These strengths not only help it to protect the market share in existing markets but also help in penetrating new markets. Based on Fern Fort University extensive research — some of the strengths of Lexus are — Strong Free Cash Flow — Lexus has strong free cash flows that provide resources in the hand of the company to expand into new projects. Automation of activities brought consistency of quality to Lexus products and has enabled the company to scale up and scale down based on the demand conditions in the market.
These strengths not only help it to protect the market share in existing markets but also help in penetrating new markets. Based on Fern Fort University extensive research — some of the strengths of Lexus are — Strong Free Cash Flow — Lexus has strong free cash flows that provide resources in the hand of the company to expand into new projects.
Automation of activities brought consistency of quality to Lexus products and has enabled the company to scale up and scale down based on the demand conditions in the market. Reliable suppliers — It has a strong base of reliable supplier of raw material thus enabling the company to overcome any supply chain bottlenecks.
Strong Brand Portfolio — Over the years Lexus has invested in building a strong brand portfolio. This brand portfolio can be extremely useful if the organization wants to expand into new product categories. Strong distribution network — Over the years Lexus has built a reliable distribution network that can reach majority of its potential market.
Highly skilled workforce through successful training and learning programs. Lexus is investing huge resources in training and development of its employees resulting in a workforce that is not only highly skilled but also motivated to achieve more.
High level of customer satisfaction — the company with its dedicated customer relationship management department has able to achieve a high level of customer satisfaction among present customers and good brand equity among the potential customers.
Strategy is about making choices and weakness are the areas where a firm can improve using SWOT analysis and build on its competitive advantage and strategic Swot analysis lexus. High attrition rate in work force — Swot analysis lexus to other organizations in the industry Lexus has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.
Not very good at product demand forecasting leading to higher rate of missed opportunities compare to its competitors. One of the reason why the days inventory is high compare to its competitors is that Lexus is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.
Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, Lexus needs to put more money in technology to integrate the processes across the board. Right now the investment in technologies is not at par with the vision of the company.
The marketing of the products left a lot to be desired. Even though the product is a success in terms of sale but its positioning and unique selling proposition is not clearly defined which can lead to the attacks in this segment from the competitors.
Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments. Not highly successful at integrating firms with different work culture.
As mentioned earlier even though Lexus is successful at integrating small companies it has its share of failure to merge firms that have different work culture. Financial planning is not done properly and efficiently.
The current asset ratio and liquid asset ratios suggest that the company can use the cash more efficiently than what it is doing at present.
Opportunities for Lexus — External Strategic Factors Government green drive also opens an opportunity for procurement of Lexus products by the state as well as federal government contractors.
The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as Lexus to increase its profitability. Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for Lexus to capture new customers and increase its market share.
New customers from online channel — Over the past few years the company has invested vast sum of money into the online platform. This investment has opened new sales channel for Lexus. In the next few years the company can leverage this opportunity by knowing its customer better and serving their needs using big data analytics.
A comparative example could be - GE healthcare research helped it in developing better Oil drilling machines. Stable free cash flow provides opportunities to invest in adjacent product segments.
With more cash in bank the company can invest in new technologies as well as in new products segments.
This should open a window of opportunity for Lexus in other product categories. The new technology provides an opportunity to Lexus to practices differentiated pricing strategy in the new market.
It will enable the firm to maintain its loyal customers with great service and lure new customers through other value oriented propositions. Threats Lexus Facing - External Strategic Factors New technologies developed by the competitor or market disruptor could be a serious threat to the industry in medium to long term future.
Changing consumer buying behavior from online channel could be a threat to the existing physical infrastructure driven supply chain model.
The demand of the highly profitable products is seasonal in nature and any unlikely event during the peak season may impact the profitability of the company in short to medium term. Rising raw material can pose a threat to the Lexus profitability. Certain capabilities or factors of an organization can be both a strength and weakness at the same time.
This is one of the major limitations of SWOT analysis.About benjaminpohle.com benjaminpohle.com is a collaborative research and analysis website that combines the sum of the world's knowledge to produce the highest quality research reports for over 6, stocks, ETFs, mutual funds, currencies, and commodities.
This Toyota SWOT analysis reveals how one of the most innovative automotive companies used its competitive advantages to become the dominant player in the automotive industry.
It identifies all the key strengths, weaknesses, opportunities and threats that affect the company the most. About benjaminpohle.com benjaminpohle.com is a collaborative research and analysis website that combines the sum of the world's knowledge to produce the highest quality research reports for over 6, stocks, ETFs, mutual funds, currencies, and commodities.
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SWOT analysis is a vital strategic planning tool that can be used by Lexus managers to do a situational analysis of the company. It is a handy technique to analyze the present Strengths (S), Weakness (W), Opportunities (O) & Threats (T) Lexus is facing in its current business environment.
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