Category: Toyota

Toyota’s Way to an Automobile Transnational Corporation: Analytical Essay

Introduction

In today’s world, no matter where you are, you could see the cars which have the emblem of “TOYOTA” on their bodies. In 2018, Toyota has 51 manufacturing bases in 28 countries or regions and it sells automobiles in more than 170 countries (Figure 1). According to “Best Global Brands 2019 Rankings” conducted by Interbrand (2019), Toyota ranked the 7th in the world. Given these situations, to see the significance of transnational corporations in globalization, this paper tries to focus on Toyota (in this paper, it means Toyota Motor Corporation) and examine the process in which Toyota became such a global-scale company. Besides, the paper sees how Toyota has expanded its business into foreign markets under the trade conflicts between Japan and the U.S. In addition, in understanding more about Toyota as a contemporary transnational corporation, the paper tries to cast an eye on its global images and labor issues. To sum up, through the whole paper, I will argue how Toyota has grown into such a huge global company by seeing its historical development, and show some distances between its global discourses and practices, specifically focusing on its labor issues.

The process in which Toyota became “global”

This section sees mainly when and where Toyota broadened its business overseas, and then, focusing on the United States, how Toyota succeeded in becoming a global automobile company under the trade conflict. Toyota’s history as a global company began with Japanese postwar economic growth. After the WW2, as the domestic economy was recovered, Toyota had rapidly grown into the top automobile company within Japan. In fact, in 1955, the amount of selling cars by Toyota was 7,055, which was about 13 times larger than the one in 1950(Toyota, 2012). As the domestic market was highly matured, Toyota began to look at foreign markets by the 1950s. Although its overseas expansion started from China in accordance with national policy, after The Foreign Exchange and Foreign Trade Act was established in Japan to enhance free trade doctrine in 1949, it began to exports to wider areas (Toyota, 2012). In 1955, Toyota started exporting “Land Cruisers” to Brazil or Columbia, where four-wheel-drive cars was demanded for transportation in oil mines or large firms, and subsequently, it began to export to Myanmar, Australia and Thailand (Toyota, 2012). However, around 1960s, third world countries tried to implement import substitutions and produce automobiles domestically rather than importing. Considering those policies and its own sourcing efficiency, Toyota started establishing its own plants overseas. By 1970, Toyota made 17 plants mainly among South East Asian and South American countries, and the amount of offshore production was 75,575 cars (Toyota, 2012). Additionally, at that time, Toyota’s export was conducted through “knock-down kit,” which is defined as “a production method whereby all of the parts of an automobile are delivered as a set and assembled locally” (Toyota, 2012). This system made it possible for foreign governments to admit Toyota’s export to support domestic production. Like these, after domestic market was matured in 1950s, Toyota aimed to expand its business mainly around South America or Asia, and at the same time, tried to do some attempts to overcome barriers of exporting through overseas production or “knock-down kit.”

In the historical analysis of Toyota, it is also important to see Toyota’s expansion in the United States under the trade conflict. The first Toyota export to the United States was in 1957 but at that time, American automobile industry was in its peak prosperity. In 1955, the big three American automakers, GM, Ford and Chrysler, had 95 percent of the domestic market share and 60 percent of world production (Bernstein, 1997). In such situations, Toyota’s effort to export its cars to the United States could be described as “laughable” (Bernstein, 1997). However, in 1980, the total demand of automobiles in the United States decreased by 16 percent but by contrast, the U.S. market share of Japanese automobiles increased 21.3 percent (Bernstein, 1997). The reasons of the dramatic growth of Japanese automobile industry are discussed in various ways, but the one of them could be Japanese cars’ high performance. Although after 1960s, American automakers focused on the design or comfortableness of cars, Japanese companies had to improve its product quality to compete in its developing domestic market (Bernstein, 1997). However, eventually, these successes led to the huge backlash from the United States. For example, United Auto Workers (UAW), one of the largest labor unions in the United States, argued that Japan was “exporting unemployment” (Toyota, 2012). Eventually, from 1981, Japanese government agreed its voluntary export restraint to the United States, which forced Toyota to make the decision of the local production within the United States (Toyota, 2012). As mentioned above, before that time, Toyota had already started offshore manufacturing but most of its plants were in relatively developing countries which have lower labor cost or easy access to raw materials. However, to avoid the trade conflict with the United States, Toyota determined to do its production in one of the biggest developed countries. In 2011, the amount of completed automobile production in North America was the largest and accounted for 31 percent of all offshore production in Toyota (Figure 2). Therefore, it could be said that the trade disputes between Japan and the United States allowed the growing of Toyota’s offshore manufacturing in the United States, a huge developed country.

Toyota’s global image and its labor issues

To see the discourses and real practices in globalization, this section examines Toyota’s global image and its labor issues, that lied behind the image. When you see the website of Toyota, you could find “Toyota Global Vision.” There are numerous mentions about Toyota’s philosophy in global business but in whole, it is emphasized two notions, “future” and “high quality”. The vision says that “Toyota will lead the future mobility society” and aim “sustainable growth” (Toyota, 2019). On the header picture of Toyota’s Facebook account page, there are two cutting-edge automobiles and a robot with the words, “start your impossible” (Figure 3). When you look at the annual report for shareholders, recently, Toyota’s net revenue has remained on the same level, which might make Toyota try to show the possibility of its future growth (Toyota, 2019). Besides, in “Toyota Global Vision”, Toyota puts emphasis on its “commitment to quality” or its spirit of improvement (kaizen in Japanese) (Toyota, 2019). In the press conference about the recall of Toyota’s automobiles in 2010, Akio Toyoda, the president of the company, commented “the quality is the lifeblood” of Toyota (J-CAST, Inc, 2019). In addition to those, as one of the most notable global images, Toyota has historically developed its manufacturing management, which is called Toyota Production System (TPS). For instance, Toyota has employed “just in time” production, which is defined as the way to produce just the only demanded amount only when it is needed (Cusumano, 1985). “Lean manufacturing” is also one of the examples and it aims to save mainly seven wastes; overproduction, inventory, motion, defectiveness, transportation, over-processing and waiting (Chiarini, 2014). Through those three distinctive images: future growth, high quality of products, and its original production system, Toyota is trying to create positive image in the world.

However, when it comes to its labor circumstances, Toyota has several issues. For example, there is an argument that Toyota’s production system to eliminate waste as much as possible led to more major accidents than in other Japanese automobile companies including suicides (Akamatsu, 1982). Try to lower the price of products, Toyota has a huge amount of irregular employment from South East Asia, but according to the National Labor Committee (NLC), they are confiscated their passports and forced to work for 16 hours a day and seven days a week, but they are paid less than half of the legal minimum wage (Abowd, 2008). There is also a criticism to point out the fewer female employees in Toyota because of their childbirth leave (Besser, 1996). Furthermore, in Japan, the death of one of the workers in Toyota, Kenichi Uchino, got a huge attention as karoshi, the death from overworking. According to his wife’s calculation, his working hour was more than 144 hours per month but the company reported it as about 45 hours (Toyokeizai, 2008). As these examples shows, Toyota’s attempt to maintain high quality of product leads to some severe circumstances for labor forces.

Conclusion

From 1960s, to gain a new market, Toyota started to expand its export to South American and Asian countries, and at the same time, Toyota tried to do offshore manufacturing to avoid import substitution. In addition, to overcome the trade conflict, on a large scale, Toyota also started doing offshore production in the United States. Regarding Toyota’s global image, there are three characteristics, “future” growth, “high quality” of products, and Toyota Production System. However, by trying to sustain its high quality, Toyota has some severe circumstances for workers, which could be described as the contrast between discourses and realities of transnational corporations. Given these historical processes and contemporary challenges, it is necessary to keep paying attention to the “future” of Toyota in the changing automobile industry.

Essay on Toyota: Analysis of Global Industry and of the Company

Introduction/Executive Summary

1.1 Description of context

Since its inception, Toyota Motor Corporation has built its success around the core philosophies of its production system. The company has obsessed over innovation and efficiency throughout all its business processes (Hill, 2011). Presently many of Toyota’s direct and indirect competitors have adopted similar processes and have been able to close in on Toyota’s competitive advantage significantly (Hill, 2011). Due to this, these competitors are prompting Toyota to change or adjust its strategy to deal with this problem.

1.2 Identification of Subject matter

This report takes a close look at the global industry of automobile manufacture. As well as using the case study, ‘Toyota: The Rise of a Global Corporation’ for a company analysis, with specific focus on the revolutionary lean production system used by Toyota and a comparison with the traditional mass production process. Through a SWOT analysis this report identifies weaknesses and problems that the company faces and in conclusion hopes to offer possible solutions and recommendations.

2. The Global Industry

2.1 Global Industry analysis

Toyota Motor Corporation is a major player in the vehicle manufacture industry. The industry is in better place than it was five years ago, over that time the industry has grown by 4.5% to reach the $3 trillion revenue it’s acquires today. In this timeframe the number of businesses has declined by -0.6% and employee rate has grown by 4.4% (Statista, 2019). In this time the automobile industry has been turbulent, seeing fuel prices rise steadily and environment concerns have shifted consumer preferences away from high fuel consuming vehicles to more eco-friendly cars. Global initiatives such as the Paris Agreement has shaken up the automobile market and several companies have embraced the change in order to comply with the stricter emission laws on new vehicles. These companies have worked on diversifying their small car productions with electric vehicles. While there are still automakers that are resistant to change as they are still anticipating that the cost of fuel will inevitably contract. Fuel prices did drop in 2008 after the US financial crisis, forcing many western nations to follow the US into recession (Krauss, 2008). The industry has seen large declines in revenue, such as the production and revenue fall in 2009, however the industry has seen an average growth of 2.2% per year (Statista, 2019). Through the last five years, Brazil, Russian, India and China have all experienced growth that has enabled the manufacture of vehicles. A rise in the standard of living in these country’s has facilitated an increase in disposable income which in turn has led to a surge in demand for automobiles. Many manufacturers have set up plants in these developing countries to gain a foothold in these markets and benefit from lower production costs. By 2020, almost a 50 percent rise in global profits for automotive OEMs is expected (McKinsey & Company, 2013). The new profits will come mainly from growth in emerging markets. Soon, internet connected car technologies and driverless cars are set to stir up another revolution in the motor vehicle sector and manufacturers will be faces with a variety of new challenges.

2.2 Demand Determinants in the Automotive Industry

Global vehicle demand is strongly connected to the prices of fuel and automobiles, the disposable income per capita, the availability of public transport, economic development and product innovation. In contrast, the factors that determine supply can be, the cost of inputs and raw materials, technological advancements and taxes. Raw materials are hovering at a six-year high, and automakers are wrestling with the volatile cost of steel and plastics (Sedwick, 2018). Thus, increasing product prices. However, on the demand side where disposable income determines customer demand. Major economies such as the U.S, Japan and China are experiencing all-time highs of increased disposable income (Trading Economics, 2019), thus the tendency to purchase luxury goods such as motor vehicles increases as they are now more affordable. Fuel price fluctuations also influence the demand for vehicles by type, for instance during times of high fuel prices more fuel-efficient vehicles are sought after.

2.3 Competitors and Market Share

Market share concentration in the automobile industry is low as the largest automakers are estimated to account of about a third of the total global revenue. Toyota to date are leading in the market share for automobiles holding 9.46% of the market, followed by Volkswagen (7.38%), Ford (5.83%), Nissan (5.42%), Honda (5.39%) with 66.52% being held by various other smaller car makers (Statista, 2019). (See appendix 1).

• Competitors –
• Competitor: Volkswagen Group
• Founded in: 1937 (81 years)
• Location: Headquarters is in Wolfsburg, Germany
• Size: Volkswagen own 100 production facilities across 27 countries
• Product/service range: Automobiles, commercial vehicles, internal combustion engines, motorcycles and turbomachinery.
• Production Output: 11,018,000 units per year
• Market Share: 7.38%
• Competitor: Ford Motor Company
• Founded in: 1903 (115 years)
• Location: Headquarters in Michigan, U.S.
• Size: Ford have 62 plants worldwide
• Product/Service range: Automobiles, Luxury vehicles, commercial vehicles, automotive parts, pickup trucks and SUVs.
• Production Output: 6.6 million units per year
• Market Share: 5.83%
• Competitor: Nissan Motor Co., Ltd.
• Founded in: 1933 (85 years)
• Location: Headquarters in Yokohama, Japan
• Size: Nissan have 45 facilities across 28 countries
• Product/service range: Automobiles, luxury vehicles, commercial vehicles, outboard motors, forklift trucks.
• Production Output: 5,556,241 units per year
• Market Share: 5.42%
• Competitor: Honda Motor Company, Ltd.
• Founded in: 1948 (70 years)
• Location: Headquarters is in Tokyo, Japan
• Size: 31 plants in across 16 countries
• Product/service range: Automobiles, commercial vehicles, luxury vehicles, motorcycles, scooters, electric generators, water pumps, lawn and garden equipment, rotary tillers, outboard motors, robotics, jet aircraft/engines, thin-film solar cells and telematics.
• Production Output: 5 million units per year
• Market Share: 5.39%

3. Company Analysis

3.1 Summary of Toyota

The Japanese company Toyota Motor Corporation is a major player in the vehicle manufacture market that designs, produces, assembles, both commercial and consumer vehicles and their associated parts. Toyota has a strong distributing presence in many developed countries and is currently the most controlling vehicle manufacturing corporation internationally.

3.2 Brief History of Toyota

Toyota began in 1933 as a small motor vehicle division of the notable Toyoda Automatic Loom Works. Due to the Japanese war with China, automobile production was endorsed by the government and in 1934 (Hill, 2011) the company produced the engine that would power its first vehicle. Not long after the conclusion of the conflict in 1937 TMC split from its parent company. During World War 2 Toyota was contracted to produce trucks for the Imperial Army. Following WW2, Toyota experienced significant economic strife and was near bankruptcy but was revived by an order from the US in Korea (Hill, 2011). The next notable advance was the development of a separate sales subsidiary, aptly named the Toyota Motor Sales Co. Within the same decade, the Crown became the first vehicle Toyota sold on the United States Market. During 1957 Toyota built both an American and a Brazilian plant. The company’s focus changed to global expansion during the 1960’s, penetrating the European market in 1962 (Upathamwaranon, Guo, 2016), and within the decade Toyota had built a strong foothold in the global motor vehicle market. Toyotas global presence continued to rise in the next few decades, with plants being built throughout America and Europe. In 2008 Toyota experienced a slump largely due to the US economic recession. Recently Toyota has recalled and stopped production of multiple models over its lifetime, in 2012 Toyota declared a settlement of over US$1 Billion to settle a lawsuit due to mechanical problems in some of its vehicles.

As of 2018, Toyota Motor Corporation boasts a net revenue of USD$263 Billion, a production output of 8,964,394 units, and 369,124-member strong workforce (Toyota Motor Corporation, 2018).

3.3 Analysis of Toyota’s production process

The Toyota Production System (TPS) is a business system invented by Toyota that is centered around the smoothing of processes and the institution of a constantly improving atmosphere. It is structured as a set of tools that are used in all facets of Toyota. It controls everything from the design of new products and their manufacture, company logistics, to how the company interacts with suppliers and clients. Some of these tools include, Kanban, Autonomation, and Jidoka. The core philosophy of the system is the optimal allocation of resources and the identification and steady elimination of waste in order to improve the flow of work. By improving production flow and efficiently applying resources, Toyota can produce higher quality goods in a shorter time.

TPS as two main philosophical bases. The business theories of ‘Just in time’ and Jidoka. Just in time refers to the efficient use of allocated resources and the manufacture of only what is required, and when. Jidoka, means Autonomation, a cost-efficient form of automation where the machine facilitates the detection correction of production abnormalities. It is a quality control process that prevents the manufacture of defective products.

The TPS can be understood as a systematic augmentation of the production process with the goal being to reduce the cost of production per vehicle. These resource management activities start at the product design stage and permeate throughout the entire development process. Each department endeavors to attain set times and then to reduce them enacting improvement activities. The process is all inclusive, involving everyone from the engineers to the chief leaders.

3.4 Comparison of Toyota’s Lean production Process and traditional mass production

Strengths

One of the main strengths of the TPS is the JUST IN TIME model. Built on the two opposing philosophies of providing fast and flexible response, and yet building mechanisms and systems that are efficient and waste-free. The concept is to use resources where and when they are needed, while maintaining high standards of efficiency and cost control. The minimization of waste is arguably one of the most significant benefits of the TPS and JIT. Compared to mass production, where long traditional production runs create a massive inventory and tie down significant amounts of capital in storage, with TPS there is almost no inventory required which frees up that capitol. This is another critical advantage of the lean production system and JIT. Toyota has an incredibly strong focus on R&D, operating one of the largest facility networks among the automotive companies, with 15 research facilities in 8 different countries. The efficiency and capital savings from the lean production system allowed Toyota to spend upwards of 1.08 Trillion Yen or A US$10 Billion in the research sector during the 2018 fiscal year (Trefis, 2018). Where the TPS saves money through efficiency, traditional mass production aims to gain massive economies of scale by spreading fixed costs out over large production runs (Hill, 2011). There is a significant risk in mass production, as if the initial machine settings are incorrect long production runs may result in many defects.

Another Innovation of the TPS was the overhaul of the workforce. A short fall of traditional mass production was the poor distribution of labour and the inefficiencies that it caused. Each assembly worker was only given a single task, compared to the variety of tasks members of the TPS workforce were trained to do. The theory behind this was the that worker would gain experience with their task and become more proficient at it (Hill, 2011). Another problem with this system was the vast amount of additional manpower that was required for maintenance. Due to this division in the work force, foremen who have no role in assembly are employed. In TPS the workforce is grouped into teams that are given multiple tasks. Each team has a leader who coordinates the team and performs their role as an assembly line worker. The team also performs non-assembly operations, such as housecleaning and minor tool repair (Hill, 2011). This reduces the need for specialists and fosters a supportive culture for solving problems (Johnston, 2001). In the TPS problems are a deviation from the standard and not the result of any individuals mistake, the cause of the defect is identified, and a long-lasting solution is found that prevents the problem from reoccurring.

Weakness’

With TPS and lean manufacturing in general, little to no inventory Is kept on hand. the TPS depends heavily on the suppliers to reliably provide materials for the manufacturing process. External factors that disrupt this chain e.g., employee strikes and transportation delays can create manufacturing holdups that can cause critical problems for the company. Suppliers may be unable to deal with the demand for products and this can significantly and negatively affect the manufacturing process. Due to this supplier dependency, any disruption along this delicate supply chain can be detrimental to Toyota.

Just in Time allows for no margin of error and vilifies any deviance from optimal process for both the equipment and the workforce. This can significantly affect the motivation and mental health of workers (Mehri, 2006). While this efficiency has led to better performance maintaining such levels may not always be possible. Equipment or labour failure can lead to major inconsistencies within lean and can make the entire operation fall behind. In mass production facilities, there is a backlog/ storage of components, materials and parts housed onsite. If a supply pathway is disrupted, employees can just move over to another machine if one fails or they can retrieve a replacement part/component from storage. Not only does the TPS rely heavily on a possibly volatile source for almost all supplies, the efficient philosophy of lean production means Toyota loses out the benefits of an economy of scale (Sean Ross, 2019).

Opportunities

Mass customisation has recently appeared as a strong source of competitiveness in the motor vehicle market (Blecker and Friedrich, 2006). It is the ability of the firm to quickly design, produce, and deliver products that meet specific customer requirements at close to mass production prices (Dollarhide, 2019). Just in time production is based on producing in small lot sizes which is enabled by set-up time reductions allowed by the kaizen philosophy at Toyota. Just in time provides the ideal situation to implement a mass customization system into the TPS (Abdallah, Matsui, 2009), as JIT can deal with the demand uncertainty associated with offering customized products. It is an opportunity for the TPS more-so than for traditional mass production because despite the advantages of economies of scale and supplier flexibility, it is difficult to move materials and information between departments in a mass production system.

There is a significant opportunity for Toyota Motor Corporation to diversify both in the conglomerate and concentric sense to invest in other areas of technology and machinery.

Threats

The dominant automotive firms compete in terms of technological advancement to further improve their products and gain an increasing control of the market. If Toyota were to miss these opportunities, it could reduce their performance compared to firms like General Motors, Volkswagen and Tesla. These companies are technologically competitive and have the brand power, resources, and systems to continue the technological advancement of their products and processes. These companies compete directly against Toyota through aggressive innovation and marketing to increase their market share. Rapid technological innovation among these competitors also increases their competitive advantages. As the current most valuable car brand in the global industry (Padeanu, 2018), Toyota has the potential to utilize technologies that present new and unique opportunities for the multinational business.

Another threat to Toyota is the price of oil and how it is continuing to rise over time (DiChristopher, 2019). This is causing customers to look for increasingly economical options from the automotive industry. The International Energy Agency states the projected number of electric vehicles on the road will increase to 125 million by 2030 (DiChristopher, 2018). Toyota must continue to develop cars that are either hybrid, electric or with better fuel economy. Else, they could lag behind other competitors that satisfy customers’ preferences regarding fuel economy and environmental impact.

4. Discussion of Problems and Challenges facing the TPS

Despite Toyota developing the incredibly efficient TPS and being the highest rated automobile manufacturer in the world, Toyota still faces difficulties and challenges today. One such issue is sustainability, sustainability is a problem that affects all industries, and in the automotive industry, the topic focuses on fuel economy and the environmental impact of current business practise. Climate change and global warming is an ever-present and rising issue that the world is having to face. High-profile influencers across the globe are calling for urgent action in the form of political, economic, and social reform (Walker, 2019). A 2010 Nasa study declared that motor vehicles were the strongest cause of climate change in the world (Atkin, 2018). Toyota is in the position to make significant, positive change due to the TPS. Both the Just in Time method and the Kaizen model are perfect for implementing new eco-friendly and efficient technologies, as the penultimate philosophy of lean manufacturing is efficiency. The TPS also allows for the quick adoption and implementation of new designs and engines that improve the fuel economy of its products. Toyota can utilise the technological advances in some of its existing models, such as the Prius and Camry, and implement them across their entire range, specifically on its trucks/ large vehicles. This will help address environmental concerns and exploiting this opportunity will help the improve brand image, customer perception, and customer loyalty.

While Toyota is undoubtedly making progress with its TPS and refining its manufacturing efficiency, the gap between competitors in the global car manufacturing market is narrowing (Hill, 2011). Firms such as Volkswagen and General Motors have invested heavily into improving their productivity and the quality of their products and Volkswagen actually invests more capital into research and development than Toyota (Casey, Hackett, 2014). Toyota has recently suffered setbacks in the American market, where they have suffered from the perception that their products “lack design flair” (Hill, 2011). This poses an opportunity for the TPS in the form of mass customization. Firms usually adopt mass customization strategies as a response to market turbulence and customer demand for variety and uniqueness. This implies that customer relationship management is a focal point for mass customization success. Therefore, the first step for firms considering mass customization should be the creation of a system that allows the firm to work closely with its customers. Such a system is expected to assure that customers could be involved at any stage of the production process starting from the design and ending with the postproduction customization. Fortunately, the TPS has incredibly short set up times (Hill, 2011), this allows for a much wider range of possible products and is perfect for the adoption of mass customization. This coupled with the incredible database of customer preferences (Hill, 2011), provides the perfect bedrock for a mass customization system to be set up in the TPS.

This system can address both the threat of new entrants creating market opposition and the aggression of existing competition. The systems allow for better productivity. This system would augment existing efforts and ensure manufactured products have some form of competitive advantage. These changes can increase Toyota’s appeal through increased efficiency and greater customer approval. through this, the company can deal with the threats facing the vehicle manufacturing industry.

5. Conclusions and Recommendations

5.1 Possible recommendations for the company and summary of findings

With the premier innovation and production system Toyota possesses, the focus of their endeavours should now be on the development of new technologies. With the issues of today, such as dwindling fossil fuels and severe climate change technological advances are required to maintain Toyotas market control. Having already mastered lean production, Toyota needs to maintain the philosophy of Kaizen, to produce the highest quality products as efficiently as possible. A more permanent reward system for employees could be implemented to maintain employee motivation and incentivise workers to uphold the quality brand image Toyota has come to be known for. This will also focus workers to detect defects quicker and to avoid mistakes. Another recommendation for Toyota is the adoption of a mass customization system, as discussed in the case study Toyota suffers from poor product perception and a lack of customer satisfaction (Hill, 2011). A mass customization system would be easily implemented using the TPS due to its inherent modularity and efficiency. A recommendation for Toyota is to implement a product-oriented management system that satisfies the requirements for all business areas (Berkel, Kampen, & Kortman, 1999). This endeavour augments any customization operations and services to help better address customers’ preferences and desires, leading to increased customer satisfaction.

5.2 Implications drawn from the report

From this paper, it is evident that Toyota is one of the top corporations in the vehicle manufacturing industry. This report is an external analysis of the threats and opportunities the company must face in order to maintain and improve its current market position. Some of Toyota’s decisions are direct responses to the current threats. However, if Toyota is to really address the issues, more action is needed to exploit the opportunities identified in this report.

Analytical Essay on Business Strategy of Toyota Company

Executive Summary

This is about environmental analysis for one of the world’s largest automobile company Toyota. This whole report contains about Toyota and this report basically focused on internal environmental and external environmental analysis and identifying the impact to the organization. Also contains competitive analysis for Toyota and identifying most suitable strategies to overcome competitors. Finally, this report makes us to develop comprehensive strategic management plans with strategies, objectives, and tactics by applying theories, concepts, and models for Toyota.

List of abbreviations

• PESTEL – Political, EconomicSocio-culturalal, Technological, Ecological, Legal
• SWOT – Strengths, Weaknesses, Opportunities, Treats
• TTC – Toyota Tsusho Corporation
• AI – Artificial Intelligence
• BCG – Boston Consulting Group

Introduction

Importance of strategic management and the role of a strategic manager

Strategy management is the skills and knowledge of planning and implementing to achieve the goals, vision and mission of a company. Strategy management is very important to a company. There is a Japanese saying that “When you are dying of thirst, it’s too late to think about digging a well” (Anon., n.d.). So we must be ready for upcoming problems before it’s too late and strategic management helps us to do that.

There are strategic managers in companies. They are very important to the company. They focus about the future of the company and they give long term plans to improve customer satisfaction and strategies to compete with competitors. They help to achieve company goals and ensure that company aligns with its vision and mission.

Toyota

Toyota Motor Corporation is a well-known multinational automotive company. Its headquarters is in Toyota City, Aichi, Japan. By revenue Toyota is the sixth largest company in the world. It was founded on 28th of August 1937 by Kiichiro Toyoda. In 2008 Toyota became the world largest automaker. Toyota expanded their business all over the world including America, China, Australia, Africa and Russia. More than 360,000 employees work in Toyota. Their profit for 2018 is more than 173,000 millions of yen (Anon., 2018). Toyota was the first automobile maker to produce more than 10 million vehicles per year. Toyota also started making hybrid and electrical vehicles. Toyota Prius series is the world’s top selling hybrid series. Under Toyota Motor Corporation they also have four other brands. They are Lexus, Hino, Ranz and Daihatsu.

So this report contains PESTEL analysis, SWOT analysis, Porter’s Five Forces Model and strategies about Toyota Motor Corporation.

Toyota Global Vision

“Reward with a smile by exceeding your expectations”

Toyota Lanka

Toyota Lanka is the exclusive distributor for Toyota in Sri Lanka. It is owned by Toyota Tsusho Corporation (TTC), Japan. Toyota Lanka is the only automobile company in Sri Lanka which is fully owned by its parent company. It was established in 1995. Toyota Lankas current managing director is Shungo Yoshioka. Toyota Lanka gives Sri Lankan people automobile sales, servicing and spare parts. Toyota Lanka sells passenger cars, commercial vehicles, trucks and sport cars. Especially Toyota Lanka sells country suited automobiles with a high quality and also Toyota Lanka has a good customer service. They deliver vehicles island wide. Since 1995 Toyota Lanka has established lots of branches island wide. Ratmalana, Maharagama, Negombo and Kurunegala are the key branches of Toyota Lanka.

Other service stations in Toyota Lanka:

• Panchikawatte
• Kandy
• Galle
• Kalutara
• Ampara
• Nugegoda
• Gampaha
• Anuradhapura

Toyota Lanka Vision

“To become the most respected &admired total auto mobility solutions provider in the country”

Toyota Lanka Mission

“To create delighted life-time customers & lifetime delighted employees”

PESTEL Analysis

1. P – Political
2. E – Economic
3. S – Socio-cultural
4. T – Technological
5. E – Ecological
6. L – Legal

PESTEL analysis is a part of the external environment analysis. It helps to analyze macro environmental factors of a company.

PESTEL analysis of Toyota

Political factors on Toyota

• Tax policies
• Government stability
• Trade regulation

Economic factors on Toyota

• Growth rate
• Currency exchange rate
• Customer demand

Socio-cultural factors on Toyota

• Cultural differences
• Trends
• Education level
• Diversity

Technological factors on Toyota

• Using AI(Artificial Intelligence)
• Numerical flexibility
• Research funding
• New vehicle models
• Functional flexibility

Ecological factors on Toyota

• Environmental regulations
• Weather
• Minimizing the wastages
• Make green products

Legal factors on Toyota

• Consumer protection laws
• Employment laws
• Discrimination laws

Critical analysis in to political impact

Tax policies impact a lot to the company. Importing vehicle tax is very high in some countries. In Sri Lanka tax rate for vehicles is about 300%. So people demotivate to buy a new vehicle because of the price. Also tax for big foreign companies is very high in Sri Lanka. Also government stability is important. When the government becomes unstable they try to collect money from putting more taxes and laws. Trade regulations also impact to the company. Company has to export and import complied with those regulations. It takes more time and money.

Critical analysis in to economic impact

Economic factors are also important to the company. When the growth rate increase in a country it is good for the company. When the growth rate increases the labour costs will be decreased because there are lots of people and less job opportunities. Currency exchange rate is also impact to the company. If Toyota imports from a supplier and currency rate of the suppliers country is low compared to Yen (All accountings of the Toyota motor corporation is done by Yen), then it is good for the company. That could also go other way and it is not good for the company. Other thing is customer demand. In an economic slowdown, the demand for vehicles will be decreased. Because of that employee demand will be low too. So Toyota will have to decrease the employee recruitment amount, rewards and incentives to save their profits. Sometimes the company has to lay off employees and it’s depending on the economic condition.

Critical analysis in to socio-cultural impact

When Toyota deals with other countries, it is very important to learn about other cultures. Cultures are different from a country to another country. So Toyota always tries to get the employees from the same country to work in their branches. It is very easy to communicate with customers because employees know the culture. Also Toyota has to work with the trends or else customers won’t buy the vehicles. These days people are more concern about hybrid and electrical vehicles. So Toyota started making vehicles such as Toyota Prius. Education level is important to the company specially in recruiting employees. Education level of the employees will impact on the performance of the company. Toyota also thinks about diversity. Toyota makes different kinds of vehicles such as traveling vehicles for traveling people, etc.

Critical analysis in to technological impact

As a big company Toyota also stared to use AI for their factories. It helps to reduce production cost and it’s fast. Because of the growth of technology Toyota reduced employees. Most of the workers who had temporary jobs were released from the company as a numerical flexibility. Toyota is funding a big amount of money for research. From research Toyota develop more types of vehicles such as luxury vehicles, budget vehicles, racing cars, etc. Their luxury-type vehicle brand is Lexus. Also Toyota is concerned about functional flexibility. Toyota trains their employees for multitasking. It can help Toyota in an economic crisis.

Critical analysis in to ecological impact

There are lots of environment regulations. Companies should protect the environment. Toyota is always trying to stop water and air pollution. So they make green products hybrids and electric vehicles. It reduces the pollution. Toyota also minimizes the wastages. They manage their factory waste and they recycle their waste. Some factors like weather is also impact to the company. Whether especially impacts to their transportation. It is hard to transport vehicles during a storm or in a heavy wind especially from the ships.

Critical analysis in to legal impact

Consumer protection law is very important. Vehicles should be made by exact standards. So Toyota does lots of standard checks before releasing a vehicle to the market. There is also an employment law. It is for employee’s safety. It includes industrial safety, protecting workers rights, the minimum salary for employees, etc. Discrimination law is also impacts to the company. Some countries don’t allow some kinds of vehicles and also doesn’t import modified vehicles from that kind.

SWOT analysis

1. S – Strengths
2. W – Weaknesses
3. O – Opportunities
4. T – Threats

SWOT-analysis helps to identify internal strengths, weakness, and also external opportunities, treats of a company.

SWOT analysis of Toyota:

Strengths of Toyota

• Having a strong brand name (S1)
• Having big financial resource (S2)
• Equipped with latest technology (S3)
• Having a good production system (S4)

Weakness of Toyota

• Product recalls (W1)
• Depending on suppliers (W2)

Opportunities for Toyota

• Focusing the developing countries (O1)
• Investing on new technologies (O2)
• Green vehicle technology (O3)

Treats for Toyota

• Having lots of competitors (T1)
• Passenger safety issues (T2)
• Changing of the prices of fuel (T3)
• Raw materials having high prices (T4)

Strategies for Toyota from SWOT analysis

• Lots of cars from Toyota were been recalled in last years. Because of that media spread lots of negativity about the company. But Toyota has the latest technology. So they must build new machines to check the quality of their vehicles. (S3,W1,T2)
• Toyota has a good production system. They manage their waste very efficiently. Also Toyota focuses on developing countries. So they should make low cost vehicles by improving their production system and developing countries will buy more vehicles for a lower price. (S4,O1)
• These days people try to make machines environment friendly. Toyota is making lots of green vehicles. Because Toyota has a big financial resource they can try to improve their hybrids and electrical vehicles to be more environment friendly. So changing fuel prices won’t be a problem for green vehicles. (S2,O3,T3)
• Most of the times Toyota depends on their suppliers. Also raw materials having a very high price. Because Toyota have a good financial resource and a good production system, they can start making some materials that they are buying from their suppliers or they can buy some companies who are selling raw materials. It will reduce their costs. (S2,S4,W2,T4)
• There are lots of competitors for Toyota. Honda and Mitsubishi are some of their Japanese competitors and Toyota also has Indian and Chinese competitors too. But it’s hard to compete with Toyota especially because of their strong brand name. In order to keep their brand name stronger they should try new vehicle models and improve the quality of their vehicles. (S1,T1)

Porter’s Five Forces Model

• Rivalry among existing contenders
• Bargaining power of buyers
• Bargaining power of suppliers
• Threat of new entrants
• Threat of substitutes

Porter’s five forces framework is used to analyze the competition of a business.

Applying porter’s five forces model to Toyota

Rivalry among existing contenders – High

In worldwide market Toyota has lots of contenders. The following external factors make competitive rivalry strong.

• High forcefulness of firms
• Low number of large firms
• High separation of firms

Automobile organizations are forceful against one another especially because of marketing and innovation. Toyota has to contend with high assortment of organizations and those organizations separate through eco-friendliness, cost, style, etc. Despite the fact that there are lots of small automobile companies, Toyota just contends with small number of larger companies. Toyota’s brand name makes it easier to rival with contenders.

Bargaining power of buyers – High

Toyota’s clients legitimately influence the business through incomes. Following factors makes the bargaining power of buyers strong.

• Low exchanging costs
• Easy to find data

The low exchanging costs imply that clients can undoubtedly change from Toyota to a contending company at no additional expense. This change commonly happens when clients purchase another vehicle. Also because of new technology customers can easily find data about the company and vehicles. That makes customers easier to choose a vehicle from a company.

Bargaining power of suppliers – Low

Toyota’s providers plan to impact the organization to improve their organizations but it is not easy thing to do because of the following reasons.

• Lots of suppliers are available worldwide
• Easy to find materials

There are lots of automobile part suppliers worldwide. So for those suppliers it is not easy to bargain with automobile companies. Also it is easy to find raw materials such as rubber, aluminium, etc. so the suppliers won’t be able to bargain with big automobile companies.

The threat of new entrance – Low

The threat of new entrants is very low for Toyota because of the following reasons.

• Need to find a high capital
• Hard to build a good brand name

It is hard to start an automobile company. There are lots of entry barriers to start an automobile company. Main barrier is capital. Starting an automobile company will cost a lot and also there are lots of rules and regulations to start an automobile company. It will take years to build a good brand name and people hesitate to try a new brand name. So the new entrants can’t affect Toyota.

The threat of substitutes – Moderate

Substitutes influence Toyota’s business by contending with the organization’s items. These are the treats of substitution.

• Exchanging costs are low
• Moderate amount of substitute availability

Customers can easily move from Toyota to a substitute. Using bicycles and public transportation are some substitutes and it takes low cost to exchange. And because of the moderate amount of substitute availability customers will exchange quickly. So because of those reasons threat of substitutes are moderate for Toyota.

Applying models, theories, concepts, and models, interpret and devise strategic planning for Toyota

The industry life cycle for Toyota

Figure 1

According to the industry life cycle Toyota is in the maturity stage. So the market has reached its maximum size and industry growth is likely to be zero.

Marketing strategies to use in maturity stage

• Product modification
• Increasing the usage rate
• Do more research
• Make products for a lower price than market

BCG Matrix for Toyota

Companies restructure the portfolio of their firms’ businesses to accelerate growth. Boston Consulting Group (BCG) is a helpful tool to guide portfolio planning. This matrix locates the firm’s individual businesses in two dimensions,

• Horizontal axis – Relative market share
• Vertical axis – Market growth

Figure 2

Toyota can be included in cash cow category. In cash cow category market share is high but the market growth is low and their earnings are high and stable.

Toyota should create new car designs using new technology to Target more customers to grow their market more.

The Ansoff Matrix for Toyota

The Ansoff matrix can be used by senior managers, marketers, and executives to devise strategies for future growth.

Figure 3

Market penetration

• Starting an environment friendly program – Together Green
• Sponsoring for motor racing – agreement with speedway
• Starting a motor racing club – Etios Motor Racing

Market development

• Started making many product lines for customers – Trucks, SUVs
• Overseas business – Making in Japan and exporting worldwide

Product development

• Manufacturing automated driving vehicles
• Manufacturing hybrids and electric vehicles

Diversification

• Launching a ski boat line
• Establishing Marine Business Division
• Establishing Biotechnology and Afforestation Business Department
• Acquiring the Japan Flying Service

Conclusion

This report contains about Toyota and also about Toyota Lanka and its vision and mission. Introduction to PESTEL analysis and applying PESTEL analysis for Toyota and a critical analysis on PESTEL. Then contains introduction to SWOT analysis and applying SWOT to Toyota and critical SWOT analysis on Toyota. Also this report contains introduction to porter’s five forces analysis and applying porter’s five forces analysis for Toyota. Also contains industry life cycle for Toyota and BCG matrix for Toyota. Finally in this report contains introduction to Ansoff matrix and applying Ansoff matrix for Toyota.

References

1. Anon., 2018. Annual Financial Report. Toyota Industries Coporation.
2. Anon., n.d. Google Scholar. [Online] Available at: https://scholar.google.com/.
3. Anon., n.d. inspirational proverbs, quotes, sayings. [Online] Available at: https://www.inspirationalstories.com/proverbs/japanese-when-youre-dying-of-thirst-its-too-late/.
4. Anon., n.d. Panmore Institute. [Online] Available at: http://www.panmore.com.
5. Anon., n.d. Research Methodology. [Online] Available at: http://www.research-methodology.net.
6. Anon., n.d. Toyota Lanka. [Online] Available at: http://www.toyota.lk/.
7. Anon., n.d. Toyota Official Website. [Online] Available at: https://www.toyota.com/.
8. Anon., n.d. Wikipedia. [Online] Available at: https://www.wikipedia.org/.
9. Fujimoto, T., 1999. The Evolution of a Manufacturing System at Toyota. New York: Oxford University Press.

Critical Analysis of Marketing Strategy for Toyota Corolla Altis 1.8

Toyota Corolla Altis 1.8

1. Company description:

Toyota Motor Corporation (Toyota), incorporated on August 27, 1937, conducts business in the automotive industry. The company also conducts business in finance and other industries. The company segment includes Automotive, Financial Services, and all others. Toyota Motor Corp. engages in the manufacture and sale of motor vehicles and parts. The Automotive Operations segments designs manufacture assembles and sells passenger cars, minivans, trucks, and related vehicle parts and accessories. It is also involved in the development of intelligent transport systems. The Financial Service segments offer to purchase or lease finance to Toyota vehicle dealers and customers. It also provides retail leasing through lease contracts purchased by dealers. The all other segment deals with the design and manufacture and sale of housing, telecommunications, and other businesses. Toyota Motor Company’s headquarter is in Toyota, Japan.

2. Product Description:

A product description is a structured format of presenting information about a product which includes its benefits, form, presentation, price, purpose, etc. . A good product description should include a detailed description of the product, its special features which differentiate it from other products unique selling points and utility of the product.

3. Marketing management orientation:

1. Production concept: Toyota Corolla has become the most economical and affordable car for different customers. Pricing is also based on segmentation. Toyota Corolla uses both penetration pricing and economy pricing strategies to reach the demands of its customer. For instance, during the introduction of the Toyota Corolla in the US, they used the penetration strategy. This pricing strategy is based on low prices and high quality of the vehicles. The objective of this pricing strategy was to reach the middle class and working customers. Whereas, Toyota Corolla cars are distributed through a wide range of networks that reach the targeted population in the required time frame.
2. Product concept: Corolla Altis 1.8 is economical in price but the product is amazing. Toyota Corolla is the most successful product of all the Toyota group’s products. This is because of its adaptability, reliability, and dependability. If we talk about interior then there is comfortable leather foamed seat corners, Rear reclining seats with split-folding, Bucket type front seat, Toyota connects app, Rear seat USB charger and for exterior, there is a front parking camera view, wide-angle reverse parking camera view, Speed auto door lock, Smart trunk opener, Side skirt and colored mud flaps, Headlamps and Rearlamps, front fog lamps and many other amazing qualities.
3. Selling concept: Toyota Corolla is promoted and advertised using different methods. Some of the commonly used aspects of the promotion of Toyota Corolla include advertising, sales, promotions, personal selling, and public relations. For example, the Toyota Corolla 2011 was promoted through television where a Japanese renowned artiste was featured. The adverts are also featured on the Toyota website where the prices and features are also available. A company should focus on their selling concept to sell their product, and to gain the attention of the customer’s company always highlight the specifications of the product.
4. Marketing concept: On this version, the front-end presentation varies by model grade, with the sportiest faces incorporating a body-colored chin. Front headlights are of the bi-beam LED variety, and LED rear lamps are standard across the model grade. The interior design, meanwhile, showcases elements drawn from a “sensuous minimalism” concept, offering a clean, sleek, and refined look.
5. Societal marketing concept: Toyota Corolla hasn’t done any societal marketing till now. But maybe in the future, they do something in which customer gets satisfaction, the company gets profit and society gets benefits.

4. Microenvironment:

5. Macroenvironment:

Macro environment analysis!

Toyota Motor Corporation’s macro-level analysis is a strategic tool to analyze the target market and potential consumer market. Demographical, Political, Economic, Social, Technological, Environmental & Legal factors that impact the macro environment of Toyota Motor are explained below;

Changes in the macro-environment factors can have a direct impact on not only the Toyota Motor Corporation but also can impact other players in the Automobiles & Parts industry. They can impact an individual firm’s competitive advantage or overall profitability levels of the Consumer Goods industry.

Demographics:

Demographics play a vital role in defining the target market and target consumers, it defines the strategies to market the products. Demographics include age, gender, social class, income, marital status, family size, etc. Toyota Corolla Altis 1.8 demographics are considered a significant variant.

According to the survey and reviews of Pakistani consumers following our the demographic factors

Age; 25-38

Gender; men

Social class; upper-middle-class

Income; 80k-120k per month

Family size; 4-8 children

Political factors:

Political factors play a significant role in determining the factors that can impact Toyota Motor Corporation’s long-term profitability in a certain country or market. Toyota Motor Corporation is operating in the Automobiles & Parts industry in Pakistan since last two decades and expose itself to different types of political environments and political risks.

Following are some key political factors influencing the macro environment of the corolla.

1. Political stability and importance of Automobiles & Parts sector in the country’s economy.
2. Level of corruption – especially levels of regulation in the Consumer Goods sector.
3. Legal framework for contract enforcement
4. Favored trading partners Anti-trust laws related to Automobiles & Parts
5. Pricing regulations – Are there any pricing regulatory mechanism for Consumer Goods
6. Taxation – tax rates and incentives in automobile industry

Economic factors:

Economic factors that Toyota Motor Corporation are considering in Pakistani market are –

1. Government intervention in the free market and related Consumer Goods
2. Exchange rates & stability of host country currency.
3. Skill level of workforce in Automobiles & Parts industry.
4. Labor costs and productivity in the economy
5. Business cycle stage (e.g. prosperity, recession, recovery)
6. Economic growth rate
7. Unemployment rate
8. Inflation rate
9. Interest rates

Social factors:

Social factors plays a vital role in companies reputation also creates great organisational culture.

Social factors of Toyota Motor Corporation considered in Pakistani markets are as follow ;

1. Education level and education standard in the Toyota Motor.
2. Culture (gender roles, social norms etc.)
3. Attitudes towards health, environmental consciousness, etc.

Technological factors:

Technological advancement plays a vital helps not only company to strive in the market but also introduce a new field and sectors.

Technology analysis involves understanding the impacts in Pakistani market.

1. Technology’s impact on product offering
2. Impact on cost structure in Automobiles & Parts industry
3. Rate of technological development

Environmental factors:

Before entering new markets the firm should carefully evaluate and observe the environmental standards that are required to operate in those markets.

Following are some environmental factors;

1. Weather
2. Climate change
3. Recycling
4. Waste management in the Consumer Goods sector Attitudes toward “green” or ecological products
5. Attitudes toward and support for renewable energy

Legal factors:

Legal framework and institutions plays vital role in protecting the intellectual property rights of an organization, legal factors sometimes provide edge to the company and in some cases they create a great setback for the organisation.

The following factors should always be considered;

1. Anti-trust law in Automobiles & Parts industry and overall in the country.
2. Discrimination law
3. Copyright, patents / Intellectual property law
4. Health and safety law
5. Data Protection

6. Market segmentation:

Corolla segment the Pakistan market demographically according to income & covers Toyota is mainly targeting:

• Upper Class
• Upper Middle Class
• Lower Middle Class

Whereas. Segmentation and targeting is necessary to position the brand in the minds of the customer, hence leading to brand loyalty. Single segment concentration: Through concentrated marketing firm gain deep knowledge about segment’s need. Making revenue through one segment.

Toyota corolla market segmentation Corolla targeted its segment by its models also which target different income group. Like,

• Corolla Xli (1300 cc)
• Corolla Gli (1800 cc)
• Corolla Altis
• Corolla Saloon

And these Models vary on different price points depending of their specificatios so that’s how Toyota Corrola Targets Different income groups.

Geographic Segmentation

Cities:

Karachi, Lahore, Islamabad, Rawalpindi, Peshawar, Abottabad, Bahawalpur, D.G.Khan, Dera ismail khan, Faisalabad, Gujranwala, Hyderabad, Mardan, Mirpur A.K,

Multan, Quetta, Rahim Yar Khan, Sahiwal, Sargodha

Sialkot

Density

Urban, Suburban

Climate

Dry & Hot, Cold

Demographic

Age

18-50+

Family Size

Single, 2members, 2-4 members, 4+ members

Income(per year)

Under 50Lakhs, 1crore or 1crore+

Occupation

Businessman, Employer, farmers, Official, transporter

Generation

Third generation, Next Generation

Psychographic

Social Class

Higher, Upper Middle, Middle,

Effective Segmentation of Toyota

Toyota chooses their segments on effective ways. These ways helps Toyota to have a clear overview of the segmentations done by them. The effective measurements that they choose for their segmentation are:

• Measurable: Segmentation done by Toyota is thoroughly researched and analyzed. As a result they have clear measurement about size, purchasing power and profiles of the targeted segments.
• Accessible: Toyota can easily reach into the core of their segments and have a profound access because of their vast knowledge and ability over these segments.
• Substantial: Toyota chooses segments in the market that are highly profitable for the company.
• Differentiable: Since Toyota has a clear knowledge over their segmented market, they know which consumer wants what product. So Toyota differentiates their consumer on their choices and creates effective segmentation for them.
• Actionable: Toyota does their segmentation on the basis of their resources and serves each and every one of them efficiently. They don’t choose segments which are out of their capability.

7. TOYOTA’s Market Targeting

Evaluating Toyota Market Segmentation:

• Segment size and growth
• Segment structural attractiveness
• Company objective and resources

Selecting Toyota’s Target Market Segmentation:

• Type of marketing
• Remarks
• Explanation
• Undifferentiated marketing(mass marketing)
• Ignore by Toyota
• The company basically does not follows the mass marketing strategy.
• Differentiated marketing
• Followed by Toyota
• Toyota offer different model of car for different segments like Corolla Xli, Gli, Altis or Grande.
• Concentrated Marketing
• Followed by Toyota
• Toyota has offer some exotic cars like Grande series some specific groups
• Micromarketing
• Ignore by Toyota
• Not possible

8. Differentiation:

Product. Company strategy starts the strong consumer relationship with an introduction to the newly reinvented Corolla with features that satisfy their needs in safety, reliability, and style at a cost that meets their approval. We bring these qualities to life in commercials, billboards, magazine articles, advertisements, and social network posts. Company non-interactive communications identify awards the Corolla has won for maintaining the highest rating in safety; the addition of voice-activated, navigation, and onstar devices that keep the driver in-the-know while keeping their hands on-the-wheel; and head restraints that limit the result of injury to the head during rear-end collisions. Additionally, we employ interactive product differentiators which accompany consumers down the marketing funnel with courteous services prior to service—such as child centers, hassle-free sales, and on-site educational and discount opportunities for parents and their new driver—and care after purchase—such as reminder maintenance emails and texts, birthday wishes and bonuses, and future loyalty discounts.

Channel. Because maintaining company relationship with the consumer is so integral to Corolla’s future audience, we also focus on the difference the Corolla offers in channels. Reflective of the ease of communication with Toyota we look beyond the traditional methods of telephone and emails—we embrace company modern market with text messages and notifications sent directly to the Corolla’s console. As the future consumes this new audience, the Corolla’s amenities will grow to adopt additional communication techniques that allow the consumer to directly connect to the nearest Toyota dealership simply by pushing a button on the steering wheel. By deploying a communication strategy that enables consumers to connect with Toyota as conveniently as possible and retains qualities of modern and traditional communication devices, we generate a service that all consumers within company market are able and happy to use.

As communication contributes immensely to perception and image, we seek to point out current communication channels and strategies that provide an easier means for company consumers to schedule repairs, communicate with company representatives, and file claims on warranty related issues. These strategies will be provided to company audience through traditional means as well as more up-to-date means that match company market, such as mobile applications, the Toyota website, the dealer website, and texting to a short code—or shortened phone numbers that are more easily read and remembered.

Image. These efforts attempt to position the Corolla by adjusting image—or the way company audience views and perceives the Corolla. Currently and according to company consumers, the brand is bland. The Corolla is not new. We make it new by giving it new technologies that relate to company audience such as GPS, onstar services, XM radio, and mobile device integration capabilities. While these partnerships and extras are easily and relatively inexpensive to add to the basic Corolla Model, the amount consumers are willing to pay for these features in a brand they can trust is surmounting.

To achieve further matching of company product to company audience, we focus not on amending the car, but working with what it already has available. For example, the colors available for the Corolla include:

• Barcelona Red
• Black sand pearl
• Magnetic Grey
• Classic Silver
• Super White
• Sandy Beach
• Nautical Blue
• Tropical Sea.

The colors listed in italics represent colors that reflect an older consumer. The simple solution is to use colors that inspire a hip and young feeling. Toyota may even consider adopting bright colors such as yellow to better target the younger audience. Modifications that are available and can be offered include round tail lights and side decals.

9. Promotion strategy (& positioning):

Toyota Corolla Altis 1.8 is one of sublime products of Toyota Motors and has potential target market upto 35% out of all Toyota Motor products.

Toyota (TM) has become one of the top ten biggest advertising spenders over the time. The company spent 435 billion on advertising and sales promotions during fiscal 2015. 1.7 billion is been spent on Toyota Corolla Altis since its launch all around the globe. These advertising and sales promotion activities primarily focus on traditional advertising channels, including print and electronic media, as well as outdoor advertising.

Along with that Toyota Corolla have dealership contacts with showroom owners to display and sell their products also

Accessories like Traction Control is been introduced in the-car so as to improve its traction on rainy and snowy surfaces. It will also enhance high speed cornering stability. This new product feature will attract extra customers in Pakistani market

Positioning:

Toyota’s uses both differentiation and low cost as generic strategies to try and gain a competitive advantage, over their competitors in the automotive industry. The market scope that Toyota uses is a broad one that encompasses nearly every type of customer that is in the market to purchase an automobile. Toyota is able to target such a large market because they have something for everyone. Toyota has four wheel dn. trucks and SUVs for the outdoor types or those who live in areas that face severe weather conditions. hybrid models like the Prius for t. eco-friendly Customers that are interested using de environment along with the standard cars for general, everyday use. Additionally, Toyota provides vehicles for all price range. From the low price Toyota Corolla line of cars to the high priced luxury line of cars and SUVs with Lexus, Toyota has something for everyone.