Competitive Strategy Analysis Report: Toyota and Google

This report provides an in-depth analysis of the competitive strategies employed by Toyota and Google. The first section examines Toyota's approach, highlighting its generic strategy of cost minimization through operational efficiency, particularly the just-in-time manufacturing method, and product differentiation through research and development. This strategy has enabled Toyota to compete effectively in the global automobile market. The second section shifts focus to Google, dissecting its business model. The analysis reveals that Google's success largely hinges on its advertising-based revenue model, where it provides free search services to users while generating revenue from advertisers. This model is supported by continuous innovation and maintaining its position as a leading search engine. The report concludes by illustrating how both companies have strategically positioned themselves to gain a competitive advantage in their respective industries, providing valuable insights into their market approaches and business models.

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Competitive Strategy
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Section 1:
Strategy plays an important role in determining the success of a company as it is only
with the help of a strategy, can an organization succeed in accomplishing its organizational
goals. The strategy of a company is designed in a way that can help a company gain competitive
edge over the rival companies and this is exactly the reason why the business strategy of a
company is inextricably associated with the organizational goals of the company (Kryscynski
2017). Toyota Company has emerged to be one of the most popular and recognized car
companies in the world. The company has kept on adopting embracing effective strategies and
hence the company is being selected to understand exactly which strategy has helped the
company become the number one company in Japan and the most formidable company in global
automobile market by the year of 2003 (Thompson 2015).
As it is a well-known fact, Toyota operates in a global market, and the company is not
free from competition. In fact, the company faces serious threats from some of the most powerful
competitors such as Honda, Hyundai, Nissan and Chevrolet. Hence, the company had to adopt an
effective strategy to sustain its position. The company as a result, follows the generic strategy
that helps it to survive in the global market. The generic strategy of Toyota is dependent on two
important strategies- cost minimization strategy in operation and product differentiation. Since
the company produces almost similar cars produced by its competitors, the company is required
to provide goods at a lower cost. However, since the same is not possible with high expenses, the
company follows an operational cost cutting strategy, as low operational cost is equivalent to low
expense. By spending much lesser on the manufacture and operation of cars, Toyota attains
competitive edge over the rival companies by selling its products at much lower cost (Thompson
2015). It is important to note here that Toyota reduces the operational cost of its company by

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employing the just-in-time (JIT) manufacturing method, which is also otherwise referred to as
the Toyota Production System. It is worthwhile to mention here that owing to the system, Toyota
is able to minimize waste and inventory cost as well as the response time. Again, at the same
time, in order to ensure product differentiation, the company invests heavily in the research and
development activities so that it can produce innovative cars that will outrival the cars produced
by other companies. Thus, the company focuses on producing unique and attractive products for
all market segments. It should be noted that the goal of the organization has been to increase its
customer segment so that it can retain the existent customers as well as attract the new
customers. However, in order to achieve this end, the company has to produce cars that have
unique features, such as cheap price or better quality. Hence, the company employs the generic
strategy which helps it to reduce its operational cost, ultimately leading to the reduction of the
selling cost. Thus, this strategic choice has enabled Toyota survive in a global market which was
dominated by the local manufacturers.
Section 2:
The business model of a company determines the extent to which a company is
successful. The business model of any company is defined as the structured plan of a company to
identify different sources of revenue, attract the customer base through innovation, and
accomplish business success effectively (HSGUniStGallen 2017). Various companies have
various business models as per the needs of the industry. It is important to analyze the business
model of Google since the company managed to generate as much as $1.21 billion net profit last
year (Lazer et al. 2014). Although Google is much more than just a search engine, the success of
the company lies in its ability to become the leader amongst all the search engine companies.
Keeping this into consideration, it is important to discuss and analyze how Google is able to

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retain its top position in the world despite intense competition from Yahoo and Bing. Hence, the
business model of the company will be critically analyzed to understand how it contributes to
organizational success.
Although most of the people tend to think Google as a diverse place, the company in
reality is not as diverse as it appears to be. In fact, the business model that Google follows relies
on the use of advertisements, hat adds to the maximum share of its total revenue. In fact, it is
important to note that Google generates approximately 98% of its massive billions in revenue
from selling ad space (Laser et al. 2014). Google is well aware that until and unless people
would search for and read information, they would not usually come across the advertisements.
This is why the company’s business model is based on its ability to establish itself as a reputed
search engine. Besides, it is equally important to state here that the company’s business model is
also based on the idea of updating the search engine, so that the people have something or other
to expect from Google each new day. The business model of any company is based on the
concept of innovation and the most important and innovative aspect of Google business model is
that it provides free service to all the users who do not need to make any payment while
accessing the web pages from the search engine. Instead of trying to make money from the
online users, the company makes search engine service free while charging the advertisers. Thus,
owing to its business model, the company makes the revenues from Advertisers who are
interested in reaching out to the online users. It charges money from the advertisers on a cost per
click basis, and it charges nothing from the online searchers as a result all the searchers end up
searching information from Google only.

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Reference List:
HSGUniStGallen 2017. Business Model Innovation. [image] Available at:
https://www.youtube.com/watch?v=B4ZSGQW0UMI [Accessed 22 Aug. 2017].
Kryscynski, D. 2017. What is Strategy?. [image] Available at: https://www.youtube.com/watch?
v=TD7WSLeQtVw [Accessed 22 Aug. 2017].
Lazer, D., Kennedy, R., King, G. and Vespignani, A., 2014. The parable of Google Flu: traps in
big data analysis. Science, 343(6176), pp.1203-1205.
Thompson, A., 2015. Toyota’s generic strategy and intensive growth strategies. Retrieved
April, 27, p.2016.