HI6006 - Strategy Development: Competitive Analysis of Toyota Cars

This essay provides a comprehensive analysis of strategy development tools, focusing on Toyota Motor Corporation as a case study. It delves into four key tools: SWOT analysis, PESTLE analysis, Porter's Five Forces, and Resource-Based View (RBV). The SWOT analysis identifies Toyota's strengths, weaknesses, opportunities, and threats, while the PESTLE analysis examines the political, economic, social, technological, environmental, and legal factors impacting the company. Porter's Five Forces assesses the competitive intensity and attractiveness of the automotive industry concerning Toyota, and the RBV explores Toyota's strategic resources and capabilities for achieving a competitive advantage. The essay concludes with recommendations for Toyota, emphasizing the importance of utilizing these tools for strategic decision-making and sustainable growth. Desklib provides access to similar assignments and resources for students.

Running head: Competitive strategy
Competitive strategy
Student name

Competitive strategy
Development tools
Executive summary
In this essay the discussion will be made on the four development tools. The tools are
SWOT analysis, Pestle analysis, Porter five forces and Resource based view. These tools will be
discussed by focusing on the Toyota Cars. Toyota is one of the largest company in automotive
industry and headquarter is in Japan. The company was established in 1937 and the founder of
the company is kiichiro Toyodo. In context to revenue it has been examined that company is the
sixth largest company in the world.
SWOT ANALYSIS
This tool is one of the famous tools which are used to start proper strategic planning.
Through this framework, it has been seen that power assistance can be given to the decision
making process as it enables an entity to uncover opportunities for the entire success. Through
this threats can also be taken into consideration before it gets burdensome. Through this analysis
it can be simple to evaluate the niche market so that competitive advantage can be achieved. The
strength of the company helps to consider the internal attributes and also resources that support
the overall results. Weakness states that internal attributes and resources can also work against
the overall outcome. In context to the opportunities the company can consider this as an
advantage. Also threats are related to the external factors that relates to the entity success. It has
been seen through this tool proper decisions can be considered that can give positive impact on
the workplace. Through this current and future position in the marketplace can be considered.
This tool is considered by the top management so that activities can be managed (Dominici,
2017).
SWOT Analysis of Toyota cars
It has been seen that company has a good employee base that helps to complete the
activities on time. The company also has the wide range of product line like from electric cars to
hybrid cars; the focus is on spreading types of cars in the market. The weakness of the company
related to the dependence on the suppliers. It has been examined that to manage the activities the
company has to rely on the supplier. Opportunities which are available for the company are
many like green vehicle technology. Also the threat of the company is related with the number of
competitors in the market. The competitors of the company are many like Ford, Hyundai,
Volkswagen and Mitsubishi (Colmorn and Hülsmann, 2014).
Pestle analysis
This is the framework that is considered by the marketers so that proper analysis and
monitoring can be done of the factors which are internal and externally related to the company.
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Competitive strategy
These factors also give effect on the overall activities of the company. Political factors are
related to the government interference in context to the activities of the company. This also
considers overall political stability and also tax policy. Political factors also affect the activities
of the company. Next is related with economic growth that gives impact on the exchange rates
and also on the interest rates. The factors also deal with the management demand and also focus
on the interest rate control. Social factor also focuses on attitude and population rate of the
society. Technological factors focuses on marketing and management of the activities with the
help of technology. Legal factors focus on health and safety opportunities and also on product
safety (Garrette, Phelps and Sibony, 2018).
Pestle Analysis of Toyota
Political factors have given impact on the overall process of the company by focusing on
the rules and regulations imposed by the company. The turnmoil in Europe has given impact on
the present years in the market. In economic factor, the recession related to the economy will be
considered. Economic factor also give impact on the overall employment rate of the company. In
social factor it has been analyzed that company has jump into the mass production of electric
vehicle by 2020. In the technological factor, it has been seen that company has achieved the
share market by focusing on the latest technology that will help to achieve competitive
advantage. In environmental factor the company focused on promoting next generation vehicles
with the emission rate of zero. In legal factor the company ensured the legal compliance that also
focused on the CSR activities (Debnath, 2015).
Porter five force analysis
Porter five force analysis is taken into consideration so that growth can be achieved and
also the managers of the company focus on this tool. This tool is important as it helps to evaluate
the overall market situation of the company and also helps to consider right direction to survive
in the competitive market (Mukherjee, 2018).
Example of Toyota
The bargaining power of the suppliers is weak and also it has been seen that their
moderate price is also the reason that influence the overall process of decision. Also the
bargaining power of customers is strong as there are large numbers of many vehicle industries
and also the customers have the choice to consider low price products. The overall threat of
substitute is weak as the people have the right choice to consider the use of proper substitutes.
The company has also introduced the products through which positive impact can be seen on the
environment. Threat of new entrants is weak and the large investment is important to introduce
the products in the market. Also it has been seen that for the new company to enter into the
market requires a lot to spend on promotions and marketing. These all are the obstacles that can
give negative impact on the overall operations of the company (Sisson and Elshennawy, 2015).
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Competitive strategy
In context to the company it has also been seen that competitive rivalry is high as there
are many players in the automotive industry and also the level of competition is high. The
competitors of the company are Ford, Toyota, Honda and Hyundai (Li, 2018).
Resource based view analysis
This is one of the development tools which are considered by the companies so that
competitive advantage can be taken into consideration. It also enables the company to consider
the strategic resources or the overall competencies so that potential can be determined towards
attaining the competitive advantage (O'brien, 2015).
Resource based view of Toyota
It has been investigated that the competencies of the company are created and
implemented by considering the intellectual capital. The competencies of the company are
related to supply chain management, lean production and also inventory management. The
company also considered the use of technology and workers so that quality cars can be built in a
proper manner. The company has also designed decentralized structure related to business and
networks that can helps to transfer the data and decisions through proper cycle. It has also been
seen that company offers effective services which helps to achieve competitive advantage and
also through this it can be simple to enhance the satisfaction level of the customers. The
company outsourced 70 percent of the overall production operations which helped to build
proper competence related to outsourcing and supply chain management (Rothaermel, 2015).
It has been investigated that through proper outsourcing the company has brought
improvisation in the overall quality of the company. The strategy which is considered by the
company is related to the value chain which leads to the quality of the cars which are purchased
by the customers. The company also focuses on proper communication process with the buyers
and suppliers so that activities can take place in the right direction. Also it helps in maintaining
long term relations with the customers that directly give impact on the activities of the company
(Hitt, Xu and Carnes, 2016). Therefore, this tool is beneficial for the company as it give positive
impact on the company operations.
Conclusion and recommendations
Therefore, it is concluded that company should focus on considering these tools so that
growth can be achieved. It is recommended that company should consider porter five forces
Analysis so that market condition can be evaluated. If company wants to analyze the internal
environment it is recommended to consider the SWOT analysis. The company should also
emphasize on Pestle analysis so that external environment can be analyzed. It has been seen that
resource based view will help to analyze the resources so this should be considered for proper
utilization of the resources.
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Competitive strategy
References
Colmorn, R. and Hülsmann, M., 2014. Strategic perspectives for electric mobility: some
considerations about the automotive industry. In Evolutionary Paths Towards the Mobility
Patterns of the Future (pp. 155-168). Springer, Berlin, Heidelberg.
Debnath, S.C., 2015. Environmental regulations become restriction or a cause for innovation–a
case study of Toyota Prius and Nissan Leaf. Procedia-Social and Behavioral Sciences, 195,
pp.324-333.
Dominici, G., 2017. Systems Thinking Research in the Twenty-First Century: A SWOT
Analysis. International Journal of Systems and Society (IJSS), 4(1), pp.10-18.
Garrette, B., Phelps, C. and Sibony, O., 2018. Structure the Problem: Analytical Frameworks.
In Cracked it! (pp. 95-116). Palgrave Macmillan, Cham.
Hitt, M.A., Xu, K. and Carnes, C.M., 2016. Resource based theory in operations management
research. Journal of Operations Management, 41, pp.77-94.
Li, Z., 2018. Business Network Positioning Analysis of Toyota. American Journal of Industrial
and Business Management, 8(07), p.1693.
Mukherjee, I., 2018. Applying Porter’s Five Force Framework in Emerging Markets—Issues and
Recommendations. In Strategic Marketing Issues in Emerging Markets (pp. 307-316). Springer,
Singapore.
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Competitive strategy
O'brien, J., 2015. Category management in purchasing: A strategic approach to maximize
business profitability. Kogan Page Publishers.
Rothaermel, F.T., 2015. Strategic management. McGraw-Hill Education.
Sisson, J. and Elshennawy, A., 2015. Achieving success with Lean: An analysis of key factors in
Lean transformation at Toyota and beyond. International Journal of Lean six sigma, 6(3),
pp.263-280.
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