UoN Business Strategy Report: Toyota Motor's Strategic Evaluation

This research report offers a detailed analysis of Toyota Motor's business strategy, focusing on its weaknesses and threats within the dynamic global automobile sector. It critically evaluates Toyota's internal and external factors, including the impact of vehicle recalls, lack of presence in emerging markets, and the challenges of evolving emission standards and increasing competition. The report employs the TOWS matrix to align internal weaknesses with external threats and proposes strategic solutions using the Ansoff Matrix. Specifically, it suggests market development strategies, such as targeting premium customer segments with a luxury brand (Lexus) in emerging economies like Thailand, and market penetration strategies through product differentiation and pricing models. The report emphasizes the need for Toyota to adapt to changing consumer preferences, embrace sustainable car manufacturing, and effectively compete in the global market.

Running head: BUSINESS STRATEGY
Business Strategy
Name of the Student
Name of the University
Author Note

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Table of Content
Introduction................................................................................................................................2
Part A:........................................................................................................................................2
Critically evaluating both the internal and external threats and weaknesses of Toyota Motor
highlighting weaknesses and threats and the areas which need to be improved....................2
Part B: Evaluation of the business strategy................................................................................4
Part C:.........................................................................................................................................8
Reflecting on the strategy processed model...............................................................................8
References..................................................................................................................................9

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Introduction
This research report provides a detailed analysis of the weaknesses and threats of the
organization Toyota Motor. As the global Automobile sector has been dynamic, there have
been several changes in the market requirements which are creating enormous pressure on the
organization. Thus, the organisation in the automobile sector is in the rush of developing or
incorporating a new strategic initiative to beat the industry competition. However, it can be
mentioned that as the global economy is trembling, the longstanding automobile giant like
Toyota may face a great level of business risk. On the other side, it is noted that a constant
shift in consumer taste and preferences is another challenge the large motor vehicle
manufacturer might have to deal with to remain the incumbent player in the market.
Part A:
Critically evaluation of both the internal and external threats and weaknesses of
Toyota Motor
Like every large sector making its presence globally has never free from the influence
of market drivers. According to Simão and Lisboa (2017) businesses in the automobile sector
has shifted the focus from the traditional fossil fuels vehicles to sustainable vehicles. It has
been identified that due to the global concern of environmental sustainability, the vehicle
manufacturers are looking for a solution that can be a pollution-free solution to a greater
level. Thus, the organisations with high Research & Development capabilities can
significantly join the race of technology-based solutions, while traditional mass-market
players like Toyota must have to face the challenge as it is not yet joined the race.
The TOWS matrix can be mentioned to be as follows:

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Hence, from the given Tows matrix it can be reflected that the firm needs to align the
internal weaknesses and external threats with each other accordingly.
Weaknesses:
 Toyota has undergone numerous vehicle recalls in the last five years, which
significantly damages the financial performance and tarnished its brand image. For
example, Toyota and its Luxury brand have issued a recall for 1.7 million cars across
the globe and almost 1.3 million of which were sold in the United State. As put
forward by Paul (2018), the recall is because of faulty Takata-made airbag inflators
which have led to 23 deaths as well as 290 injuries across the globe. Consequently,
there have been a series of lawsuits tied to car failure and this has significantly caused
the damage both in financial and brand’s name.
 The organization Toyota Motor does not have a strong presence in emerging presence
in spite of the opportunities for the future development inclusion China or India the

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audiences and the car lovers are more inclined towards the fuel-efficient and green
vehicles. In this context, the large vehicle manufacturers like Volkswagen and Tesla
have gained a foothold where Toyota only receives the disadvantages and the brand is
on the verge of losing its market share in the global market (Hoque et al. 2013).
Threats:
 It has been identified that the emerging standards are more likely to continue to be
introduced across the globe without any sort of standardization and this can create
serious challenge for Toyota with respect to proceeding with making more
investments in the new technology to meet the emission criteria and it is worth stating
that the same may affect the profits for Toyota in the short term (Amasaka 2013).
 Mass-market player like may also have to deal with the threat of the increase in the
cost of raw materials, which is taking place happening over the last few decades. This
is kind of a pressure on Toyota and other vehicle manufacturers in the row to find a
more innovative ways to manufacture the vehicles
 The constant of the threat of increasing competition is already taking place for
Toyota, as increasing number of vehicle manufactures can make hybrid and electronic
vehicles; hence, the other manufacturers have significantly identified and become
more competitive with respect to the models and the pricing (Eneizan et al. 2016).
 This vehicle manufacture Toyota faces a constant threat from the exchange rate for
Toyota being associated with the ‘Yen’ as well as revenue across the world and
likewise when the revenue is further sent back to the home country Japan, then
converting the same into yen often leads to lower profits.

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Part B: Evaluation of the proposed business strategy
Toyota is the leading Japan-based global vehicle car manufacturer and well known
among vehicle users as it often makes a large investment in advertisement and established
innovative and creative design for cars. However, due to the recent turmoil in the economy
and shift in customers’ taste and preferences have made Toyota’s existing solutions
irrelevant. Due to the global demands of sustainable and green cars, Toyota faces the
challenge of developing sustainable cars, beat the economy and retain its market share. On
the basis of weaknesses and threats analysis presented above, the following strategies have
been developed with the help of Ansoff matrix. According to Ottman (2017), the successful
leaders tend to understand the fact that if the business is supposed to grow in the long-term, it
is not supposed to stick to business as usual mind-set despite the things go well. Due to the
lack of focus on sustainable and green car manufacturing, failures to meet the emission
criteria and the past record of vehicle recalls, the brand Toyota is on the verge of losing its
market share.
Figure 1: Ansoff Matrix

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(Source: Hussain et al. 2013)
Market development:
As put forward by Ito (2019), that the brand or the business needs to target the new markets
or any new areas of the existing market and hence the brand may prefer to sell some of the
same things or same products to different groups of consumers or people. It is certain that the
brand Toyota is performing its operation all over the world in more than 50 nations but thus,
when it comes to market development, it needs to shift its focus from mass-market view to
premium group segments. This means that it has to manufacture a luxury brand with
innovative features and functions and then approaches the high end customer group or
premium group of customers. As the brand is significantly popular in the Asian markets,
Toyota should leverage the brand popularity and focus on the emerging economies (Schmidt,
Spann and Zeithammer 2015). This means when it comes to targeting the premium class of
consumers, the brand should choose the high-end sector of an emerging economy.
For example, Thailand can be a solution, as it is one of the leading economically
developing nations after China and India. Moreover, the nation Thailand receives global
attention especially from the investors because the social culture in the chosen place is
improving due to global tourisms. Westernisation has greater importance among the people in
Thailand. So to implement this strategy, Toyota needs to implement the strategy of market
focus in which Toyota should concentrate on particular niche market and on the basis of the
understanding the dynamics of the market and the unique needs of consumer within it. Thus,
the organisation needs to serve customers in the market uniquely well. Market focus strategy
would be effective for Toyota is supposed to launch its luxury brand Toyota Lexus for a
specified group of people. Toyota would focus on the premium customers groups and hence,
the market is limited. In addition, to implement the market focus strategy, Toyota needs to

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treat its niche market quite effectively; for example, it can develop strong brand loyalty
amongst the premium group of customers by providing 24X7 services. After purchase,
vehicle technicians would be sent to customers’ door for general supervision periodically.
This approach would definitely make the market segment less attractive to rivals in the
sector.
So, when focusing on the premium customer groups for its new luxury brand, Toyota
needs to focus on business class people who are self-employed individuals having a prior
interest in luxury vehicles. Nonetheless, it can be stated that the brand Toyota may have to
face a competitive challenge as Thailand is a place where all world-class brands and business
are looking forward to, and the government of Thailand is welcoming the FDI, soon there
will be a mass crowds of competitive brands in the market. According to Propfe et al. (2013),
within a short period of time, the proposed brand may face a tough global competition as a
market entry in the automobile sector of Thailand is easy due to governments’ backup.
Therefore, the chosen product or vehicle model should have a limited or short product life
cycle. Zhou et al. (2015) suggested that a complete a new product in Thailand’s automobile
sector would be a financial loss for the brand. Therefore, the brand needs to manufacture a
new luxury model of cars. Thus, to sell the proposed product in the chosen market, the brand
needs to follow an indirect selling channel where it can sell the brand through intermediaries.
For example, the proposed product through third-party distributors and dealers in Thailand.
This is because the local dealers and distributors in the sector better know the market.
Promotional initiatives
In order to promote and market the proposed product, Toyota should use both online
and offline media channels. For example, the brand can advertise its products through airline
services. This means it should select a top airline providers like Emirates which has global

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popularity and tie up with them to promote the luxury car. Emirates airline as per the
proposed term would promote the new car, so that passengers boarding the flight can be
aware of the new product. On the contrary, the organisation also needs to select top digital or
social media channels to spread the awareness.
Market Penetration
It has been identified that market penetration policy could fit the company in
increasing, existing and developing its markets share in a global scale (Lévay, Drossinos and
Thiel 2017). Hence, Toyota needs to ensure that its automobile products are there in every
segment of the market. When it comes to market penetration, the brand may sell more of the
same product to the same markets but with a different marketing approach. For example, the
existing products like Toyota Camry, Toyota land Cruiser and Toyota Yaris needs to be sold
or approached to the same market but the organization should select different marketing and
implementation approach.
For example, Toyota needs to develop or upgrade its above existing models with
different innovative and creative features like GPS, auto location tracking, traffic updates,
etc. This is more of a product differentiation approach in which the brand upgrades or
innovates its existing products. Nonetheless, this product differentiation approach needs to be
implemented differently. For example, the brand should select a different channel of
marketing. According to Simão and Lisboa (2017) pricing approach would be one of the most
effective strategies to sell an existing upgraded product. The organization would sell the
products in its existing markets like Bangladesh, India, China, Singapore and other Asian
markets. However, the same would be done with a different pricing model. For example, as
the organization can develop a skimming pricing approach because the existing product can
be considered a new version that is not there in the market. The key to success through

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skimming pricing is that the brand can set a high price for the product until and unless there is
a new player joining the race. Paul 2018) argued that as the automobile sector is highly
competitive such up-gradation can be a financial loss, the brand today should be more
inclined towards buying a popular luxury brand in the existing market. The organisation
should find out or focus on the popular brands of the market which can an incumbent
competitor. Buying a competitor’s brand often helps to increase the market share in an
existing market. For example, the organization can buy the brand of Volkswagen which is
another popular global brand.
Part C:
Reflecting on the strategy processed model
When it comes to grasping the understanding of or grasping the idea of Strategy
Process Model, I must state the fact there have been different sources that I have used. I
believe that marketing is a broad aspect of business and there have been many changes in the
marketing approaches in recent time. To keep up with the pace of change and knowledge, I
have searched recent journal articles on strategic marketing. However, I must state the fact
that the data that I have collected about the strategic business model and the module learning
are little different; this means I must have module learning is richer each element of the
theory and models are explained in detail, while the journal articles are more broad and
descriptive. Thus, my perspective about the strategic business has significantly changed after
going through the module learning. In addition to this, I must not forget the fact there online
broad reading sources have also helped me to understand the strategic failure in global
automobile sector. This learning approach would help me to prepare my next assignment in
the future as I have mastered a great number of skills in relation to breaking down the
marketing idea and using them appropriately.

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References
Amasaka, K., 2013. The development of a total quality management system for transforming
technology into effective management strategy. International Journal of Management, 30(2),
p.610.
Eneizan, B.M., Wahab, K.A., Zainon, M.S. and Obaid, T.F., 2016. Effects of green marketing
strategy on the financial and non-financial performance of firms: A conceptual
paper. Arabian Journal of Business and Management Review (Oman Chapter), 5(12), p.14.
Hoque, I., Faruque, M.M., Shahid, E.M., Pasha, S.H.A. and Rahman, S.O., 2013. Analysis of
Toyota’s marketing strategy in the UK market. European Journal of Business and
Management, 5(2), pp.223-233.
Hussain, S., Khattak, J., Rizwan, A. and Latif, M.A., 2013. ANSOFF matrix, environment,
and growth-an interactive triangle. Management and Administrative Sciences Review, 2(2),
pp.196-206.
Ito, H., 2019. Analyzing Toyota City’s eco-policy through strategic marketing tools. Asian
Social Science, 15(4), pp.23-36.
Lévay, P.Z., Drossinos, Y. and Thiel, C., 2017. The effect of fiscal incentives on market
penetration of electric vehicles: A pairwise comparison of total cost of ownership. Energy
Policy, 105, pp.524-533.
Ottman, J., 2017. The new rules of green marketing: Strategies, tools, and inspiration for
sustainable branding. Routledge.
Paul, J., 2018. Toward a'masstige'theory and strategy for marketing. European Journal of
International Management, 12(5-6), pp.722-745.

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Propfe, B., Kreyenberg, D., Wind, J. and Schmid, S., 2013. Market penetration analysis of
electric vehicles in the German passenger car market towards 2030. International Journal of
Hydrogen Energy, 38(13), pp.5201-5208.
Schmidt, K.M., Spann, M. and Zeithammer, R., 2015. Pay what you want as a marketing
strategy in monopolistic and competitive markets. Management Science, 61(6), pp.1217-
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Simão, L. and Lisboa, A., 2017. Green marketing and green brand–The Toyota
Case. Procedia manufacturing, 12, pp.183-194.
Spann, M., Fischer, M. and Tellis, G.J., 2015. Skimming or penetration? Strategic dynamic
pricing for new products. Marketing Science, 34(2), pp.235-249.
Zhou, Y., Wang, M., Hao, H., Johnson, L. and Wang, H., 2015. Plug-in electric vehicle
market penetration and incentives: a global review. Mitigation and Adaptation Strategies for
Global Change, 20(5), pp.777-795.