Literature Review and Analysis of Strategic Management

The provided assignment requires a detailed analysis of various literature sources related to strategic management. It involves identifying and explaining essential concepts, theories, and frameworks in the field. The review encompasses multiple books and articles from renowned authors and researchers, covering topics such as dynamic capability, resource-based theory, and strategic perspectives on corporate sustainability management. Additionally, it includes PESTLE analysis and a discussion of key research studies in strategic management. The assignment aims to provide an in-depth understanding of strategic management concepts and their applications across different industries and fields.

Strategic Management

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Strategic direction followed by the organisation in past........................................................1
TASK 2............................................................................................................................................3
Detailed analysis of industry..................................................................................................3
TASK 3............................................................................................................................................6
Internal analysis of organisation.............................................................................................6
TASK 4............................................................................................................................................8
Strategic choice model to sustain competitive position of the company................................8
TASK 5..........................................................................................................................................11
Resource implication of the selected strategy......................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Strategic management refer to activity conducted by administration to formulate goals
and objectives which are used to design system. It is essential that management of each and
every organisation frame vision and mission statement which define information about outcomes
to position firm requires to be in future time. For this, internal and external environment are
acknowledged by company to make initiatives for expanding, diversifying and growth of
business (Morden, 2016). Present report is based on Toyota, is automotive firm which provide
commercial vehicles, automobiles, engines and luxury cars to people. It is multinational firm
which has branches in different countries to have large customer base and market reach to
enhance sales volume and profitability. Along this, company also provides banking, financing
and leasing services to customers. This assignment defines different types of strategies which are
used by firm in past. Management asses internal and external environment to make changes in
system and enlarge business for growth purpose. Along this, competitive forces are also analysed
by top personnel to select appropriate strategic choice models.
TASK 1
Strategic direction followed by the organisation in past
Strategic management refers to the process of utilising all the resources in effective
manner for achieving goals and objectives. Under this, top management of the organisation
makes effective strategies for the purpose of business growth and development. It is the
responsibility of the to analyse internal as well as external environment in order to identify the
modification area. Strategic management is considered as the continuous process which helps the
organisation to appraise its market position. In relation with Toyota, this organisation is opting
various strategies in order to compete its competitors and grab desired position across world. It
is multinational automotive manufacturing company of Japan which manufactures 10 million
vehicles every year and serves all over the world. Business of Toyota includes vehicles, car
compressors, engines, car electronic element, textile machinery and material handling equipment
(Bryce, 2017).
Toyota have used various schools of strategies in the past years that have supported
organisation in setting their desired objective for success at market place. Mintzbergs have given
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various school of thoughts which helps the managers in formulating their strategies for achieving
business goal and objective. Some of them are evaluated as below:
The Planning school: In this, top management of the organisation makes complete plan
from starting to end. In addition to this proper document is formulated which will help the
business manager in future decision making process and also provides clear direction for
business growth.
The cognitive school: This thought states that business can grow in smooth manner by
understanding the needs and wants of the customers. In context to Toyota, its manager have to
concentrate on the perception and thoughts of the customers in order to understand their
requirements. This organisation can take advantage of this thought by introducing new products
according to customers wants (Frynasand Mellahi, 2015).
The learning school: In this, management of the organisation observes its previous
strategies and the strategies of its competitors in order to understand most effective one. While
formulating strategies manager of Toyota should go through the past strategies and analyse it
outcome. As a result non profitable strategies will not be implemented in future. This
organization have formulated its past five year strategies on the basis of observance and learning
of its previous strategies and other strategies of competitors.
The environmental school: This school of thought more emphasize on the environment.
Management team of Toyota should concentrate nature in their strategies formulation process. It
also depends upon the situation as it environmental factors are involved in decision making.
Toyota should more more emphasize on introducing produce at market place to attract more
number of customers (Barney, 2012).
Strategic direction of company developed within five year
In the previous years Toyota have opted various strategies which have helped in
increasing in its market value worldwide. These strategies were based on several principles
which are introducing environmental friendly cars. Its another principal emphasize on
manufacturing products with high quality that will satisfy the needs of customers. In addition to
this, Toyota will always produce new and innovative designing of the car to meet customer
requirement. .
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TASK 2
Detailed analysis of industry
Every sector have large number of firms which are conducting business to provide
products and services to people and generate adequate profit from business. It is necessary that
strategic decisions are made by organisation to gain competitive edge and utilise future
opportunities. Top personnel of Toyota require to make changes in system and establish
competitive advantage to position firm superior than rival brands. For this, examination of
external environment, competitive analysis and industry scenarios are ascertained by
management to make system function effectively (Godoy and Naidich, 2012).
PESTEL analysis of Toyota: This is an imperative tool which is used by administration
to have accurate and complete information about market conditions. It is necessary that
management asses macro factors to make appropriate decisions and judgements which are
beneficial for company's performance are stated beneath (PESTLE Analysis, 2011):
(Source: PESTEL ANALYSIS, 2018)
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Illustration 1: PESTEL Analysis

Political factors: This tactic define rules and regulations which are formulates by
government to regulate and make organisation function legally. Along this, authorities formulate
framework which comprises trading policies, political trends, structure funding grant and
initiatives to promote and support firms to conduct operations and help them in development of
country. Toyota is conducting business globally which define that management require to frame
strategies and policies in according to government (Langston and Lauge-Kristensen, 2013).
Company provides different range of products to protect themselves from political inferences.
Government policies and bank functioning affect on capital availability and business operations.
Along this, management require political stability to survive in long run. British government
taxation policies and changes in petrol prices affect on buying power of people which result in
decline of sales volume.
Economic factors: This aspect includes components which depend upon conditions of
country which never remain static and fluctuates with time. Interest rate, inflation, exchange rate,
growth and tax are various tactics which are framed by authorities to regulate functioning of
firms. Economy of UK doesn't have recession which define that people have sufficient money to
purchase products and fulfil their demands and needs. But, country still have issue about poverty,
labour forces and changes in inflation rate which influence on business activities of Toyota.
Social factors: This tactic define that organisation require to provide products and
services in according to requirements and demands of people. For this, market research and
survey are conducted by management to acknowledge choices and needs of public. This help
Toyota to provide vehicles in according to choices and demands of people. For this, company
provides luxury and innovative vehicles to people for giving them facility to travel from one
place to another (Jenkins and Williamson, 2015).
Technological factors: This aspect define that management require to implement
appropriate tools and equipments in system to provide adequate products and services to people.
In present time, when there are advancements and development in technology help management
to provide high-tech and creative items to customers. Toyota require to provide environment
friendly vehicles which have appropriate technologies implemented in car. It is necessary that
buyer get safety, comfort and other facilities in vehicle.
Environmental factors: It is another tactic which specifies that organisation require to
use appropriate technologies and produce products by using resources efficiently. Toyota is auto
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mobile firm which manufacture and design vehicle in such manner that they are environment
friendly and don't emit harmful gases in air.
Legal factors: This aspect define government laws and act which are formulated by
government for protecting and security of rights of members. Equality, discrimination, health
and safety are various act which management of Toyota require to consider while providing
duties and tasks to members. This help company to have skilled and competent members which
provide quality products to people (McKiernan, 2017).
Competitive analysis of Toyota – Porters Generic model is used by management of
Toyota to acknowledge market scope and its competitive position in market to frame appropriate
strategies for business. Cost leadership: This strategy is used by organisation which require to provide products
at low prices in respect to rival firm in sector. For this, management responsibility is to
use appropriate technologies, have adequate material and acknowledge sources to
establish cost advantage. Differentiation : It is another strategy which firms uses to provide unique items and
services which are distinct from rival brands. For this, management of Toyota require to
design and implement technologies in vehicle. Along this, company execute attributes
This help firm to attract large number of people to enhance their sales volume and
profitability (Baumgartne rand Rauter, 2017). Focus: This strategy define that companies have target segment for which they set prices
to become cost advantage firm. Besides this, management even find target customer's
demand and choices to design product and implement appropriate attributes and features
in items accordingly. Toyota which is auto mobile firm have manufactured cars and have
variety of vehicles in respect to income and choices of people.
Possible industry scenarios faced by Toyota in existing market domain - Globalisation and consolidation of Platforms: Toyota is a famous and leading auto
mobile firm which is conducting business globally. For this, management require to have
sufficient resources to conduct and operate branches in different nation.
 Increasing competition: Toyota have large number of rival firms which provide
aerodynamic and variety of vehicles to people. This impact on sales and profit of
company (Hitt, Ireland and Hoskisson, 2012).
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TASK 3
Internal analysis of organisation
Internal analysis involves the various factors within the organisation which have
influence over the business growth. SWOT analysis is beneficial for the organisation to
understand their internal strengths and the available opportunities which are available outside.
SWOT includes strengths , weaknesses, opportunities and threats of the organisation.
Strengths
 Toyota concentrates on research and development department to understand the market
scenario. This helps the business organisation manufacturing innovative products for its
customers and also popularise the brand at market place (Hill, Jones and Schilling, 2014).
 This organisation is most valuable brand worldwide. Apart from this, its brand
recognition is very high which reflect the popularity of the brand in its customers range.
 Toyota provides high quality vehicle to its customers at nominal cost. Toyota Production
System is the manufacturing system of Toyota which follows just in time concept. In this
major focus of this system is on eliminating wasteful activities in order to reduce the
production cost. As a result it reduces the cost of products and also improve the
productivity.
 Toyota owns global supply chain at its products are available at various outlets,
manufacturing factories, and branch offices in different countries. It is considered as the
biggest strength of this organisation (Ginter, Duncan and Swayne, 2018).
Weakness
 Toyota has its supplier across the world. This organisation highly dependent on its
supplier which affects the productivity of goods and services.
 This organisation is not successful in capturing the market according to its products and
services. Toyota have introduced environmental friendly vehicles at market place but its
marketing team is not able grab targeted market yet.
Opportunities
 This organisation can target the customers of developing countries as income of people is
increasing which will attract the customers to buy car (Dezsö and Ross, 2012).
 Toyota should more concentrate on its green vehicle technology. According to its
benefits it will attract the customers in huge number.
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 This organisation should introduce new products and service in other sectors also. As this
brand already own good brand name and it will be easier to gain the customers attention
in new products.
Threats
 Increasing number of competitors are becoming major threat for this organisation as they
are offering similar kind of products. Competitor of Toyota are Volkswagen, Hyundai,
Ford etc. which own good brand image at market place (Wheelen and et. al., 2017).
 Increasing cost of raw materials is directly affecting the price of final product. It reduces
the customers influence over this brand as product cost is increasing.
Vision and mission
Mission of Toyota is to attract the customers by providing them high valued products and
services across the world. In addition to this, its mission also include enhance the posit8ive
experiences of the customer in terms of satisfaction level. Vision statement of Toyota is to grab
the position of successful and honoured automobile organisation in the world. Therefore, mission
and vision of the organisation support the management team in formulating strategies and plans
according the situation. It also guides the manager in decision making process for the business
growth and profitability (Gamble,Thompson and Peteraf, 2013).
Strategic capabilities
Strategic capabilities is concerned as the resources, skills and capacity that supports the
organisation in increasing competitive advantage for long term benefits. In relation with the
Toyota, this organisation have concentrating on providing green vehicle technology to its
customer’s which is not affecting the environment. These vehicles are population free and does
not harm any of the natural resources which attracts large the customers towards this
organisation. Apart from this, Toyota production system is the manufacturing unit of the firm
which follows the just in time strategy for eliminating wasteful activities in production
department and minimises the costing of each product. These strategic capabilities of the Toyota
increases the brand recognition and helps the manager in achieving goals and objectives. This
also helps the organisation in increasing its competitive benefit for long run (Priem ,Li and Carr,
2012).
Business canvas model
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Business canvas model is single page chart which reflects strategic management for
existing or new business models. This chart includes various elements like infrastructure,
products value, finances and customer’s. This model was introduced by Alexander osterwalder.
It supports the organisations formulating their business activities in proper sequence by
providing approximate figure of their trade.
Toyota is one of the best automobile manufacturer across the world. This organisation
has been ranked within the top three automobile company worldwide. Toyota follows the
business model in the from of low cost (Vogel and Güttel, 2013). It has adapted the differentiated
strategy to grab the attention of targeted customers. “ Moving Forward” is one among the most
popular statement of Toyota which reflects the management planning for achieving future
business goal. In 2000, new cost effective strategy named as CCC21(construction of cost
competitiveness for the 21st century) was launched by this organisation reducing the operational
cost. This strategy have differentiate it from its competitors.
TASK 4
Strategic choice model to sustain competitive position of the company
Organisation are present in environment which is dynamic and changes with time. It is
essential that management formulate policies and implement appropriate tools and equipments in
system to conduct operations effectively. Top personnel of Toyota design system and establish
competitive advantage in respect to rival firm to sustain its position and share in market. Ansoff
matrix is used by management to conduct strategic planning and formulate efficient strategies
which are beneficial for company's performance in market in respect to competitors (Morden,
2016).
Ansoff matrix: This model is used by management of Toyota to have information about
market which help company to have knowledge about expanding business either increasing
variety of products or market reach to have large customer base and sales volume.
Market penetration: In this strategy major concentration of the organisation is to increase
its sales of the existing product in existing market for improving market share (Bryce, 2017). In
relation with Toyota this organisation is improving its marketing skills to aware the customers
about the benefits of the Green vehicle technology. This increase its sales in the existing market.
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Product development: This strategy emphasize on introducing new products in the
existing market. It is beneficial for the company in increasing its product range to grab attract the
customers attention. Toyota can opt this strategies to improve the product portfolio.
Market development: This strategy emphasize on introducing existing product in new
market. Toyota can opt this strategy to attract the customer of new market. It will helpful the
organisation as they are familiar with the product.
Diversification: In this strategy, new product is introduced in new market. In context to
the Toyota, this organisation should introduce its new innovative products in the new countries
and cities (Frynas and Mellahi, 2015).
Another business strategy used by Toyota –
BCG matrix: This matrix was developed by Bruce D. Henderson in 1970's for the Boston
Consultancy Group. This model define assessment which organisation conduct to have
information about business units. Along this, product lines are also acknowledged by
management to utilise resources efficiently. Brand marketing, portfolio analysis, product and
strategic management are various tools which are used by Toyota to have knowledge about
market performance and position. Star: This tactic include firms which have high market share in sector which is growing
fastly. It is improved aspect of question mark condition which define that management
require to increase funds to have sufficient resources for making growth. Toyota has large
number of rival firms which define that top personnel require to provide vehicles and
conduct business to compete with rival firms. If firm remain niche leader which might
affect on sales volume and performance (Barney, 2012). Cash Cow: It is another aspect which comprises enterprises which have high market
share but in industry which is growing slowly. This help firms to gain good amount of
profit from business which is excess than require for maintenance. Question Marks: This tactic define that organisation is established in market which have
low market share and high growth capabilities. Ne business venture have potential and
resources to enhance business and make appropriate position in market. Management
conduct market survey to asses various expansion opportunities and compute worth of
investment to enhance share in market.
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 Dogs: It is another aspect which includes firms which have low market share in slow
growing and mature sector. It is essential that firm make revenue to maintain its position
and share in market in according to rival firms. But, if management is not able to generate
profit for sustaining its reputation than they have to exit from market to protect firm from
losses (Godoy and Naidich, 2012).
The strategic choice model – Strategic choice is concept which define that management
require to make decisions and formulate strategies to make system function effectively. It is
essential that uncertainties and market conditions are acknowledged by top personnel to frame
policies and design system accordingly. Political, technical and procedural are all components
which are considered to handle risks and conduct business operations in efficient manner.
Decision area, comparison area and uncertainty area are various elements which are used for
structuring problems and making appropriate judgements for firm.
There are four modes of strategic choice:
Shaping: This is first phase which specifies that administration of firm require to give
appropriate shape and design system to conduct business activities to accomplish goals and
objectives. Along this, manager even frame strategies and policies to direct members and make
them perform tasks effectively to deliver quality products and services for success and growth of
firm (Langston and Lauge-Kristensen, 2013).
Designing: It is another stage which is to design system and implement appropriate tools
and equipments in system to execute operations effectively. For this, management require to
have adequate manpower which are able to provide products and services to people in according
to satisfy and fulfil demands and requirements of people.
Comparing: This is essential activity which is conducted by management is to have
information about capabilities of employees. For this, standards which are provided to staff are
acknowledged by comparing outcomes with benchmarks. This help administration to conduct
training sessions to enhance skills and knowledge of members to make them perform tasks
effectively (Jenkins and Williamson, 2015).
Choosing: This phase define that management select strategies which help them to
conduct business in efficient manner. This help Toyota to construct competitive edge over rival
firms to establish and maintain position and reputation in market in respect to rival firms.
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TASK 5
Resource implication of the selected strategy
An organisation is the combination of various types of resources which are important for
the process of formulation strategy and its execution. It is the responsibility of the manager of
the organisation to understand requirement of the resources at workplace. In addition to this, all
these resources helps the business in its growth and development. Essential resources of Toyota
are described as below :
Human resource: These resource ensures that each and every task of the organisation
must be finished in the given period of time. It is required by the human resource manager of the
Toyota to hire skilled employees which use their innovative skills in designing new attractive
and innovative cars. This will help the organisation in building their brand name at market place
and attract more number of new customers (McKiernan, 2017).
Research and development resource: Major role of research and development
department is to analyse the external market and understand the requirement and wants of the
customers. It will guide the production and designing team to manufacture the products
according to the need of the customers. Research and development department of Toyota also
find the new innovative way to modify their product and compete its competitors by the new
products.
Marketing resource: Marketing resources are considered as most important resource of
the company as they promote the products at market place. Marketing team of Toyota uses high
and advance technologies to increase brand recognition by spreading awareness about the
products among more number of people (Baumgartner and Rauter, 2017).
Financial resource: It is necessary for every organisation to use its funds at appropriate
project. In this financial department of Toyota formulates proper budget plan for every business
activity and invest accordingly.
Technical resource: Toyota belongs to the automobile industry which requires advance
technology to maintain their brand name at market place. Adoption of new technology is
beneficial for Toyota to distribute its product at global level and helps in business growth.
It is required by business manager of Toyota to formulate business strategy effective manner by
satisfy three essential criteria that is acceptability, feasibility and suitability. All of them are
described as below (Hitt, Ireland and Hoskisson, 2012):
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Suitability: It ensure that management formulate strategies and design system to conduct
activities which help them to utilise resources efficiently. Market survey is appropriate technique
which helps top personnel to make changes in system to sustain its position and reputation in
market.
Feasibility: It ensures that the according to situation the resources are available for
strategy or not.
Acceptability: Management require to conduct business activities and select choices and
make decisions about objectives and goals which are acceptable by stakeholders of company
(Hill, Jones and Schilling, 2014).
CONCLUSION
From the above mentioned report it has been concluded that strategic management refers
to the formulation of effective strategies for the purpose of achieving business objectives and
goal. In this top management of the organisation analysis the internal and external environment
to identify the available resources and makes the strategy to use them for growth purpose. In this
report, various schools of thoughts have been discussed which were given by Mintzbergs. These
thoughts involve planning, learning, positioning, cognitive thoughts which are beneficial of the
multinational organisation and guides the manager in decision making process as well as
formulation of strategies. In addition to this, PESTLE analysis, competitive analysis, Ansoff
matrix have been discussed with their importance in the strategic management.
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REFERENCES
Books and Journals
Wheelen, T. L. and et. al., 2017. Strategic management and business policy. Pearson.
Gamble, J. E., Thompson, A. A. and Peteraf, M. A., 2013. Essentials of strategic management:
The quest for competitive advantage. McGraw-Hill/Irwin.
Priem, R. L., Li, S. and Carr, J. C., 2012. Insights and new directions from demand-side
approaches to technology innovation, entrepreneurship, and strategic management
research. Journal of management. 38(1). pp.346-374.
Vogel, R. and Güttel, W.H., 2013. The dynamic capability view in strategic management: A
bibliometric review. International Journal of Management Reviews, 15(4). pp.426-446.
Goetsch, D. L. and Davis, S. B., 2014. Quality management for organizational excellence. Upper
Saddle River, NJ: pearson.
Morden, T., 2016. Principles of strategic management. Routledge.
Bryce, H. J., 2017. Financial and strategic management for nonprofit organizations. Walter de
Gruyter GmbH & Co KG.
Frynas, J. G. and Mellahi, K., 2015. Global strategic management. Oxford University Press,
USA.
Barney, J. B., 2012. Purchasing, supply chain management and sustained competitive advantage:
The relevance of resource‐based theory. Journal of supply chain management. 48(2).
pp.3-6.
Godoy, M. C. and Naidich, D. P., 2012. Overview and strategic management of subsolid
pulmonary nodules. Journal of thoracic imaging. 27(4). pp.240-248.
Langston, C. and Lauge-Kristensen, R., 2013. Strategic management of built facilities.
Routledge.
Jenkins, W. and Williamson, D., 2015. Strategic management and business analysis. Routledge.
McKiernan, P., 2017. Historical Evolution of Strategic Management, Volumes I and II.
Routledge.
Baumgartner, R. J. and Rauter, R., 2017. Strategic perspectives of corporate sustainability
management to develop a sustainable organization. Journal of Cleaner Production. 140.
pp.81-92.
Hitt, M. A., Ireland, R. D. and Hoskisson, R. E., 2012. Strategic management cases:
competitiveness and globalization. Cengage Learning.
Hill, C. W., Jones, G. R. and Schilling, M. A., 2014. Strategic management: theory: an
integrated approach. Cengage Learning.
Ginter, P. M., Duncan, W. J. and Swayne, L. E., 2018. The strategic management of health care
organizations. John Wiley & Sons.
Dezsö, C. L. and Ross, D. G., 2012. Does female representation in top management improve
firm performance? A panel data investigation. Strategic Management Journal. 33(9).
pp.1072-1089.
Online
PESTLE Analysis, 2011. [Online]. Available through:
<http://undergroundwaterproject.blogspot.com/2011/03/pestle-analysis.html>
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