Internal and micro

analysis of Toyota
motor company:
-mohammed tahir
 Toyota vision:
 Toyota Company is having very broader visions that depicts from
their vision statement which is
 “To be the most successful and respected car company in America”
 It shows that Toyota wants to be the best company of the world but
Toyota’s also to be best they do not want to comprise on their quality and
customer friendliness. They want to be respected by their customers
mission & as well as their all other stake holders.

vision Toyota mission:

 Toyota is company which is known due to its quality products. They
provide their customer best quality and high value products in order
to gain their loyalty this is also depicts from their mission statement.
 “To attract and attain customers with high-valued products and
services and the most satisfying ownership experience in America.”
 This mission statement tells us that the mission of the Toyota is all
about its customer. They want to provide high value products to
attract new customers and to retain the older ones as well.
  Toyota is 3rd largest automotive manufacturer
 Toyota Motor Corporation is headquartered in Toyota City,
Aichi
Introduction  Toyota has annual sales of $120 Billion
On Toyota  Produces ~5.5 million vehicles per year
Motors  From 56 manufacturing plants across 6 continents
 Employs ~ 325,905 (as of March 31, 2013) Headquarter of
Toyota City, Aichi-Japan
   Established in August 28, 1937 out of Sakichi Toyota’s
weaving machine company
 Launched first car (SA Model) in 1947
 “Toyota Production System” formed in 1950 based on just in
History of time principal
Toyota auto  First global expansion in 1959 at Brazil  In 1972, cumulative
production >10M units
Industry
 Founder & CEO Founder: kiichiro toyoda
 CEO : Akio toyoda
 MD: Hiroshi nakagawa
Market share
 Toyota’s new organizational structure now has the following
main characteristics:
1. Global hierarchy
2. Geographic divisions
3. Product-based divisions
Toyota’s
Organizational
Structure: An 1. Global hierarchy: Toyota still maintains its global hierarchy
despite its reorganization in 2013. However, in the current
Analysis organizational structure, the company has increased the
decision-making power of regional heads and business unit
heads. In essence, Toyota’s decision-making processes
became less centralized. Nonetheless, all business unit heads
report to the firm’s global headquarters in Japan.
 2. Geographic divisions: Toyota’s new organizational
structure has eight regional divisions (Japan, North
America, Europe, East Asia and Oceania, China, Asia and
Middle East, Africa, and Latin America and Caribbean).
Each regional head reports to the company’s
headquarters. Through these regional divisions, the
organizational structure enables Toyota to improve
Toyota’s products and services according to regional market
Organizational conditions.
Structure: An 3. Product-based Divisions: Another feature of Toyota’s
Analysis organizational structure is the set of product-based
divisions. The company has four of these divisions: (a)
Lexus International, (b) Toyota No. 1 for operations in
North America, Europe and Japan, (c) Toyota No. 2 for
operations in all other regions, and (d) Unit Center, which
is responsible for engine, transmission and other related
operations. This feature of Toyota’s organizational structure
supports development of brands and product lines.
 1. Strengths:
The strength of a business refers to the area which keeps it far
ahead than its competitors. The strong points of Toyota in the
automotive market are as follows-
 Strong Human Resource– A Company needs skilled and
professional human resource to grow bigger. Toyota is blessed
with huge human power throughout the world. They have
SWOT invested in getting resources, and the return they get is big. As of
December 2015, they have 348,877 skilled human resources
Analysis around the world.
 Innovative Organizational Culture– While it comes to advanced
operating system and functional strategies, Toyota will always be
on the top. From widely practiced management system to lean
manufacturing details, Toyota has set examples for the fellow
companies.
  Strong Brand Image– This is obviously one of the most important
strong points of Toyota. Whenever people look for cars, they search
for the brand name ‘Toyota,’ and that has kept them far ahead of
their competitors.
 Strong Diversified Portfolio– Cars means Toyota. They have a
large number of varieties of their product. From electric cars to hybrid
cars, Toyota has spread its wings to all types of cars in this market.
 Advanced Technology– Toyota is not only a car manufacturing
SWOT company, but they are also considered as an innovator. Their hi-fi
technology has introduced hybrid cars in the market. The green
Analysis vehicle technology of Toyota has been adorned by customers in
large scale when they consider the environmental concern and price
of petrol.
 Global Supply Chain– They has outlets, branch companies,
manufacturing factories around the world. The strong and global
supply chain of Toyota is really one of the greatest strength of this
company.
 High Production Capability– Toyota is giving serious competition to
its contemporaries on this point as they have a high production
capacity of producing cars, almost 10 million per year.
 2. Weaknesses in the SWOT analysis of Toyota
 Dependence on Suppliers– as Toyota has suppliers around
the world; they have to depend on them. It makes the
production a bit sloth.
 Not Grabbing Markets– Toyota has developed green vehicle
technology, but it has been failed in grabbing the actual
market where it would be implemented accurately. The
SWOT market of China and India can be the best for launching these
Analysis vehicles, but there is still time.
 Negative Publicity– This happens due to large vehicle
recalls. Any type of vehicle recalls affecting the automaker,
and Toyota is no exception. Also, the recall rates are higher in
Toyota, and that can cause more negative publicity.
 Poor Brand Recognition– There are 4 different flagships of
Toyota- Hino, Lexus, Daihatsu, and Among these, Lexus and
Toyota have been successful in making the brand
recognition.
 3. Opportunities:
 The growth of Developing Nations– Perspectives is changing,
and now, people are more inclined to buy cars. In the developing
nations, the demand for cars is exuberating.
 Green Vehicle Technology– Maybe slower, but the green vehicle
SWOT technology is gaining popularity around the world. If Toyota
focuses on this area, they will get much revenue from
Analysis this innovation.
 Growing Concern for Environmental Pollution– People, around
the world, is getting more concerned about the environmental
degradation and are also willing to do their bit. This is the high
time to popularize Toyota’s environment-friendly.
 4. Threats:
 Number of Competitors– Toyota is competing with huge
names in the market, like Volkswagen, Ford, Mitsubishi,
and Hyundai. It makes quite hard to make strong feet in the
market.
SWOT  High-priced Raw Materials– As the cost of raw materials is
Analysis increasing, that is also increasing the cost of the end product.
 Lower Profits– The continuous threat of exchange rates is
always there. When the revenues are sent back to Japan in
the Yen that becomes quite lower profit in comparison to
other currencies.
 1. Political Factors Affecting Toyota’s Business
 Political stability in most major markets (opportunity)
 Free trade agreements (opportunity)
 Governmental support for ecofriendly products (opportunity)
2. Economic Factors Important to Toyota
Toyota’s  Weaker Yen vs. U.S. Dollar (opportunity)
PESTEL/PESTLE
 Gradual growth of U.S. economy (opportunity)
Analysis
 Rapid growth of developing countries (opportunity)
3. Social/Sociocultural Factors Influencing Toyota’s
Business Environment
 Increasing interest in hybrid cars (opportunity)
 Increasing interest in electric cars (opportunity)
 Widening wealth gap (threat)
 4. Technological Factors in Toyota’s Business:
 Rising use of e-commerce (opportunity)
 Mobile technology trend (opportunity)
 Cybercrime (threat)

Toyota’s 5. Ecological/Environmental Factors:

 Climate change (opportunity)
PESTEL/PEST
 Declining global oil reserves (opportunity)
LE Analysis  Increasing emphasis on business sustainability (opportunity)
6. Legal Factors:
 Improving intellectual property laws (opportunity)
 Increasingly complex environmental laws (opportunity)
 Increasingly complex consumer laws (opportunity)
 The external factors identified in this PESTEL/PESTLE
analysis of Toyota’s remote or macro-environment mostly
create opportunities for the company. For instance, the firm can
Toyota’s focus on product development to exploit opportunities in the
PESTEL/PESTLE market. Toyota can also improve business operations and
market presence to exploit opportunities based on economic
Analysis – external factors. However, Toyota must address threats based
Recommendatio on the external factors of the widening wealth gap and the
ns rising frequency of cybercrime. Technological measures and
product innovation could prove beneficial in this endeavor.
Thus, this PESTEL/PESTLE analysis shows that Toyota has
significant opportunities for growth and stability.
ANSOFF
MATRIX
ANSOFF
MATRIX
 1. Primary activities:
 Inbound logistics: Each of the Toyota cars is made up of
thousands of vehicle parts sourced from suppliers around the
globe. Toyota has managed its inbound logistics very well
through a  network of warehouses. Its global network of
distribution centers and warehouses receive parts from the
VALUE CHAIN suppliers.
ANALYSIS OF • Outbound logistics: Toyota has parts and logistics centers
TOYOTA in various nations around the globe. It ships thousands of
parts and orders each day from its network of warehouses
MOTORS: and distribution centers. Toyota notes on its website, “The
Toyota Parts Centre Europe is its central distribution center,
at the core of its parts supply chain. The center is located in
Belgium and ships thousands of parts every day to its
regional depots across the entire region”.
  Operations: Toyota is a global brand with global operations.
With its headquarters in Japan, the brand serves customers
across the globe through a  large and global distribution
network. Apart from several manufacturing and R&D sites,
the brand also has several parts distribution centers located
globally.
VALUE CHAIN  Marketing & sales: Toyota is a global brand and is facing
ANALYSIS OF stiff competition in the 21st century from the other vehicle
TOYOTA brands. To retain its market share and customer base, the
brand has to make major investments in marketing and
MOTORS: promotions. Toyota uses a mix of traditional and modern
advertising mediums to promote its brand and products. Apart
from its own website and social media, the brand also uses
its sales and distribution channel for marketing. Events like
races and motor shows are also an important channel of
promotion for Toyota. In 2015 and 2016 the brand invested
more than 4 Billion US dollars in advertising.
 2. Support Activities:
 Technology : Toyota is a major vehicle brand known for its
exceptional engineering and technology. Apart from great
production technology, the brand has continued to invest in
technological innovation for growth. It has its own research
VALUE CHAIN centers and has struck partnerships with institutes like MIT
and Stanford for faster innovation. Every year it invests a
ANALYSIS OF large sum in R&D for innovation in AI and Robotics.
TOYOTA  Infrastructure: Toyota has maintained  a large infrastructure
MOTORS: globally. From its headquarters in Japan to North and South
Americas as well as Asia and Europe, it has maintained an
extensive presence throughout the globe. Currently led by
Akio Toyoda, the brand has an impressive presence in most
of the major markets of the world.
  HRM: Toyota had 364.5K employees in 2017. The brand
believes in a  human centric approach to value creation and
therefore focuses on the development of its human
resources. It follows the philosophy of human centered
Monozukuri. In the automotive industry, smart and able
VALUE CHAIN human capital can be a major source of competitive
advantage.
ANALYSIS OF
TOYOTA  Procurement: Toyota procures from thousands of suppliers
around the world. In 2009, the brand formulated a specific
MOTORS: ‘Toyota way of purchasing’ that lays down the policies and
principles to be followed by the procurement staff. Through its
procurement strategy, Toyota has always worked to
contribute to local economies.
 • Technological capabilities:
Toyota far excels most of its competitors in terms of
technological capabilities.  The brand has excellent
technological capabilities in manufacturing, supply chain as
CORE well as sales and service. It is also because of its technology
that the brand is so popular in the most advanced markets.
COMPETENCIES
OF TOYOTA • Customer loyalty:
MOTORS: Toyota is a popular brand with some of tis products among the
most popular in the advanced and fast growing markets. It has
millions of loyal customers around the world. The brand has
earned high level customer loyalty through its focus on quality
and passenger safety.
  Global Presence:
Toyota is a global brand that  has maintained an excellent
presence from Europe to Asia and the Americas. Its products
sell in more than 170 countries. Apart from that it has an
CORE international manufacturing, distribution and sales network.
COMPETENCIES  Supply chain network:
OF TOYOTA The brand has managed an excellent supply chain network. It
MOTORS: sources from thousands of suppliers from all around the globe.
Toyota’s focus has remained on forming strong long term
relationships with its suppliers. However, it always keeps its
doors open for those who can offer better quality than others.
  A mix
of Demographic, Geographic and Psychographic segmentati
on strategies is used by Toyota for customer profiling and
understanding different customer groups.
Segmentation,
targeting,  Toyota uses differentiated targeting strategy for
positioning in the manufacturing and selling its offerings as per the customer
segments and improve the customer satisfaction.
Marketing strategy
of Toyota –  Value-based and user benefit positioning strategies are used
by the company for highlighting the functional benefits of the
offerings of the company.
 1. Product in the Marketing mix of Toyota 
Toyota provides their customers with both tangible
and intangible products ranging from cars to warranties.
A product of high quality is usually self-marketed, and this is what
makes Toyota vehicles so desirable. They have nineteen car
models, which are further broken down into different categories
Marketing mix  Passenger – comprising of small, medium size, and large
of Toyota – vehicles. Aurion, Yaris, Camry, Tarago, Corolla and Rukus

Toyota  SUVs & 4WD– Kluger, Rav4, Parado and Landcruiser 200
 Hybrid – Prius and Camry
Marketing mix  Commercial – HiAce, Coaster, Landcruiser 70 and HiLux.
Toyota also offers vehicle parts such as gears and other parts. As
far as the intangible parts are considered, they offer financial
services, warranties, road assistance, car services
and extended warranties. Their extended warranties have various
mileage coverage options ranging from 36,000 to 1,00,00 miles.
 2. Place in the Marketing mix of Toyota
 Toyota always keeps its customer first and knows the importance
of making its product available to the target audience. They sell
their vehicles through dealerships and sales are made to
costumers by the selling staff on one to one basis. The sales staff
in all these dealerships works together in teams of seven or eight
Marketing mix similar to their teams in the assembly plants. The staff is highly
skilled with not only sales but also product information, data
of Toyota – collection, finance insurance and order taking. Toyota focuses on
the ‘pull’ strategy and make cars that the customer demands.
Toyota Apart from this, Toyota has sales representative going from door
to door in Japan.
Marketing mix  A typical dealership of Toyota is similar to the western dealership.
They try to minimize supply chain costs and keep a reasonable
service level along with having high quality products. They have
organized suppliers into different tiers where the first level
suppliers work in a product development team. The second tier
suppliers make individual parts. This enables cross sharing of the
personnel as Toyota sends their staff to the suppliers in case there
is a work overload.
 3. Pricing in the Marketing mix of Toyota
Toyota became the second largest two-carmaker company in the year
2003. Due to their innovative designs and heavy investments in
promotional activities, they have enticed customers all over the world. They
built high quality vehicles and price them moderately.
The selling price of any product is usually determined by the cost price and
Marketing mix the profit taken together. Any increase in the cost of production is directly
passed to the customers in terms of selling price. However, Toyota has a
of Toyota – different approach. Even though the formula is same they use it slightly
differently making a huge different. Instead of calculating the selling price,

Toyota they calculate the profit. Thus, they go by selling price-cost price=profit.
They believe that it’s the market mechanisms and the consumers who
determine the selling price. They also give utmost attention to waste
Marketing mix elimination. The profit of the company has increased over time due to the
high quality and low cost vehicles.
According to a report in 2007, Toyota unit sold increased heavily to
2,281,000 units worldwide. They offer vehicles of all price range. The price
range of their cars starts from $18,990 and goes up to $80,000 according
to the model, add options and make. They use low cost
and differentiation to have a competitive edge in the automotive industry.
They differentiate their product on the basis on quality, technology and
superior design.
 4. Promotion in the Marketing mix of Toyota
 Toyota uses different promotional strategies to increase their sales
volume. They advertise themselves through radio, newspapers,
television, yellow pages, flyers, billboards, Internet, word of
mouth and brochures. They use catchy slogan to draw attention to
their brand. It has been ‘Moving Forward’ since 2004; however,
Marketing mix they have come with a new tagline in the US market – “Let’s Go
Places”. In 2012, they announced Virat Kohli as their brand
of Toyota – ambassador in India.

Toyota  In addition to this they started with a cash back offer. These offers
are given by the Toyota corporate to dealer and the consumers
Marketing mix revive it as an instant rebate. Such offers especially attract the
non-cash buyers. Some of the promotional schemes also allow the
customers to use rebate as a down payment.
 To promote their new model Yaris they come with a show called
“The Block”. By promoting shows they are able to each a wider
audience. In the show, they try to entice customers by offering them
a chance to win a new Toyota car.
  Technological innovation for differentiation:-
The focus of Toyota since its foundation has remained on
innovation for making efficient cars. It is why the brand has
Toyota been to establish itself as an innovative brand in several areas.
Motors Key when it comes to making hybrids, Toyota Prius is ahead of all
its competitors. In other areas too Toyota has used technology
Strategies: to distinguish itself from the others. It is investing in growing its
line of electrified vehicles and being a leader in autonomous
driving. Technology based differentiation has helped Toyota
achieve a leadership status in the global market.
  Waste reduction for excellent production:-
The brand has maintained strong focus on managing efficient
Toyota production. The Toyota Production System is also referred to
Motors Key as Just in Time or Lean Manufacturing System. It is considered
a highly efficient production system that targets complete
Strategies: waste elimination. By reducing wastage, Toyota has been able
to control production and operational costs leading to higher
profitability.
 According to Toyota the four main strategies for the next three
years are as follows:
1) to expand the number of SUV models;
2) advancing and improving hybrid models;
Toyota’s 3) introduction of sports models; and
Radical 3-Year 4) expansion of EV technology.
Plan To In the SUV genre, over the next year, Toyota Group will
introduce a new Land Cruiser 300, the Corolla Cross, a new
Redefine The Lexus NX, Then, in 2022, the group will launch a new Land
Company Cruiser Prado and a new super luxurious Lexus SUV. Slated
for a September 2021 debut, The Land Cruiser 300 will employ
a Toyota New Global Architecture (TNGA) platform and a newly
developed 3.5-liter V6 turbo and a 3.3-liter diesel turbo. A
planned 3.5-liter V6 hybrid has been put on the back burner
until at least 2022, according to one Toyota insider.
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