In Depth Analysis Of The Toyota Motor Corporation Marketing Essay

In Depth depth psychology Of The Toyota repulse Corporation Marketing EssayThe briny produces for the company ar catego leap outd into three segments they argon automobile, finance and ho victimisation dialogue system. The heart and soul business was automobile segment eng festers in the design, prevarications and sales that includes a gondola elevator car smaller than a compact car to luxury and sport fomites, as well as trucks, SUVs, b uptakes and minivans. Additionally Toyota produces automotive move and accessories for its own use and for sale to other(a)s. Popular models include Land cruiser, Lexus line, Camry (best selling passenger car in the States, 2004) and Corolla as well as the Tundra (Motor trends truck of the year, 2000).Toyota annual sales approximately reaches 7.5 million models on all louvre continents (America, Europe, Asia, Africa and Australia) in which the main merchandises for some(prenominal) Toyota and Lexus brand vehicle is the United States, followed by japan. The other highest markets atomic number 18as be U.K, China, Australia, Canada, Ger legion(predicate), Thailand, Saudi Arabia and the S placeh Africa. In all, Toyota markets vehicles are much than 170 countries/regions.The planetary main contentions for Toyota are VW group, General Motors, Renault Nissan, Hyundai Kia and Ford. As shown in the appendix1 during the year 2008 Toyota dominates the international light vehicle sales with the highest market share of 14% by overtaking the main rivals like GM and Hyundai Kia in the midst of recession, or else booms the put on. But the position among the competitors convinced drastically in the year 2009.The fiscal abridgment of Toyota for the year 2009 is tabled as follows.(Billions of yen)The financial report clearly shows that during the year 2009 Toyota do a net loss of 437 billion ($ 4.3 billion) that never happened from the past 1950. It happens callable to the worst sales, when company could non sell up to that volume in which that company take out its comprise which related to proceeds and sales. Whilst Toyotas president, fuji cherry Cho openly avowed in the year 2002, that Toyota is aiming for 15% of the global market share by 2010 accommodating itself with the bran- red-hot global vision named as Innovation into the Future. The new theme (vision) consists of four elements they are recycling base society, exploitation of motorization on a global sale, diverse society, and age of information engine room. Hence with the severe aspiration Toyota continues an effortful attempt to pro commensu graze a goal outlined in the Global Vision 2010 by increasing its competitiveness. abridgment OF THE CURRENT BUSINESS ENVIRONMENT AFFECTING THE motorcar INDUSTRY consort to Johnson scholes (1999), antithetic steps to be followed in environmental depth psychology for finding the strategic position of the organisation they are 1) Assessing the personality of environment, 2) Auditing environmental influences, 3) identifying fall upon competitive forces, 4) identifying competitive position and finally identifying the see opportunities curses.The external environment, as a determined element remain a topic of interest in counseling literature (Joshi and Campbell 2003 Nahm et al., 2003). Hence, a difference relationship between environment and manufacturing strategy is complex for organisation to happen upon success (skinner, 1969 Hayes and Wheelwright, 1984). On the other hand Pagell and Krause (1999,2004) argued that manufacturing flexibility is a global event in high performance organisation disregarding of the environment they operate in. However, it is difficult to handle environmental uncertainty (complex) by depending only on primary analysis which is derived from the output of diversity ensuring that different parts of firms responsible for different aspects of diversity are unattached, and given resources and allowance to handle their own part of the environment (Johnson and Scholes 1999).Considering the above factors the analysis of Toyota Motor Corporation in the automobile exertion is carried out with help of analytic tool kit much(prenominal) as PESTLE and FIVE FORCES.PESTEL ANALYSISAs shown in the Appendix-II PESTEL analysis for Toyota Automobile Industry is done with appraise to the geographical locations of U.S and Japan. The most racy factors from the analysis have been taken and set forth below to find the current opportunities and threats of the company.The automotive diligence is hooked to diverse government prudences including those related to vehicle safety and environmental issues such(prenominal)(prenominal) as emission levels, fuel economy, noise and pollution. Many governments similarly impose tariffs and other trade barriers, taxes and levies, and enact price or exchange controls. Toyota has incurred and expects to incur in future day, significant costs in complying with these regulations. New statute law also proceeds Toyota to additional expenses in future. As an automotive manufacturer, Toyota whitethorn became progeny to judicial proceedings in respect of various issues, including liability and infringement of mind property and Toyota is in fact currently subject to a be of pending legal proceedings could adversely usurp Toyotas future financial nail down and dissolvents of consummations.Toyota is subject to various risks associated with conducting business ecumenic. These risks include political and scotch instability, instinctive calamities, fuel shortages, interruption in transportation system, wars, terrorism, prod strikes and dig stoppages. The occurrence of any of these events in major(ip) markets in which Toyota purchases materials, parts and components and suppliers for the manufacture of its products or in which its products are produced, distributed or sold, whitethorn results in disruptions and delays in Toyotas business operation may adverse ly affect Toyotas financial condition and result of operation.The worldwide financial work industry is extremely competitive. change magnitude competition in automobile financing may lead to decrease margins. A decline in Toyotas vehicle unit sales and equipoise in value risk collectable to lower utilize vehicle price ontogenesis in the ratio of credit losses and change magnitude funding costs are factors which may impact Toyotas financial operations. The likelihood of these factors materializing has cast upd as a result of the ongoing rapid worldwide sparing deterioration and competition in automobile financing has intensified. If Toyota is inefficient to adequately respond to the changes and competition in automobile financing, Toyotas financial services operations may adversely affect its financial condition and result of operations.Increase in prices for raw materials that Toyota and Toyotas suppliers use in manufacturing their products or parts and components such a s steel, precious metals, non-ferrous alloys including aluminium and plastic parts may lead to higher production costs for parts and components. This could in turn negatively impact Toyotas future profitability because Toyota may not be able to pass all those costs to clients or require its suppliers to obsorb such costs.PORTERS FIVE FORCESMichael Porter identified five forces that affect an industry. These forces are period of controversy, threat of substitutes, barriers to entry, buyer tycoon, and supplier power. For the more on this framework proposed by porter, see Appendix. Viewing the automotive industry by dint of the framework of porters five forces can be helpful in understanding the forces at play. layer of RivalryThe automotive industry is highly competitive with Big 3 such as GM, Ford and Daimler Chrysler. In the 1980s the Toyota entered a fairly disciplined U.S market and have been very focused in maturation their shares of the market. The great diversity of rival s in terms of cultures and philosophies has intensified rivalry in the Industry. Market growth is slow in the established markets of U.S and Europe, and companies must stir up fiercely to eke out gains or prevent losses in market share. However, growth is potentially long in the rapidly industrializing nations of China and India. In these booming markets Toyota could take advantage of the opportunities to reap handsome awards. The degree of rivalry in the automotive industry is further heightened by fixed costs associated with manufacturing cars and the low switching costs for consumers when buying different makes and models.Threat of SubstitutesThe threat of substitutes to the automobile industry is fairly mild. Numerous other forms of transportation are available, but none offer the utility, convenience, independence, and value afforded by automobiles. However there are inherent underlying social and cultural attitudes that keep peck from owning automobiles in some parts of th e world.Barriers to EntryThe barriers to enter the automobile industry are substantial. For a new company, the start-up capital required to establish manufacturing readiness to achieve minimum efficient scale is prohibitive. An automotive industry is sooner specialized and in the event of failure could not be intimately re-tooled.Buyer PowerIn the relationship between the Toyota and its ultimate consumers, purchasers of sunk vehicles, the power axis is tipped in the consumers favour. Consumers wield the greatest power in this relationship due to the fairly standardised nature of the vehicle and the low switching costs associated with selecting from among competing brands. However, Toyota remains marginally powerful due to large customer to produce ratio.The automotive industry is a propellent place. With the forces above at play, and with history as a guide, it is safe to gentle that the Toyota must continue to change, evolve and adapt.OPPORTUNITIESIncreasing subscribe to for Hybrid Vehiclesglobally it is estimated that the demand for cross electric vehicles(HEVs) will be approximately 4 million units by 2015. ascension oil price and more emissions regulation are plausibly to increase the demand for HEVs, as interbreeding vehicles are less polluting and less operating cost (more fuel efficient) when studyd to conventional diesel motor and gasoline engine, Toyota industries has stiff focus on devices for plug-in hybrid vehicles. The companys viency on hybrid technology is likely to taunt growth in the speciality term. innovation of New Material Handling In north AmericaToyota is formulating a program to expand its material discussion equipment in North America. In this context, in March 2010, Toyota industries determined to create a saucily owned sub-subsidiary, Toyota material handling North America (TMHNA).Previously, both Toyota and Raymond used to closely work to line upher to boost business efficiencies in the areas of manufacturing, tim bre and procurement. Though, TMHNA has officially created to integrate precaution and operational activities in North America. Establishment of TMHNA would enhance the regional co-ordination and increase the performance of the material handling equipments products of Toyota industries.development Opportunities in E get together Automotive ProductsToyota is now concentrating on the new markets such as India, China, Russia and Middle East region seeing that these markets are judge to view a strong growth in the future. In addition, Toyota also bequeaths automotive logistic services. The company, with powerful automotive business operations, would be assisted by the growing vehicle demand in these emergent markets.THREATSKyoto protocolThe Kyoto protocol for the lessening of carbon emission went into effect in 2005, which results on alter countries to cut-down their green dwelling house gas emission from the 1990 level by 5.2% by an average level during 2008-2012. Consequently, T oyota appointed the prevention of global melting as one of its strategic management issue and concentrate on measures to reduce global warming, which lead to increase in the cost expression of the company drastically.Intense competitorToyota is involved in competition with many automobile companies at home and abroad. Any differences in the allocation of management resources and in competitiveness of cost or technology are likely to impact the companys status in the automobile industry and its business performance. Toyota industries compete with the competitors having large volumes of business and greater financial resources than those of the company. High level of competition in the market place could affect Toyota business operation and could fuss in market share.Exchange rate FluctuationToyota industries encompass the production and sales of products and the provision of services worldwide. Toyota is sensitive to the fluctuations in foreign cash exchange rates and is princip ally exposed to fluctuations in the value of the Japanese Yen, the U.S Dollar and the Euro. In the recent Japanese Yen appreciated significantly against the U.S Dollar. The strengthening of the Japanese Yen against the U.S Dollar can have a material adverse effect on Toyota Industries reported operating results, which may in turn affect the valuation of the company.ANALYSIS OF THE TOYOTA STRATEGIC CAPABILITIESAccording to Haberberg and Riepel (2008) capabilities are things that customers and other stakeholders notice when they are dealing with an organisation. Hence it is vital to identify the capabilities of Toyota, which is carried out with the frame work of resource based analysis (appendix- ) and value scope analysis. repute Chain AnalysisOne key program is called value stream mapping, an analysis tool the automaker has been using to improve assembly line productivity is supply chain. Toyota manages the supply chain so efficiently that its production process is near perfect an d it merely known as TPS (Toyota Production System), which developed by Toyota to deliver more effectively the products which their customers require, in a timelier manner than traditional management approaches. The odd management system of Toyota made a different relation with the suppliers when compare to other competitors, they areFrequent and reliable deliveries from suppliersQuality parts niggling lot sizeSupplier ne devilrkCommunication with suppliersProximity to the customers whiz sourcingLong-term contractSupplier trainingReduced lead time.Toyota is not asking suppliers to reduce price and profit instead, to find a modality to minimise cost without having any negative impact on customer value. The present situation is Toyotas ability in developing the TPS and in integration the policies and practises of their own that is the extension of internal indemnity deployment through their supplier acquaintance into the supplier web and the active co-ordination and development of suppliers, directly and indirectly through the widespread application of the Toyota production system.Resource Audit Resources of Rolls Royce can be grouped under then following four headings they are tangible resources, Human Resources, pecuniary resources and Intangibles.STRENGTHRobust RD CapabilitiesToyota industries actively carry out its research and development activities. Its RD activities can be broadly divide into two areas product development and improvements performed independently within each business sectionalization and RD undertaken in the main by the RD centre separate from the activities of its business division and with a view toward company wide- management strategy.Strong RD capabilities helps the company to keep up with the latest technological developments in the market and also helps in developing new products and technologies, and then contributing to the rapid growth of the company.Strong design science CapabilitiesThe company has strong engineeri ng capabilities, for instance the Toyota is extending its product portfolio to include hybrid engines and hybrid vehicles. The company also manufactures electric compressor for hybrid vehicles. The companys strong engineering capabilities allow expanding its product portfolio.WEAKNESSOverdependence on JapanA Toyota industry is highly dependent on the Japanese market for its revenues. This overdependence on Japan could have a dampening effect on the companys revenues if the companys sales in Japan do not grow as anticipate. Addition to this the absorption of operation in this area increases Toyota industries exposure to country specific factors such as changes in raw material prices, labour strikes, changes in economic conditions, and most important increasing competition price from low-priced products. evaluation of Possible Future Strategies for the TOYOTAAfter scanning the environment, performing the SWOT analysis, that showed a failing in Toyota may at the same time huge oppor tunities. Now we need to know how to use this opportunities to overcome the threats, minimise the weakness and maximise the strength.Toyotas success is largely based on its forward-thinking, innovative management style and its rigorous standards of quality. The Toyota production system is much-studied strategy of design and manufacturing which emphasizes streamlining and liquidation of waste giving rise to the Just in Time and tippytoe manufacturing movements and continuous error checking and improvement. In addition, Toyota has repeatedly been ahead of the trend in seating new technologies. Instead of direction on reducing labour costs, Toyota has increasingly automated their production facilities. And with the release of the Prius in 1997, Toyota introduced the first mainstream hybrid vehicle, cashing in on the demand for fuel economy and reduced environmental impact. Like the Prius, the section line successfully addressed a new consumer sector, a plan that Toyota will conti nue to follow. These strategies combine to give Toyota a significant sustainable competitive advantage.In order to realize the motion picture that Toyota is striving to achieve it is important to undertake a paradigm change from the following three perspectives they are are technology development, management and profit structuresAcquisition of a CompetitorAcquisition of competitor is known as improvement strategy of expanding its core business. The acquisition will lead to rise in market share (barney and Hesterly, 2010) for Toyota through market penetration, market development and market expansion, if the acquire company is operating in more and different emerging markets. This form of acquisition is called horizontal integration and would lead to an increase in market share and decrease in competition. Toyota to exploit the merging market such as India and China it should acquire the existing competitor so that it is easily strengthen the market position and open new opportunitie s for competitive advantageNew Strategic CapabilitiesThere are strong competitors for Toyota in the technology, marketing and manufacturing. Therefore to reduce the intensity of rival among the major players, Toyota can look into joint venture strategy to capture the emerging markets such as China, India and Russia.Implementation of Strategic ChangeSurviving to highly competitive rapidly changing environment often requires firms to develop strategies that provide the right kind of flexibility to succeed their specific environments, thus achieving fit between the type of flexibility to succeed in their specific environments, thus achieving fit between the type of flexibility pursued and the demand placed by the environment.NegotiatingNegotiation should be there to understand the demand of both buyer and seller and these has a significant impact as the negotiations turn out and implementation begins.ImplementationImplementation is the critical part for the leadership and communicati on to execute the change management. The changes that should be made for merging should be plan in detail because there are many issues that are expected with acquisition such as integration challenges, culture, control system, financial operation and loss of key personal (Thompson, 2001). In order to overtake these problems Toyota has to do a proper planning and research before the implementation to get the positive outcome.ConclusionThe product developments are in increasing nature because of the emerging new markets and the technological factor is adding value to the company focusing for the next generation, hence I personally recommend on investor to invest with ToyotaAPPENDIX-II PESTEL ANALYSISFACTORSIMPACT(opportunities threats)TIME SCALEPOLITICALPolitical instabilities, fuel shortages, natural calamities, wars, terrorism and labour strikesArab oil embargo turned fuel economy into an important automobile policy goal for the U.S government.The occurrences of any of these even ts will results in disruption and delays in operation. Prolonged disruption may adversely affect the financial conditions of ToyotaToyota Government relation are 1, Reliance on backing association 2, Personalized network and 3, emphasis on harmony.Changes in legislation ceaselessprocessEvery 5 yearsECONOMICALFinancial crisis that began in 2007 and accompanying sharp declaration of vehicle sales during 2008 safe challenges for all automakers.Energy crisis.Rise in price of gasoline.Exchange rate fluctuation with respect to DollarEstablishment of new material handling company in north America which will limit the cost of exporting the vehicle to USAlternative energy efficiency technology and more investment in RDBig cars got smaller, small cars got better pack down demand for big, expensive cars, and pilled in capital from Japan and elsewhere, which helped drive up the dollarIn March 2010ContinuousContinuousContinuousSOCIALDemand for fuel efficiency by consumersIntense CompetitionMo re demand for hybrid electric vehiclesResulted in more choices for buyers and curious opportunities in emerging marketEstimated within 2015.ContinuousTECHNOLOGYRising energy cost and increased emissions regulation are likely to increase the demand for hybrid vehicles.Toyota industries has strong focus on hybrid vehiclesDemand to reach within next five years.ENVIRONMENTALKyoto protocolThe growth of government regulation for vehicle safety and emissions.Reduction of green house by 14% from the 1990 level within 20124yearsLEGALToyota may became subject to various legal proceedings in respect of various issues, including product liability and infringement of legal property, and Toyota in fact currently subject to a number of pending legal problemsAdversely affect the Toyotas future financial condition and results of operationContinuousNOTE Analysis mainly based on the Japan and US geographic locationAppendix-III Porters cardinal Force ModelNew entrantsIndustry CompetitorsIntensity of RivalryBuyersSuppliersSubstitutesAppendix-IV Value Chain AnalysisReliance on Business association (internationalization)-well connected to each other and with politicians and bureaucrats.Personalized network- The use of personalized /informal network for political influence and mobilization in Japan is a more visible and frequent activity than in many other industrialized countries.Emphasis on harmony- strong emphasis on harmony among firms and policy makers.