SWOT Analysis: Toyota Prius
Many companies use the SWOT matrix to allow them to identify the strengths, weaknesses, opportunities, and threats that they face. This strategic planning tool is essential for a business looking to become successful because it increases awareness of the things they should and should not do. If a company or business fails to analyze any plans using the SWOT analysis, there is potential for failure. Companies can identity their competitors and their points of advantage and use these for their benefit. Strengths and weaknesses usually refer to internal factors, while opportunities and strengths apply to factors outside the business. Toyota is one of the leading car manufacturers in the world, with several models under its name. One of these models is the Toyota Prius that has been in production since 1997. A SWOT analysis is essential in weighing the successes of the Prius as well as identifying shortcomings and areas of improvement.
With carbon emissions from motor vehicles reaching worrying levels, the Toyota Prius is one of several environmentally friendly cars. It was first produced in the year 1997 and has since gained popularity around the world, mainly because of its low levels of emissions. The first Prius model was a four-door sedan, but from 2003 Toyota switched production to a four-door liftback. The Prius was the first hybrid electric vehicle to be sold in worldwide markets, with the United States and Japan being the main markets (Halbright & Dunn 12). The main point of attraction for the Toyota Prius is its hybrid characteristic that comes in handy as the world seeks to reduce carbon emissions from automobiles. The Prius remains the top-selling hybrid vehicle in the world, with more than 6 million units sold around the world as of January 2017.
Strengths and weaknesses in the SWOT matrix relate to internal factors within a company or business. The Toyota Prius has several strengths. The first of these is the environmentally-conscious features of the vehicle, which reduce carbon emission compared to other vehicles in the market (Doll 31). The other strength of the Toyota Prius is the elegant interiors of the model, as well as the revolutionary exterior. People like to have a nice-looking vehicle, and the Prius meets the aesthetical expectations of customers. The Toyota Prius is also extremely fuel-efficient, a feature that helps it consume lower amounts of fuel with distance compared to other automobiles in the market. Fuel efficiency contributes to lower levels of emission. Another strength for the Prius is its popularity, having sold over six million units worldwide. The Toyota Prius also boasts of three driving modes that the driver can choose from based on their needs. These modes are for fuel efficiency, smooth performance, and low emissions (Prokhorov 461). Finally, Toyota has invested in branding and advertising for the Prius, increasing its awareness and popularity in the market. There are two main points of weakness for the Toyota Prius. The first one is its higher price relative to other car models that use petrol. Being a hybrid model, the Prius is also costlier to maintain compared to other models, and this proves to be a disadvantage.
On the external front, the Toyota Prius has several opportunities as well as threats. The first opportunity is the first-mover advantage. The Prius was the first hybrid vehicle to be introduced; thus, the model stands to benefit from its market share, resources, and popularity. The second opportunity for the Toyota Prius is the augmentation of distribution and servicing (Halbright & Dunn 35). Toyota should increase the number of distributors across the world to make sure that the Prius is available and that customers are aware of it. Toyota should also take advantage of collaborations with other automobile businesses in the distribution of the model as well as associated services. Such collaborations will increase the presence of the Prius brand in the market. The high maintenance costs of the Prius proves to be a threat to the model because customers prefer lower maintenance costs. Another possible threat for the Toyota Prius is that several other companies have begun to produce hybrid models with better features and also lower prices. Such a situation threatens the market presence of the Prius as customers look for the cheapest hybrid model with similar or even better features.
To make the Prius even more successful with the increasing competition, Toyota should work on converting weaknesses to strengths and threats into opportunities. One of the points of weakness is the higher prices compared to vehicles that use petrol. This can be converted into a strength by aggressive advertising. People are becoming more aware of global warming and how individuals can contribute to its reduction. The Prius should be advertised as a personal contribution to the fight against carbon emissions, and customers will be willing to pay more for a hybrid vehicle if it means saving the planet (Doll 52). One significant threat to the Toyota Prius is the entry of new hybrid vehicles into the market with more innovative features and lower price points. To convert this into an opportunity, Toyota should invest in newer technologies that are more efficient and add new features into their model. The company should also take advantage of economies of scale in production and try to make the Toyota Prius as cheap as possible. These conversions will help Toyota gain a competitive advantage in the market over its competitors.
Doll, Claus. “Innovation in vehicle technology–The case of hybrid electric vehicles.” DIME International Conference’Innovation, sustainability and policy. 2008.
Halbright, Rudi, and Max Dunn. “Case Study: The Toyota Prius.” Managerial Marketing (2010).
Prokhorov, Danil V. “Toyota Prius HEV neurocontrol and diagnostics.” Neural Networks 21.2-3 (2008): 458-465.