Comprehensive Strategic Management Report: Toyota's Business Analysis

This report provides a comprehensive analysis of Toyota's strategic management, examining its business strategies and market position. It begins with an executive summary and an introduction to the company, including its history, mission, and vision. The core of the report focuses on strategic analysis frameworks such as PESTEL and SWOT, evaluating the external and internal factors impacting Toyota. It delves into political, economic, social, technological, environmental, and legal factors (PESTEL) and explores the company's strengths, weaknesses, opportunities, and threats (SWOT). Furthermore, the report includes a competitive profile matrix, long-term objectives, and strategies for achieving those objectives. Recommendations are provided regarding marketing, finance, R&D, and customer relationship issues. The report concludes with procedures for strategy review, evaluation, and control, offering a holistic view of Toyota's strategic approach. The report highlights Toyota's global presence, its diverse product range, and its commitment to innovation, sustainability, and customer satisfaction.

Strategic Management

EXECUTIVE SUMMARY
This report majorly has put focus upon the strategies formed by the organizations. There
are various analyses framework which the organization uses before forming its strategic plans,
some of these analyses framework includes the SWOT analyses, PESTEL analyses, Boston
Matrix, competitive profile matrix, grand strategy matrix and the so on. All these framework
helps an organisation in making the correct decision about their actual position and the standard
position they have in market. Strategic management is a concept in which the tactics and the
strategies formed by the organisation are manage in such a way that it helps the it in attaining the
specified task or objective. This report has taken an example of Toyota. Toyota is a Japanese
multinational company which specializes in manufacturing the automobiles. According to the
reports, in 2019 the company has around 364445 employees around the world. This company has
ranked at 10th position in the world on the bases of revenue.
Toyota company started its business in the year 1933. The owner, Kicchiro Toyoda
travelled to Europe and US in the year 1929 for investigating more about the automobiles.
Initially the company has its manufacturing unit into Japan only, after 1960s the company
performed many researches and decided to expand its business by opening their ne
manufacturing unit at the international markets also. The ever first manufacturing unit of the
company which set up outside of their home country was in Melbourne, Australia. Until 1965,
Australia was the highest exporter of the company’s automobile. It is also been observed that
after the end of the decade the company had a global presence. The company had started
exporting its 1 million unit at that time. Toyota is indulge into the manufacturing of all sorts of
cars ranging it from high class SUV’s to buses, mini vans, trucks and cars which can be afford by
middle class people. Apart from their automobile business the company has also engaged into
the other industry like banking, financing and leasing.
The company vision is to meet the needs of the customers with a smile at their faces. Also to
incorporate the business activities in the most admiring and sustainable manner. The mission is
to attract and attain the customers through the offering the valuable and satisfactory products to
them”. The market share of the company according to the reports of 2019 was the highest among
all the other competitors with a percentage of 10 percent. The report of Satista for Global
automotive market in the year 2019 is presented below in the table:

Contents
EXECUTIVE SUMMARY ................................................................................................................................2
INTRODUCTION...........................................................................................................................................5
Introduction of the company.......................................................................................................................5
PESTEL and SWOT analyses.........................................................................................................................6
Competitive profile matrix ........................................................................................................................10
Internal factor evaluation .........................................................................................................................12
Long term objectives for the company – Toyota ......................................................................................13
Strategies for achieving the above stated long term plans........................................................................15
Recommendations about the marketing, finance, R&D, CIS issues which the company should follow:....17
Recommend procedures you’ll have in place for strategy review, evaluation and control specific to your
business entity...........................................................................................................................................19
CONCLUSION ............................................................................................................................................21
REFERENCES ..............................................................................................................................................22

INTRODUCTION
Strategic management refers to making the necessary changes into the tactics used by the
organisation after proper monitoring, analyzing, evaluating, assessing all the needs and goals of
the organisation. Proper management of the strategies used by the organisation helps them in the
achievement of their goals and objective. There are many frameworks which can be used in
accessing the true positions and tactics use by the organisation. For reference this report has
taken an organsiation, Toyota. Toyata is a Japanese company. It is specializes in manufacturing
the automobile around the globe. The company has a huge manufacturing units spreading over
the world. It is a multinational company which has its global presence of around 10 percent into
the market. The company was established into the year 1933 by Kicchori toyoda.
This report discuss about the various strategic analyses framework like SWOT, PESTEL, Boston
Matrix, competitive matrix and the etc.
Introduction of the company
The company Toyota was establish into the year 1933 by Kicchori Toyoda. The company
manufactures the automobiles and sells around the globe. Apart from this the company is also
into banking, financing and leasing business. The company has the following mission and
visions:
Mission:
The mission is to attract and attain the customers by providing them the high valued products and
services which brings satisfaction into the lives of their customers along with a smile (Barca,
2017). The company plans to attain its mission with the help of all these core values and these
values are:
 By providing the professional excellence into their products and services offered to
customers.
 Bringing their system towards the customer orientated concept.
 Through effective and efficient team work
 By welcoming the new challenges the company has face
 And lastly through have a global perspective before forming any structure or system.
Vision:

The company’s vision is to be the most successful business into the world by gaining the respect
from their customers. And to provide the products which satisfies the needs to the customers and
bring up the smiles at their faces.
The company plans to achieve this vision through the sustainable growth. They develop the
vehicles which match with the expectations of the customers, making them satisfied. They also
give their contribution in the easy access and mobility of communities. And promotes the eco
friendly environment and systems.

PESTEL and SWOT analyses
The pestel analyses is a framework which is used evaluate the factors which are
independent to the control of any organisation. These are the factors which are do put an impact
upon the working of any organisation (Baumgartner and Rauter, 2017). The pestel analyses are
used to form the strategies after analyzing all the external factors. The pestel analyses helps in
taking out the opportunities from these external factors and evaluating the kind of risks the
organisation can face. The pestel analyses of Toyoto are as follows:
Political factor: The political factor refers to the rules and regulations which the government
from. It is also refers to the degree towards which the government can exercise the control upon
the industries. Some of the examples of political factor may include foreign trade policies, taxes,
corruption and the etc. The company, Toyota, in 1992 set up its industrial unit in UK, which
earlier they has decided to establish in US. As the market and the government of UK is very
much stable which looks very much more promising to the company they decided to shift their
manufacturing unit from US to UK. The UK government also provides some relaxation of the
company in terms of expensive tariffs as the company employees hundreds of local people of the
country contributing to the growth and employment rate of UK. Similarly the company also
planned to establish its manufacturing unit in Thailand but due to very instable government and

political situations of the country the company decided to take off its idea (Deephouse, Gardberg,
and Newburry, 2019). Toyota believed that the demand into the Thailand would not be so high
compared with the invested price. The political stability did played an important role into the
company decision as it has impacted the company’s operations to a great extent.
Economic factor: The economic factor refers to the economic stability of a particular region or
country. Some of the examples may include employment rates, GDP, growth rate and the etc.
Evaluating all these factors are very much necessary as they tell the company about the
disposable income of the people and the prices which they can afford for the product or service.
Toyota not only competes with the companies its home market but also with the international
companies such as Ford and BMW. To fight with such competitors the company has to evaluate
about the customers income and their needs so that the company can manufactures the product
within their afford limit. The company also produces the automobile according to the prices of
petrol and diesel. In some countries the prices of diesel are very less there the people prefer to
purchase the diesel based vehicle. Whereas in some countries the prices of petrol are very much
less that’s why they prefer the petrol based vehicles. Toyota also gets very much affected by the
decrease in disposable income of the people. As due to recession many companies’ production
and revenue gets impacted, Toyota was one of them.
Social factor: Social factor includes the taste and preferences of the targeted market. It also
includes the attitude and perception the targeted market has on a topic. This helps the company
in knowing about the taste and wants their customers. There were many a times the company
Toyota has to call back its vehicle due to some problem or issue like any malfunctioning into
their vehicle’s system, does not get liked by the people, and etc. for which the company has also
to pay various penalties. The company does take its customers very seriously and perform a
thorough investigation into their product if their customer finds any issue or malfunctioning. The
company also investigates about the needs and desires of their targeted market so that they can
come up with such a vehicle which can satisfy their needs and wants. The social factor helps the
company in producing the product which is liked by the customer and also gives them the high
value through their satisfaction level.
Technological factor: The technological factor includes the factor like technological
advancements and up gradations. It has been said that the first hydrogen car was manufactured
by the company Toyota. The company invests massive amount of money into their research and
development program so that they can offer the alternatives for the fuels. This would help not
only in saving these scare resources but also these can save the energy used. Toyota is also very
much into the manufacturing of Hybrid cars which is the mixture of fuel and electric cars. The
company always tries its level best in bringing the new innovation and creation into the vehicles
and relative services it provides to their customers. It never stands back when it comes to
technological advancements and innovation and keeps on surprising its customers with new and
advance technological vehicles.

Environmental factor: This factor includes the rules and regulations which are related with the
environment and the related issues. The Toyota Company is contributing to the environment by
producing and coming up with the technology which helps the environment in the sustainable
growth. The vehicles like hydrogen and the Hybrid vehicles are helping in less consumption of
the fuels and save these scare resources (Ergunova and et al., 2017). The process and the
technology used by the company are also eco friendly. Apart from this the company has adopts
the sustainable and smart policies regarding their waste handling and recycling products.
Legal factor: The legal factor includes the factors such as rules and regulations which have been
formed by the legislation. Some of them includes the employment Acts, discrimination Act,
wages Act and the like. The organizations have to follow all these rules and regulations if they
want to operate into the region or country. The company Toyota is established globally, the
company has follows and has obeys all such regulations according to the region in which they
are. This has also helped the company in gaining the trust of the government as well as of
customers. The legal factor is very much important to consider by any organisation, if not
followed the company has to pay a huge penalties for that.

The SWOT is an abbreviation of strength, weakness, opportunities and threat. This is an
internal analyses or micro analyses which helps the organisation in evaluating its internal
strength and weaknesses. And also this helps the organisation in analyzing its opportunities and
threats. Here,
Strength refers to the unique qualities which help the organisation in differentiating ifself from
the other competitors.
Weakness refers to the weak points which the organisation has and in which they needs some
improvements.
Opportunities refers to the areas which the company can explore more that would help in
bringing the growth and success.
Threats are the risks or the dangers which the organization is prone to.
Strengths: The Company Toyota has a major strength that it invests much in its research and
development department. Through working more in R & D department, it is able to bring such
new and innovative vehicles into the market place. The company keeps satisfying its market by
bringing innovation in their vehicles which offered the high value to its customers along with the
greater satisfaction. The company has a global presence which does helps it in not advertising
and promoting about it. Also it has a huge and strong customer base which is much a huge
benefit for any company (Favoreu, Carassus and Maurel, 2016). The Toyota Company cares
about the sustainable growth and they also have made their processes and procedures
accordingly. The technology used by the company is also very innovative and new which helps it
in attaining the competitive advantages over other competitors. Apart from all these the vehicles
which are provided by the company are of high valued which satisfies the customer’s needs and
wants at that price. The vehicles which the company manufactures targets all sorts of market as it
produces variety of it like trucks, mini trucks, SUV’s, petrol cars, diesels cars and so on.
Weakness:
Dependence on suppliers: As the company does not manufactures all the parts of a
vehicle, they do import that from other companies or suppliers, any delay in that process can also
delay in further activities for the company. This is considering a major weakness as the company
might be able to face problem in achieving their production target at time.
Not grabbing markets: The Company had produced the green vehicle technology, but
these vehicles were get failed to get the required attention from the people. This did create a loss
for the company has they fail to attain the required or targeted market for their green vehicles.
Negative publicity: Sometime it happens that the company has to call back some of its
vehicles due to malfunctions or any sort of problem into them. This has create the wrong and
negative image for the company.

Poor brand recognition: Toyoto has in total 4 flagships namely Hino, Daihatsu, Lexus
and Toyota. Among all these lexus has the good brand recognitions other are not so very popular.
Opportunities:
The developing nation’s growth: The nations or the economies are getting developed with
the time. The under developed economies are coming into the category of developing nations
and with that the disposable income of the people is also increasing making them financially able
to afford the automobiles. This is a good sign for the company as this can help in increasing their
sales. This also creates the demand for the company.
Green vehicle technology: there is a running trend of green vehicles in which there is a
less use of scare resources such as petrol and diesel (Ferreira, Mueller and Papa, 2018). The
green vehicle are made with a purpose that they consume the less energy which would not only
reduce the consumption of scare resources but also would produce less pollution into the
environment. The field for green vehicle is very much new and has the capacity to grow more.
Concern for environment pollution: The companies belonging to any industry are trying
their best in producing the products which encourage sustainable development and growth.
Likewise the automobile industries are investing huge into their R & D department so that they
can produce the automobiles which can produce the less pollution into the environment. As in
the case with Toyota, the company has produced the vehicles like Hydrogen cars and hybrid cars
which help the environment in not producing any kind of carbon element into the air. This is a
field which is very much promising to any industry and a lot of research and exploring can be
take place.
Threat
Competitors: The Company Toyota faces a huge competition not only from its domestic
competitors but also from the international competitors like BMW and Ford. It is very hard for
the company to keep up with the market and market needs by creating the new products and
vehicles which can help them in gaining competitive advantage and also differentiate themselves
with the other companies also.
Huge price for raw materials: The raw materials or the parts of an automobile company
are very much expensive. Any rise into the prices of these raw materials would put a direct
impact upon the prices of vehicles (Heath, 2018). This creates a threat for the company as if the
prices of raw materials get increased they might have to increase their prices for vehicles which
might can lose their customers.
Lower profits: Due to the continuous changes into the exchange rates the profits margins
for the company gets decreased. When the company gets back to the Japan, it becomes quite less
profit margins for the company as compared with other countries currencies.

Competitive profile matrix
The competitive profile matrix is a matrix which helps the company in the identification
of the organization competitors and compares them with their strength and weaknesses. In order
to understand the actual competition which company face and the various external forces this
matrix get in use. In this the competitors are get compared with the factors which makes them
successful. This also helps the company in analyzing the company’s strength and weakness and
from this the company can make the required strategies to bridge the gaps. Critical success
factors are yet another important term. These are the factors which are taken as a highest possible
value and if a company has to attain success then it is necessary for them to have the command
in these factors. These include both the internal and external factors in their evaluation. In this
matrix the comparative are weight according to the rank of 1 to 4 where,
4 = major strength
3 = minor strength
2 = minor weakness
1 = major strength
In the above competitive matrix it is clearly seen that for the automobile industry the
advertising and the Global expansion is of great priority and importance as they weigh the
highest among the lot with a weight of 0.20. Following to this financial position is yet another
important factor with a weight of 0.15. The lowest importance among the available factors is the
Market share with a total weight age of 0.05 only. These weight ages are provided according to
the factors which are need to be consider as a priority and if the company wants to be very much
successful they need to have a command at the above stated factors.
According to the table which has been provided above, the company 2 has the major
strength holding in this factor. It is clear that this company puts a lot of investments in its
advertising. They have the goals that their brand should be easily recognizable among the
targeted market which also helps in making their company to have a global presence. It is also
observed that the company which invests much into their advertising activities, which helps the
company in educating about the company’s products and services that they got to offer, also help
the company in spreading and increasing a global presence. Along with the advertising the global
presence is yet another factor which has been put up as a priority by the company. In this factor
Company 1 has scored the first position as their global presence among the other two companies
is more and the company 2 is the least in this factor which was at first position in advertising.
Also the company 1 has the highest position in the financial position factor. This means that
along with the good global presence the company also has the great financial position in its
operations. Having a strong financial position into the market is a good thing for any company as
it helps the company in building trust among the investors or the shareholders. After doing all the
calculations and adding up the total weight, it has been observed that the company 1 is a lot