MGMT20143: Business Model Analysis of Toyota Australia's Operations

This report provides a critical analysis of Toyota Australia's business model, examining its key components, strategies, and performance. It begins with an introduction to Toyota Australia, highlighting its history and market position. The analysis then delves into the business model, focusing on customer segments (demographic and psychographic), key partners, and value propositions such as environmental sustainability and innovation. The report explores key activities, channels, revenue streams, and cost structures. It identifies key resources, including tangible and intangible assets, and examines customer relationships and interrelationships within the business model. The report emphasizes critical success factors, such as waste reduction in the supply chain, and discusses potential downside risks, like supply shortages. The conclusion offers recommendations for continued innovation, continuous improvement, and enhanced customer service. The report references several sources to support its findings, providing a comprehensive overview of Toyota Australia's business operations and strategic approach.

Running head: BUSINESS MODEL ANALYSIS
Business Model Analysis
Name of the Student
Name of the University
Author Notes:

1BUSINESS MODEL ANALYSIS
Table of Contents
Introduction......................................................................................................................................2
Business Model................................................................................................................................2
Customer segments......................................................................................................................2
Key partners.................................................................................................................................3
Value Proposition........................................................................................................................4
Key activities...............................................................................................................................4
Channels......................................................................................................................................4
Revenue streams..........................................................................................................................5
Cost structure...............................................................................................................................5
Key Sources.................................................................................................................................5
Customer relationships................................................................................................................5
Interrelationships.............................................................................................................................5
Critical success factors....................................................................................................................6
Downside risk..................................................................................................................................7
Business model changes..................................................................................................................7
Conclusion and recommendations...................................................................................................7
REFERENCES................................................................................................................................8

2BUSINESS MODEL ANALYSIS
Introduction
Toyota Australia started manufacturing vehicles in the year 1963 after it was founded in
1958. The company is headed by the parent company Toyota Motor Corp (Toyota.com.au,
2019). that is based in Japan. The head office of Toyota Australia is based Port Melbourne and
has corporate offices in other regions of the country as well. Furthermore, the company is
responsible for the distribution of Lexus vehicles in Australia (Toyota.com.au, 2019). The
company has business model that is characterised by high degree of sustainability. As a result of
the sustainable initiatives of the company, they have been able to gain high levels of awareness
in the market that they are operating in apart from the development in terms of becoming the
company who have been recognised as the company who are leading the Australian automotive
industry with the maximum number of sales and car on road. The aim of the paper is to critically
analyse the business model of company and to provide recommendation for the betterment of
operations of the same.
Business Model
The business model that is incorporated into the operations of the company is
characterised by the establishment of a lean supply chain. The lean supply chain forms one of the
top most competencies that are associated with the organisation. A lean supply chain is
characterised by the development of a supply chain that helps in maintaining a low amount of
wastage in the operations (Jurado & Fuentes, 2014). Apart from a lean supply chain there is high
degree of innovation that is incorporated into the operations of the company.

3BUSINESS MODEL ANALYSIS
Customer segments
It is important to carry out research regarding a potential group of consumers in order to
gain information regarding the viability of the strategies to be taken by the company while they
operate in the market. Toyota Australia has been successful in carrying out the same as a result
of which they have been able to gain a competitive advantage in the Australian automotive
industry. The segmentation approach that has been carried out by the company helps them in
targeting specific group of customer according to which they would device policies. The basis of
segmentation that has been undertaken by the company has been on the basis of demographic
and psychographic segmentation.
In terms of demographic segmentation, the company has been found to be targeting the
high income to the upper middle income group of the consumer community. For this segment the
company has developed cars such as the Parado and the Toyota land cruiser. In terms of
psychographic segmentation, the company aims to capitalise on the customers who are in need
for family cars. The income group that is being targeted is high income group and the car models
that are being developed are the Toyota Corolla Altis and the Toyota Fortuner (Yamaguchi,
McAllester & Urtasun, 2014).
Key partners
Establishing partnerships is necessary in order to satisfy the long-term goals of the
company (Blank & Villarreal, 2015). It also helps in ensuring the sustainability of the company
in the long run. While operating in the Australian market, the company has been able to gain
favourable partnerships. With the help of the international presence of the company, the latter
has been able to gain collaborative partnerships with various organisations across Australia. The
company has been able to collaborate with various suppliers along with favourable partnerships

4BUSINESS MODEL ANALYSIS
with organisation s such as the Australian Football League (Lobo, Meyer & Chester 2014). As
the main sponsors of the football league they have been able to gain the incidence of engagement
with the community. Partnership with the consumer community has been realised as one of the
main partnerships that are present in the business model of the company.
Value Proposition
Following are the elements of the company’s value proposition (Belal, Shirahada & Kosaka,
2013);
i. To spread awareness regarding environmental sustainability.
ii. To incorporate innovation with all the activities of the company.
iii. To reduce the amount of wastage in the supply chain.
Key activities
The key activities of the company are to cater to the needs of the diverse groups of
customers in the Australian market and contribute to the sustainable development of the
environment while carrying put operations in the market that is considered to be highly
competitors. The latter is aimed at gaining a sustainable competitive advantage which should be
the aim of all companies that are a part of a highly competitive market.
Channels
The channel refers to the medium through which a product is offered to the end user.
Since lean supply management is one of the main activities of the company, wastage in terms of
time is also catered to and paid due attention to by the company. Toyota Australia is now
operating in Australia as a sales and marketing unit hence, manufacturing does not take place in

5BUSINESS MODEL ANALYSIS
the country as a result the channel involves the assembly centre and the retail outlet from which
the vehicles are directly offered to the end users (Soosay et al., 2016).
Revenue streams
The company has been able to earn A$ 137 million from the sale of 229,258 units of
Toyota and Lexus vehicles in the financial year ended 2018. 25,791 was the number of vehicles
that were successfully imported by the company in the same year (Global.toyota, 2019).
Cost structure
The cost that are incurred by the company on gaining the ownership of the units from the
parent body is approximately around 70% of the price at which the vehicles are offered for sale
in the market.
Key Sources
The key resources of the organisation have been identified the tangible and the intangible
resources. The tangible resources are the physical assts of the company and the intangible
resources include the goodwill of the organisation, patent and copyrights.
Customer relationships
Customer relationships are highly valued by the organisation. Most of the activities that
have been taken up by the company have been made to ensure that they can provide favourable
experiences to the customers. The importance of relationships has been emphasised by the
company through the efficient customers services

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Interrelationships
The importance of relationships has been emphasised by the organisation. The aim of the
organisation is to help the customer community in gaining favourable experiences with the help
the sustainable initiatives from the party of the company. It helps the company in developing
good relationships with the customer community. The main aim of the latter is to help in the
development of activities through which communities can prosper along with contribution aimed
at the development of the environment. Furthermore, the company believes that the employees
are one of the most important stakeholders of the company as a result of which the human
resources policies that have been developed are for the best interest of the employees who are
subject to various allowances.
The innovative product development, and aim to protect the environment, the company
has been successful in holding the spot of the top car brand in Australia. The company which is
the part of the Fortune 500 group has been able to secure favourable amount of returns as a result
of which they have been able satisfy their investors and shareholders (Kim & Sung, 2014). As a
result of the same they have been able to achieve corporate governance. The latter is one the key
roles of organisations looking to sustain themselves in the long run.
Critical success factors
One of the most noticeable factors that separates the company from other competitors in
the Australian market is the fact that they have been able to increase their focus of the
elimination of waste that takes place in the supply chain of the company. It has been found that a
considerable portion of the revenue goes down the drain in the form of wastage that is incurred
by the operations of the supply chains of the company. This wastage that is being incurred is

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similar to losses that a company suffers. Hence, avoiding the same gives competitive advantage
to the company and is deemed to be the top success factor.
Downside risk
The only risk that posses a threat of arrival is the shortage of supply of the vehicles for
the country. Even if the country as been one of the most successful sales units, the import prices
are rising and the parent company might curtain production of the same.
Business model changes
As per the concern of the company all the operations that are being conducted by the
company in the said country are favourable in nature. As a result of the same, there is no
alteration or modification needed in the business model.
Conclusion and recommendations
On a concluding note, it can be said that the company one of the Amin grounds on which
the company derives competitive advantage is through the sustainable initiatives and the
innovation that is catered to by the company while it operates in the market and it is the medium
through which the competitive advantage.
It can be recommended that;
 The company should continue to carry out innovation while operating in the market
 They should ensure to carry out the cycle of continuous improvement while operating in
the market.
 Should aim to improve and enhance customer service.

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REFERENCES
Belal, H. M., Shirahada, K., & Kosaka, M. (2013). Value co-creation with customer through
recursive approach based on Japanese Omotenashi service. International Journal of
Business Administration.
Blank, M. J., & Villarreal, L. (2015). Where It All Comes Together: How Partnerships Connect
Communities and Schools. American Educator, 39(3), 4.
Global.toyota. (2019). Annual Report | Investors Library | Shareholders & Investors News |
Toyota Motor Corporation Official Global Website. Retrieved 9 August 2019, from
https://global.toyota/en/ir/library/annual/
Kim, S., & Sung, K. H. (2014). Revisiting the effectiveness of base crisis response strategies in
comparison of reputation management crisis responses. Journal of Public Relations
Research, 26(1), 62-78.
Lobo, A., Meyer, D., & Chester, Y. (2014). Evaluating consumer response associated with
sponsorship of major sporting events in Australia. Sport, Business and Management: An
International Journal, 4(1), 52-70.
Martínez-Jurado, P. J., & Moyano-Fuentes, J. (2014). Lean management, supply chain
management and sustainability: a literature review. Journal of Cleaner Production, 85,
134-150.
Soosay, C., Nunes, B., Bennett, D. J., Sohal, A., Jabar, J., & Winroth, M. (2016). Strategies for
sustaining manufacturing competitiveness: Comparative case studies in Australia and
Sweden. Journal of Manufacturing Technology Management, 27(1), 6-37.

9BUSINESS MODEL ANALYSIS
Toyota.com.au. (2019). About The Company | Toyota Australia. Retrieved 9 August 2019, from
https://www.toyota.com.au/the-company
Yamaguchi, K., McAllester, D., & Urtasun, R. (2014, September). Efficient joint segmentation,
occlusion labeling, stereo and flow estimation. In European Conference on Computer
Vision (pp. 756-771). Springer, Cham.