Business and Entrepreneurship: Analysis of Electric Cars as a New Product for Toyota

This document provides an analysis of electric cars as a new product for Toyota in the field of business and entrepreneurship. It covers the mission and vision of the business, industry review, competitive analysis, segmentation analysis, and marketing mix analysis of electric cars.

Business and Entrepreneurship
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Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Mission and vision of the business..............................................................................................3
Industry review and macro and micro analysis............................................................................3
Competitive analysis and competitive advantages......................................................................5
Segmentation analysis..................................................................................................................6
Marketing mix analysis of electric cars.......................................................................................7
Market growth strategy for new product.....................................................................................8
Required resources and source of finance...................................................................................9
Risk analysis................................................................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11
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INTRODUCTION
Business entrepreneurship is the set of activities which an individual does for starting and
operating a business with the help of a business idea. In this project the chosen company is
Toyota and a new product for this project is Electric cars which also has the feature of solar
panel to make it more efficient and sustainable. In this project the rationale for launching of such
a business product missions and vision is explained. This project will also provide a review for
the industry of this product. This project will also make the competitor analysis by stating the
advantage this product will have over its competition. There will be a segment analysis of this
product which will determine the target customers of this product. In this project the marketing
mix and marketing strategy of this product will also be discussed. The source of finances for this
product will also be explained.
MAIN BODY
Mission and vision of the business
Toyota is an automotive manufacturing multinational company which is based is Japan.
This company has a great brand name all over the world. Cars manufactured by this company is
famous for its quality and design. The product this business will introduce is electronic car, not
just simple car that runs on electricity. This car will also have the feature of charging itself with
solar panel it will help. The mission of this product to make the customers understand the
advantages of using a car which used the sustainable energy source. The idea behind this product
is that it can create its own energy. Sources of energy which is used for vehicles is non-
renewable sources of energy which have bad effects on the environment and also is limited at
source (Boxwell, 2017). This product will use the energy source of sunlight with the help of solar
panel. Recently electric cars have been very innovative product in the market, adding solar
technology to electric cars will increase the effectiveness and make travelling places where there
are no charging station also very easy.
Industry review and macro and micro analysis
The global market for electric cars have increased a lot in the last couple of years. In
2019 this market was valued at $162.34 billion. According to some studies it has been found out
that this market will increase a lot and by 2027 its is projected to reach $802.81 billion (Singh,
2020). This shows the extreme potential this product has in the market. For the Micro analysis of
this product SWOT analysis is used in the following ways,
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Strength :
The biggest strength of this product of Toyota is that it will get the image benefit of
Toyota. The idea is sustainable and has great scope in the future as the world is shifting towards
the use of sustainable energy.
Weaknesses :
This product is the first of its type which creates uncertainty in its success. These solar
power cars will not be able to charge themselves at night although it can be charged on the
charging stations like the existing electric vehicles.
Opportunities :
Many countries are looking to decrease the pollution which is caused by the old cars
which use petrol and diesel. The electric cars also use electricity which is prepared with the help
of thermal power plants. For this market this product can make a huge difference.
Threats :
The threats of this product are other electric car producing companies like Tesla. The use
of this technology has not been seen before which makes a doubtful project (Noura and et.al.,
2018).
For the macro analysis of this product PESTLE analysis is used,
Political :
It depends on the international initiatives taken by the government which will, can effect
the manufacturing of this product. Generally ideas like this which have a great cause is supported
by the government.
Economical :
It is important for this idea to have economic stability in the country otherwise the sales
of this electric vehicle will not increase. This product will depend on the prices of both the
electric batteries and solar panel made for this vehicle.
Social :
The increase in the preference of renewable energy in the society will improve the
performance of this product in the market.
Technological :
Technology is improving every day, there are great chances for the technology to develop
that will make this product even more useful (Kasti, 2017).
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Legal :
Government frequently changes the regulation related to auto-mobiles, any regulation
against or in favour of this product can change the dynamics of the business.
Environmental :
The main motive of this product will be towards decrease the greenhouse gas emission
which happen due to auto-mobiles.
Competitive analysis and competitive advantages
Competition is the rivalry that happens between different companies which have similar
products and services. The analysis of the competition of this product of Toyota can be done
with the help of Porter's Five Forces model,
Competitive Rivalry :
The market for Toyota is very competitive. According to this force the Solar power
Electric Vehicle of Toyota will face competition from all the auto-mobiles companies and
specially those which are producing electric cars. There are small number of companies which
produce electric vehicle in the auto-mobile market. This product will have great competition
from the electric cars of Tesla which also have auto pilot feature (Khan and et.al., 2018).
Bargaining power of customers :
This product is unique in its feature due to which the customers which will desire this car
will not have strong bargaining power as other cars do not have the same feature. The cost of
switching for the customers of Toyota for this product will be high as this product will be using a
renewable source of energy.
Bargaining power of suppliers :
The suppliers of this company will be the companies which will develop the batteries and
solar panel which are essential for the vehicle design. The use of these supplies makes the
bargaining power of supplies strong but, the availability of this product in the market is very high
nowadays thus the company will not have to bear much switching cost.
Threat of substitutes :
The impact of substitutes on any business is very challenging. This product will be a
premium product and thus the customers which will buy this product and will not consider other
substitutes. Vehicles industry have a lot of substitutes making the switching cost of the customer
very low, such as public transport (Safdar and et.al.,2017).
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Threat of new entrants :
For establishment of a vehicle production plant it requires a lot of capital. This business
has a great brand name which will make it very hard for new business to enter the market. The
cost of brand development is also very high for a new business to enter this market.
This business will have many advantages as the competition of its business have not yet
developed the technology which this product possesses. The market of this product is very
difficult to enter for a new business. The bargaining power of its supplier is very low as there are
multiple producers of batteries and solar panel thus the company will not face any issues in
switching the suppliers.
Segmentation analysis
For understanding the market segment of this product of Toyota STP analysis is used,
Segmentation :
Segmentation is finding out the customers segment which the business can target for their
product. The segmentation of the market is done is various ways. For this product the customers
will be unique. First of all the customers which will buy this car will be medium to high society.
It is natural for the customers which take public transport for daily travelling to buy such a
product. The main customers for this product will be the people who are looking for electric
premium cars and also people who are looking for sustainable source of energy for their vehicles.
Target market :
The target customers of this company are the customer which are willing to spend more
in comparison to other vehicles. This company will also benefit from the fact that this vehicle
will be the first to use solar energy for the source of energy. Therefore, customers which like to
try new technologies will also be a target of this company.
Positioning :
This product will provide the customers a totally new experience which will provide both
sporting and luxury to the customers. Being an electric car which does not require charging will
create great scope for this business. This company can use this idea for making different types of
model on the basis of their usage (Riyadi , Joni and Ubaidillah, 2021).
The customers who will buy this product will be more those people who are very keen on
trying new technologies. As this product use renewable energy of sunlight the users will be able
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to travel long distances without worrying about the fuel cost and availability. Apart from them
the rich and loyal customers of Toyota company will also buy this product.
Marketing mix analysis of electric cars
Marketing mix is one of the best and effective marketing strategies that help buyers in
making purchasing decision regarding buying products as they can compare all elements of
marketing mix with other company’s products. As Toyota has developed a new idea and
according to this, it wants to sell electric vehicles that run by solar energy and it is environmental
friendly. 4P’s of this product or new product include:
Product: Electric vehicle that will run from solar energy is the new product that it wants
to sell to customers. Some characteristics of this new vehicle and product of Toyota include: eco-
friendly that can decrease carbon emission and pollution to the great extent, can save diesel for
the future generation, can save money of customers etc. All these features can attract customers
as they can run electric vehicle by charging it in sunlight or solar energy and such vehicles will
consists high power of battery.
Price: As this product is technological based and for that producers has used strong and
qualitative tools in it that are costly. It is the new business idea that has never being sold before
and can save money of customers. For attracting customers, company will use penetration
pricing strategy as per this at initial stage; it will sell its product at lower prices without adding
profit margin to the great extent (Donndelinger and Ferguson, 2020). After that as per the
demand and popularity it will pay higher than before for earning money and providing value to
customers. This pricing strategy will be the best as it can help Toyota in attracting customers
towards knowing all features of this vehicle and buying it.
Place: Toyota has numbers of physical stores from where people can buy product and
customers are allowed to know all features by visiting stores. It can also help customers in
making an effective buying decision. So, this product will be available or customers can buy it
from its all stores. They can gather information online by visiting Toyota’s official website
where it will provide detailed information regarding this new vehicle. So, it will be beneficial for
customers as they can save their time and by knowing and gathering information online, they can
take buying decision.
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Promotion: Promotion is one of the main key of success of business especially when
company wants to provide new product. Promotion includes all platforms via which company
can make customers aware about new products and can attract them for buying products. In this
regard, it is known that Toyota mainly focuses on online or digital promotion in which it makes
use of social media platforms and its official website. It is well-known company and customers
have trust on it. For this new vehicle it will focus on both face to face and social media
promotion in which, it will provide detailed information on social media platforms and will meet
customers face to face (Kumar and Alok, 2020).
So, on the basis of above discussed marketing mix elements, it can be said that it can easily
grab attention of target people and can increase sale.
Market growth strategy for new product
It is important for Toyota to become successful and grow in the market and it is possible only
when it makes use of an effective growth and development strategy. With the help of Ansoff
growth model it can identify the best and effective way of developing and growth in the market
such as:
Market penetration: It is the most used strategy of growth in which businesses focus on
increasing sales by providing existing products in an existing market. For becoming successful in
this strategy, companies need to focus on investing in promotional activities and to grab attention
of customers. For this company can decrease its prices for its existing products.
Product development: It is the growth strategy in which companies introduce new product
within an existing as their main focus is on product. In regard to Toyota, it can be said that it is
suitable strategy and for becoming successful, it needs to invest in research and development in
order to know needs of customers (Loredana, 2017). It can form strategic partnership with other
firms and by doing so; it can gain access to each partner’s distribution channel.
Market development: It is just opposite of product development as in this strategy; companies
enter into new market with their existing products in order to approach new customers and
increasing sales. For making this strategy successful, companies require to target customers as
per the type of product. By entering in domestic market as per the region and needs of customers,
it can increase sales.
Diversification: It is quite risky as in this type of strategy, companies enter in a new market with
new product and only those companies can be successful that have improved image in the
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market. Unique features in new product that can satisfy needs of customers and an effective use
of promotional channels can be the main key of success.
On the basis of above discussed all strategies, it can be said that as per the new business idea,
product development would be suitable and the best for Toyota as by entering into new market, it
should provide new vehicle in an existing market (Martins, 2020). It can help this company out
in increasing sales and becoming successful with the new business idea or product.
Required resources and source of finance
For this product the company will require different resources. For the production of this
type of vehicle the company needs to have special facility which will make vehicles of excellent
quality and also have workers on which the company can trust. This is a product that will be
available in the market for the first time so the company will need to protect its privacy. For the
development of an electric vehicle this company will need batteries and also solar panel which
will allow the vehicle to charge itself with the help of sunlight.
Major sources of finance for this product are,
Commercial Banks :
For the manufacturing of such an auto-mobile the company Toyota will require large
amount of capital that will help it in its operational activities of production. Commercial banks
can provide loan to this company and also cash credit. This source of finance has a term of
payment of instalment but the business can get lump sum money fairly quickly (Verclas, 2018).
Indigenous Bankers :
The company can also take personal loans from private money lenders rather than the
banks. The rate of interest of these loans is fairly higher that commercial banks but the company
can get quick money with less paper work.
Self-generated revenue :
Toyota has immense business in many countries and this company has been very
successful over the years therefore it will not be difficult for this company to develop capital for
this project. Although this process takes significant amount of time.
Risk analysis
For assessing the risks present in this product the triple risk model is used, In this model
different tools are stated for the analysation of risk. The Risk assessment of the electric vehicle
with solar energy is done as follows,
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Vulnerable Infant :
According to this section of this model the risks which this product possesses in the early
stages of its production is discussed. It can be said that for any new product which enters the
market. The beginning stage is the most risky as there are doubts in the success of the product.
The success of the product totally depends on whether its functions as the customers want it to
(Talamon and et.al., 2019).
Critical Development period :
This electric care after the coming into the market will face series of challenges. These
challenges will be a risky period for the product. This is the period when the company will make
changes in the product according to the tests. The risk which the product faces in this stage is
that it is a possibility that the idea of the company fails.
Exogenous Stressors :
After the production of a vehicle it faces the risk of external pressure. The external
pressure in this scenario will be the competitors of this product. The competitors of this product
will be the other electric car production company. Companies like Tesla can pose huge threat for
this product as their technological development is very strong and have the capacity of
challenging Toyota (Chachdi, Rahmouni and Aniba, 2017).
CONCLUSION
From the above study it has been summarized that marketing strategy plays a vital role in
promoting new products within market and attracting customers to the great extent. It has further
discussed reasons of targeting specific segments of people and ways as how it can help
companies in increasing sales. There are some internal and external environmental factors that
can affect productivity and successful product development. It has further shown different
growth and development strategies by which companies can take competitive advantages and
increase sales. Competitive analysis also plays a vital role as it makes companies able in
knowing the current status and intensity of competition and accordingly they can develop their
internal strategies.
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REFERENCES
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Boxwell, M., 2017. The Solar Electricity Handbook-2017 Edition: A simple, practical guide to
solar energy–designing and installing solar photovoltaic systems. Greenstream
Publishing.
Chachdi, A., Rahmouni, B. and Aniba, G., 2017. Socio-economic Analysis of Electric Vehicles
in Morocco. Energy Procedia. 141. pp.644-653.
Donndelinger, J.A. and Ferguson, S.M., 2020. Design for the marketing mix: The past, present,
and future of market-driven engineering design. Journal of Mechanical Design. 142(6).
Kasti, N.A., 2017. Ranges of applicability of a solar-battery car with single and double solar-
trailers. Solar Energy. 144. pp.619-628.
Khan, S., and et.al., 2018. A comprehensive review on solar powered electric vehicle charging
system. Smart Science. 6(1). pp.54-79.
Kumar, R.R. and Alok, K., 2020. Adoption of electric vehicle: A literature review and prospects
for sustainability. Journal of Cleaner Production. 253. p.119911.
Loredana, E.M., 2017. The use of Ansoff matrix in the field of business. Annals-Economy
Series, 2, pp.141-149.
Martins, A.M.A.R.D.L., 2020. Scenarios and Ansoff Matrix (Doctoral dissertation).
Noura, N., and et.al., 2018, August. Comparison of the energy consumption of a diesel car and
an electric car. In 2018 IEEE Vehicle Power and Propulsion Conference (VPPC) (pp. 1-
6). IEEE.
Riyadi, A., Joni, K. and Ubaidillah, A., 2021. Smart Electric Solar Car Application System
Based on Android. Procedia of Engineering and Life Science. 1(1).
Safdar, I., and et.al.,2017. Feasibility, emission and fuel requirement analysis of hybrid car
versus solar electric car: a comparative study. International Journal of Environmental
Science and Technology. 14(8). pp.1807-1818.
Talamon, A., and et.al., 2019. Global Solar Energy Trends and Potential of Building Sector In
Hungary. Interdisciplinary Description of Complex Systems: INDECS. 17(1-A). pp.51-
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Verclas, K., 2018. Electric vehicle and solar energy pilot: Opportunity to address suburban
energy challenges. The Electricity Journal. 31(6). pp.48-56.
Online
Singh., A, 2020.Electric vehicle market.[Online] Available trough:
<https://www.alliedmarketresearch.com/electric-vehicle-market>
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