Strategic Management Analysis of Toyota Motors: A Comprehensive Report

This report provides a comprehensive analysis of Toyota's strategic management practices within the multinational automotive industry. It begins by defining strategic management and its importance, then focuses on Toyota's strategies to address external environmental factors, including political conditions, economic impacts, and technological advancements. The report highlights specific strategies such as penetration pricing, trade show marketing, guerrilla marketing, and social media marketing. A detailed discussion of Porter’s Five Forces is included to assess the competitive landscape, alongside a SWOT analysis to evaluate Toyota's internal strengths and weaknesses, and external opportunities and threats. The report concludes with recommendations for future strategic development, offering a holistic view of Toyota's approach to maintaining its global leadership position in the automotive market. The document is contributed by a student to be published on the website Desklib.

SECTION 1:
Strategic Management
1

SECTION 2:
EXECUTIVE SUMMARY
Strategic management refers to the identification and descriptions of strategies that a
business organisation can carry in order to achieve better performance and a competitive
advantage for their organisation. This present report is context to Toyota Motors. It is public
company operating in multinational automotive industry. The full name of the company is
Toyota Jidosha. Company is maintaining its position as a leading global firm by effectively
addressing the concerns which are affecting the operations and function of Toyota. There are
three strategic influence which are impact of political condition, impact of economy on Toyota
and advance technology. This report also discussed some strategies of Toyota which are Trade
show strategy, Penetrating Pricing strategy, Guerrilla marketing strategy and social media
marketing strategy. Competitive forces of environment that affect the functions and operations of
Toyota was also discussed in detail. To track those factors company use the analytical tool called
as Porter’s five forces. With the help of this model company can analyse the attractiveness of the
industry. In addition to this company’s; strength and weakens and opportunity and threats was
also presented in detailed way.
2

SECTION 3: TABLE OF CONTENT
1
11SECTION 4: INTRODUCTION.................................................................................................4
13SECTION 5: AIM .......................................................................................................................4
15SECTION 6: DISCUSSION........................................................................................................4
36SECTION 7 CONCLUSION.......................................................................................................8
38SECTION 8: RECOMMENDATION ........................................................................................9
43REFERENCES .........................................................................................................................10
2
3
4
5
6
10SECTION 4: INTRODUCTION.................................................................................................4
12SECTION 5: AIM .......................................................................................................................4
14SECTION 6: DISCUSSION........................................................................................................4
35SECTION 7 CONCLUSION.......................................................................................................8
37SECTION 8: RECOMMENDATION ........................................................................................9
42REFERENCES .........................................................................................................................10
7
8
9
3

10 SECTION 4: INTRODUCTION
11 Strategic management is means the identification and descriptions of strategies that a
business organisation can carry to achieve better performance and a competitive advantage
for their organisation (Hill, 2017). Basically, strategic management deals with making as well
as implementing decision about the future direction of a company. In this present report,
Toyota company is being chosen for assessment. It is public company operating in
multinational automotive industry. The full name of the company is Toyota Jidosha. This
present report will address the issues which are faced by company such as impact of external
environment, strategy development and many other issues which company faces.
12 SECTION 5: AIM
13 Aim: “To understand the significant of strategic management in managing the impact of
external environment on the business”. A study on- Toyota Motors.
14 SECTION 6: DISCUSSION
15 Tactical management is very important for the business as it involves setting objectives,
analysing the competitive environment, analysing the internal organisation, evaluating the
strategies and ensuring the management rolls out the strategies across the organisation. The
strategic management of Toyota is also outstanding as they evaluate the business goals,
objectives and plans of the company. In order to manage the impact of external
environment, Toyota makes strategies which influences the entire operations and functions
of the organisation. Strategic influence is the art of planning as well as establishing
influences among the customers, public, employees or potential customers (Hitt and Duane
Ireland, 2017).
16 Toyota is maintaining its position as a leading global firm by effectively
addressing the concerns which are affecting the operations and function of Toyota.
17 Impact of political condition- The international automobile industry is context to
a range of political factors like stability in the political conditions, effect of home lobbying
groups. major geo-political inclination and others. It is fact that Toyota has experienced the
direct effect of political components in many instances. Toyota motors is greatly affected by the
types of government in the country they are operating, stability of government, government
policy of trade and economic and readiness of the organisation in global competition. The
4

example of Stark which influence the performance of Toyota that is because of poor relationship
among china and japan (Doz, ,2017). This disputes among the counties leads to direct impact of
the revenue of Toyota in China. In addition to this, in UK, the European Union has provides the
most stable political condition where all nations merged their economies in order to create a huge
market where the movement of labour, goods and services are easily moved from one country to
another. It is true that it is very complex task to manage, monitor, adapt as well as understand the
political condition when company has its operations on global market. The continuity of the
company is greatly affected by the political impact. Thus, in order to overcome the situations the
strategic management of Toyota is very effective and efficient. Toyota is using the penetration
pricing strategy which help company to raise their share of market globally. The main objective
of Toyota is to capture the large market share as fast as possible bt setting low price for the
products that organisation sells.
18 Impact of economy on Toyota- The entire development and growth of the
organisation is greatly depends on the economic trends of the country. The relationship between
the conditions of the market and economic factors are well-known. The world market is only be
good if the global economic condition are good. Economic factors affects Toyota both the levels
global and local. It is true that the economic condition of the country directly affects the
operations. function, profitability and sales of the company (Wheelen and et.al., 2017). A good
economy means high disposable income of people that means people will feel more inclined to
make the big ticket purchases. But, it is not present in all countries, as Toyota has its operations
in many country thus company face the challenges of good and bad economic factors. Thus,
company in order to withstand the effect of economic forces they are also focusing on building
small cars for lower prices. This the one of the best and successful strategy of Toyota which
directly increases the profit, sales and market share of the company. In addition to this, to
overcome the impact of economic factors, Toyota has also make the strategy which attract the
customers as well as it creates value to the clients, Trade show marketing strategy. This strategy
very effective strategy in order to reach key customers as well as finding new ones.
19 Advance technology- This is one the leading factor that influence the strategic
management of company in both positive and negative way. In today’s era, technology is
growing with very fast speed and it is very important for the company to accept this challenge. it
5

is because none of the business or company whether small or big can sustain in the market by
ignoring the use of advanced technologies (Lasserre, 2017). Toyota company is also using very
advance technology in order to make the operations efficient and effective. customers are also
highly satisfied with the use of advance technology. Toyota motors is using IT everywhere in
order to grow their business as well as to manage in much better way. It is fact that the
automobile industry is entirely based on the technologies. If company use advance technology, it
will automatically raise the sales of the company. The technologies used by Toyota is highly
advance and this is the reason why company is leading in the automobile industry as well as in
the entire world. The strategic management in term of technology of Toyota is outstanding. They
have made a strategy known as Guerrilla Marketing Strategy. They used techniques which are
totally unconventional in order to attract large number of customers as well as gain the attention
of customers. Still company is facing high competition due to higher technology but the strategic
management of company is outstanding which in turn compelling the impact of competition in
the marketing environment (Michael, Storey and Thomas, 2017). In addition to this, the information
systems groups at Toyota motor sales has moved from an order taker role to next generation
demand management is an attempts to meet the needs and demands of corporate world.
20 Toyota Porter’s Five Forces
21 Toyota is one of the lading organisation across the world. It is a international company
which is well-known for the technological innovation as well as brilliant models of cars.
Toyota is inventing huge amount of fund to be a first automotive drivers across the world. it
has outstanding and incredible strategic management team but still there are some factors
that affects the entire operations of the company (Bonardi and et.al.,2018). Thus, in order to
track those factors company use the analytical tool called as Porter’s five forces. With the
help of this model company can analyse the attractiveness of the industry. There are five
forces that affect the business which are as follows-
22 Bargaining Power of Supplier- This is pressure exerted by the suppliers on the company.
The bargaining power of suppliers of Toyota is weak. There are so many reason why the
bargaining power of suppliers is weak. The first reason behind this is that the Toyota use to
make relationship from huge number of suppliers, the suppliers are in moderate and small in
6

size put pressure on the company. Basically, the size of these suppliers are moderate or
small which in result reduces the ability to blend forward. Therefore, the chances of
competition from the suppliers are nil (Trigeorgis. and Reuer, 2017). Toyota can easily switch
to others, thus, if any suppliers increase the prices suffer the loss. Outstanding control and
monitor on the strategic management team of the company is the first reason how Toyota
have the control on its suppliers.
23 Bargaining power of Buyers- Buyers are the key assert of the company. It is the forces
or pressure which is exerted by the buyers on the organisation. The bargaining power of the
customers are very strong at Toyota. There are so many options available by the buyers to
switch on other organisation. There are so many rivalry organisation which offers same
goods at same rates. Customers are free to select any option. They also resources to search
the information and make comparison of both (Baumgartner and Rauter, 2017). Thus, these are
the factors which raise the strength of customers of Toyota. Whatever the strength company
holds is its design, advance technology and innovation in the products. Innovation is one the
best strategy that makes the Toyota one of the leading organisation across the world.
24 Threat of Substitutes- Toyota has moderate threat of substitutes. The cars made by the
other brands in the market of transportation for the products of Toyota there are various
substitutes available. The cost of switching of Toyota is quite low as well as people find
more easy to use the substitute. In order to moderate the threat, Toyota has made a strategy
to introduce the vehicles which have low consumption of fuel as well as they also introduce
small cars. Thus, it is one of the successful strategy of Toyota (Albers and et.al.,2017).
25 Threat of New Entrants- In automotive industry the threat of new entrants is weak. In
automotive industry, it requires huge amount of capital investment in the management as
well as foundation to build the automotive brand. If any new company wants to enter in the
new market they to invest there huge amount of fund which is not an easy task.
26 Competitive Rivalry- The level of competition in the automotive industry is very high
however the major international players might be small. Toyota is facing intense
competition from the companies operating in the automotive industry. In terms of
innovation, design, features slike safety of passenger and fuel efficient vehicle are the main
7

components of competition. Honda, Fors, Hyundai are the major competitors of Toyota
(Rees and Smith, 2017). But still Toyota is leading organisation in the world due its
strategic management.
27 SWOT Analysis of Toyota
28 STRENGTH
 Innovative culture
 Brand reputation which is values at
$35 billion.
 Leader in the industry of sales and
production.
 Strong brand portfolio (Kasemsap,
2017).
 Leader in manufacturing of green car
development.
 High profit margin.
 Large and Loyal base of customers.
 Innovative and highly sophisticated
chain of supply.
29 WEAKNESS
 Products not priced competitively.
 Product and services not compatible
with other brands.
30
31 OPPORTUNITY
 Rising demand for the mobile gadget
along with advance technology.

 Product diversification.
 Make a comparable products.
 Increasing prices in fuel.
 Growth through acquisition.
32 THREAT
 Cut-through competition.
 Rising manufacturing costs.
 New emission standard (Barca, 2017).
 Rise in the prices of raw material.
33
34
35 SECTION 7 CONCLUSION
36 The above report concluded that strategic management is the identification as well as
descriptions of strategies that a business organisation carry in order to achieve better
performance and a competitive advantage for their organisation. With the help of strategic
management company can achieve the desire goals and objectives. The assignment also
make understand the significance of strategic management in managing the impact of
external environment on the business.
8

37 SECTION 8: RECOMMENDATION
38 The strategic management team of Toyota should make Improvement in the Penetration
Pricing Strategy. It is recommend that Toyota should sell their cars on low price so that it
can cover large market share.
39 The strategic management team of Toyota should improve their guerrilla
marketing strategy. They should blend the guerrilla marketing strategy of social media
marketing. It is fact that the social media strategy is free of cost it does not required any efforts
and attempts.
40 In addition to this, Toyota should make the improvement in social media strategy
so that they can study deppely on the their competitors. they should assign the duty and
responsibility to monitor and control the websites of company and keep them updated.
Moreover, strategic management should make improvement in the marketing strategy of trade
show. they should blend this strategy with social media strategy. They can bring improvement in
the traffic of as well as as raise the awareness of the show.
41
9

42 REFERENCES
43 Books and Journals:
44 Trigeorgis, L. and Reuer, J.J., 2017. Real options theory in strategic management.
Strategic Management Journal, 38(1), pp.42-63.
45 Frynas, J.G. and Mellahi, K., 2015. Global strategic management. Oxford University
Press, USA.
46 Stead, J.G. and Stead, W.E., 2014. Sustainable strategic management. Routledge.
47 Apenko, S., 2017. Human resource management of innovative projects in the context of
business strategy. Strategic Management, 22(1), pp.3-6.
48 David, F.R. and David, F.R., 2017. Strategic Management: A Competitive Advantage
Approach, Concepts and Cases (Sexteenth ed.). Essex: Pearson.
49 Mitchell, W. and Leiponen, A., 2016. Virtual special issue on innovation, intellectual
property and strategic management. Strategic Management Journal, 37(13), pp.E1-E5.
50 Hill, C.W., Jones, G.R. and Schilling, M.A., 2015. Strategic management theory. Cengage
Learning,.
51 Doz, Y.L., 2017. Strategic management in multinational companies. In International
Business (pp. 229-248). Routledge.
52 Ethiraj, S.K., Gambardella, A. and Helfat, C.E., 2018. Theory in strategic
management. Strategic Management Journal. 39(6). pp.1529-1529.
53 Lasserre, P., 2017. Global strategic management. Macmillan International Higher
Education.
54 Morschett, D., Schramm-Klein, H. and Zentes, J., 2015. Strategic international
management (pp. 978-3658078836). Springe
55
56
57
10