Strategic Analysis of Toyota: Porter's Five Forces and Recovery Plan

This report provides a strategic management analysis of the Toyota company, a Japanese multinational automotive manufacturer. It begins with an introduction to strategic management and its importance, followed by a comparison of strategic management theory and practices, specifically focusing on Porter's Five Forces to understand competitive threats and advantages within the automotive industry. The report includes a detailed case study of Toyota's approaches, particularly its lean manufacturing system, Just-in-Time (JIT) production, and the Toyota Production System (TPS) and how these approaches contribute to its competitive advantages. It also addresses a recovery plan to mitigate challenges like rising raw material costs and strategies for maintaining supplier relationships. Finally, the report discusses risk management strategies to overcome market challenges and concludes with a summary of the key findings and recommendations for Toyota's continued success.

strategic management

Table of Content
INTRODUCTION ..........................................................................................................................3
MAIN BODY ..................................................................................................................................3
Compare theory and practices.....................................................................................................3
A Case study of the approaches..................................................................................................5
A recovery Plan ..........................................................................................................................7
RISK Management Strategies ....................................................................................................8
CONCLUSION .............................................................................................................................10
REFERNCESS...............................................................................................................................11

INTRODUCTION
Strategic management is the ongoing planning, monitoring, analysis and assessment of all
necessities an organization needs to meet its goals and objectives. Changes in business
environments will require organizations to constantly assess their strategies for success.
This report will cover case study and explain the strategic management of the Toyota
company which is Japanese multinational company and their products are Automobile,
Luxury victuals, engines and commercial victuals. This report will cover the strategic
management of this company and it will compare the theory and practices which will include
Porter's five forces so company can understand the threats in the industry and how this
company use this strategy for their business expansion. This report will also analyze the
approaches used by the Toyota company in their manufacturing process and how they are
using it to take competitive advantages. This report will also provide recovery plan of the
company where company take the recovery from the weakness and threats. In the end of this
report will provide the risk management strategies so company can overcome fro the risk
and problems they are facing in the market where they are operating their business.
MAIN BODY
Compare theory and practices
Porter's five Forces of the competitive analysis theory was developed by the Michael
Porter in 1979 and explain the forces within the industries which can become the threat for
them or they can have the positive influence on the company, and they can take the competitive
advantages in the marketn (Asravor., 2019). This framework is for assessing and evaluating the
competitive strength and the position of the business organization. This theory is totally based
on the concept for 5 forces in the industries which helps to determine the Intensity and the
attractiveness of the market this analysis helps to identify where the power lies in the situation
of the business. This is also useful for the companies to understand the strength of the
organization ad their current standing in the market where they are operating their business.
Strategic analysts often use Porter’s five forces understanding whether new products or services
are potentially profitable. By understanding where power lies, the theory can also be used to
identify areas of strength, to improve weaknesses and to avoid mistakes.

Toyota company has use this strategy successful to know the competitive advantages
and threat which has negative impact on the companies business. Here is the Porter's five
model analysis of the Toyota company -
Porter's five forces
Threat of the New entreat
The threat of the new entrants is very week force in the Automobile industry, if any new
company wants to enter the automobile industry then they will need high investment which can
involve the foundation and management of the company. T they also have to include huge
amount on the supply chain management , marketing of their brand and other resources like
employees and their training (Chiarini, Baccarani and Mascherpa., 2018). This will take times
and huge investment. Without having the innovation and the product specification company
is not able to take competitive advantages.
Moreover for any new entrant top grow there business shares in this industry , they would have
to spend a lot on the promotion and their marketing to are people
Bargaining power of buyers
The bargaining power of the customers is string in this industry because the customers
have some of the options to go with the other brand. Every customer is highly informed, and
they are free to make their own choice. Customers can get the other similar product in the less
prices s they can go with the other so the companies in the automobile have to bargain with the
customers and Provide them the product with the discount. But the Toyota company has been
hold the strength because they are using the approaches which reduce the cost, and they can
offer the customers their product with the huge discount . Their technology and their design
make this threat low for them because they are providing better features for the customers
which helps to satisfy their needs.
Barging Power of suppliers
The bargaining power of the suppliers force is very weak within the industry where
Toyota company is operating their business Apart from the large number of suppliers, their
moderate size is also a reason that they cannot influence Toyota (Dieperink and et.al., 2016).
Generally these suppliers are small or moderate in size and that reduces their ability to integrate
forwards. Thus, the chances of any competition from the suppliers for Toyota are nil. Moreover,
due to the high number of suppliers, there are a large number of options before Toyota. It can

always switch to a new supplier without any trouble. However, for any of its suppliers, it can
mean a major loss of business. All these factors give Toyota better control over the suppliers and
their bargaining strength remains low.
Rivalry among existing competition
This force is very high among the automobile industry because there are many
competitors of the Toyota company who is putting the pressure on the company and the firms
are highly aggressive in the term of competition, and they are taking the competitive
advantages through the innovations and the new technology implementation at their workplace.
Toyota company is also innovation and launching their new technology and the product which is
helping them o reduce this threat, and they are able to stay in the competition in the industry or
the market .
Threat of substitute product
The threat of substitutes before Toyota is moderate. From vehicles made by other brands
to public modes of transportation, there are several substitutes for the Toyota products. The
switching costs are also quite low and in several areas people may find it more convenient to use
the substitutes (Kung’u., 2017). Moreover, for the middle class and lower middle class
consumers often the public mode of transport proves less costly.
A Case study of the approaches
Toyota is one of the top leading company in the Automobile industry which is famous
for their innovation and approaches used by the company in their manufacturing department.
Toyota is using the lean manufacturing approach to improve their production, and they were
able to take the competitive advantages in the market. The production system of the Toyota
company is based on the Philosophy of the achieving the complete elimination of the waste
from the manufacturing process of the company which is used to add the value of the
customers and company can also improve their product quality and the utilization of the
resources of the company will also improve.
Toyota company vehicle production system is way of the creating the things which is
something based on the Just in times (JIT) system or the most famous approach which is lean
manufacturing approaches . The production system in the Toyota company was implemented
before many years of continuous improvement and their objective was to make their vehicle
order by their product customers in more chevalier and the efficient way and I order to sell

the companies product as swiftly as possible (Ledbetter., 2018). The Toyota production system
(TPS) was based on the two different approaches which are Jidoka which was able to
transmuted automobile with the human touch as when the production started the equipment
stops at the point , preventing the defects from the being produced ; and the Just in time
concept which was the another approaches implemented In which every process used ti
produce which is needed for the another process in the continues flow. The concepts based on
the Philosophies of the Jidoka and the just in time TPS can effectively and quickly produce
Vehicles scud quality improvement and make it low and smoother who hear their car sound
this make easy for the people decrease the noise pollution and thins also feels good and
comfortable for the customers and the at time , this fully satisfy the needs and the requirement
of the customers and also add some value for the customers and company is able to gain the
customers locality and this helps to take the competitive advantage for the Toyota company,
and they were able to show their presence in the market.
The TPS approach of the Toyota company helps to reduce the cost of the product and
company can provide their product to the customers in the lower prices with the better features
and better innovation in the product this helps to satisfy their needs and their demand this also
help to wellsprings and the competitive strength and the unique advantages for the Toyota
company in the market Thoroughly honing these strengths is essential for Toyota's future
survival. We will use these initiatives and develop our human resources to make ever-better cars
that will be cherished by customers.
The Just in time approach is making the things what is needed and when is needed
and the each step of the production department of the company which means that the waste in
the manufacturing is decreased and the flow of the production is also increase according to the
needs and demand of their customers (Moreno-Izquierdo, Ramón-Rodríguez and Perles-Ribes,.,
2016)./ this requires the production lin to be stocked with the all necessary parts which can
make their production more better and smoother and in the right sequence at the right
movement of the production of the cars began As the parts are used up, in the stock is
delivers at the proper and the expect times which is is needed and the right quality as well so
the interposition or the slow down in the production process and the The kanban system is
central to the just-in-time process, providing an automatic, real-time method to replenish parts at
the line side and keep minimal stock.

This all approaches are used by the Toyota company to take the competitive advantages
and company was able to show their presence and now they are one of the top car
manufacturing company, and they have won many awards because of their approaches used in
the production a and this makes easy for the others to use those technology and the approaches
in their production, and they are taking this industry at their top and the peak point.
A recovery Plan
Recently company is facing the challenge because of the Row material prices which has
been increased and creating threat for the Toyota company and it is important for the company
to recover from this problem otherwise the other competitors can overtake them, and they can
take the competitive advantages in the market where they are operating their business. They
are getting the row martial for their product in high cost, and they are not able to add some
value for their customers. This makes their customers top change the brand and go with the
other brands (Phogat and Gupta., 2019) . Recovery can be possible for the company by using
the strategies one of them is making the good relationship with their suppliers. Companies
relationship with their suppliers are not good but the prices of the raw material has increased
and creating threat for the company so it is necessary for the Toyota company to make the good
relationship with their suppliers, so they can get the raw material in the know process, and they
can add some value for the customers and this will also lead them to take the competitive
advantages in the market. Good relationship wi8th the suppliers can provide the some discount
in the raw material, and they can add some values for the customers so their customers will be
loyal with them and company will able to stay in the competition.
Recently company is performing very poor in the market because they are not utilizing
the resources of the company properly. Company has the strong financial resources which can
help them to take the competitive advantages but now company is not using it properly on their
product department and other operational department of the company. I would like to suggest
the finance mangers of the Toyota company to ensure the proper utilization of the financial;
resources o improve the companies performance, and they can able to take the competitive
advantages in the market (Ploetz And et.al., 2016). This is an responsibility of the companies
finance managers to provide enough financial resources which is required to run the day to
day activities for each department of the company so t6ehir process will be smooth, and they
will able to produce some outcomes for the company and the Toyota company's performance

can be recovered again, and they will able to achieve their business goals and their business
objectives in the market. Companies operational department need to utilize the resources
properly and they can help company to take the competitive advantages if they will use the
companies financial resources to conduct the researches for the product development, and they
can also add some features which can make their product more comfortable for the customers
and this will help to satisfy the needs and the demand of the customer and company and the
new customers in the market and gain the competitive advantages in the market whether they are
operating their business . This will also enable them to show their presence as the emerging
brand name, and they can increase their brand name in the market.
One more challenging Toyota company is facing is the competition and it is increasing
because other companies are innovating there cars and using the new concept which is
electronic car (Ploetz Ad et.al., 2016). This is useful idea which can be helpful for the company
to take the advantages. Some of the countries like Indian and Chinese is welcoming the new
concept in the car because this cars run with the help of the electricity so the countries can save
the oil and use it in the future. This Eco friendly cars can create the opportunities for the
Toyota company to take competitive advantages, and they will able to show the presence in the
market. They should work on the electronic ares, and they can launch the car in the both
market India and the china where they are already have good market hold and their loyal
customers will accept their cars in those market. They can introduce their concept and take the
competitive advantages in the both the market and they can introduce the future concept to the
people who live in the India and china. Company will make the new customers, and they will
able to take competitive advantages in both the market and increase their growth.
RISK Management Strategies
Toyota company is facing the environmental risk and most of the government is
creating the problems to Toyota company and they are forcing the automobile company to
make the Eco friendly cars which can give their contribution toward the environment (Qian
and Lin., 2016). This is an risk for the company because they need to plan the whole concept
and many risks are associated with the concept of electronic cars but the Toyota company
want to take the competitive advantages in the market then they have to accept this challenges
and make the electronic vehicle to take the competitive advantages in the market. They will
face the problem I this concepts, so they will also need to make some strategies which can

reduce the risk of the failure in there new concept. I world like to suggest the companies CEO
to use the Risk management to overcome from the risk. There are some risk management
strategies which can be used by the Toyota company.
Identify the risk
Risks include any events that cause problems or benefits for the Toyota company. Risk
identification begins with the sources of internal problems and benefits or those of competitors.
Risks can be internal or external, so software can be used to identify the wide range of risk
possibilities (Rüttimann and Stöckli., 2016).
Analysis the Risk
Once Toyota company superiors have identified risks, they can thoroughly analyze the
potential effects that each will have on consumer behavior, and their company and other current
endeavors.
Evaluate the risk
Now the companies superiors can assign ranking according to the risk factors. This
will clear the picture that which risk will affect them the most, ranking will decide the risk
factors so the Toyota company can focus on the risk which can affect the most (Sahi, Lai and
Li., 2016).
Threat the risk
After finding the Risk in the project the company can begin to the threat to the worst
risk first. They will able to find the strategies which ca reduce the effectiveness of the threat
and company can make the opportunities for themselves. At this stage of risk assessment,
preventative and contingency should be prepared so that there are no surprises as your move
forward with action plans.
Monitor the risk
The last stage of the risk management is monitoring the risk, their likelihood , what will
gonna happened if they occur when their project will be live and how they will go through
defusing any disaster which can be arise (Wee., 2017). They have to monitor the risk by
tracking the involved variables and proposed possible threats to chain the reactions. As the
companies tracking system will identify the changes , calmly the threat started rising the
problems to avoid widespread ripple effects and the triggering of a big risk.

CONCLUSION
As per the report has been cover the strategic management of this company and it has
been compare the theory and practices which has been included Porter's five forces so
company can understand the threats in the industry and how this company use this strategy for
their business expansion. This report also has been analyzed the approaches used by the
Toyota company in their manufacturing process and how they are using it to take competitive
advantages. This report has been provided recovery plan of the company where company take
the recovery from the weakness and threats. In the end of this report has been provided the
risk management strategies so company can overcome from the risk and problems they are
facing in the market where they are operating their business.

REFERNCESS
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