SWOT Analysis of Lexus Company
Introduction of the Company
Lexus is a brand under the Toyota industry for luxury vehicles first implemented in 1989 in Japan by Eiji Toyoda. The first sedans were ES 250 and LS 400, whose aim was to pursue perfection. Albeit a young brand, Lexus has distinctive features that afford its high competitiveness capability around the world. SC, IS, GX, RX, and other luxury utility vehicles have been developed over the years (Nkomo, 2013). However, the Toyota industry initially had limited experience in the production of luxury cars, and hence, the first one imposed critical expenses on manufacturing. In this regard, Toyota contracted the gearbox to Aisin Seik to collaborate with engine and body designers (Nkomo, 2013). Nonetheless, Toyota soon dominated the essential functions through learning and advanced in better competitive cars. The brand currently dominates the home country as the market leader in the luxury segment, with a presence in over 70 countries globally.
SWOT Analysis for Lexus Brand
SWOT analysis is an essential tool in the manufacture of Lexus products to aid in strategic planning. Below is a description of the SWOT analysis.
Strengths
Availability of high skilled labor. Toyota industry has acquired the top-notch employees with technology-based skills necessary for research and implementation in the manufacturing sector.
A high level of customer satisfaction is another strength. The brand is rich in the customer relationship, which aids in determining the needs of the current and potential customers. As such, the products are designed with the customers’ needs as the central focus (Kozlovskiy & Aydarov, 2017).
Japanese technology – being under the Japan-based industry, the brand enjoys the benefits associated with high-tech knowledge in vehicle manufacturing. The country is associated with quality norms and superior designs, and hence, Lexus acquires global attraction.
Weakness
Limited excitement – Luxury cars are associated with a variety of exciting driving features. Contrary, Lexus has limited exciting experiences, which renders it a boring brand in the otherwise luxurious segment.
Late market entry – Lexus was introduced in the market when other industries from Italy and German had already dominated the market with luxury vehicles. These older industries had established a strong market rapport, and hence Lexus has faced challenges acquiring a market share (Madoh et al., 2019).
Low Branding – Toyota spends low on Lexus promotion resulting in poor visibility and mileage of this brand.
Opportunities
Increase in the number of wealthy people. The growing economies, especially in Asia and the Middle East, depict an expansion for the market of luxury goods. Hence, Lexus gains a better chance for increased demand.
Technology – Toyota invests more in future-oriented research such as robot-driven cars and interconnected traffic, which favors the Lexus brand.
The potential market for Green and Alternate energy cars. Toyota ventures in hybrid and green cars by supporting hybrid technologies (Madoh et al., 2019). As such, there is a huge growth prospect in this domain.
Threats
Stiff competition is the greatest threat facing Lexus vehicles. The luxury automobiles are highly competitive, with a strong presence of European players such as Audi, BMW, and Mercedes Benz.
Increasing fuel costs. The rise in fuel costs prompts more consumers to prefer green and alternate energy cars (Majid, 2017).
Description of the Chart
The first columns represent the strengths whereby high-skilled labor is the greatest strength of the Lexus brand, followed by high customer satisfaction and high technology. The second column represents weakness with late market entry as the most significant weakness. Limited excitement and low branding are subsequent weaknesses.