Strategy Management of Toyota Motor Corporation

Introduction: Toyota Motor Corporation, the universe largest automotive maker ( catching GM in 2008 ) , was originated independently in the twelvemonth 1937 and normally known merely as Toyota, holding its transnational headquartered in Japan.

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.

February 2009

( 04/2008-03/2009 )

February 2008

( 04/2007-03/2008 )


Internet Grosss








Operating Income




Net Income




( 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.

Analysis OF THE CURRENT BUSINESS ENVIRONMENT AFFECTING THE AUTOMOBILE INDUSTRY: 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.


INCREASING Demand FOR HYBRID VEHICLES- Harmonizing to the study ( DATAMONITOR: Toyota Industries Corporation ) 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. Furthermore, Toyota launched the universe ‘s first GENEO-Hybrid internal burning ( IC ) hybrid lift truck in the Nipponese market in the twelvemonth 2009. The company ‘s competence on intercrossed engineering is likely to drive growing in the average term.

ESTABLISHMENT 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 OPPURTUNITIES IN EMERGING AUTOMOTIVE PRODUCTS- Toyota is now concentrating on the emerging markets such as China, India, Russia and Middle East part, because these markets are anticipated 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 competes 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.



IMPACT ( chances & A ; menaces )



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

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

Relationship edifice with B2B

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

Constitution of new stuff managing company in north United States


Demand for fuel efficiency by consumers

Intense Competition

More demand for intercrossed electric vehicles

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



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

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.

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