Strategic Management Report Toyota Motor Essay

Excerpt from Essay :

Therefore, they use strict evaluation criteria to make choice among different alternatives. Keeping in view the strength of customers' bargaining power, Toyota and other automakers are expending huge amounts on advertisements and promotional campaigns to create awareness about their brands and convince these customers to prefer them over all other brands (Jenny & Scammon, 2010).

5. Internal Environmental Analysis for Toyota Motor Corporation

5.1. The Resources Types:

Like other types of business corporations, Toyota also relies on four different organizational resources. These are: financial resources, human resources, informational resources, and physical resources. Financial resources are the money invested by the company's shareholders and the profits left after paying off liabilities. These resources enable the company to run its day-to-day operations, run marketing campaigns, and make strategic investments to keep it innovative and competitive in all aspects. Secondly, the human resources are the intellectual capital that plays a major role in enhancing organizational productivity and achieving strategic objectives in an effective and efficient way (Toyota Motor Corporation, 2013). Informational resources include all types of information, data, and reports which are helpful for the internal stakeholders (employees) and external stakeholders (investors, supply chain members, business associates, and customers). Lastly, the physical resources include manufacturing plants, machineries, equipments, buildings, research centers, and products of the company.

5.2. The Company's Capabilities:

Toyota Motor Corporation is best known for its world-class automobiles that provide the real value for the customers' money. Its highly advanced manufacturing plants, high-tech business processes, Total Quality Management and Just in Time (JIT) practices, and operational efficiency are the strongest capabilities which contribute towards its success and competitiveness in the industry (Toyota Motor Corporation, 2013). With the help of these core competencies and capabilities, Toyota is able to design and develop the most innovative, modern, fuel-efficient, and reliable automobiles (Young, 2013). Today, it is one of the most successful companies that have built their image through performance and efficiency (Motton, 2013).


Toyota Motor Corporation is exposed to highly stiff competition and strong environmental forces that impact its performance in the industry in one way or another. It takes advantage from its manufacturing capabilities and operational excellence to beat the competitive forces and encounter the negative impacts from environmental forces. By utilizing its resources and capabilities, Toyota can avail attractive opportunities from the market, mitigate environmental threats, and overcome its weaknesses in order to strengthen itself in both operational and financial terms (Kotler, 2008). The threats from top industry rivals, substitutes, and new entrants can be mitigated by focusing on Total Quality Management, innovation, R&D, and service efficiency.


Keeping in view the current corporate and business-level strategies, capabilities, core competencies, and resources of Toyota Motor Corporation, it can be recommended that it should give more emphasis on expanding its business operations in the emerging markets of the world. Global expansion projects will strengthen its position against the top rivals like General Motors and Volkswagen which are currently holding higher position in the automobile industry. Secondly, Toyota should focus on low cost leadership by controlling its costs and making efforts to achieve operational efficiency in all the departments (Kotler, 2008). Thirdly, it should try to bring improvements in the performance and quality of its vehicles which are not giving attractive revenues. Differentiation strategy can also help it in increasing the sales of its low-demand vehicles. Moreover, it can introduce innovative features in its vehicles which are not yet offered by its competitors. This strategic move is only possible through differentiation strategy at the business level (Mullins, Walker, & Boyd, 2008).

As far as corporate level strategies are concerned, Toyota should make efforts to become self-sufficient through vertical integration in both backward and forward directions. It can produce raw material and spare parts for its vehicles in its own plants so as to save the heavy costs which suppliers take as commission. Moreover, Toyota should invest heavily in the R&D section in order to come up with the most innovative technologies in its fuel, hybrid, and electric cars. This strategy will also keep it competitive against its rivals. Finally, Toyota should set competitive prices for its vehicles in a view to get a competitive advantage its competitors that are charging higher prices to make attractive returns on their investments (Kotler, 2008).


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