SWOT and Strategic Analysis of Toyota - Essay Example

The greatest challenges that an organizational setup has to face are those of initial internal challenges which require a lot of determinism, vision, and valor for an apt and befitting response. Toyoda, the founder of the company has to sell out patent rights of automatic loom invented by him to a Britain firm in order to generate funds for his future plans.

This early strategic move in 1929, six years later in 1935, paved the way for Toyoda to introduce the first prototype passenger car of Toyota, the industry giant today. (Toyota-global, n.d.). The company then has to face the early external threat of the Second World War and during the period of 1936-1943, it could only produce less than two thousand cars.  (Toyland. n.d.).  In the post-war scenario, Toyota fulfills the local military requirement and post-war rehabilitation through a focus on truck manufacturing.

The demand for these trucks was on rising in this period and Toyota has not only seized the opportunities thereby generated but has also gained public and political appreciations. The government extended great support to Toyota through strict legislation on imported automobiles, which provided Toyota with the room to expand its operations and completed the 100000 units by the end of 1947. This growth is then translated into an expansion of company operations through Toyota Tsusho Corporation, Toyoda Gosei Co., Ltd., and DENSO Corporation.

Adoption of Total quality Control mechanism and Labor-management joint declaration in 1961 and 1962 respectively had further strengthened internal stability and by the end of 1969 Toyota had crossed the landmarks of 1 million units’ domestic sales and 1 million units’ cumulative exports. (Toyota-global, n.d.). Throughout the history of Toyota, we can trace the application of Porter’s four generic strategies. In the early two and half decades, Toyota ensured the cost leadership strategy.

It kept the prices lower than its competitors while increasing the total number of units produced and sold. Summarizing this strategy Kreitner states, “In manufacturing firms, the preoccupation with minimizing costs flows beyond productions into virtually all areas: purchasing, wages, overheads, R&D, advertising and selling.