SWOT ANALYSIS of Yamaha Motors:
#INTRODUCTION:
Yamaha motors is a global brand of motorcycles. Mainly known for its excellent engineering, Yamaha has a diversified and large product portfolio. The brand makes and sells power products and industrial robots also. The motorcycle industry has grown highly competitive but Yamaha has continued to perform consistently. It is because of the high level brand equity and its focus on smart engineering. Yamaha is a global business whose products sell across more than 180 countries. In 2016, its net sales reached 1502 Billion Yen. The brand has always focused on customer satisfaction and invest in building trust. It has also built a diverse culture that believes in inclusion. Now, Yamaha is focusing on finding faster growth in the Indian market. The importance of the Asian markets has grown fast in the recent years. To reach a larger customer audience, Yamaha is focusing on cutting costs down and bringing reasonably priced and lower priced models to these markets. It is also working on creating new markets for its products in Africa. This is a SWOT analysis of Yamaha Motors to help you understand the position of the brand and its most critical strengths and weaknesses.
#Strengths:
Brand equity:
Yamaha has built a strong brand image that rests on great engineering and good quality products. It has always focused on building strong trust among its customers. This is why it is a trusted name of motorcycles throughout the world. High brand equity has led to a large customer base and strong customer loyalty. Strong brand equity also works to retain customers. It is also a reason behind Yamaha’s consistent performance over years.
Large and diversified product portfolio :-
Yamaha has a large and diversified product portfolio. While it is mainly known as a brand of motorcycles, it makes and sells several other products too like industrial robots, marine products and power products. Apart from motorcycles, it makes other vehicles including ATVs, recreational off highway vehicles, snow mobiles and E-bike systems. Marine products made by Yamaha include waverunners, outboards and boats. Its proprietary technologies extend to a large variety of products.
Financial strength :-
Yamaha is in a financially strong position. For several years it has performed consistently. Last year, despite the fluctuations in exchange rates, it retained its profitability which was because of the higher sales of its higher priced products. Its net sales in 2016 equalled 1502 Billion Yen whereas its operating income reached 108.6 Billion Japanese Yen. In order to retain its profitability, the brand is focusing on the Indian market and growing its product line there. Apart from that, it is also working on reducing costs and bringing more of lower and reasonably priced products to the market.
Global presence :-
Yamaha is a multinational brand. Its products sell in more than 180 countries. Its global presence and popularity are some critical strengths that have helped its retain its profitability. Yamaha operates a global development, production and sales network.
Focus on innovation :-
The motorcycle industry is seeing competition grow at a very fast rate. This has resulted in overcrowding of products in the international market. Brand are investing aggressively in innovation. Yamaha has also retained it focus on innovation. While it is already known for smart engineering and great product quality it also invests a heavy sum each year in research and development. In 2016 it spent 94.9 Billion Japanese yen on research and innovation. Yamaha continuously focuses on bringing products that are safer and better for its customers.
#Weaknesses:
Low market penetration in key markets:
Yamaha’s level of penetration in the Asian markets excluding Japan and the South American markets is still low. In 2016 while its sales grew in India, it fell in China. Both of these are the most important Asian markets. However, the level of competition in these markets is also very high. There are both local and international brands competing with Yamaha in these markets. To succeed in the Asian markets, Yamaha would need to bring more products that are within the affordable price range. regional partnerships with local brands can also help its grow its penetration and market share in these markets.
Low brand awareness:
Yamaha sells a large range of products apart from motorcycles. However, it is mainly known for its motorcycles. Around the world awareness regarding its other products is low. It also makes unmanned helicopters for agricultural use. Yamaha also produces industrial robots and several other vehicles. Except its motorcycle products, awareness regarding its other products is low in most corners of the world.
#Opportunities:
AI and digital technology:
AI and digital technology have brought several new opportunities for vehicle makers. Apart from marketing and promotions, digital technology also offers opportunities for engaging suppliers, customers and other stakeholders. Yamaha can use digital technology to improve its brand recognition and awareness. It can also use AI to provide better customer experience and customer service.
Diversification:
Yamaha apart from having exceptional technological capabilities also has great financial strength. It can diversify into new areas based upon its existing strengths to grow its market and customer base. Apart from extending its product line it can grow its customer base by bringing new lines of products.
Asian markets:
Asin markets are among the fastest growing markets in the world. Both India and China are excellent markets that offer great opportunities of growth. Yamaha can use local partnerships in these markets to penetrate them deeper and grow its sales. It must also invest more in marketing in the Asian markets to find faster growth there.
#Threats:
Competitive pressure:
Competitive pressure in the motorcycle industry is growing. There are several brands including both local and international that are competing for market share in the motorcycle industry. This has led to rising competitive pressure and higher expenditure on research and innovation as well as marketing and sales. In 2016, Yamaha saw its sales decline in several of the markets including China and Brazil. This was affected partly by competitive pressure.
Regulatory threats:
Regulatory pressures on the technology industry have kept growing. Around the world government agencies are growing increasingly aggressive about oversight and control of the industry. This has led to compliance related pressures over the large businesses like Yamaha. operating in the international market requires complying with the local laws and regulations. Non-compliance can result in fines and losses.
Fuel costs:
Rising fuel costs in certain markets have affected sales of cars and motorcycles. Rising fuel prices are always a threat for the sales of motorcycle brands like Yamaha.
Rising prices of raw material and labor:
Rising prices of labor and raw material are driving the operational costs of brands like Yamaha higher. It has led to higher expenditure on manufacturing as well as supply chain management and the human resources.
Conclusion:
Yamaha is a strong global brand of motorcycles. However, apart from motorcycles, it also sells a large range of the other products. The brand needs to focus on growing its brand recognition and awareness regarding the other products apart from motorcycles. It must also focus on growing its customer base in the Indian and Chinese markets. Building regional alliances can help Yamaha find faster growth in these markets. Moreover, the brand can sue digital technology to engage its customers, suppliers and other stakeholders better.
Sources:
YAMAHA ANNUAL REPORT 2016