Strategic Analysis of Toyota Motor

Category: Outsourcing, Toyota
Last Updated: 07 Jul 2020
Essay type: Analysis
Pages: 4 Views: 138

According to Toyota (2010) the business came into existence in 1935 by Kiichiro Toyoda. Mr. Kiichiro made intensive efforts to develop a gasoline powered engine and traveled in Europe and United States to understand the key business operations. Through his great efforts he finally developed a prototype of A1 passenger car and G1 truck. Toyota logo was designed in 1936 and finally in 1937 the business was established as Toyota Motor Corporation Limited. In 1947 the company further expanded into the manufacturing of BM, SB trucks and SA passenger cars.

In 1957 the firm expanded in USA and established its first manufacturing facility in 1972 in USA. In 1989 the business introduced Lexus and just after 10 years it got listed in NYSE. Later on Scion, Hybrid cars, Tundra and Highlander were also introduced. Today the business performs in four different dimensions comprising of Cars, Trucks, SUVs & Van and Hybrids. Some of its world class brands include Corolla, Camry, Prius, Land Cruiser, Tundra, Highlander and many more. Other than this, the business portfolio comprises of Biotechnology, Robotics and Financial Services. The head office is located in Toyota City, Aichi, Japan.

Currently more than 308, 000 employees are working for Toyota Worldwide. The revenue for the year 2010 accounts for JPY 18, 950, 973 million. Strategic analysis of Toyota Motor Corporation: Target Market: According to Bruner et al. , (2008) the corporation operates across the globe. Four major markets include Europe, the America, Africa and Asia and Oceania. According to one of the research, its different brands are sold in 170 different countries of the world. Currently there are 52 different manufacturing facilities in 27 countries. Moreover the design and R&D (research and development) facility exists in 7 overseas facility.

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Majority of the potential customers are located in North America (USA), Belgium (Europe), Thailand and Singapore (Southeast Asia). These regions are considered as most quickly developing economies and the purchasing power of parity also seems sustainable. Prior to this USA and Europe were the most potential markets for automobiles however the recent demand from Southeast Asia has shown an increasing trend. More importantly one of the facts reveals that the head office is located in Japan and the business understands the needs and wants of Asian customers profoundly and continuously performs to satisfy the value requirements.

According to the advertising team, the target market of ‘Scion’ is considered as urban population. The research team extensively conducted research with Generation ‘Y’ and studied the minds, hearts and desires of potential customers. The findings reveal that the specific segment reflects individualism with more preference towards diversity which cannot be seen in any other generation. Therefore the business came up with personalized option. Generation ‘Y’ accounts for 25% of the light vehicle target market of Toyota and it is assumed that it will increase to 40% till 2020.

In a broader scope the target market of Scion is considered as youth between 18-30 years of age having average income in between $30,000-$50,000. Another well known brands ‘Lexus’ has repositioned itself in the luxurious market segment and the customer satisfaction accounts for more than 85%. It is a male dominated brand. In 2005 the research team interviewed few individuals having assets of the worth of $5 million minimum and considered them as potential market for the brand. The target market mainly comprises of customers with age factor of 35 years and more and income starts from $65,000.

The target market of Toyota car starts from 25 years of age and the income starts from $40,000. Core competencies: The company owns assortments of core competencies which can be used to gain competitive edge over major competitors. Recently the corporation has outshined GM (General Motors) and gained the market leadership position in the automobile industry. Some of the key factors are as follows: •    Most important competency is brand management where the corporate name is easily recognized even in those areas where cars are not considered the mode of transportation.

•    It has streamlined the supply chain. The business owns in-house production system while establishing its plants all over the world in order to attain economies of scales. Toyota has build alliance with key suppliers of plastic, glass and others prominent suppliers of raw material. It continuously focuses on building long-term relationship with its customers. The entire logistic is outsourced which results into outclass inventory management, time management, project management and wastage has reduced. •    The entire assembly line provides flexibility and customization options.

Toyota mass production system saves time and cost. •    The business has installed its own product-information management program which facilitates in product development programs. •    Sustainable development is always considered as important part in attaining corporate goals and periodic objectives. The business considers both social cost and financial cost as important parts. •    It has further strengthened the performance by focusing on key strategy of localization and globalization. It has expanded very quickly across different parts of the world.

•    Recently the business introduced the concept of CCC21 (construction of cost competitiveness for the 21st century) which is consistently performing to reduce cost by 30% while providing the superior quality and customer service. It has implemented a global business which specifically differentiates its business operations from those of competitors. Sage Publications (2009) instigated that Toyota has clearly established the brand image that provides quality service which last for longer time and no other competitor can claim the value proposition.

For three consecutive years the business has continuously received 11 segments awards out of 199 different segments. More importantly Toyota provides same quality brand across the globe and has established certain quality standards which are strictly followed. One of the recent introductions of Prius reflects a break-through technology which further contributes towards green provisions and sustainable development. Furthermore the top management believes in Kaizen (continuous improvement) which is applied across different functional units to attain quality management as an integral part of the system.

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Strategic Analysis of Toyota Motor. (2018, Aug 14). Retrieved from

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