Advanced GIS and Spatial Analysis MBG771
- Subject Code :
MBG771
Toyota Motor Corporation
Strategy Formulation for Toyota Motor Company
Submitted to: Deakin University
Submitted By: Prateesh Deepankar
Student ID: 223293128
Course: Master of Business Administration (Global) M707
Course Code: MBG771
Executive Summary
As Toyota Motor Corporation leads its increasingly competitive and sustainable automotive landscape in Japan, it is coping with rapid change. Certain key findings of the analyses illustrate that Toyotas premium in hybrid technology is challenged by domestic rivals (e.g., Honda and Nissan) as well as international entrants (e.g., Tesla). Another critical trend is the government policies that became a priority to achieve carbon neutrality by 2050 and the demand increase for electrified vehicles by customers. There are opportunities to improve EV infrastructure and make use of the progressions in autonomous driving technology. However, there is also the threat of fluctuating prices of raw materials and an increase in competition in the industry, which can hurt profitability. Regulatory support and consumer demand for such sustainable options are two other big factors pushed by the PESTEL analysis that determine Toyotas strategy. As competitor analysis demonstrates, Toyota has very strong brand equity, but it must improve its ability in battery tech innovation and digital transformation so that it remains ahead. As such, Toyota will need to be able to address these prioritized trends and threats to continue leading the market in the coming 5 years.
Table of Contents
Industry and Sector Performance Analysis
Strategic Responses for Toyota
Implications for Toyotas Strategic Decisions
Industry and Sector Performance Analysis
At present time the condition of the automotive industry in Japan is going through a dramatic turn as follows. The strength of electric vehicles (EV) has increased, both environmental issues must be settled strictly, and the buyers choice has changed. The CAGR of Japan's automotive EPS (Electric Power Steering) market is valued at 5.1% from 2025 to 2033, as it reached $1.7 billion by 2024 and is forecast to be $2.7 billion by 2033 (IMARC, 2024). The main reason for this tremendous growth is attributable to the rising adoption of EVs and autonomous cars that can rely on EPS systems to improve efficiency and match the requirements regarding Advanced Driver Assistance Systems (ADAS). Japan's automotive motor market is projected to grow at a CAGR of 6.7% from 2019 to 2025 due to rising environmental concerns and demand for EVs (NEBRASKA, 2024). For example, the first Japanese company to become a New Chapter member and reach a production volume of 10.2 million units is expected to be on track to achieve this level by 2028.
Key Industry Trends
Shift towards Electrification
The increase in the demand for EVs has been driven by a global push to lower carbon emissions in Japan. Such incentives from the government and greater environmental standards are further accelerating this shift (Bharadwaj, 2023). Toyota, which is famous for its work in hybrid technology, is now confronted with the challenge of scaling up its EV production beyond the limited run of its EV products to compete with local and worldwide players (Reuters, 2024). To maximize this trend, the company should invest in battery technology and charging infrastructure.
Technological Advancements
The improvement in automotive technologies like ADAS and autonomous driving systems is generating the need for much more sophisticated components like EPSs and advanced automotive motors. To prove their worth, these technologies must be put into vehicles of Toyota to enhance safety, the vehicle's performance, and the appeal to tech-dummy consumers (Toyota, 2023). It will require a lot of research and development (R&D) as well as strategic partnerships.
Regulatory Environment
The Japanese government is mandating the increase of fuel efficiency, lowering emissions, and strengthening the environmental standards. The countrys goal of carbon neutrality is duly reflected in these regulations. These regulations require Toyota to function in this way to maintain access to its market, as well as take care of its reputation (JapanGov, 2022). It involves investing in cleaner powertrain technologies and sustainable manufacturing processes.
Changing Consumer Preferences
Japanese consumers tend to be more inclined to purchase vehicles with more safety and convenience features. MaaS solutions are also growing in their interest. To solve these evolving consumer preferences, Toyota has to change its offering products (Weilkiens et al., 2011). It may include the development of new vehicle models, digital service integration, and MaaS business model development.
Competitive Landscape
Findings: The automotive industry is highly competitive due to both old and new entrants seeking to increase market share. Survival and growth are becoming strategies of consolidation and partnerships. Toyota must remain innovative, profitable, and of high quality to maintain its competitive edge (Weilkiens et al., 2011). It may also need to develop strategic alliances or conduct acquisitions to fortify its position in the market.
In Appendix 1 the results indicate that the shift to electrification and the regulatory environment were the top trends for Toyota to be managed. High impact factors with high priority in terms of care to guarantee the firms success in the long term in the Japanese market. There is an emphasis on technological advancements and the competitive landscape and importance needs to be given to how the changing consumer preferences would be dealt with using the targeted product and service offering.
Macro-environmental Analysis
PESTEL analysis for the macro-environmental factors that have a significant effect on Toyota Motor Corporation. Political, economic, social, technological, environmental, and legal factors are discussed, analyzing their potential effects on Toyotas operations and positioning.
Political Factors
The automotive industry is affected by political factors. Operations in Toyota are affected by government regulations like the ones related to emissions, safety standards, and trade policies. Hence, for instance, incentives for the adoption of electric vehicles (EVs) increase the demand, while tariffs on imported components increase the production costs (Jagani et al., 2024).
- Impact: High. Market dynamics, as well as the strategic decisions of Toyota, can be largely determined by government policies.
- Likelihood: High. The automotive sector is subjected to policies and regulations that are ongoing, and planning indicates that they will continue to affect the sector.
Economic Factors
Consumer purchasing power and production costs are influenced by economic factors such as economic growth, interest rates, exchange rates, and inflation. Toyotas profitability can be affected by fluctuations in raw material prices, particularly battery components (Toyota Industries, 2023). On the other hand, the weakness of the Japanese yen is an opportunity to help exports.
- Impact: Medium to High. Sales volumes as well as profits can be influenced by economic conditions.
- Likelihood: Medium. The markets and economic cycles are volatile risks.
Social Factors
The demand for different types of vehicles is determined by social factors such as changing consumer preferences, changes in demographics, and cultural trends. The number of consumers who are becoming more and more environmentally conscious is pushing for hybrid and electric vehicles (Secinaro et al., 2022). In addition, changes in demographics, for example, their growing sway in the form of Millennials and Gen Z, are changing mobility preferences.
- Impact: High. Product development and marketing strategies are dependent on consumer preferences.
- Likelihood: High. Social trends and consumer behavior change constantly.
Technological Factors
The automotive industry is turning into a technologically advanced one. They are critical in terms of innovations in electric vehicle technology, autonomous driving systems, and connectivity. Toyota has been investing a lot of money in areas like these; the company has allocated $13.6 billion to have it done by 2030. By 2026, 10 new BEVs will be launched by the company (Toyota Motor, 2024).
- Impact: Very High. Technology can turn on existing business models and offer new opportunities.
- Likelihood: High. The automotive industry is more and more characterized by the rapid innovation in technology.
Environmental Factors
Factors such as climate change, pollution, and resource scarcity are becoming more and more important. Such a drive towards electrification comes as a consequence of stricter emission standards and growing customer demand for a sustainable vehicle. Toyota plans to eliminate CO2 emissions by 35 percent by 2030 (Toyota Motor, 2024a).
- Impact: High. The automotive sector is changing because of environmental concerns and regulations.
- Likelihood: High. The environmental issues will rise to a higher degree of intensity, which will shape the policy and consumers' behavior.
Legal Factors
Legal factors refer to car safety regulations, pollution, and consumer rights. To keep the market access, it is necessary to comply with these regulations (Singh, 2023). There is a big role in intellectual property rights as well as data protection laws.
- Impact: Medium. Compliance, of course, is mandatory, but it does not always differentiate.
- Likelihood: High. The law and regulation continue to live in flux.
Justification for Prioritization Appendix 2
- Technological Factors: Toyota is strongly committed to investing in this area; the transformative impact of technological advancements is very high, and this factor receives a priority score of 10.
- Environmental Factors: The automotive industry is driven by change by political and environmental factors. All these factors are given a high priority score of 9.
- Social Factor: Very important are the social factors, i.e. the changing consumer preferences that play a significant role in how the product is developed and sold. It is given the high priority score of 8.
- Legal Factors: Legal compliance is always important, but it is not a differentiating factor. Its priority score is 7 and thus medium.
- Economic Factors: Sales and profitability are influenced by economic conditions but can be volatile. A medium priority score of 6 is assigned for this factor.
Competitor Analysis
Given that Toyota has to continue the lead in the automotive market in the world's biggest nation, Japan, it needs to have its eyes on the competitive landscapethe direct and the novel competitors in the sector of sustainable mobility (Nkomo, 2013). This analysis also looks at whether other companies play the role of direct competitors for Honda, Nissan, and Tesla, and emerging competitors for BYD and KINTO. To highlight each others strengths and weaknesses, conduct a SWOT analysis for each, and then discuss their market strategy and other actions that may affect Toyota.
Direct Competitors
|
Direct Competitors |
|||||
|
Companies |
Strengths |
Weaknesses |
Market Strategies |
Potential Impact |
|
|
Honda |
There is a range of products created by Honda, which includes hybrids and fuel-efficient cars; however, it a lack of brand loyalty (Brand Vision, 2024). In general, they are well known for reliability and innovation. |
Compared to some of its competitors, Honda has lagged when it comes to releasing fully electric vehicles (EVs) (Ferris, 2024). Finally, they have been in the hybrid tech business, although that could detract from their appeal in an era of purely electric cars. |
The project has gradually brought in the EV models, while its focus has been on hybrid models. In its marketing efforts, the company stresses fuel efficiency and a good record with reliability. |
Honda could cause a potential problem for Toyota since it has strong brand loyalty and advanced hybrid technology, aiming to ramp up development on EVs. |
|
|
Nissan |
Nissan strengthened its position with the Leaf model, one of the first mass-market EVs; it has an early mover advantage (Nissan, 2025). In addition, they have e-Power, an electric motor and gasoline engine combination for extended range. |
They are less competitive than Toyota with their hybrids. Last year was a financial challenge for the company, which means that it didnt spend much on new technologies. |
Nissan is aggressively growing its EV line-up. Whenever they want to up the market share, they are only targeting affordable EVs. |
Nissans Goal of Affordable EVs: The focus on affordable EVs might attract price-sensitive customers and thus pull Toyotas market share in the EV segment. |
|
|
Tesla |
Tesla has strong brand recognition, and it is a leader in innovation in the EV market. Furthermore, their vehicles come with advanced technology, performance, and complete charging infrastructure (Liu et al., 2025). |
Tesla's high price points might restrict the market's reach in Japan. Production and quality control problems have affected the company |
Teslas market strategy: premium EVs with advanced technology. As the sales grow, they are expanding their charging infrastructure |
Tesla's ability to market itself as a premium brand will be an influencing factor for affluent customers to purchase their luxury vehicles |
|
Emerging Competitors
|
Emerging Competitors |
||||
|
Companies |
Strengths |
Weaknesses |
Market strategies |
Potential Impact |
|
BYD |
There is a quick increase in the BYD product range and products offered at a competitive price (Zhang, 2024). As a leading manufacturer of batteries, they are offering the best cost advantage in EV production |
There is a lack of brand recognition of BYD in Japan. Its difficult for the company to make a strong distribution and service network (Zhang, 2024 |
BYD has an eye on ensuring the production of affordable EVs for price-sensitive consumers |
Disrupting the market and putting pressure on Toyota to lower its EV prices: BYDs affordable EVs have the potential to impact Toyota. |
|
KINTO |
Once parked, these can be retrieved and booked through the KINTO app, which is Toyotas own (as is its disposal of the car). It banks on Toyotas brand reputation and extensive network (Toyota Europe, 2021). |
For a new service, KINTO has a lot of work to do to expand its customer base and product offerings. |
KINTO has been engaged in subscription-based car services, car sharing, and so on with the integration of AI technology into the field of mobility platforms and further targeting customer-centric product development (KINTO, 2023). |
Impact on Toyota: KINTO's mobility services may discourage new car sales and present new sources of revenue as well as reorient to customer preferences. |
Strategic Responses for Toyota
The following strategies should be considered by Toyota to respond to these competitive pressures effectively.
- Accelerate EV Development:Invest as heavily in EV technology to establish a niche in the EV space, as well as develop its battery technology to support EVs.
- Hybrid leadership: Try to leverage hybrid vehicles as a transitional solution and ready the full electrification strategies.
- Enhance Brand Positioning: To improve brand loyalty among environmentally conscious consumers, marketing efforts should be strengthened around sustainability and innovation.
- Identify Opportunitiesfor Partnerships: Establish close ties with relevant technology companies or battery suppliers to improve technological capacities and secure a better competitive position.
- Customer Experience: Develop services that engage the customers as well as increase the connectivity of customers and open up the hostilities for a flexible ownership model, i.e., KINTO.
Industry Forces Analysis:
The automotive and sustainable mobility industries are assessed in terms of competitive intensity and attractiveness using Porters Five Forces model.
|
Porters Five Forces model |
||
|
Force |
Impact Level |
Description |
|
Threat of New Entrants |
Low |
Barriers to entry for the automotive industry are very high given the large amount of capital required, customer brand loyalty, and incumbents such as Toyota benefit from economies of scale (Bubna et al., 2016). This threat is low since new entrants would not easily access channel and supplier networks. |
|
Bargaining Power of Suppliers |
Moderate |
The components, like batteries, are critical parts, and there are few dominant suppliers. Concentrating allows suppliers to have an impact on pricing and terms, especially as demand for EV components grows (Slanger and Carreon, 2023). |
|
Bargaining Power of Buyers |
High |
The number of options offered to the consumers makes them powerful bargainers. The increase in buyers price sensitivity and the increased availability of information allow the buyers to demand better quality and features from already existing manufacturers, which motivates them to innovate continuously (Low et al., 2012). |
|
Threat of Substitutes |
Moderate |
In urban areas, types of public transportation and services of shared mobility are becoming increasingly popular (Vasudevan et al., 2021). Nevertheless, the threat of lack of personal vehicle ownership is slightly alleviated by the fact that personal vehicle ownership is very strong in Japan. |
|
Industry Rivalry |
Very High |
The automotive market is a competitive battle among established players, namely Honda and Nissan, as well as Tesla, all fighting to gain market share in a fast-growing EV space. |
Implications for Toyotas Strategic Decisions
The high rivalry and buyer power are given in Appendix 4, in which it is given that Toyota must innovate, improve customer experience, and increase the EV portfolio of the company to sustain its competitive edge. Appendix 4 summarizes the prioritization matrix of the scoring for each force in terms of their effect on Toyotas performance in Japan.
Conclusion
Five years later, Toyota Motor Corporation is a company that faces both opportunities and threats in a dynamic landscape. And the most urgent opportunities are things like developing an electric vehicle infrastructure or technological advancement in autonomous driving. However, raw material costs can fluctuate as a threat, as well as the competition can intensify. These are issues that will be crucial to the strategic planning in Toyota because they match market demand for sustainability and innovation. If tackled, these priorities can help Toyota remain a leader in Japan's automotive industry while also enhancing sustainable development in an international context.
References
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- Brand Vision. 2024.The marketing strategy of Honda: building a global brand with local roots |. Available at: https://www.brandvm.com/post/the-marketing-strategy-of-honda-building-a-global-brand-with-local-roots [Accessed: 20 February 2025].
- Bubna, P., Humbert, M.P., Wiseman, M. and Manes, E. 2016. Barriers to Entry in Automotive Production and Opportunities with Emerging Additive Manufacturing Techniques.SAE Technical Papers on CD-ROM/SAE Technical Paper Series. Available at: https://doi.org/10.4271/2016-01-0329.
- Ferris, R. 2024.How the EV era is challenging leading engine maker Honda. Available at: https://www.cnbc.com/2024/11/22/how-the-ev-era-is-challenging-honda.html.
- 2024.Japan Automotive EPS Market Size, Share, Trends 2025-33. Available at: https://www.imarcgroup.com/japan-automotive-eps-market [Accessed: 19 February 2025].
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- 2022.Together for Action: Japans initiatives for achieving the common goal of Net zero by 2050 | The Government of Japan - JapanGov -. Available at: https://www.japan.go.jp/kizuna/2024/01/together_for_action_japan_initiatives.html [Accessed: 19 February 2025].
- 2023.About Global KINTO. Available at: https://www.kinto-mobility.com/ [Accessed: 20 February 2025].
- Liu, C., Boothman, S.G. and Graham, J.D. 2025. The rise and recent decline of Teslas share of the U.S. electric vehicle market.World Electric Vehicle Journal16(2), p. 90. Available at: https://doi.org/10.3390/wevj16020090.
- Low, W.-S., Lee, J.-D. and Cheng, S.-M. 2012. The link between customer satisfaction and price sensitivity: An investigation of retailing industry in Taiwan.Journal of Retailing and Consumer Services20(1), pp. 110. Available at: https://doi.org/10.1016/j.jretconser.2012.06.011.
- 2024.Global electronic power steering market poised for growth amid rising demand for fuel efficiency & safety features. Available at: https://northeast.newschannelnebraska.com/story/52382509/global-electronic-power-steering-market-poised-for-growth-amid-rising-demand-for-fuel-efficiency-safety-features [Accessed: 19 February 2025].
- Nissan Malaysia. 2025.NISSAN E-POWER: THE ELECTRIFIED SOLUTION WITHOUT COMPROMISES | Nissan Malaysia. Available at: https://nissan.com.my/nissan-e-power-the-electrified-solution-without-compromises/.
- Nkomo, T. 2013.Analysis of Toyota Motor Corporation. Available at: https://scholar.harvard.edu/files/tnkomo/files/analysis_of_toyota.pdf.
- 2024. Toyota bets big on hybrid-only models as EV demand slows.The Economic Times. 15 August. Available at: https://economictimes.indiatimes.com/industry/renewables/toyota-bets-big-on-hybrid-only-models-as-ev-demand-slows/articleshow/112546132.cms?from=mdr.
- Secinaro, S., Calandra, D., Lanzalonga, F. and Ferraris, A. 2022. Electric vehicles consumer behaviours: Mapping the field and providing a research agenda.Journal of Business Research150, pp. 399416. Available at: https://doi.org/10.1016/j.jbusres.2022.06.011.
- Singh, A. 2023.Driving Innovation: Intellectual property rights in the automotive industry - the Amikus Qriae. Available at: https://theamikusqriae.com/driving-innovation-intellectual-property-rights-in-the-automotive-industry/.
- Slanger, D. and Carreon, A.R. 2023.The EV battery supply chain explained. Available at: https://rmi.org/the-ev-battery-supply-chain-explained/#:~:text=Chinese, South Korean, and Japanese companies dominate,(22 percent), and Japan's Panasonic (15 percent).
- 2023.AD/ADAS Technology - woven by Toyota. Available at: https://woven.toyota/en/ad-adas-technology/ [Accessed: 19 February 2025].
- Toyota Europe. 2021.Toyota launches KINTO, a single brand for mobility services in Europe. Available at: https://newsroom.toyota.eu/toyota-launches-kinto-a-single-brand-for-mobility-services-in-europe/.
- Toyota Industries. 2023.Toyota Industries Report. Available at: https://www.toyota-industries.com/investors/item/TICOReport2023_E_full_view.pdf.
- Toyota Motor. 2024a.Goals & Targets: Toyota Environmental Challenge 2050. Available at: https://www.toyota.com/usa/environmentalsustainability/goals-and-targets#:~:text=Toyota North America Milestones:,at our facilities by 2035. [Accessed: 20 February 2025].
- Toyota Motor. 2024b.Toyota unveils new technology that will change the future of cars | Corporate | Global Newsroom | Toyota Motor Corporation Official Global website. Available at: https://global.toyota/en/newsroom/corporate/39288520.html [Accessed: 20 February 2025].
- Vasudevan, V., Agarwala, R. and Dash, S. 2021. Is vehicle ownership in urban india influenced by the availability of high quality dedicated public transit systems?IATSS Research45(3), pp. 286292. Available at: https://doi.org/10.1016/j.iatssr.2020.12.005.
- Weilkiens, T., Weiss, C. and Grass, A. 2011. Frameworks. In:Elsevier eBooks. pp. 123140. Available at: https://doi.org/10.1016/b978-0-12-386985-2.00001-0.
- Zhang, H. 2024. Strategic Internationalization of BYD: A Case Study on Entry into the German EV Market Using the Eclectic Paradigm Framework.Frontiers in Business Economics and Management17(1), pp. 254259. Available at: https://doi.org/10.54097/nmap2t62.
Appendix
Industry & Sector performance
- Return on Investment (ROI): The return on investment for Toyota is 8.99% for the fiscal year ending March 31, 2024. The average ROI for the auto manufacturing industry is approximately 10.09% as of the second quarter of 2024.
- Gross Profit Margin: For the fiscal year ending March 31, 2024, Toyota reported a gross profit margin of 20.77%. The average gross profit margin for the auto manufacturing industry is approximately 17.9%.
- Inventory Turnover Ratio: The inventory turnover ratio for Toyota is 7.76 times for the fiscal year ending March 31, 2024. The average inventory turnover ratio in the auto manufacturing industry is approximately 7.87 times as of the second quarter of 2024.
- Debt-to-Equity Ratio: As of December 31, 2024, Toyota's debt-to-equity ratio was 1.10. The average debt-to-equity ratio for the auto manufacturing industry is approximately 1.02.
- Market Share: In 2024, Toyota maintained its position as the world's largest automaker. This makes the brand sell 10.8 million vehicles globally.
- Customer Satisfaction: In the 2024 Japan Automotive Performance, Execution and Layout - Lexus, Toyota's luxury brand is ranked highest among luxury brands with a score of 760.
- Employee Satisfaction: Toyota's reputation as a leading employer suggests a focus on maintaining a positive work environment.
Total revenue of Toyota from 2014 to 2021
(Source:Statista, 2025)
Profits from operations (in Billions)
(Source:Statista, 2025)
(Source:Statista, 2025)
Appendix 1: Prioritization Matrix
|
Trend |
Impact Level |
Urgency Level |
Priority Score |
|
Shift Towards Electrification |
High |
High |
9 |
|
Technological Advancements |
High |
Medium |
8 |
|
Regulatory Environment |
High |
High |
9 |
|
Changing Consumer Preferences |
Medium |
Medium |
7 |
|
Competitive Landscape |
High |
Medium |
8 |
Pestel Analysis
|
Political Factors |
Description |
Impact on Toyota |
|
Government Regulations |
Stringent emissions laws, safety standards, and trade policies impact production and market access. |
Increased compliance costs and potential restrictions on certain vehicle models. |
|
EV Incentives |
Government incentives promote electric vehicle (EV) adoption. |
Boosts sales of Toyotas hybrid and electric models. |
|
Trade Tariffs |
Tariffs on imported components affect supply chain costs. |
Higher production costs, impacting profitability. |
Scenarios Analysis
|
Scenarios |
Description |
Impact on Toyota Group |
Rating |
|
Economic Downturn |
Reduced consumer purchasing power leads to lower vehicle sales. |
High |
4 |
|
Increased Competition |
Growth of EV-focused competitors like Tesla and BYD. |
High |
5 |
|
Technological Advancements |
Rapid developments in AI, EVs, and autonomous vehicles. |
High |
5 |
|
Shift in Consumer Preferences |
Demand for sustainable and connected vehicles increases. |
High |
4 |
|
Labor Law Changes and Unionization |
Stricter labor laws and union demands increase wages. |
Moderate |
3 |
|
Environmental Changes and Regulations |
Stricter emission regulations and climate policies. |
High |
3 |
Competitive Analysis
|
Competitor |
Description |
Strengths |
Weaknesses |
Opportunities |
Threats |
|
Honda |
Offers a range of hybrids and fuel-efficient cars but struggles with brand loyalty. |
Strong reputation for reliability and hybrid technology. |
Lags in fully electric vehicle (EV) development. |
Expanding EV models and leveraging hybrid expertise. |
Increasing EV development could challenge Toyotas market share. |
|
Nissan |
Early EV leader with the Nissan Leaf and e-Power hybrid technology. |
Strong EV market presence with affordable options. |
Weaker hybrid lineup and financial struggles. |
Expanding affordable EVs could attract budget-conscious buyers. |
Affordable EVs could erode Toyotas share in the segment. |
|
Tesla |
Premium EV brand known for innovation, technology, and charging infrastructure. |
Strong brand recognition and advanced technology. |
High prices and quality control issues. |
Expansion of charging network and luxury EV segment. |
Affluent buyers prefer Tesla over Toyotas EVs. |
|
BYD |
Fast-growing EV manufacturer with a cost advantage in battery production. |
Competitive pricing and strong battery technology. |
Limited brand recognition and distribution in Japan. |
Affordable EVs targeting price-sensitive customers. |
This puts pressure on Toyota to lower EV prices. |
|
KINTO |
Toyotas own mobility service, offering subscription-based car access. |
Strong backing from Toyotas brand and network. |
Still developing its customer base and offerings. |
Growing mobility-as-a-service market. |
It could reduce traditional car ownership and sales. |
Appendix 2: Scoring Table
|
Factor |
Impact Level |
Likelihood Level |
Priority Score |
|
Political |
High |
High |
9 |
|
Economic |
Medium |
Medium |
6 |
|
Social |
High |
High |
8 |
|
Technological |
Very High |
High |
10 |
|
Environmental |
High |
High |
9 |
|
Legal |
Medium |
High |
7 |
Industry Forces Porters five forces analysis
|
Industry Forces |
Factor |
Description |
Strength |
Strength Of Force |
|
Threat of New Entrants |
Economies of Scale |
Capital intensive initial investments is mandatory for entry. Thereby rendering high barriers to entry |
High (4) |
4 |
|
Distribution Channels |
Supply chain and distribution channels necessitates long and challenging routes to be created for newcomers. |
High (4) |
||
|
Government Regulations |
Stringent licensing coupled with regulatory requirements renders it extensively challenging for new entrants |
High (4) |
||
|
Bargaining Power of Suppliers |
Supplier Base |
Large supplier base lessens supplier power |
Low (2) |
3 |
|
Competition |
Intense rivalry among suppliers leads to lower prices |
Medium (3) |
||
|
Bargaining Power of Buyers |
Availability of Substitutes |
Abundance of substitute products empowers buyers |
High (4) |
4 |
|
Price Sensitivity |
Price-sensitivity among consumers are at all time high. |
High (4) |
||
|
Threat of Substitute Products or Services |
Presence of Substitutes |
Substitutes are alternatives options offered by Tesla or other firms. This limit pricing power. |
High (4) |
3 |
|
Brand and Customer Loyalty |
Exemplary brand and customer loyalty lessens the threat of substitutes |
Medium (3) |
||
|
Competition |
Strong competition from other major supermarket chains in Singapore |
High (4) |
Appendix 4: Porter Five Forces
|
Force |
Impact Level |
Priority Score |
|
Industry Rivalry |
High |
9 |
|
Bargaining Power of Buyers |
High |
8 |
|
Threat of New Entrants |
Low |
3 |
|
Bargaining Power of Suppliers |
Moderate |
6 |
|
Threat of Substitutes |
Moderate |
5 |
|
Radar plot |
||
|
Competitive rivalry |
3.1 |
|
|
Threat of new entry |
3.7 |
|
|
Threat of substitution |
2.6 |
|
|
Power of buyers |
2.5 |
|
|
Power of suppliers |
3.1 |
|
Blue Ocean Strategy Canvas
|
Actors |
Toyota Group |
Competitor 1 |
Competitor 2 |
Competitor 3 |
Competitor 4 |
|
Value Proposition |
5 |
3 |
3 |
4 |
4 |
|
Buyer Utility |
4 |
3 |
4 |
4 |
3 |
|
Price |
5 |
4 |
3 |
4 |
4 |
|
Cost Structure |
5 |
3 |
3 |
3 |
3 |
|
Convenience |
5 |
3 |
3 |
4 |
4 |
|
Brand Reputation |
5 |
4 |
3 |
3 |
3 |
|
Product Range/Quality |
4 |
4 |
4 |
4 |
4 |
|
Customer Segments |
4 |
3 |
3 |
4 |
3 |
Critical Success Factors
- Value Proposition:
Toyota offers high-quality as well as fuel-efficient vehicles with a focus on sustainability. The brand is recognized for reliability as well as innovation in hybrid and EV technology.
- Cost Structure:
Toyota adheres to a lean manufacturing system that lessens waste. It ameliorates efficacy as well. The company concentrates upon economies of scale. Localized production along with vertical integration to maintain competitive pricing all while investing in R&D for new technologies.
- Convenience:
Toyota also invests in digital solutions, such as online vehicle purchasing and KINTO car-sharing services. Thereby ameliorating accessibility for consumers as well.
Actions to be taken:
- Value Proposition:
- Expand EV and hybrid offerings to meet global sustainability demands.
- Enhance autonomous and AI-driven vehicle features.
- Strengthen Toyotas brand as a leader in innovation and reliability.
- Cost Structure:
- Increase investment in renewable energy for production.
- Optimize supply chain efficiency to reduce costs.
- Develop more cost-effective battery technologies for EVs.
- Convenience:
- Improve digital sales platforms and customer service.
- Expand the KINTO car-sharing model globally.
- Strengthen partnerships for charging infrastructure.
|
Competitor |
Score |
|
Honda |
8 |
|
Nissan |
7 |
|
Tesla |
9 |
|
BYD |
7 |
Appendix 3: SWOT
|
|
Honda |
Nissan |
Tesla |
BYD |
KINTO |
|
Strengths: |
Strong brand reputation; diversified product range |
First mover with the Leaf; innovative technologies |
Innovator; strong brand awareness |
Value for money; battery manufacturing know-how |
Benefits from the reputation of Toyota; avant-garde mobility solutions |
|
Weakness: |
Slow to transition to EVs |
Lack of funding for tech investments |
High prices; quality issues in production |
Weak brand awareness in Japan |
Under development services; small customer base |
|
Opportunities: |
Increasing demand for hybrids |
Growing EV market |
Rising demand for premium EVs |
Growth of the global EV market |
Boom of subscription services |
|
Threats: |
Competition from emerging EV manufacturers |
More competition from established names |
Stiffer competition from legacy automotive companies |
Price competition may affect margins. |
Possible cannibalization of the new vehicle sector. |
Blue Ocean Four Actions Framework
|
Four Actions |
Toyota Group |
|
Eliminate |
Dependency on purely internal combustion engine (ICE) vehicles to focus on hybrid and electric vehicle (EV) technologies. |
|
Reduce |
Carbon emissions, production costs through lean manufacturing, and reliance on non-renewable resources. |
|
Raise |
Investment in EV innovation, autonomous driving and hydrogen fuel cell technology. |
|
Create |
New mobility solutions like KINTO (car-sharing) and AI-driven smart vehicles. |
Salience Model
|
Stakeholder Group |
Power |
Legitimacy |
Urgency |
Salience Level |
Action Required |
|
Customers |
High |
High |
High |
High |
Enhance customer experience, invest in EVs, and improve digital sales platforms. |
|
Employees |
High |
High |
Medium |
High |
Provide career development, fair wages, and improve workplace conditions. |
|
Suppliers |
Medium |
High |
Medium |
Medium |
Strengthen supply chain relationships and ensure ethical sourcing. |
|
Government |
High |
High |
High |
High |
Ensure compliance with regulations and engage in policy discussions. |
|
Competitors |
Medium |
Low |
Medium |
Medium |
Monitor market trends and invest in innovation. |
|
Community |
Low |
Medium |
High |
Medium |
Strengthen CSR initiatives and invest in sustainability programs. |
|
Shareholders |
High |
High |
High |
High |
Maximize shareholder value through profitability and innovation. |
Corporate Governance
Board of Directors:Toyota's Board comprises a diverse group of individuals responsible for overseeing the strategic direction of the company.
Code of Conduct:The "Toyota Code of Conduct" delineates ethical standards as well as anticipation for all employees. This emphasized integrity as well as compliance with laws.
Shareholder Rights:Toyota ensures equitable treatment of shareholders, providing transparent communication and opportunities for participation in key decisions.
Risk Management:A risk management template that comprehensively discern and mitigate potential risks.
Sustainability:Toyota is dedicated to environmental stewardship, aiming for carbon neutrality by 2050 and promoting sustainable practices across all operations.
Board of Directors:
- Akio Toyoda: Chairman of the Board of Directors (Representative Director).
- Shigeru Hayakawa: Vice Chairman of the Board of Directors (Representative Director).
- Koji Sato: President (Representative Director).
- Hiroki Nakajima
- Yoichi Miyazaki
- Simon Humphries
