Example of a Report on Toyota And Its Business Level Strategies

Toyota is ranked globally as the second largest automaker company behind their main competitors, General Motors regarding productivity; though Toyota is ranked the first with respect to the revenue, profit, and net worth. In 2012, Toyota produced nearly ten million vehicles, one million behind the General Motors. Its principal market is the United States, China, and Japan where it sells over 50% of its cars (Balakrishnan, 2015). Additionally, Toyota has outstanding shares in the majority of the South East Asian countries that have a fast-growing economy. The companys worth is the US $53.5 billion The company manufactures a broad range of cars that are highly considered due to their quality, value, and engineering; their designs has set a worldwide safety standard, ease of maintenance and reliability. Some of the model units produced by Toyota include Toyota Corolla, Voxy, Hiace, Probox, Harrier, Passo, Rav4, Hilux, Celica and among others (Barabba, 2007). The Toyota management together with the business model are said to be having the most appropriate business strategy as well as strategy management. The major model unit that will be focused on this essay is the Toyota SUVs.

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What is the strategy of the business (what/who/which/how), Porters 5 forces?

The Toyota SUVs faces by major environmental effects of the external factors as demonstrated by Porter's model, Five Forces analysis. Despite these challenging issues mentioned in the five forces analysis, Toyota SUVs remains to be among the main players in the automotive industries worldwide. Such kind of success denotes the companys aptitude to endure the negative forces within its external environment. In spite of this, as represented in the Five Forces analysis, Toyota have to innovate for competitive advantages against other corporations continuously (Lee & Jo, (2007).

Aggressive rivalry among the existing companies.

The major competitors of Toyota company in the global marketplace are General Motors, Ford Motor Company, Hyundai. Honda Motor, SAIC Motor, BMW Group, Volkswagen, Nissan, Daimler, and others. The pie chart below demonstrates the automotive market structure, as it can be seen, Toyota upholds the leadership position I the world marketplace with regards to the sales, GE enjoys a great US market share, partly because of the US government protectionism policies (Ferguson, 2017).

Threat of new entrants or new entry (weak force)

In the case of the Toyota company, potential competitors are the threat to the automotive manufacturing business. However, the threat of the new entrants into the industry is becoming weak due to some of the barriers, they include. A high amount of capital required, access to the distribution channels and economies of scale. Toyota SUV enjoys the economies of scale because of its global scope and firm size with regards to its operation; all these benefits is further relayed to the customers hence reducing the prices of the vehicles and remain competitive. Additionally, the anticipated retaliation from the current auto manufacturers, vast product role differentiation as well as the major regulatory obstructions in the main markets are also among the factors which minimize the threat of the new entrance onto the market (Ferguson, 2017).

The bargaining power of the Toyotas Suppliers.

There is an insignificant bargaining power of the suppliers in the vehicle manufacturing field, due to the immense number of the suppliers of different parts and the significance of the size of the many suppliers is important. The switching cost of the supplies for the automobile manufacturers differs concerning the makeup of the delivered product to the supplier as well as the type of the supplier. Due to the Toyotas dependence on lean manufacturing and the timely supply chain management, the suppliers adjacently located to the production units have a more bargaining power.

Customers bargaining power

According to Chiarini, (2012), the Toyotas customers directly influence the business with the revenue. Some of the factors that lead to the firm bargaining power of the buyers are such as; the high quality of information, lower switching cost, and high information quality. Having a lower switching cost implies that the customer can comfortably shift from Toyota to its competitors without any extra cost incurred, this kind of change appears when the client purchases a new vehicle (Chiarini, 2012). Furthermore, Toyota's customers can select their finest option since they have access to credible information, like information from the websites run by the company. There are substitutes available; however, cars from the companies like Toyota are still preferable regarding the convenience. Toyota ought to ensure that the products that they manufacture fit the predilections and anticipation of its target customers (Nkomo, 2013).

Threat of substitution or substitutes

Substitutes influence Toyotas operations since it competes with the companys products. With regards to the Toyota, lower switching cost, modest availability of substitutes and lower suitability in using alternatives, are the external factors there are significant aspects of the automotive industry that contributes to the moderate threats of substitution. In many instances, it is comparatively easy for the customers to move from Toyota to its substitute. With regards to the article by Nkomo (2013), substitute to the Toyota is such as the bicycle, among other means of transportation. Nevertheless, these substitutes are moderately available. In some geographical locations substitutes to the Toyota's are products are not present, in this case, the suburban areas where there is no available transportation. Furthermore, these substitutes are typically inconvenient as compared to using the products from Toyota.

Difference between Toyota (SUV) and its competitors on key drivers of profitability

The Toyota Motor company has continuously managed to combine the cost leadership with the differentiation strategy, making excellent values through meeting and targeting the customer's expectation on the attributes of the product and meeting their expectation in price. The production of Toyota is apparently the most efficient in the world; also its effectiveness permits the company to keep an eye on strict low-cost strategy in the international car industry. All at once, in the past decades, Toyota has begun to differentiate SUVs from those produced by its competitors with regards to the superior quality and design. This kind of superiority has allowed the company to change its premium price and general value.

Toyota applies both low cost and differentiations the core strategies of gaining the competitive advantage over their rivalry in the industry of automotive. Toyota's market scope is a large one, and it entails almost every kind of customer available in the market to buy the Toyota SUVs automobile. Toyota has the capacity of targeting such vast markets since their product is mostly preferred. The Toyota SUVs is suitable for the outdoor activities and for people who live in the areas that have severe weather conditions. Toyota SUV comes up with different models that suit different market price anticipated by their customer's globally. The Toyota's 4Runners midsize SUV is a kind of a body-on-frame SUV continues to become more popular in the US, regardless of the new automotive that are introduced continuously in the market. Another, redesign of Toyota "Sherpa of SUVs will be released in 2017.

Companys core competencies

There are no core competencies to Toyota with regards to the SUVs though it operates within the direction of the two ideas: respect for the people and continuous improvement. Toyotas operates with the guidance of both the lean manufacturing together with the set of 14 principles referred to as "The Toyota Way." The principle defines the firms working philosophy. The principles are concerned with the production and management, culture and workload, excellent decision-making, constant improvement, leadership development, eradication of the wasteful practices, together with valuing partnerships. Toyota has positioned a specific accent on its clients service experience because of the previous recall matters. Such problems have not distant the firm from getting awards. Toyota through its product, SUV, defines itself as committed to incessant enhancement in the aspects of operations in its entire global facilities (Monden, 2011).

References

Balakrishnan, N. (2015). Toyota Production System. In Dependability in Medicine and Neurology (pp. 239-260). Springer International Publishing.

Barabba, V. (2007). The Toyota innovation model. Strategy & Leadership, 35(4). http://dx.doi.org/10.1108/sl.2007.26135dae.002Chiarini, A. (2012). Lean organization: from the tools of the Toyota Production System to lean office (Vol. 3). Springer Science & Business Media.

Ferguson, E. (2017). Toyotas Five Forces Analysis (Porters Model) - Panmore Institute. Panmore Institute. Retrieved 9 February 2017, from http://panmore.com/toyota-five-forces-analysis-porters-model

Lee, B. H., & Jo, H. J. (2007). The mutation of the Toyota production system: adapting the TPS at Hyundai Motor Company. International Journal of Production Research, 45(16), 3665-3679.

Monden, Y. (2011). Toyota production system: an integrated approach to just-in-time. CRC Press.

Nkomo, T. (2013). Analysis of Toyota Motor Corporation.