he largest of the Japanese auto makers. It has a strong presence in the American market, and a reputation for producing quality vehicles in a variety of price ranges. Combined with its luxury car line (the Lexus), the company has led the way for Japanese manufacturers seeking to expand both their revenues and profits within the United States.
The company also has strength in that it has already begun shifting production of automobiles overseas and now operates plants in the United States, for example, which enable cars to be built and sold in the same country. This offers Toyota the ability to insulate itself somewhat from the currency float and enables the company to sell more cars than the limitation on imports would otherwise allow (Moyer, September 8, 1993, p. 4).
While the company remains financially strong, its financial positioned has weakened over recent years. With profitability down, the company is less able to take advantage of strategic opportunities that may be available in the marketplace, at least when compared to its Japanese and American competitors.
The company is also weakened by its inability to expand its European sales until the end of the century. While the agreement with the European Community was politically motivated and may have long-term benefits for overall trade between the partners involved, the inability to seek additional market share in Europe puts the company at a competitive disadvantage.
Toyota also suffers from weakness stemming from its reputation as the highest priced Japanese auto maker, and from the perception that Japanese cars are overpriced when compared to American cars (Armstrong & Miller, April 26, 1993, p. 28). While the company could combat this position in the past, recent increases in the yen make it difficult to defend this position.
Although the company's opportunities in Europe are limited, it has strong potential in Canada, the United States and Japan. Strict ...