Swot analysis lexus
Core capabilities and core rigidities: A paradox in managing new product development. It involves the Weaknesses-Opportunities strategies that involve converting weaknesses to strengths by using opportunities. 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. Baker, M. 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. 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. This would help increase sales in volumes and is feasible due to low inflation and cost S2, O3. 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.
Rented Property: A significant proportion of the property that Lexus owns is rented rather than purchased. It also involves estimating the probability of an event occurring in the external environment.
This leads to lack of consistency and the possibility of damage to quality across its various outlets. 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. The three social media platforms; Facebook, Twitter and Instagram, have shown the greatest number of increase in monthly active users.
Quality Control: Lexus has a lower budget for its quality control department than competitors. Perceived as a very costly brand which can lead to limited exposure to potential customers 2.
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.
Dyson, R. It lists the Strengths-Threats ST strategies that involve using strengths to fight of threats. Strengths Lexus has a Strong Distribution network with a large number of outlets.
W3, O3 Threats There is a threat of new entrants coming into the market. Lack of legal experience and legal department employees are not highly qualified. High Day Sales Inventory: The time it takes for products to be purchased and sold are higher than the industry average, meaning that Lexus builds up on inventory adding unnecessary costs to the business. It also faces cash flow problems. Exploring SWOT analysis — where are we now? Not very good at product demand forecasting leading to higher rate of missed opportunities compare to its competitors. ST Strategies Use a strong distribution network to reach out to customers and fight off new entrants into the market S1, T1. Right now the investment in technologies is not at par with the vision of the company. This makes its brand awareness high. In the next few years the company can leverage this opportunity by knowing its customer better and serving their needs using big data analytics. Fuel price has risen in recent years making inputs expensive. Lexus is a brand that has been in the market for years, and people are aware of it. This means that it has more people leaving the job, and as a result, it is spending more on training and development as employees keep leaving and joining.
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