Applied Marketing Management: Toyota Competitive Analysis

This report provides a comprehensive competitive analysis of Toyota, examining its internal and external environmental factors. It begins with an introduction emphasizing the importance of understanding these factors in the rapidly changing automotive industry. A SWOT analysis is conducted, highlighting Toyota's strengths such as brand value and global presence, and weaknesses like limited presence in the premium segment. Opportunities, including electric mobility and globalization, are identified, along with threats like rising fuel costs and economic recession. Political, economic, social, and technological factors influencing Toyota are then discussed, including the impact of protectionism, competition from new entrants, growing awareness of electric mobility, and the increasing influence of artificial intelligence. The report references several academic sources to support its findings.

Running head: COMPETITIVE ANALYSIS
Competitive analysis
Name of the student
Name of the university
Author note

1COMPETITIVE ANALYSIS
Introduction
In the recent time, determination of the internal and external environmental factors is
important in the current business scenario due to the reason that the current business factors are
rapidly changing and evolving and it is important for the business entities to cope up with these
changes. This is fairly applicable for Toyota as well because they are operating across the world
with having different business situations. On the other hand, the internal factors of the entities
should also be monitored as they should be effective in dealing with the external changes. In this
paper, the internal and external factors of Toyota will be analyzed and major factors will be
identified.
SWOT analysis
Strengths
The major strength of Toyota is their immense brand value and identity. This is due to the
fact that Toyota is having the distinction of being the leading automaker in the world. Thus, the
gained popularity and brand name for them is beneficial in tapping the new regions and pushing
the sales of their products. This can be aligned with that of their business objectives of staying
profitable due to the reason that newer models can be easily pushed in the market. In addition, it
should also be noted that Toyota is also the largest automaker in terms of global presence and
market presence (Sisson & Elshennawy, 2015). Hence, they are already operating in majority of
the areas and tapping to maximum customer bases that are further ensuring their higher business
revenue and volumes. This strength factor will be beneficial for Toyota in managing their
penetration in the market. This is due to the reason that the more extended will be the market
presence for Toyota; the more will be the market penetration for them. The presence of diverse

2COMPETITIVE ANALYSIS
product portfolio is also effective in managing the market penetration for Toyota because of the
fact that it is helping them to cater the different needs of the customers (Simao & Lisboa, 2017).
Weaknesses
The major weakness for Toyota is the lack of presence in the premium segment.
However, this is important in enhancing the profitability of them. The profit margin in the
affordable segment is limited due to the competitive pricing while in the case of premium
segment, the margin is high (Chiarini & Vagnoni, 2015). However, Toyota is having their major
presence in the affordable segment only. Thus, the average profit margin is also low for them.
This will be challenging in meeting the business objectives of maintaining profitability.
Opportunities
The major opportunity for Toyota is the emergence of the electric mobility. This is due to
the fact that evolution of the electric mobility is creating new opportunities for Toyota in offering
different products. Moreover, this sector is still in the nascent stage and is growing. Thus, Toyota
is having huge opportunities in the coming years from the electric mobility sector. It is also
identified that Toyota will gain opportunity in terms of globalization as well (Allcott, 2013). This
is due to the reason that with the help of globalization, they are being able to manage their
average cost of production by off shoring to countries with having lower cost of resources. Thus,
the more will be the trade flexibility in the coming years, the more will be the off shoring
advantages for Toyota.
Threat

3COMPETITIVE ANALYSIS
The major threat of Toyota is the increasing cost of fuel. This is due to the reason that
majority of the business of Toyota is coming from the combustion based vehicles. Hence, the
more will be the cost of fuel; the lower will be the demand for the products of them. This will
pose challenge for Toyota in maintaining their profitability (Shende, 2014). On the other hand,
emergence of the economic recession is another major threat for Toyota because it will reduce
the purchasing power of the customers and demand will get lowered.
Political factors
Political factors for Toyota will be challenging due to the reason that they are operating
in different regions with different political situations. It is projected that in the coming years, the
trend of protectionism will further gain traction and Toyota will face more barriers in their
international business (Oatley et al., 2013). Moreover, the diplomatic relations are getting
worsened majorly due to the trade wars between the countries. In the next 1 year, Toyota will
mainly face the challenge of trade war between China and the United States.
Economical factors
The major economical factor for Toyota is the competitive rivalry due to the reason that
newer entry in the industry is affecting the sales potential of the existing players. Moreover, the
more will be the competition in the market; the lower will be the market share and profitability.
In the new few months, the major economical challenge for Toyota will be to keep the market
share from the wrath of new entrants such as Tesla (Kushwaha & Sharma, 2016). However, as
per the projected trend, developing countries such as India and China will continue to witness
growth in the new few months. This will have positive impact on the business of Toyota in terms
of sales and volume.

4COMPETITIVE ANALYSIS
Social factors
The major socio cultural trend for Toyota is the growing awareness about the electric
mobility solutions. Customers are becoming more aware about the sustainability and they are
increasingly opting for electric mobility solutions over the conventional ones. Thus, Toyota
should come up with electric mobility solutions to cope up with this change. In addition, social
trend majorly in the developing countries is towards the fuel efficient cars, which should be
offered by Toyota in order to maintain the market penetration in the target market.
Technological factors
The major technological change that will be faced by Toyota in the coming months is the
increased influence of artificial intelligence. In the current automobile industry, artificial
intelligence is used in the production process as well as the value propositions for the customers.
Hence, Toyota should be able offer to involve the latest technologies with their products. This
will help them to manage the penetration in the market. However, continuous process of
technological development will also incur added cost for them.

5COMPETITIVE ANALYSIS
Reference
Allcott, H. (2013). The welfare effects of misperceived product costs: Data and calibrations from
the automobile market. American Economic Journal: Economic Policy, 5(3), 30-66.
Chiarini, A., & Vagnoni, E. (2015). World-class manufacturing by Fiat. Comparison with Toyota
production system from a strategic management, management accounting, operations
management and performance measurement dimension. International Journal of
Production Research, 53(2), 590-606.
Kushwaha, G. S., & Sharma, N. K. (2016). Green initiatives: a step towards sustainable
development and firm's performance in the automobile industry. Journal of cleaner
production, 121, 116-129.
Oatley, T., Winecoff, W. K., Pennock, A., & Danzman, S. B. (2013). The political economy of
global finance: A network model. Perspectives on Politics, 11(1), 133-153.
Shende, V., 2014. Analysis of research in consumer behavior of automobile passenger car
customer. International Journal of Scientific and Research Publications, 4(2), p.1.
Simão, L., & Lisboa, A. (2017). Green marketing and green brand–The Toyota Case. Procedia
Manufacturing, 12, 183-194.
Simão, L., & Lisboa, A. (2017). Green marketing and green brand–The Toyota Case. Procedia
Manufacturing, 12, 183-194.
Sisson, J., & Elshennawy, A. (2015). Achieving success with Lean: An analysis of key factors in
Lean transformation at Toyota and beyond. International Journal of Lean six sigma, 6(3),
263-280.

6COMPETITIVE ANALYSIS