Business Strategy of Toyota: A Strategic Analysis Report

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Business Strategy - Assessment Brief 2

Table of Contents
Introduction................................................................................................................. 3
LO3 Evaluate and apply the outcomes of an analysis using Porter’s Five Forces
model to a given market sector...................................................................................4
LO4 Apply models, theories and concepts to assist with the understanding and
interpretation of strategic directions available to the chosen organisation..................7
Conclusion................................................................................................................ 13
Reference List...........................................................................................................14

Introduction
Business strategy is the means through which a company is able to expand and
improve its product wear by which it is in a position to attend higher market growth.
In this report, various strategies that will enable a company such as Toyota to
expand in the market through better managerial decision will be explored (Toyota
UK, 2019). Here a variety of strategic frameworks and a management plan will be
created that will project the future steps of the business in order to have a clear
pathway in which the company can head. Following which, several
recommendations will be made as well, through which the company will be in a
better position to perform in the future.

LO3 Evaluate and apply the outcomes of an analysis using Porter’s Five
Forces model to a given market sector.
P3 Apply Porter’s five forces model and to evaluate the competitive forces of a
given market sector for an organization
Porter’s five forces Is a simplistic strategic tool that helps a company to ascertain
the level of competition that is present in the business environment and identify
potential threats that might cause harm to the company in the future circumstances
of a business (Wright and Stigliani, 2013). All five elements of this framework are
applied in the case of Toyota here down below so that an assessment of its
competitor can be detailed.
Threat of New Entry (high)
In order to enter the market, car companies need a high level of financial backing
and investment through which they can establish themselves in the market. It is not
easy for a new start-up to do this as. There are very few investors that it involve
themselves in companies that are not established causing there low rate of
competition in the market.
Buyer Power (Medium)
The buyers, which are present in the automotive industry, are selective in nature and
low in numbers. These consumers have a substantial amount of power over the
pricing system of the company as the fewer number of customers that exist the lower
the rate of sales (Serem et al., 2015).
Supplier Power (High)
In the automobile industry, there are very few suppliers because of which, these
individuals have more power on the company suggest Toyota and able to charge
higher prices. This increases the cost of the final product, which the enterprise is
delivering (Tanwar, 2013)
Threat of Substitution (Medium)

There are very few players in the market chances of creating a product that is
identical in nature to do what is delivering is slow. Owing to this, Products that are
direct substitute to do the cars and services of Toyota are pure in nature then
substitutive commodities in other industries
Competitive Rivalry (Very High)
There is a huge level of competition in the automobile industry. There are several
players such as Nissan Tesla Honda BMW and other major companies. These
companies are at the junction of providing car products that rival Toyota commodities
(E. Dobbs, M., 2014).
The Ansoff Growth Matrix is a pathway through which different strategies that a
company can implement into it business system is explored. There are four different
types of strategies that can be implemented from this type of matrix. From all of this
one is chosen so that an in-depth exploration into the system is made.
Market Development
A company expands into a new market where it has not initiated its products before
and is in a position where it must explore new grounds through this strategy. In order
for this strategy to work a high degree of research must be implemented before
entering the market so that less risk is faced.
Market Penetration
When a company implement this method then it tries to penetrate and enter for the
into a market where it already has target audience for the enterprise. Through this
methodology, existing technology and products that are already established in the
market are utilised so that it further consumers can be reached what did you
purchase the product of the company.
Product Development
When utilising this technique the company needs to produce a product that does not
exist in the current product line of the organisation. In order to do this more revenue
must be located in the research and development of new commodities in the
organisation, so that better services can be made.

Diversification
This particular strategy is the riskiest of all the techniques, which have been
illustrated above. This is because of the fact that who this method accompany tries
to not only enter a market with it has not performed before but it also tries to do so
with a new product or service that it has not tested in the market earlier as well.
In accordance with the above strategies, which have been presented the most
appropriate one in the case of Toyota, would be product development. It would not
only help the company initiate a new line of commodities that it is not present in the
market, the company can assess the type of products that exist in the market and try
to provide an alternative which is not present. The best direction the company can
take in reference to this strategy would be time to create a environmental friendly car
which utilizes nature friendly resources that cause less harm to the atmosphere and
cause less pollution as well (Wicker et al., 2015).
A move like this would have a high impact on the automobile market, as there are so
many cars, which are petrol based, and have no other means through which vehicles
can operate. In the case that a product such is successful in the market it would give
rise of a new target audience that would be more focused towards the betterment of
the society and would help take the automobile industry in a new direction as well.

LO4 Apply models, theories and concepts to assist with the understanding
and interpretation of strategic directions available to the chosen organisation
P4 Apply a range of theories, concepts and models, interpret and devise
strategic planning for a given organisation
Porter’s Generic Strategies Is a strategy through which a company can increase its
level of competitive advantage in the market by altering the price at which the
product is being offered. There are three strategies in this technique, which include
cost leadership strategy, differentiation strategy and focus strategy (Moon et al.,
2014).
Cost Leadership Strategy
When an organisation tries to push itself forward in the market by providing lower
prices than its competitors then this strategy is implemented. Within this strategy, the
company lays less emphasis on providing quality to the market and higher stress is
given on providing a low and reasonable price (Littler, 2015).
Differentiation Strategy
Differentiation strategy is the technique through which the company focuses on
improving its product so that it has a higher value when compared to other
commodities in the market. This strategy is very effective when and the product is
highly innovative in nature.
Focus Strategy
Focus strategy is a technique through which a company e courts its resources into to
expanding its product line and customising it in a way that will appeal to a niche
audience. Consumers in this section have a high degree of purchase power and are
willing to pay premium prices so that they can have the products that they want.
After discussing all the above strategies the one strategy that would be most
appropriate in the case of Toyota would be focus strategy as implementing it along
with the above-mentioned strategies earlier. This would help the company to attain a
niche target audience that would be more interested towards environmental friendly
car. In order to implement a strategy like this the company must create a campaign

that is geared toward the psychology of these customers who are environmentally
conscious and aware of the harm that petrol car are causing to the atmosphere
(Michel and Evans, 2016).
Impact of such a strategy would assist the company to have to target audience with
different forms of purchase power that would increase the revenue of the company
and help in growing the daily profits so that highest sustainability is achieved
(Rumelt, 2012).
Bowman’s Extended Clock model Is a unique model that helps explode in knowing
at which position the company lies in the market in terms of the amount of value,
which is perceived by the consumers when it comes to the products, and services of
the company (Hill et al., 2014). Through this model a company can know where it
stands the market and hope to change its position to a better place through which
improve its sales and performance.
 Low price - The enterprises that are ascertained to be in this position, they
change the lowest of low prices because of which consumers in the market
perceive these company to be low value.
 Hybrid - On this stage, the companies tries to find a balance between price,
quality, and products that the consumers see as medium value.
 Differentiation - organisations art this position, focus more quality and
resources that are being used while putting some emphasis on price.
 Focused Differentiation - Here the focus is entirely on quality and price is fully
ignored until the last stage. This is done so that the product that is being
created is superior in nature (McDonald and Wilson, 2016).
 Increased Price and Standard product – The businesses that use this
strategy, increase their prices while trying to provide a normal rated product.
 High price and low value – On this position the business tries to implement
high prices and tries to give the illusion that value is being provided when the
consumers can understand that there is low value.
 Low value and standard price – At this position the consumers see no value in
the product that is being offered and the business in a position of loss
whereby which they try to push normal price

After discussing all of the above, it can be said that Toyota is currently is in a position
of differentiation for all of its normal products. However, in the case if the company
decides to initiate and give birth to environment friendly cars then the company
would move to a position of focused differentiation. Whereby which the customers
would see a very high degree of value in the products of the company enabling that
to be a new chain of sales.
About us
PAST & TODAY
Past – Toyota was founded by and in the initial stages of the company, the
enterprise sold automatic loom based products.
Today – Currently the business is a multi millionaire enterprise that tells luxury cars
in various countries around the world.
VISION
The vision of Toyota is to provide high quality cars at a moderate price so that the
consumers of the company attain the highest level of utility that they can from
automobile product.
MISSION and Objectives
The mission of the company is to provide an environment in which their employees
are able to innovate and create new products that will revolutionize the world and
change the way people look at cars.
The objectives of the company have been listed on below
 To attain at least 25% more profit in the coming year then its current state
 To increase and diversify is employee portfolio so that a higher number of

talented employees join the company
 To expand for the business in the market so that the revenue of the company
rises and their company is able to sustain itself in long term in the coming
future.
CORE VALUES
The core values of the company include having integrity respect towards others and
ethical background through which higher performance is achieved.
GOALS
OBSTACLES
There are several competitors in the market such as Nissan, BMW, Ferrari and
others that pose a direct threat to the functioning of the company and its sales
LONG-TERM GOALS
The long term goals of the company include the expanding for the in market so that a
higher level of revenue comes into the company.
SHORT-TERM GOALS
Short-term goal of the company is to make limited profits so that day-to-day activities
of the company can met and the employees can be paid on timely basis.
MEASUREMENTS OF SUCCESS
In order to measure the amount of success that the company will have in the future
there must be a constant surveillance of the financial documents of the company to
understand how much progress is being made with change in the management

decisions.
STRATEGY
RESOURCE ASSESSMENT
The biggest research in the case of Toyota is the huge you develop financial banking
with the company has through its investors who have a high degree of trust in the
working of the company.
IMPLEMENTATION
In order to implement all of the strategies that has been discussed above like focus
strategy, product development strategy and others (Kipley et al., 2012). The
company must Take the help of financial banking and implement resources in such a
way that would enable of the operations of the company to function in the new
direction, which has been determine and would help the marketing campaign to take
a new direction as well to help initiate the eco friendly products of Toyota.
Time Constraint – The period within which the company should achieve all of the
above discussed planning should be within a period of 1.5 years.
Budget – The estimated Limited budget which can be set in the case of Toyota
would be an amount of £50,000
DISSEMINATION
In order to initiate the scan properly every aspect of this plan must be detailed and
discussed with the shareholders of the company. Along with that, the managerial
heads of his department must know also in the Annual General Meeting so that
every key person knows the direction in which the company is heading (Lientz and
Rea, 2016)

PROGRESS ASSESSMENT PLAN
In order to assess the level of progress which is being made by all the strategies the
financial statements of the company which include the profit and loss statement
balance sheet cash flow statement and other white papers must be checked by the
top ranking heads of the company so that progress is ascertain.
Table 1: Strategic management plan
(Source: Created by the learner)