Strategic Management Report: Toyota's External Environment Impact

This report provides a comprehensive analysis of Toyota's strategic management, focusing on its ability to navigate the external environment and maintain a competitive advantage. It examines the importance of strategic management in setting objectives, analyzing the competitive landscape, and evaluating strategies. The report highlights Toyota's use of penetration pricing, trade show marketing, and its response to political and economic factors. It also utilizes Porter's Five Forces to analyze the automotive industry's attractiveness, assessing the bargaining power of suppliers and buyers, the threat of substitutes and new entrants, and competitive rivalry. The report emphasizes Toyota's technological advancements and its strategic responses to industry challenges, concluding with recommendations for future strategic management.

SECTION 1:
Strategic Management
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SECTION 2:
EXECUTIVE SUMMARY
Strategic management is means the identification and descriptions of strategies that a business
organisation can carry to achieve better performance and a competitive advantage for their
organisation (Hill, 2017). Basically, strategic management deals with making as well as
implementing decision about the future direction of a company.Strategic management is very
important for the business as it involves setting objectives, analysing the competitive
environment, analysing the internal organisation, evaluating the strategies and ensuring the
management rolls out the strategies across the organisation. The strategic management of Toyota
is also outstanding as they evaluate the business goals, objectives and plans of the company. in
order to overcome the situations the strategic management of Toyota is very effective and
efficient. Toyota is using the penetration pricing strategy which help company to raise their share
of market globally. The main objective of Toyota is to capture the large market share as fast as
possible bt setting low price for the products that organisation sells. To overcome the impact of
economic factors, Toyota has also make the strategy which attract the customers as well as it
creates value to the clients, Trade show marketing strategy. This strategy very effective strategy
in order to reach key customers as well as finding new ones. Toyota motor sales has moved from
an order taker role to next generation demand management is an attempts to meet the needs and
demands of corporate world. Toyota is one of the lading organisation across the world. It is a
international company which is well-known for the technological innovation as well as brilliant
models of cars. Toyota is inventing huge amount of fund to be a first automotive drivers across
the world. it has outstanding and incredible strategic management team but still there are some
factors that affects the entire operations of the company
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SECTION 3:TABLE OF CONTENT
SECTION 3:TABLE OF CONTENT 2
SECTION 4: INTRODUCTION 3
SECTION 5: AIM 4
SECTION 6: DISCUSSION 4
SECTION 7 CONCLUSION 9
SECTION 8: RECOMMENDATION 10
REFERENCES 11
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SECTION 4: INTRODUCTION
Strategic management is means the identification and descriptions of strategies that a
business organisation can carry to achieve better performance and a competitive advantage for
their organisation (Hill, 2017). Basically, strategic management deals with making as well as
implementing decision about the future direction of a company. In this present report, Toyota
company is being chosen for assessment. It is public company operating in multinational
automotive industry. The full name of the company is Toyota Jidosha. This present report will
address the issues which are faced by company such as impact of external environment, strategy
development and many other issues which company faces.
SECTION 5: AIM
Aim: “To understand the significant of strategic management in managing the impact of
external environment on the business”. A study on- Toyota Motors.
SECTION 6: DISCUSSION
Strategic management is very important for the business as it involves setting objectives,
analysing the competitive environment, analysing the internal organisation, evaluating the
strategies and ensuring the management rolls out the strategies across the organisation. The
strategic management of Toyota is also outstanding as they evaluate the business goals,
objectives and plans of the company. In order to manage the impact of external environment,
Toyota makes strategies which influences the entire operations and functions of the organisation.
Strategic influence is the art of planning as well as establishing influences among the customers,
public, employees or potential customers (Hitt and Duane Ireland, 2017).
Toyota is maintaining its position as a leading global firm by effectively addressing the
concerns which are affecting the operations and function of Toyota.
Impact of political condition- The international automobile industry is context to a range
of political factors like stability in the political conditions, effect of home lobbying groups. major
geo-political inclination and others. It is fact that Toyota has experienced the direct effect of
political components in many instances. Toyota motors is greatly affected by the types of
government in the country they are operating, stability of government, government policy of
trade and economic and readiness of the organisation in global competition. The example of
Stark which influence the performance of Toyota that is because of poor relationship among
china and japan (Doz, ,2017). This disputes among the counties leads to direct impact of the
revenue of Toyota in China. In addition to this, in UK, the European Union has provides the
most stable political condition where all nations merged their economies in order to create a huge
market where the movement of labour, goods and services are easily moved from one country to
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another. It is true that it is very complex task to manage, monitor, adapt as well as understand the
political condition when company has its operations on global market. The continuity of the
company is greatly affected by the political impact. Thus, in order to overcome the situations the
strategic management of Toyota is very effective and efficient. Toyota is using the penetration
pricing strategy which help company to raise their share of market globally. The main objective
of Toyota is to capture the large market share as fast as possible bt setting low price for the
products that organisation sells.
Impact of economy on Toyota- The entire development and growth of the organisation is
greatly depends on the economic trends of the country. The relationship between the conditions
of the market and economic factors are well-known. The world market is only be good if the
global economic condition are good. Economic factors affects Toyota both the levels global and
local. It is true that the economic condition of the country directly affects the operations.
function, profitability and sales of the company (Wheelen and et.al., 2017). A good economy means
high disposable income of people that means people will feel more inclined to make the big
ticket purchases. But, it is not present in all countries, as Toyota has its operations in many
country thus company face the challenges of good and bad economic factors. Thus, company in
order to withstand the effect of economic forces they are also focusing on building small cars for
lower prices. This the one of the best and successful strategy of Toyota which directly increases
the profit, sales and market share of the company. In addition to this, to overcome the impact of
economic factors, Toyota has also make the strategy which attract the customers as well as it
creates value to the clients, Trade show marketing strategy. This strategy very effective strategy
in order to reach key customers as well as finding new ones.
Advance technology- This is one the leading factor that influence the strategic
management of company in both positive and negative way. In today’s era, technology is
growing with very fast speed and it is very important for the company to accept this challenge. it
is because none of the business or company whether small or big can sustain in the market by
ignoring the use of advanced technologies (Lasserre, 2017). Toyota company is also using very
advance technology in order to make the operations efficient and effective. customers are also
highly satisfied with the use of advance technology. Toyota motors is using IT everywhere in
order to grow their business as well as to manage in much better way. It is fact that the
automobile industry is entirely based on the technologies. If company use advance technology, it
will automatically raise the sales of the company. The technologies used by Toyota is highly
advance and this is the reason why company is leading in the automobile industry as well as in
the entire world. The strategic management in term of technology of Toyota is outstanding. They
have made a strategy known as Guerrilla Marketing Strategy. They used techniques which are
totally unconventional in order to attract large number of customers as well as gain the attention
of customers. Still company is facing high competition due to higher technology but the strategic
management of company is outstanding which in turn compelling the impact of competition in
the marketing environment (Michael, Storey and Thomas, 2017). In addition to this, the information
systems groups at Toyota motor sales has moved from an order taker role to next generation
demand management is an attempts to meet the needs and demands of corporate world.
Toyota Porter’s Five Forces
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Toyota is one of the lading organisation across the world. It is a international company
which is well-known for the technological innovation as well as brilliant models of cars. Toyota
is inventing huge amount of fund to be a first automotive drivers across the world. it has
outstanding and incredible strategic management team but still there are some factors that affects
the entire operations of the company (Bonardi and et.al.,2018). Thus, in order to track those factors
company use the analytical tool called as Porter’s five forces. With the help of this model
company can analyse the attractiveness of the industry. There are five forces that affect the
business which are as follows-
Bargaining Power of Supplier- This is pressure exerted by the suppliers on the company.
The bargaining power of suppliers of Toyota is weak. There are so many reason why the
bargaining power of suppliers is weak. The first reason behind this is that the Toyota use to
make relationship from huge number of suppliers, the suppliers are in moderate and small in size
put pressure on the company. Basically, the size of these suppliers are moderate or small which
in result reduces the ability to blend forward. Therefore, the chances of competition from the
suppliers are nil (Trigeorgis. and Reuer, 2017). Toyota can easily switch to others, thus, if any
suppliers increase the prices suffer the loss. Outstanding control and monitor on the strategic
management team of the company is the first reason how Toyota have the control on its
suppliers.
Bargaining power of Buyers- Buyers are the key assert of the company. It is the forces
or pressure which is exerted by the buyers on the organisation. The bargaining power of the
customers are very strong at Toyota. There are so many options available by the buyers to switch
on other organisation. There are so many rivalry organisation which offers same goods at same
rates. Customers are free to select any option. They also resources to search the information and
make comparison of both (Baumgartner and Rauter, 2017). Thus, these are the factors which raise
the strength of customers of Toyota. Whatever the strength company holds is its design, advance
technology and innovation in the products. Innovation is one the best strategy that makes the
Toyota one of the leading organisation across the world.
Threat of Substitutes- Toyota has moderate threat of substitutes. The cars made by the
other brands in the market of transportation for the products of Toyota there are various
substitutes available. The cost of switching of Toyota is quite low as well as people find more
easy to use the substitute. In order to moderate the threat, Toyota has made a strategy to
introduce the vehicles which have low consumption of fuel as well as they also introduce small
cars. Thus, it is one of the successful strategy of Toyota (Albers and et.al.,2017).
Threat of New Entrants- In automotive industry the threat of new entrants is weak. In
automotive industry, it requires huge amount of capital investment in the management as well as
foundation to build the automotive brand. If any new company wants to enter in the new market
they to invest there huge amount of fund which is not an easy task.
Competitive Rivalry- The level of competition in the automotive industry is very high
however the major international players might be small. Toyota is facing intense competition
from the companies operating in the automotive industry. In terms of innovation, design, features
slike safety of passenger and fuel efficient vehicle are the main components of competition.
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Honda, Fors, Hyundai are the major competitors of Toyota (Rees and Smith, 2017). But still
Toyota is leading organisation in the world due its strategic management.
SWOT Analysis of Toyota
STRENGTH
● Innovative culture
● Brand reputation which is values at
$35 billion.
● Leader in the industry of sales and
production.
● Strong brand portfolio (Kasemsap,
2017).
● Leader in manufacturing of green car
development.
● High profit margin.
● Large and Loyal base of customers.
● Innovative and highly sophisticated
chain of supply.
WEAKNESS
● Products not priced competitively.
● Product and services not compatible
with other brands.
OPPORTUNITY
● Rising demand for the mobile gadget
along with advance technology.
●
● Product diversification.
● Make a comparable products.
● Increasing prices in fuel.
● Growth through acquisition.
THREAT
● Cut-through competition.
● Rising manufacturing costs.
● New emission standard (Barca, 2017).
● Rise in the prices of raw material.
SECTION 7 CONCLUSION
The above report concluded that strategic management is the identification as well as
descriptions of strategies that a business organisation carry in order to achieve better
performance and a competitive advantage for their organisation. With the help of strategic
management company can achieve the desire goals and objectives. The assignment also
make understand the significance of strategic management in managing the impact of
external environment on the business.
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SECTION 8: RECOMMENDATION
The strategic management team of Toyota should make Improvement in the Penetration
Pricing Strategy. It is recommend that Toyota should sell their cars on low price so that it
can cover large market share.
The strategic management team of Toyota should improve their guerrilla marketing
strategy. They should blend the guerrilla marketing strategy of social media marketing. It is fact
that the social media strategy is free of cost it does not required any efforts and attempts.
In addition to this, Toyota should make the improvement in social media strategy so that
they can study deppely on the their competitors. they should assign the duty and responsibility to
monitor and control the websites of company and keep them updated. Moreover, strategic
management should make improvement in the marketing strategy of trade show. they should
blend this strategy with social media strategy. They can bring improvement in the traffic of as
well as as raise the awareness of the show.
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REFERENCES
Books and Journals:
Trigeorgis, L. and Reuer, J.J., 2017. Real options theory in strategic management. Strategic
Management Journal, 38(1), pp.42-63.
Frynas, J.G. and Mellahi, K., 2015. Global strategic management. Oxford University Press,
USA.
Stead, J.G. and Stead, W.E., 2014. Sustainable strategic management. Routledge.
Apenko, S., 2017. Human resource management of innovative projects in the context of business
strategy. Strategic Management, 22(1), pp.3-6.
David, F.R. and David, F.R., 2017. Strategic Management: A Competitive Advantage Approach,
Concepts and Cases (Sexteenth ed.). Essex: Pearson.
Mitchell, W. and Leiponen, A., 2016. Virtual special issue on innovation, intellectual property
and strategic management. Strategic Management Journal, 37(13), pp.E1-E5.
Hill, C.W., Jones, G.R. and Schilling, M.A., 2015. Strategic management theory. Cengage
Learning,.
Doz, Y.L., 2017. Strategic management in multinational companies. In International
Business (pp. 229-248). Routledge.
Ethiraj, S.K., Gambardella, A. and Helfat, C.E., 2018. Theory in strategic management. Strategic
Management Journal. 39(6). pp.1529-1529.
Lasserre, P., 2017. Global strategic management. Macmillan International Higher Education.
Morschett, D., Schramm-Klein, H. and Zentes, J., 2015. Strategic international management (pp.
978-3658078836). Springe
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