyota Motor Corp Heir Steers Carmaker Out Of Crisis

1. Internal situational analysis

Conducting an internal situational analysis is very useful as it sheds light upon the internal strengths and weaknesses of an organization. In Toyota Motor's case, the analyzing the internal resources and detecting potential issues can help identify the issue of defected cars and faulty braking system, as well as the deeper rooted problem with the corporate culture that is more focused on sales growth rather than quality control.

A SWOT analysis is a useful tool in conducting an internal evaluation. Following is the SWOT analysis for Toyota Motor Corp.:

i. Strengths

Toyota motors is a well-established brand name. The car manufacturer has a global presence is among the top players in the industry. The company also has a diversified product portfolio as it has different product lines to satisfy and cater to every type of customer. It has Lexus which is a higher-priced luxury option as well as SUVs.

Another major strength is the company’s production capabilities. The Japanese company adopted and introduced many groundbreaking production methods, like kaizen and lean production, that transformed production in several industries, not just car manufacturing. Toyota continues to innovate and be at the helm of product development to stay on top and compete in a constantly evolving market.

ii. Weaknesses

Despite the strengths, there are many areas in which the company is lacking and these hold back the company in many ways. The company's reputation has taken a hit due to the much-publicized issues with Toyota cars, especially the tragedy that befell the Saylor family. The accidents and the subsequent recalls did cause financial loos, but the loss of goodwill and trust in the company has been a much more severe one. The organizational structure is also very inflexible as it remains extremely hierarchical and entrenched in tradition, with the line of succession still running through the Toyoda family rather than being on merit.

iii. Opportunities

Growing demand for environmentally safer and more efficient cars means that Toyota can improve upon its brand image and cater to a new market segment. It is already investing heavily in electric cars which are better for the environment.

iv. Threats

There is increased competition, particularly from low-cost rivals like Hyundai. In addition to this, there is intense competition in terms of innovation with every car manufacturer seeking to launch more fuel-efficient and environmentally vehicles before any other company in the industry.

2. External environmental analysis

The external environment can have a huge impact on any organization no matter how big they are. Here is a PEST analysis for Toyota Motors to identify the external factor that impacts the firm:

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