Strategic Analysis Report: Toyota Motor Corporation (M20467)

This report provides a comprehensive strategic analysis of Toyota Motor Corporation. It begins with an overview of the company, including its history, financial data, and key activities. The analysis then delves into the external environment using PESTLE analysis, assessing political, economic, social, technological, legal, and environmental factors impacting Toyota. Porter's Five Forces is applied to evaluate the competitive landscape. The internal resources and capabilities are assessed using VRIO analysis, identifying Toyota's strengths and competitive advantages. SWOT analysis highlights the company's strengths, weaknesses, opportunities, and threats. The Ansoff matrix is employed to explore growth strategies. The report concludes with recommendations for Toyota's strategic direction, offering insights into the company's future prospects.

STRATEGIC MANAGEMENT

Table of Contents
MAIN BODY..................................................................................................................................3
OVERVIEW....................................................................................................................................3
A strategic analysis of the organization...........................................................................................3
Environmental analysis................................................................................................................3
Resources and competence analysis............................................................................................5
ANSOFF matrix of Toyota..............................................................................................................8
Recommendation...........................................................................................................................10
REFERENCES..............................................................................................................................12

MAIN BODY
OVERVIEW
The full name of the company is Toyota Motor Corporation which was founded in the year 1937
on 28 August. The president and representative director of the company is akio Toyoda. The
capital of the company on 31st March 2020 voice 635 billion yen. The main activities of the
business are production and sale of motor vehicles. In the year 2020 on the 31st March the
numbers off employees who are working in the company are 74132 and has around 364445
employees working with them around the world. The head office of the company is in honcho
Along with this it is also known as one of the world first automobile manufacturer to produce 10
million vehicles per year along with the production of 200,000,000 vehicle. Toyota is also listed
in largest company in Japan on the basis of market capitalization and revenue.
A strategic analysis of the organization
Environmental analysis
PESTLE ANALYSIS
Pestle analysis is used by the company to find out what are the external factors that will impact
the operations related to business model, market strategy and growth trajectory (Karlik and et.al.,
2017).
POLITICAL FACTORS: As Toyota is fast growing business of UK they have to face political
issues better related to uncertainty over Brexit. After does Brexit the company have to face
various issues that is they have to change their strategy and it is also resulted in increasing high
competition across the globe. The company also had to face Japan’s cold relations along with
China which is another factor that affected the activities of the business.

ECONOMIC FACTORS: As economic factors I related to different types of policies that are
related to economic growth in this the company have to face the issues that is related to border
tax and trade protectionist that was made by the policy at the time of trump administration. On
the other hand the company also has to face the impact that is related to emerging markets which
is regarding witness off strong economic growth.
SOCIAL FACTORS: Social factor is the main factor which is related to needs and desire of the
consumers as in today’s era the customer prefer more environmentally friendly transportation as
compared to normal one. In the countries like Saudi Arabia the woman’s are also allowed to
open the market of Toyota (Kim, 2018).
TECHNOLOGICAL FACTORS: As Toyota is the industry and machine company we have two
focus on more technological factors as it impacts direct the production of the business they have
to connect different technologies and that will give it’s user a good car experience along with this
there team also have to keep a strong focus on the research and development that is related to
new technology.
LEGAL FACTORS: Legal factors are related to different rules and regulations that are made by
the government at the time of exporting goods to the other country. The company has to follow
different regulation data related to hybrid and autonomous vehicles.
ENVIROMANTAL FACTORS: Environmental factors are related to using eco-friendly products
that company can make the products that are related to zero emissions or which have zero
pollution. They can also focus on the impact that is elected to zero casualties from traffic
accidents.
Porter five forces analyzes of Toyota
This is done by the company to find out the concern that is related to competition and by
beginning power of customers that is the strongest factor in automobile industry (Darning, King
and Tienari, 2017).
Competitive rivalry or competition (Strong force) The Company have strong competition Almost
compared to external factors which I mean contribution at the time competitive rivalry in the
industry data related to his aggressiveness, variety and differentiation of forms along with this it

have moderate force that is related to low number of large firm. As the company has strong force
in the factors like innovation and marketing along with this they provide high variety of products
that are different in cost, fuel efficiency, brand image and style.
Power of customers and buyer (Strong force) the customers of the Toyota affects their business
directly through revenues this analyzes helps the company to influence their buyers by giving
different forces that are related to company adopting low switching cost by creating strong force
that is related to high quality of information along with moderate substitute availability. As the
company have to keep focus honest products that it is made as for the preference and
expectations of its customers.
Bargaining power of Toyota’s suppliers (weak force) the company limited population of it
supplies that is the big force of the company let’s compare its bargaining power is high on the
other end it suppliers are few as compared to that they also have Weak suppliers power at the
time of manufacturing products (Barney and Mackey, 2018). The majority of its suppliers from
the global industry do not have ownership Anne control at the time of distribution of materials
today’s the firms like Toyota.
Threat of substitutes (Moderate force) the substitute of the company affect their product as it
includes public transportation, modes of transportation and by cycles. As in some ideas the
substitutes of Toyota are not available in the areas. The threat of substitution makes its product
more affordable, convenient and assessable for its customer.
Threat of new entry (Weak force) new entry of the competitors affects the business of Toyota is
this five forces analyzes help them to find out what are the impacts of new entry. As in this field
it requires high cost of establishment and maintenance for growing its business as they have we
can barriers that affect the new entry of companies like Toyota. This force also reduces
competition and bargaining power of customers on the business (Knight, Daymond and
Paroutis, 2020).
Resources and competence analysis
VRIO ANALYSIS

VRIO analyze is used by Toyota that includes capabilities and resources which are important
part at the time of promoting technological advancement which is important for company to
compete in highly competitive international automobile market (Tytenko, 2018). Any other
competitors have innovative technologies to grow their business in the world. along with this it is
also known as tool that is used to find out internal analyzes of business organization by knowing
the function data related to core competences along with resource based view as a part of its
strategic planning process. Resource and capabilities of Toyota along with sustain competitive
advantages is given below by using VRIO analysis.
Toyota’s Organizational Resources & Capabilities V R I O
– High efficiency manufacturing processes ✔
– High production capacity ✔
– Global network in strategic locations ✔
– Partnerships with companies ✔
– high technology ✔
– Rapid innovation ✔ ✔
Sustained Competitive Advantage(s):
– Technological expertise by using R&D ✔ ✔ ✔ ✔

– Access to support from diverse businesses via the Toyota Group ✔ ✔ ✔ ✔
– compete at the time of price and products ✔ ✔ ✔ ✔
– High brand reputation ✔ ✔ ✔ ✔
SWOT ANALYSIS
SWOT analyzes is done by Toyota Motor to find out what are the competitive advantages that
the business have taken outstand time its rivals. It also helps in identifying internal strength and
external opportunities that will result in leading to saturation of the organization. It also
represents the weakness and threats of the company which effects the growth (Toyota
PESTEL/PESTLE Analysis & Recommendations.2021).
STRENGTH
The biggest strength of Toyota is it’s a
strong brand value that is famous in world.
Along with this they also have good
technology that helps in research and
development at that time when you things
are launched and buy this they can also
make the strategy that will result in
development of the company. Along with
this the company has also good financial
health as compared to its competitors.
WEAKNESS
The biggest strength of Toyota is it’s a
strong brand value that is famous in world.
Along with this they also have good
technology that helps in research and
development at that time when you things
are launched and buy this they can also
make the strategy that will result in
development of the company. Along with
this the company has also good financial
health as compared to its competitors.
OPPORTUNITY
The company gets different opportunity on
daily basis data related to developing its
market in the emerging economics.
THREATS
The biggest threats of the company are
its competitors and the rising price of
the fuels that are keep on increasing

Nowadays people prefer more fuel
efficient and hybrid cars it is also big
opportunity as it will result in growing
demand of the company. Also they have
opportunity for driving its technology
with researching automated.
Along with this they also have to face
issues that act related to development of
different innovative things buy it
competitors across the world. On the
other hand again the biggest threat of
the companies cab aggregators is
noticed people prefer more to go by
using cab as compared to their vehicle.
ANSOFF matrix of Toyota
It is used by the company to show their relationship with the products in its market among the
various options that company can use for its charge of course.
Market penetration
Suitability
It is used by the company to make this strategy better related to suitability of emerging
and growing markets (Aoki and Wilhelm, 2017). In this car market is well established and by
using this strategy it will be easier for the company to target markets and grow their business
easily. Toyota is an established name that is the automotive industry rich no how to take the risk
of opting at the time of penetrates the market which is not significant barrier.
Acceptability
It is the duty of management Ruby worry about targeting their customers of their rival
car manufacturers which will result in retaliation along with this retention strategy will be
considered as a preferable a possible option. Since the company uses fair amount of cost which
are related to implementing a specific strategy by using this Toyota need to improve both level of
services and the product quality instead of promotional stand. However the disco taking this
strategy does not mean that is related to pay good stuff and shareholders but it will result Losing

shareholders value in their shares along with employees possibly losing their jobs as a result of
lost and failed ventures and revenue.
Feasibility
Toyota is known as the best and largest range in the automobile world data already exists
in different types of segments that are related to car market which helps them determining the
factors that are related to penetration on the market. However Toyota has the position that will
result in going ahead and penetrate in this existing market in which mostly the target market of
the company is small cars which are predominately aimed at younger people (Morgan and Liker,
2020).
Product development
Suitability
The company developed their product which will result in giving higher competition in
the automotive market as it is necessary for the car manufacturer to keep their speed with the
latest development. Toyota is the company along with other car manufacturers are known as you
just spender who spends lot of money in their research and development. The biggest amount
that was splendid by the company was in the year 2008 on its research and development. The
company has spent total amount of dollar 8994 million on research and development which have
resulted in 4.4% sales. The company was running on the estimation of euro 190,000,000 per
season among this the last year budget of the Toyota was estimated as dollar 445 million. The
company is suitable targeting to build their technology that is related to new fuel alternatives.
The global 21 project of Toyota known as Toyota Prius has given the company first mover
advantage. Rapidly increasing in banishing natural resources and other types of specific oils
among this the future plans of Toyota also includes development of Camry hybrid fuel better
compressed of natural gas which will result in showing more possibility at the time of using new
fuel in the future. Also the TMC is also planning to launch 10 new hybrid models in various
global markets. The other factor that affects the market of Toyota is the launch of battery electric
vehicle and urban commuter in 2012. Moving forward the company has wide range of small car
disposal which will result in continue in large in which Toyota occupies.

Acceptability
Rising in fuels have resulted in more drivers are using or looking away to cut the costs
that are related to monitoring or driving environmentally friendly vehicles. Along with this the
shareholders and manager of the company are also interested in maintaining the image of the
firm that is related to environmentally responsible (Toda and Sakai, 2017). This is the result that
the company wants to continue to spend more on its research and development in order which
will result in fulfilling the plans that is at the time of releasing hybrid cars in the future. By using
the who model the company has made good reputation by meeting all the needs and desires of its
consumers. The government of the company are also satisfied about the decision that are made
by Toyota for its research an at the time of manufacturing innovative and new fuel alternatives.
Feasibility
The company is very serious about developing new technology which will result in good
reputation in future of the industry. The company had made various progresses that are related to
developing new products in the existing market which are certainly feasible to continue
development in the market.
Recommendation
It has been recommended there the strategies that are made by the Toyota has shaken up in the
countries like UK and EU markets competition in a hybrid cars data futuristic along with this it is
also a thread of mass produced cars.
Suitability
The strategy of the firm as based on the capabilities, developing The existing resources and
creating product and services that will result in sustaining the market competition in the future
(Polancich and Pilon, 2019). The strategy of the company at design and test launch hybrid cars
in line which will result in growing demand of gas prices but are also focused towards fuel
efficient. On the other hand innovation is the key of the earth of philosophy along with this they
have also made a commitment that is to manufacture ecofriendly cars by adopting new
powertrains into the existing models.

Acceptability
the company can adopt new technology that is related to new engine prototype which will result
in meeting the expectation of the shareholders that is related to motor vehicle authorities’ that
will give the range of 79 gram and kilometer that is 1.8 liter engine Richard also said the cost of
ownership 128.70 Pence per liter. The company has also won awards that is meeting polluting
range, Co missions which will result in better driving shows higher economy.
Feasibility
The feasibility strategy of the company is to produce hybrid engines that have conventional
standard which required tweak existing production process. The company can make new strategy
which will result in UK production process, methodology and suppliers Mitchell result in
demanding or pulling hybrid engine (Das and et.al., 2019).
The recommendation is Toyota can also adopt A girl manufacturing which will result in or helps
them to switch models that will fulfill the requirement of align product planning materials, QMS
and materials requirement planning and which are also important for selecting few employees
assemble the hybrid engine powertrain.

REFERENCES
Books and Journals
Aoki, K. and Wilhelm, M., 2017. The role of ambidexterity in managing buyer–supplier
relationships: The Toyota case. Organization Science. 28(6). pp.1080-1097.
Barney, J.B. and Mackey, A., 2018. Monopoly profits, efficiency profits, and teaching strategic
management. Academy of Management Learning & Education. 17(3). pp.359-373.
Chiarini, A., Baccarani, C. and Mascherpa, V., 2018. Lean production, Toyota production system
and kaizen philosophy. The TQM Journal.
Dagnino, G.B., King, D.R. and Tienari, J., 2017. Strategic management of dynamic growth.
Das, S., and et.al., 2019. Toyota smarthome: Real-world activities of daily living. In Proceedings
of the IEEE/CVF International Conference on Computer Vision (pp. 833-842).
Hill, T., 2017. Manufacturing strategy: the strategic management of the manufacturing function.
Macmillan International Higher Education.
Karlik, A.E., and et.al., 2017, May. Developing a strategic management system of Russia's
economy. In 2017 XX IEEE International Conference on Soft Computing and
Measurements (SCM) (pp. 689-691). IEEE.
Kim, Y., 2018. Enhancing employee communication behaviors for sensemaking and sensegiving
in crisis situations: Strategic management approach for effective internal crisis
communication. Journal of Communication Management.
Knight, E., Daymond, J. and Paroutis, S., 2020. Design-led strategy: how to bring design
thinking into the art of strategic management. California Management Review. 62(2).
pp.30-52.
Morgan, J. and Liker, J. K., 2020. The Toyota product development system: integrating people,
process, and technology. CRC Press.
Polancich, S. and Pilon, B., 2019. The Application of the Toyota Production System LEAN 5S
Methodology in the Operating Room Setting. The Nursing clinics of North
America. 54(1). pp.53-79.
Toda, T. and Sakai, M., 2017. The new Toyota inline 4-cylinder 2.5 L gasoline engine (No. 2017-
01-1021). SAE Technical Paper.
Tytenko, L., 2018. Economic security as an element of strategic management system: accounting
and analytical aspect. Baltic Journal of Economic Studies. 4(3). pp.309-318.
Online

Toyota PESTEL/PESTLE Analysis & Recommendations.2021. [online]. Available through:
<http://panmore.com/toyota-pestel-pestle-analysis-recommendations>