Business Plan Project: Toyota's Innovative Automatic Driving Cars

This project presents a comprehensive business plan for Toyota's foray into the automatic driving car market. It begins with an executive summary and company overview, detailing Toyota's strengths, product innovation, and market position. A thorough situational analysis, including PESTLE and SWOT analyses, assesses the political, economic, social, technological, legal, and environmental factors, alongside internal strengths and weaknesses. The plan delves into market and industry analysis using Porter's Five Forces, competitor analysis, and a detailed marketing mix, including product, price, place, and promotion strategies. Segmentation, targeting, and positioning strategies are outlined, followed by a break-even analysis and a financial plan. The plan emphasizes Toyota's innovative approach to electric, driverless cars, designed to meet changing customer demands and gain a competitive advantage. This plan underscores Toyota's commitment to innovation, sustainability, and market leadership in the automotive industry, addressing potential challenges and opportunities for future growth.

Situational Analysis
Political factors Strict government rules pertaining to tax and pollution control
Economic factors Economic slowdown and thereby decrease in customer spending
Social factors Demand for advanced features: Changing customer preferences
Technological factors Technological advancements are taking place frequently
Legal factors Compliance with laws and legislation is must
Environmental factors Focus on sustainable operations for improving brand image
Business Plan
Strengths
Largest manufacturers
Undertaking advanced
technology
Loyal customer base
High market share
Company overview: Toyota Motor
Corporation
Japanese automotive manufacturer
Headquartered in the Aichi, Japan
Market leader for hybrid electric vehicles
Product Overview
 New unique business idea for automatic
driving cars.
 Highly advanced robotic features
 Charge the battery automatically from the
friction created while running
 Eco-friendly car
Weaknesses
Weak management and relationship
with suppliers
Opportunities
By focusing on and adopting highly
advanced technology firm can
improve brand image.
Threats
Facing threats from
competitors
Changing regulations and
customer preferences
impose threat in front of
the firm.

Porter five force analysis
Marketing mix
Product Automatic cars with unique
features Price Cost plus pricing strategy Place
Will be sold through physical stores Promotion
Social media marketing, advertisements on
television and newspapers
Bargaining power of
suppliers: High
Competitor analysis
 Volkwagen
 Ford
 Hyundai
Threat from substitutes:
high
Bargaining power of
buyers: low
Threat from new entrants:
Low
Segmentation, targeting and
positioning
Segmentation
Toyota will segment customers based
on their income
Targeting
Differentiated targeting strategy
Positioning
Innovation and advancement
Break-even analysis
Particulars Formula Figures
Number of units required to sell
Fixed cost + desired profit
margin / contribution per unit 6250
Competitive rivalry: high
Monitoring and Control
Top executives of Toyota will monitor and evaluate
reports
Test controls will be implemented
Focus will be placed on assessing defaults and taking
corrective measures for improvement

Notes
INTRODUCTION
Entrepreneurial venture could be defined as organisation which takes place the innovation and
opportunities at primary attention for producing social or economic value. Entrepreneurs are the people who have
business idea and undertakes the responsibility for accomplishing that idea. This idea is usually new product or
service which encompasses new product or service which would be based over existing model. They undertake
the complete responsibility for their business from risks to all the rewards. Present report will discuss about the
new business plan that would be undertaken by the company. The business plan will provide about the new
product that will be brought by the company
Executive Summary
The automobile industry is changing constantly with new inventions and innovations. It is laying
increased importance over the companies to bring something new and unique to the market that will help them in
gaining competitive advantage over others. Toyota is planning to bring new robotic cars. Toyota is big
manufacturer in the world of cars and the consumers are demanding new innovations from the regular technology
(Wilberforce and et.al., 2017). The robotic cars have zero emissions as they do not use fuel and run on electric
charging. The most unique feature is that the car can run without any driver and take the passenger to the
destination without manual driving. This will be complete automatic car that will run on sensory detectors. It will
be the first car that will run without driver and take the passenger to destination.
Company overview
Toyota Motor Corporation is multinational Japanese automotive manufacturer that is headquartered in
the Aichi, Japan. In 2019 is was 10th largest company by revenues in the world. It is 2nd largest manufacturer of
automobiles after Volkwagen based on unit sales. It is market leader for hybrid electric vehicles. It is also leading
market in vehicles of hydrogen fuel cell. Lexus passenger and Toyota car models have achieved milestone of 15
million in January 2020.
Product Overview
Toyota along with electric cars has now brought a new unique business idea for automatic driving cars.
The cars will have highly advanced robotic features that are successfully tested by the companies. These are
electric cars that will put a stop to environment pollution and provide relief over increasing fuel prices. The
automation system will also charge the battery automatically from the friction created while running. This will
also reduce the charging of car at short intervals (Magnusson and Wellington, 2017). Cars will get high
recognition in market as other automobile companies do not have such technology and it is new innovation in the
automobile sector.
Situational Analysis
Internal and external factors influencing the company are analysed using PESTLE and SWOT analysis
PESTLE Analysis
Political: Company operates in several countries and therefore has to comply with all the political regulations.
There is lower political interventions in the automobile industry but strict rules are there regarding the pollution
control. The trade policies of governments may impact the functioning of Toyota.
Economical: The economic state of the world has slowed down due to several forces. Inflation is increasing in
countries with lower growth in real income (Toyoda and Nakamura, 2018). It is decreasing consumer spending
and decreasing the revenues. The monetary and fiscal policies of economies are being framed for increasing
investments. Economic state may affect sales.
Social: With growing automation demand of society is also increasing. They are demanding new and advanced
features that make their life more easier. The new and advanced features will help the company to meet the
demand of consumers properly. Toyota is most trusted brand for its quality products and it needs to retain that

status.
Technological: Automation is requiring the company to bring new and advanced features to its products for
gaining competitive advantage over the others. Toyota uses highly advanced features for manufacturing the
products.
Legal: The rules and regulations are different in all the countries and it has to comply with to operate successfully
(Kapustin and Grushevenko, 2020). It is critical task for the company to analyse all the laws and ensure that they
have been complied to avoid penalties and fines.
Environmental: Increasing pollution is causing high pressure over the companies to bring products that cause
least environment of natural resources. The electric cars will cause zero emissions but at the same time will
increase the pressure over electric power.
SWOT Analysis
It provides the company about strengths and weakness of organisation
Strengths Weaknesses
Company is among largest manufacturers of the
automobile units.
It has highly advanced technology in its products.
It has large market share with loyal customers.
Toyota is well known for the quality products and
advanced features
Advanced manufacturing processes
Known for innovation and automation
The products are expensive as compared to competitors
The internal management is weak.
Supplier relationship are not strong
Increasing cost of production
Opportunities Threats
Growth of automobile industry
Changing demands and requirements of customers
Advancement will improve the working processes
Increasing competition
Continuous innovation and invention may bring
substitutes
Slow growing economy of world
Market and Industry Analysis
The automobile market is growing and leading to various opportunities for the companies.
Manufacturers through new inventions and innovations are competing with each other. It could be seen that
number of innovations have arrived in the industry in recent times.
Porter's Five Forces
The model helps Toyota in evaluating the market of automobile industry
 Threat of New Entrants - Threat from new entrants is very low as the industrial sector requires high
investments which is not possible for all the companies. Also the industry requires continuous R & D for
new innovations.
 Threat of new substitutes – The research and development for new innovation is high. There are some
competitors that might bring similar electric cars by collaborating with other companies (Danielis,
Giansoldati and Rotaris, 2018). Threat from the new substitutes is moderate.
 Bargaining power of Suppliers – This will be high as the number of suppliers producing the raw
materials used by company for producing cars are less. Toyota can negotiate with them by building
healthy relations.
 Bargaining power of Customers - It will be low as customers do not have wide choices. Toyota is
offering unique automatic driving cars which will help in gaining competitive advantage.
 Rivalry among Competitors – It is high as there are strong market competitors of Toyota that are coming
with new inventions and striving for market share.

Competitor Analysis
Toyota is global vehicle brand and a strong competitor of Hyundai, For and Volkwagen. Company is
well recognised brand for the SUVs, cars and the electrical vehicles. It is currently focusing over production of
the electrical vehicles and for sustainable growth with reduced impact in environment. Volkswagen and Ford are
trusted brands and Volkswagen is largest car manufacturer. These manufacturers are brining technological
improvements in their cars such as hybrid engines, cruise control, front end engines and many other features.
They have very large market share and provide cars at affordable prices. In slow economic growth the
competitors are able to sell cars because of their lower prices (Jacoby, 2017). However Toyota is leading in field
of electric cars and new automatic robotic cars will further create new market for the company giving tough tough
competition to these competitors. The competitors are also increasing their investments in research and
development for brining innovation and improvements in existing processes.
Marketing Mix
It shows the strategies that company will adopt for selling its cars
Product: The automatic cars have unique feature that can drive on their self without manual
control. These are electric vehicles with no pollution and also light weight. The unique
feature of automatic plus manual driving will help to gain competitive advantage.
Price: The pricing strategies play an important role in defining the success of products. The
cars includes high advanced automatic technology that is not available in all vehicles.
However company would adopt cost plus pricing policy for the cars.
Place: They will be available through offline stores and will be first launched in America and
other major markets. Specific number of production will be made analysing the demand.
Promotion: Cars will be promoted over all the advertisement channels offline through launch events
and online over internet and social platforms. The advertisement will increase the brand
awareness among mass.
Segmentation, Targeting & Positioning
Segmentation
Segmentation helps to identify the target market so that attention could be paid over them specifically.
Demographic – It is straightforward method of segregating the customers in small group based on their
characteristics. These include gender, ethnicity, income, education, age and culture. Toyota will segment
customers based on their income.
Psycho-graphic – Segment focus over interests and personalities of the customers. There are categorised based on
hobbies, personality traits, lifestyles, values and beliefs (Liu and Meng, 2017). It is more complex process but
provides good outcomes. Company can focus over lifestyles of people.
Geographic – It is easy to find as it groups the customers based over physical location. It involved identifying the
countries in which it will be selling products. It will choose products only on major markets.
Behavioural – This segmentation is useful for the e-commerce businesses. It includes use of software to analyse
behavioural trends of the consumers to offer them of their interest.
Toyota will segment customers having income levels above GBP 10000.
Targeting
There are mainly three types of the targeting for marketing the products
Mass - This involves selling the products to society as whole without targeting any particular group. This is not
useful for specific products.
Segmented – It identifies set of target segments that have ability to create value for company. Identifying the
target, company has to create unique marketing strategies for them.
Niche – It captures only specifically concentrated marketing segment for products. Brand channel the marketing

efforts towards to that particular group (Enyedi, 2018).
Toyota will adopt niche marketing as the cars could be purchased by only high income group customers.
Positioning
Toyota will position its product as per per cost plus positioning. The company will focus over reducing
the cost of the products and providing quality products analysing the demands and needs of customers.
Financial Plan
The implementation of the business will require adequate number of financial resources from different
sources. The Toyota will have to propose a budget for the initial stage to estimate the costs and resources.
Cash flow statement for the first nine months
Particulars January February March April May June July August
Septembe
r
Cash inflows
Opening cash
inflow 7000 8300 10682 13145.88 15691.45 18318.43 21026.48 23815.16 26683.94
Sales revenue 10000 10200 10404 10612 10824 11041 11261.62 11486.86 11717
Other income 2000 2000 2000 2000 2000 2000 2000 2000 2000
Total cash
inflows 19000 20500 23086 25757.88 28515.45 31359.43 34288.1 37302.02 40400.94
Cash outflows
Material 2500 2750 3025 3327.5 3660.3 4026.3 4428.9 4871.8 5359.0
Labour 2000 2000 2000 2000 2000 2000 2000 2000 2000
Marketing
Expenses 3000 3000 3000 4000 2000 2001 2002 3000 3000
Other expenses 2200 2288 2380 2475 2574 2677 2783.702 2895 3011
Distribution
Expenses 1500 1575 1653.75 1736.44 1823.26 1914.42 2010.14 2110.65 2216.18
Administration
expenses 4000 4000 5000 5000 5000 5000 6000 6000 6000
Total cash
outflows 15200 15613 17058.75 18538.94 17057.51 17618.70 19224.75 20877.44 21586.16

Cash deficit /
surplus or
closing cash
balance 3800 4887 6027.25 7218.94 11457.94 13740.73 15063.35 16424.58 18814.78
Break Even Analysis
Break even analysis shows the amount of products required to be sold for the costs and for earning the
desired profits.
Particulars Formula Figures
Selling price per unit 20
Variable cost per unit 12
Contribution per unit
Selling price per unit - variable cost
per unit 8
Fixed cost 200000
BEP (in units) Fixed cost / contribution per unit 25000
BEP (in value or monetary terms)
BEP (in units) * selling price per
unit 500000
Units need to sell for attaining desired profit margin
Particulars Formula Figures
Fixed cost or expenses 200000
Desired profit 50000
Contribution per unit 40
Number of units required to sell
Fixed cost + desired profit margin /
contribution per unit 6250
Monitoring and Control
The business plan will be monitored by top executives of the Toyota and reports will be submitted

through lower level managers. Managers will keep close monitoring over the production of cars. Test controls
will be implemented by the company to identify what defects and faults at early stage and take actions for their
improvements.
CONCLUSION
In conclusion it could be summaries that the unique feature cars will help Toyota to gain competitive
advantage and to make new market share. The business plan will enable the company to execute the process
properly and in defined direction. Toyota having already established market base will successfully sell its
products in market.
REFERENCES
Books and Journals
Wilberforce, T. and et.al., 2017. Developments of electric cars and fuel cell hydrogen electric cars. International
Journal of Hydrogen Energy. 42(40). pp.25695-25734.
Magnusson, S. and Wellington, N.Z., 2017. new zealand electric car guide. Wellington, Erişim Adresi:
http://www. gw. govt. nz/assets/NZ-Electric-Car-Guide-4April2017. pdf, Erişim Tarihi. 1. p.2019.
Toyoda, A. and Nakamura, T., Toyota| Subaru| Increasing Cooperation.
Kapustin, N.O. and Grushevenko, D.A., 2020. Long-term electric vehicles outlook and their potential impact on
electric grid. Energy Policy. 137. p.111103.
Danielis, R., Giansoldati, M. and Rotaris, L., 2018. A probabilistic total cost of ownership model to evaluate the
current and future prospects of electric cars uptake in Italy. Energy Policy. 119. pp.268-281.
Jacoby, M., 2017. Fuel-cell cars finally drive off the lot. Chem. Eng. News Arch. 95. p.28.
Liu, J.H. and Meng, Z., 2017. Innovation model analysis of new energy vehicles: taking Toyota, Tesla and BYD
as an example. Procedia engineering. 174. pp.965-972.
Enyedi, S., 2018, May. Electric cars—Challenges and trends. In 2018 IEEE International Conference on
Automation, Quality and Testing, Robotics (AQTR) (pp. 1-8). IEEE.