In Depth Analysis Of The Toyota Motor Corporation Marketing Essay

The chief merchandises for the company are categorised into three sections they are automobile, finance and lodging & A ; communicating system. The nucleus concern was automobile section engages in the design, industries and gross revenues that includes a auto smaller than a compact auto to luxury and athletics vehicles, every bit good as trucks, SUVs, coachs and minivans. Additionally Toyota produces automotive parts and accoutrements for its ain usage and for sale to others. Popular theoretical accounts include Land patrol car, Lexus line, Camry ( best merchandising rider auto in America, 2004 ) and Corolla every bit good as the Tundra ( Motor tendency ‘s truck of the twelvemonth, 2000 ) .

Toyota one-year gross revenues about reaches 7.5 million theoretical accounts on all five continents ( America, Europe, Asia, Africa and Australia ) in which the chief markets for both Toyota and Lexus trade name vehicle is the United States, followed by Japan. The other highest markets countries are U.K, China, Australia, Canada, Germany, Thailand, Saudi Arabia and the South Africa. In all, Toyota markets vehicles are more than 170 countries/regions.

The planetary chief rivals for Toyota are VW group, General Motors, Renault Nissan, Hyundai Kia and Ford. As shown in the appendix1 during the twelvemonth 2008 Toyota dominates the planetary visible radiation vehicle gross revenues with the highest market portion of 14 % by catching the chief challengers like GM and Hyundai Kia in the thick of recession, alternatively booms the net income. But the place among the rivals changed drastically in the twelvemonth 2009.

The fiscal sum-up of Toyota for the twelvemonth 2009 is tabled as follows.

( Billions of hankering )

The fiscal study clearly shows that during the twelvemonth 2009 Toyota made a net loss of A?437 billion ( $ 4.3 billion ) that ne’er happened from the past 1950. It happens due to the worst gross revenues, when company could non sell up to that volume in which that company take out its costs which related to production and gross revenues. Whilst Toyota ‘s president, Fuji Cho openly avowed in the twelvemonth 2002, that Toyota is taking for 15 % of the planetary market portion by 2010 suiting itself with the new planetary vision named as “ Innovation into the Future ” . The new subject ( vision ) consists of four elements they are recycling based society, development of motorisation on a planetary sale, diverse society, and age of information engineering. Hence with the terrible competition Toyota continues an effortful effort to achieve a end outlined in the Global Vision 2010 by increasing its fight.


Harmonizing to Johnson & A ; scholes ( 1999 ) , different stairss to be followed in environmental analysis for happening the strategic place of the administration they are 1 ) Measuring the nature of environment, 2 ) Auditing environmental influences, 3 ) placing cardinal competitory forces, 4 ) placing competitory place and eventually placing the key chances & A ; menaces.

The external environment, as a determined component remain a subject of involvement in direction literature ( Joshi and Campbell 2003 ; Nahm et al. , 2003 ) . Hence, a balance relationship between environment and fabrication scheme is complex for administration to accomplish success ( Skinner, 1969 ; Hayes and Wheelwright, 1984 ) . On the other manus Pagell and Krause ( 1999,2004 ) argued that fabricating flexibleness is a planetary event in high public presentation administration regardless of the environment they operate in. However, it is hard to manage environmental uncertainness ( complex ) by depending merely on primary analysis which is derived from the end product of diverseness guaranting that different parts of houses responsible for different facets of diverseness are unattached, and given resources and authorization to manage their ain portion of the environment ( Johnson and Scholes 1999 ) .

Sing the above factors the analysis of Toyota Motor Corporation in the car industry is carried out with aid of analytical tool kit such as PESTLE and FIVE FORCES.

PESTEL Analysis:

As shown in the Appendix-II PESTEL analysis for Toyota Automobile Industry is done with regard to the geographical locations of U.S and Japan. The most critical factors from the analysis have been taken and described below to happen the current chances and menaces of the company.

The automotive industry is capable to assorted authorities ordinances including those related to vehicle safety and environmental issues such as emanation degrees, fuel economic system, noise and pollution. Many authoritiess besides impose duties and other trade barriers, revenue enhancements and levies, and enact monetary value or exchange controls. Toyota has incurred and expects to incur in future, important costs in following with these ordinances. New statute law besides capable Toyota to extra disbursals in future. As an automotive maker, Toyota may became capable to legal proceedings in regard of assorted issues, including liability and violation of rational belongings and Toyota is in fact presently capable to a figure of pending legal proceedings could adversely impact Toyota ‘s future fiscal status and consequences of operations.

Toyota is capable to assorted hazards associated with carry oning concern worldwide. These hazards include political and economical instability, natural catastrophes, fuel deficits, break in transit system, wars, terrorist act, labour work stoppages and work arrests. The happening of any of these events in major markets in which Toyota purchases stuffs, parts and constituents and providers for the industry of its merchandises or in which its merchandises are produced, distributed or sold, may consequences in breaks and holds in Toyota ‘s concern operation may adversely impact Toyota ‘s fiscal status and consequence of operation.

The worldwide fiscal services industry is extremely competitory. Increased competition in car funding may take to reduced borders. A diminution in Toyota ‘s vehicle unit gross revenues and residuary in value hazard due to take down used vehicle monetary value addition in the ratio of recognition losingss and increased support costs are factors which may impact Toyota ‘s fiscal operations. The likeliness of these factors materializing has increased as a consequence of the on-going rapid worldwide economic impairment and competition in car funding has intensified. If Toyota is unable to adequately react to the alterations and competition in car funding, Toyota ‘s fiscal services operations may adversely impact its fiscal status and consequence of operations.

Addition in monetary values for natural stuffs that Toyota and Toyota ‘s providers use in fabricating their merchandises or parts and constituents such as steel, cherished metals, non-ferrous metals including aluminum and plastic parts may take to higher production costs for parts and constituents. This could in turn negatively impact Toyota ‘s future profitableness because Toyota may non be able to go through all those costs to clients or necessitate its providers to obsorb such costs.


Michael Porter identified five forces that affect an industry. These forces are degree of competition, menace of replacements, barriers to entry, purchaser power, and supplier power. For the more on this model proposed by porter, see Appendix. Sing the automotive industry through the model of porter ‘s five forces can be helpful in understanding the forces at drama.

Degree of Rivalry:

The automotive industry is extremely competitory with Large 3 such as GM, Ford and Daimler Chrysler. In the 1980 ‘s the Toyota entered a reasonably disciplined U.S market and have been really focussed in turning their portions of the market. The great diverseness of challengers in footings of civilizations and doctrines has intensified competition in the Industry. Market growing is slow in the established markets of U.S and Europe, and companies must contend ferociously to eke out additions or prevent losingss in market portion. However, growing is potentially immense in the quickly industrializing states of China and India. In these dining markets Toyota could take advantage of the chances to harvest fine-looking awards. The grade of competition in the automotive industry is further heightened by fixed costs associated with fabrication autos and the low shift costs for consumers when purchasing different makes and theoretical accounts.

Menace of Substitutes:

The menace of replacements to the car industry is reasonably mild. Numerous other signifiers of transit are available, but none offer the public-service corporation, convenience, independency, and value afforded by cars. However there are built-in implicit in societal and cultural attitudes that keep people from having cars in some parts of the universe.

Barriers to Entry:

The barriers to come in the car industry are significant. For a new company, the start-up capital required to set up fabrication capacity to accomplish minimal efficient graduated table is prohibitory. An automotive industry is rather specialised and in the event of failure could non be easy re-tooled.

Buyer Power:

In the relationship between the Toyota and its ultimate consumers, buyers of finished vehicles, the power axis is tipped in the consumer ‘s favor. Consumers wield the greatest power in this relationship due to the reasonably standardized nature of the vehicle and the low shift costs associated with choosing from among viing trade names. However, Toyota remains marginally powerful due to big client to bring forth ratio.

The automotive industry is a dynamic topographic point. With the forces supra at drama, and with history as a usher, it is safe to remain that the Toyota must go on to alter, germinate and accommodate.


Increasing Demand for Hybrid Vehicles:

Globally it is estimated that the demand for intercrossed electric vehicles ( HEVs ) will be about 4 million units by 2015. Rising oil monetary value and more emanations ordinance are likely to increase the demand for HEVs, as intercrossed vehicles are less polluting and less runing cost ( more fuel efficient ) when compared to conventional Diesel and gasolene engine, Toyota industries has strong focal point on devices for plug-in intercrossed vehicles. The company ‘s competence on intercrossed engineering is likely to drive growing in the average term.

Constitution of New Material Handling In North America:

Toyota is explicating a plan to spread out its stuff handling equipment in North America. In this context, in March 2010, Toyota industries determined to make a freshly owned sub-subsidiary, Toyota stuff managing North America ( TMHNA ) .

Previously, both Toyota and Raymond used to closely work together to hike concern efficiencies in the countries of fabrication, quality and procurance. Though, TMHNA has officially created to incorporate direction and operational activities in North America. Constitution of TMHNA would heighten the regional co-ordination and increase the public presentation of the stuff managing equipments merchandises of Toyota industries.

Turning Opportunities in Emerging Automotive Merchandises:

Toyota is now concentrating on the new markets such as India, China, Russia and Middle East part seeing that these markets are expected to see a strong growing in the hereafter. In add-on, Toyota besides provides automotive logistic services. The company, with powerful automotive concern operations, would be aided by the turning vehicle demand in these emerging markets.


Kyoto Protocol:

The Kyoto protocol for the decrease of C emanation went into consequence in 2005, which consequences on industrialised states to cut-down their green house gas emanation from the 1990 degree by 5.2 % by an mean degree during 2008-2012. Consequently, Toyota appointed the bar of planetary heating as one of its strategic direction issue and concentrate on steps to cut down planetary heating, which lead to increase in the cost construction of the company drastically.

Intense Competition:

Toyota is involved in competition with many car companies at place and abroad. Any differences in the allotment of direction resources and in fight of cost or engineering are likely to impact the company ‘s position in the car industry and its concern public presentation. Toyota industries compete with the rivals holding big volumes of concern and greater fiscal resources than those of the company. High degree of competition in the market topographic point could impact Toyota concern operation and could gnaw in market portion.

Exchange rate Fluctuation:

Toyota industries encompass the production and gross revenues of merchandises and the proviso of services worldwide. Toyota is sensitive to the fluctuations in foreign currency exchange rates and is chiefly exposed to fluctuations in the value of the Nipponese Yen, the U.S Dollar and the Euro. In the recent Nipponese Yen appreciated significantly against the U.S Dollar. The strengthening of the Nipponese Yen against the U.S Dollar can hold a material inauspicious consequence on Toyota Industries reported operating consequences, which may in bend affect the rating of the company.


Harmonizing to Haberberg and Riepel ( 2008 ) capablenesss are things that clients and other stakeholders notice when they are covering with an administration. Hence it is critical to place the capablenesss of Toyota, which is carried out with the frame work of resource based analysis ( appendix- ) and value concatenation analysis.

Value Chain Analysis:

One cardinal plan is called value watercourse function, an analysis tool the car manufacturer has been utilizing to better assembly line productiveness is supply concatenation. Toyota manages the supply concatenation so expeditiously that its production procedure is near perfect and it merely known as TPS ( Toyota Production System ) , which developed by Toyota to present more efficaciously the merchandises which their clients require, in a timelier mode than traditional direction attacks. The alone direction system of Toyota made a different relation with the providers when comparison to other rivals, they are

Frequent and dependable bringings from providers

Quality parts

Small batch size

Supplier web

Communication with providers

Proximity to the clients

Single sourcing

Long-run contract

Supplier preparation

Reduced lead clip.

Toyota is non inquiring providers to cut down monetary value and net income alternatively, to happen a manner to understate cost without holding any negative impact on client value. The present state of affairs is Toyota ‘s ability in developing the TPS and in incorporating the policies and practises of their ain that is the extension of internal policy deployment through their provider association into the provider web and the active co-ordination and development of providers, straight and indirectly through the widespread application of the Toyota production system.

Resource Audit: Resources of Rolls Royce can be grouped under so following four headers they are Physical resources, Human Resources, Financial resources and Intangibles.


Robust R & A ; D Capabilities:

Toyota industries actively carry out its research and development activities. It ‘s R & A ; D activities can be loosely divide into two countries merchandise development and betterments performed independently within each concern division and R & A ; D undertaken chiefly by the R & A ; D centre separate from the activities of its concern division and with a position toward company wide- direction scheme.

Strong R & A ; D capabilities helps the company to maintain up with the latest technological developments in the market and besides helps in developing new merchandises and engineerings, therefore lending to the rapid growing of the company.

Strong Engineering Capabilities:

The company has strong technology capablenesss, for case the Toyota is widening its merchandise portfolio to include intercrossed engines and intercrossed vehicles. The company besides manufactures electric compressor for intercrossed vehicles. The company ‘s strong technology capablenesss allow spread outing its merchandise portfolio.


Overdependence on Japan:

A Toyota industry is extremely dependent on the Nipponese market for its grosss. This overdependence on Japan could hold a dampening consequence on the company ‘s grosss if the company ‘s gross revenues in Japan do non turn as expected. Addition to this the concentration of operation in this country increases Toyota industries exposure to state specific factors such as alterations in natural stuff monetary values, labour work stoppages, alterations in economic conditions, and most of import increasing competition monetary value from low-cost merchandises.

Evaluation of Possible Future Schemes for the Toyota:

After scanning the environment, executing the SWOT analysis, that showed a failing in Toyota may at the same clip immense chances. Now we need to cognize how to utilize this chances to get the better of the menaces, understate the failing and maximize the strength.

Toyota ‘s success is mostly based on its forward-thinking, advanced direction manner and its strict criterions of quality. The Toyota production system is much-studied scheme of design and fabrication which emphasizes streamlining and riddance of waste – giving rise to the ‘Just in Time ‘ and ‘Lean ‘ fabrication motions – and uninterrupted mistake – checking and betterment. In add-on, Toyota has repeatedly been in front of the tendency in puting new engineerings. Alternatively of concentrating on cut downing labor costs, Toyota has progressively automated their production installations. And with the release of the Prius in 1997, Toyota introduced the first mainstream loanblend vehicle, cashing in on the demand for fuel economic system and decreased environmental impact. Like the Prius, the subdivision line successfully addressed a new consumer sector, a program that Toyota will go on to follow. These schemes combine to give Toyota a important sustainable competitory advantage.

In order to recognize the image that Toyota is endeavoring to accomplish it is of import to set about a paradigm alteration from the undermentioned three positions they are are engineering development, direction and net income constructions

Acquisition of a Rival:

Acquisition of rival is known as betterment scheme of spread outing its nucleus concern. The acquisition will take to lift in market portion ( barney and Hesterly, 2010 ) for Toyota through market incursion, market development and market enlargement, if the get company is runing in more and different emerging markets. This signifier of acquisition is called horizontal integrating and would take to an addition in market portion and lessening in competition. Toyota to work the unifying market such as India and China it should get the bing rival so that it is easy beef up the market place and unfastened new chances for competitory advantage

New Strategic Capabilities:

There are strong rivals for Toyota in the engineering, selling and fabrication. Therefore to cut down the strength of challenger among the major participants, Toyota can look into joint venture scheme to capture the emerging markets such as China, India and Russia.

Execution of Strategic Change:

Surviving to extremely competitory quickly altering environment frequently requires houses to develop schemes that provide the right sort of flexibleness to win their specific environments, therefore accomplishing tantrum between the type of flexibleness to win in their specific environments, therefore accomplishing tantrum between the type of flexibleness pursued and the demand placed by the environment.


Negotiation should be at that place to understand the demand of both purchaser and marketer and these has a important impact as the dialogues unfold and execution Begins.


Execution is the critical portion for the leading and communicating to put to death the alteration direction. The alterations that should be made for meeting should be planned in item because there are many issues that are expected with acquisition such as integrating challenges, civilization, control system, fiscal operation and loss of cardinal personal ( Thompson, 2001 ) . In order to catch these jobs Toyota has to make a proper planning and research before the execution to acquire the positive result.


The merchandise developments are in increasing nature because of the emerging new markets and the technological factor is adding value to the company concentrating for the following coevals, hence I personally recommend on investor to put with Toyota



IMPACT ( chances & A ; menaces )



Political instabilities, fuel deficits, natural catastrophes, wars, terrorist act and labor work stoppages

Arab oil trade stoppage turned fuel economic system into an of import car policy end for the U.S authorities.

The happenings of any of these events will consequences in break and holds in operation. Prolonged break may adversely impact the fiscal conditions of Toyota

Toyota – Government relation are 1, Reliance on Business association 2, Personalized web and 3, accent on harmoniousness.

Changes in statute law



Every 5 old ages


Fiscal crisis that began in 2007 and attach toing crisp declaration of vehicle gross revenues during 2008 serious challenges for all car manufacturers.

Energy crisis.

Rise in monetary value of gasolene.

Exchange rate fluctuation with regard to Dollar

Constitution of new stuff managing company in North America which will restrict the cost of exporting the vehicle to US

Alternative energy efficiency engineering and more investing in R & A ; D

Large autos got smaller, little autos got better

Drove down demand for large, expensive autos, and pilled in capital from Japan and elsewhere, which helped drive up the dollar

In March 2010





Demand for fuel efficiency by consumers

Intense Competition

More demand for intercrossed electric vehicles

Resulted in more picks for purchasers and seeking chances in emerging market

Estimated within 2015.



Rising energy cost and increased emanations ordinance are likely to increase the demand for intercrossed vehicles.

Toyota industries has strong focal point on intercrossed vehicles

Demand to make within following five old ages.


Kyoto protocol

The outgrowth of authorities ordinance for vehicle safety and emanations.

Decrease of green house by 14 % from the 1990 degree within 2012



Toyota may became capable to assorted legal proceedings in regard of assorted issues, including merchandise liability and violation of legal belongings, and Toyota in fact presently capable to a figure of pending legal jobs

Adversely affect the Toyota ‘s future fiscal status and consequences of operation


Note: Analysis chiefly based on the Japan and US geographic location

Appendix-III Porter ‘s Five Force Model

New entrants

Industry Rivals

Intensity of Rivalry




Appendix-IV Value Chain Analysis

Reliance on Business association ( internationalisation ) -well connected to each other and with politicians and administrative officials.

Personalized network- The usage of personalized /informal web for political influence and mobilisation in Japan is a more seeable and frequent activity than in many other industrialised states.

Emphasis on harmony- strong accent on harmoniousness among houses and policy shapers.

Leave a Reply

Your email address will not be published. Required fields are marked *