EXECUTIVE SUMMARY
In this report I took a look at Toyota, with a particular focus on its business plan. An important aspect of this report is how the company stays on top of its game and how it may improve upon its current position in the market. The research I conducted was for the purposes of analyzing Toyota’s marketing strategy and its entire business plan. This is a research in the realm of natural science where it combines both independent and dependent variables and it is required to acquire an understanding of the business sector. Findings from this research illustrate how Toyota’s business outline mix helps the firm achieve significant market share and develop a strong brand recognition for its cutting-edge technologies. Ultimately, the automotive industry leads worldwide manufacturing in terms of output, capital, employees, and yearly income. Hundreds of businesses have rushed to secure their own supply in this industry. As an example, Toyota describes how a product from eastern Asia managed to penetrate into the global market despite numerous challenges. Toyota is the third-largest automobile manufacturer in the world. Ford and General Motors take first and second place in annual sales. As of the year-ended 31-March 2007, the company’s sales were $202,864,000, up 13.28 percent over the prior year. The corporation made $189,64,000 in operating profit. Over 5.5 million vehicles are produced by Toyota each year in nearly 170 countries. Traditionally, Toyota has pushed the boundaries of marketing innovation and its business outline. Toyota has made marketing a company-wide discipline that anybody can participate in. When it comes to Toyota’s business plan, it’s now a cross-discipline effort. The entire Toyota business, not just the marketing department, is responsible for customer satisfaction. It is because of these limitations that marketing has never been fully incorporated into a company’s overall strategy or operational plan.
From this idea, Toyota’s organizational philosophy and business approach have been developed. The firm’s top priorities are its clients and the quality of its products. Customer service is at the heart of everything the company does, from product creation to marketing strategy to after-sales support. Right now, Toyota lacks a distinctive brand identity, but this will be changed in the near future if its Lexus brand succeeds. Despite the fact that they cannot control macro forces, a huge firm like Toyota is expected to be able to handle any crisis that develops. Toyota has made a major commitment in the development of hybrid technology. They now have to pay back the money they spent. Toyota, for example, uses a variety of strategies to ensure that these hybrid products are available to as many people as possible. There must be a balance between low costs and price overcharging. Two of the world’s fastest-growing markets, China and India, provide enormous opportunity for Toyota. Toyota’s profits will skyrocket if they succeed in these markets if at all they prioritize quality control when translating for such new markets.
INTRODUCTION
The aim of this report is to give a well examined business plan of Toyota Company. In 1933, the Toyota Motor Manufacturing Company was created to produce military trucks. Following World War II, Toyota began to make non-military automobiles, both inexpensive and high-end models. It later entered the global market in the mid-1950s and had manufacturing facilities in the United States, Brazil, South Africa, Thailand, and Malaysia by the end of the 1960s this became its global success. In addition, Toyota began to buy Japanese automobile manufacturing businesses, such as Hino, as it grew fast in Japan.
For Toyota’s foreign marketing strategy, tailoring its goods to meet the demands of local clients and paying close attention to its suppliers were the most important aspects. The company’s quick expansion may be attributed to the efficient management of its supply chain. Ultimately, though, it was the chain’s mishandling that contributed to Toyota’s historic 2007 catastrophe (Toyota Motor Corporation Official Global Website, 2021).
Toyota’s Logistics Services
One of Toyota’s most notable accomplishments is its supply network. Toyota has four layers of suppliers, the fourth of which includes almost 40,000 small businesses. Supplier association was Toyota’s mechanism for uniting partners, encouraging information exchange, coordinating and supervising them, and ensuring high-quality supplies were provided. A long-term cooperation has always been a goal of Toyota’s, and the association has helped it achieve that goal (Plummer, 2012).
Rapid Progress of Toyota
CCC21, or “Construction of Cost Competitiveness in the 21st Century,” is a Toyota initiative that began in the year 2000. There were several changes made, including a 30 percent reduction in the price of the items, to reach this goal. As a result, Toyota saw a spike in business and saw its growth accelerate. Toyota overtook General Motors in April 2007 to become the world’s largest automobile maker (Plummer, 2012).
The Crisis at Toyota
Toyota’s rapid development had significant downsides as the number of suppliers grew, it became increasingly difficult to manage. The quality of the product dropped because new suppliers were not properly supervised.
Even though this issue was made public in 2006, little progress was made at resolving it. As far back as 2007, Toyota automobile owners began reporting difficulties with acceleration. Even still, it appears that Toyota did not make enough of an attempt to improve the issue. Toyota had to recall 55,000 vehicles in 2007 because of consumer dissatisfaction, yet the problem remained.
Toyota’s biggest rival, General Motors, has also issued a recall of its cars as a precautionary measure. Even yet, the 2007 Toyota recall cost the business almost $2 billion in lost revenue and damaged its brand image as a result.
Toyota made a name for itself throughout the crisis for its inability to react quickly. In 2010, the Automotive Center of Quality Excellence was established as the first substantial effort to correct the issue. A large portion of the harm done to the company’s image was due to the company’s inability to keep its commitments and its disregard for its consumers’ requirements.
The Toyota Approach
It was in 2001 that Toyota established its own code of ethics, which it calls “The Toyota Way.” As an example, it includes instructions on how to continually improve product quality, test new technology carefully before to putting it into use, learn from previous experience by reflecting on it, and respect stakeholders in the decision-making process. The 14 guiding principles of Toyota’s way of doing things are logical and, above all, ethical (Toyota Motor Corporation Official Global Website, 2021).
There is an issue, however, because Toyota appears to have failed to put these concepts into practice, as demonstrated by the 2007 crisis. The items were plainly of poor quality, but the corporation refused to accept responsibility and hence failed to learn from its mistakes. The company’s disregard for the safety of its consumers exacerbated the harm done to Toyota’s reputation. It is fair to say that the corporation is still striving to recover from a crisis that is not yet resolved, but rather, has entered a chronic stage. This must be taken into consideration while developing a strategy for the company’s growth (Plummer, 2012).
Toyota’s current market situation.
Toyota is one of the most powerful players in the automotive manufacturing sector today, with General Motors, Ford, and Honda. In order to survive in the market, pricing, quality, and brand loyalty all play a role. In addition, the price of gasoline and the state of the global economy might have a significant influence on the market. Toyota’s automobiles have been competitive since the turn of the century because of their high quality and affordable prices; nevertheless, the current crisis has badly tarnished the company’s reputation. Apart from this, Toyota looks to have launched off the trend of manufacturing more affordable automobiles in the industry. The effect has been a lowering of quality standards for other automobile manufacturers since they remained looking for cheap materials (CORPORATION., 2018).
A critical analysis of various financial and investment models by Toyota Corporation
Professionals in the field of financial modeling of Toyota choose from the wide range of corporate financial models outlined in the following paragraphs.
Model of Three Statements
Profit and loss, cash flow, and a balance sheet are all included in Toyota’s three-part financial model. This model is used by many other corporations. A set of assumptions is used to link all of the accounts and make modifications to the overall model. Formulas in Excel related to Toyota’s financial and accounting statements are dynamically linked to the company’s statements.
Depreciation/Discount Rate Model
Toyota and its investors use this technique to determine the net present value of their company’s future cash flows. When evaluating an investment, Toyota looks at the cash flow from three statement models to arrive at a current value.
The Merger and Acquisition Model
In order to evaluate the accretion and dilution caused by a merger or acquisition, Toyota uses this model of business. A merger or acquisition can have a significant impact on Toyota’s customers. To preserve its competitive edge, it provides a list of goals and partners, as well as a breakdown of financial and legal consultants (Bartlmann, 2018).
Model for an Initial Public Offering
This model is used by Toyota’s financial specialists and investment bankers when appraising the company prior to going public. It entails estimating the amount of money potential investors are willing to put into Toyota’s firm in order to conduct an analysis of its operations (Bartlmann, 2018).
Model of Leveraged Buyout
Toyota’s business plan often entails borrowing a significant amount of money to pay for the purchase of another company. Toyota relies on it heavily because of its capacity to leverage large sums of money from investors such as sponsors and banks. It is through the use of this business strategy that Toyota has been able to increase sales of automobiles (Bartlmann, 2018).
Analyzing the strengths, weaknesses, opportunities and Threats facing Toyota
SWOT analysis is a strategic planning method that uses the company’s strengths, weaknesses, opportunities and threats (SWOT) to identify potential opportunities and threats in the marketplace.
Consequently, SWOT is a quick description of the external and internal aspects that may influence the business’s future growth. The preceding sections provide an in-depth analysis of the company’s internal and external elements. In the next part, an effort will be made to classify and integrate the various components into the strategic planning process.
Strengths of Toyota
Size, power, and market domination are some of Toyota’s primary advantages. Additional advantages may be found in the supply chain, which has been thoroughly examined in the preceding sections. More than half a century of experience allowed the firm to build strong ties with its suppliers, including other carmakers. If the organization displays that it is able to learn from its mistakes, its managers’ expertise might be a benefit (Anderson, 2013).
Weaknesses of Toyota
Here, it’s clear that Toyota’s greatest flaws are its persistent quality concerns, a lack of crisis management expertise, and its reputational troubles. This situation is still plaguing Toyota as seen by last year’s big recall of pre-2010 vehicles owing to a range of issues discovered during testing. Toyota is still battling. The issue is far from being resolved, despite what appears to be efforts to correct it (50MINUTES, 2015).
Opportunities in the Market for Toyota
Toyota’s advantages provide several chances for the company. For example, a larger organization has more resources at its disposal, which allows for more prospects for growth. Toyota, for example, has exploited connections with other companies to do joint research. Other than that, Toyota has a variety of options to take advantage of contemporary market trends (50MINUTES, 2015).
Markets and Consumer Behavior
On the technical side, movements in the industry might represent both possibilities and challenges. It is evident that the organization may develop by embracing market-trending technology and methods, yet any innovation carries some risk. Unnoticed trends are frequently picked up by a rival company, giving it an advantage.
Being aware of the latest fashions means being aware of new opportunities that may arise. Adopting current trends, on the other hand, might help businesses acquire new clients. When it comes to “green” technology, Toyota has done substantial research on its own and with the help of other carmakers, such as Mazda (“Toyota and Mazda reportedly cooperating on green car technology,” 2021).
In theory, this type of technology is expected to be both more efficient and less destructive to the environment. Toyota should take advantage of the rising public concern about the future of the earth and environmental challenges as well as the economic crisis that makes cost-saving solutions more appealing.
There is a downside, though, to the tendency of aiming to produce more affordable vehicles that was outlined above. This is an issue that Toyota can’t ignore, given that it’s now common on the market; yet, quality is now a top concern for Toyota, so the business can only go so far with this trend. Toyota’s future might be in jeopardy if this market trend continues.
Market threats facing Toyota
Competition is the biggest danger in an oligopolistic market. Them is true that Toyota’s size and power provide it an edge, but the fact that numerous other competitors have similar market shares and well-known brands is less beneficial. It is important to remember that the competition might make blunders as well.
GM’s defective ignition switches, for example, may have been responsible for 13 deaths and prompted a large recall in 2014 due to the problem. In spite of the 2007 crisis, Toyota remains a prominent and competitive automobile manufacturer (Anderson, 2013).
The Most Important Aspects of the Business Strategy
It is difficult to dispute that the company’s flaws are critical. The quality and reputational crises necessitate ongoing efforts to remedy them. Additionally, the company’s strengths are supplying it with adequate resources to help combat the company’s flaws. Finally, the market’s current developments can’t be ignored. In order to keep up with the other main participants in the industry, Toyota has no choice but to answer to their issues by creating new ones (Anderson, 2013).
The Strategic Plan and the Method of Evaluation
Toyota’s future development strategy must begin with an assessment of the existing situation of the firm. The Automotive Center of Quality Excellence can help improve product quality, which in turn will assist improve the company’s reputation.
It is clear that the corporation has all the resources necessary to optimize its manufacturing process. However, repairing the company’s reputation will be a far more difficult undertaking. Promotion of the Toyota Way might be completed by a more widespread and forceful use of its ethical and rational recommendations.
Unfortunately, the company can’t wait for things to settle down before attempting to expand. Because of the competitive nature of the industry, the corporation must continue to produce new items and use new technology in order to maintain increasing its business, as well as addressing existing shortcomings. However, the company’s current problems should not be exacerbated by taking advantage of current trends.
SWOT is a widely used, yet widely criticized, approach to strategic planning. Since its inception, the technique has been criticized for being too generic and simple as well as illusive and superficial.
It’s also possible to leverage these drawbacks to your advantage in strategic planning. A broad and simplified nature of the strategy provides for an overall perspective of the positive and negative aspects as well as their possible interactions. While this document does not make specific predictions about the company’s future, it may be used as a starting point for further research and analysis, which is what it was intended to do.
Recommended Integrated Marketing Campaigns for Toyota
As part of a well-rounded strategy for communication, it is advisable for Toyota to use advertisement, brand management, new media, as well as direct mail. Personal selling services will be provided by the present network of respected dealers. In order to get consumers to buy, advertising will use broadcast, print, and outdoor media. With the use of digital marketing, this vehicle’s high level of sophistication will be better showcased in sales and direct mail efforts. If the results of pre and post-testing are unpleasant, this strategy may have to be re-evaluated, as it is now only a prototype and not a final one. A lengthy planning procedure with regular meetings of all relevant stakeholders before performing the proposed action to ensure that the campaign’s authenticity and message are presented in sync. In the case of a completely new product, pre-testing is very vital in order to verify that the intended message is received by the targeted audience (Watono & Waton, 2013).
In addition to reducing the chances of failure, testing will help determine the ideal ratio of image to copy. All projected communications and executions, as well as their conception, style, and creative approach, should be tested with test audiences that are representative of the overall public and the target audience. Pre-testing will necessitate some of the allocated resources. Email marketing should be among the first actions performed once letters are delivered to existing clients to raise awareness about the official announcement. Toyota can purchase additional databases from news outlets that their audience subscribes to like the Daily Mail or the UK telegraph and then filter such datasets for the required demographic profile as far as legality allows. In order to publicize the debut of their autos, a second batch of mailings should be sent out following the launch. As a reward for their Toyota devotion, attendees should be given the option to pre-order the car or arrange a test drive at a nearby dealership during the presentation. It will be necessary, among other things, to link and tailor it to the local dealer’s own mailing efforts. Direct mail should also be sent to Toyota’s database of potential consumers and clients, which includes corporate purchases. Public awareness and interest in the Prius may be sparked early on, and the vehicle’s features and benefits can be explained to potential buyers through various marketing tactics. Public relations are more effective when they appear in media that the target market consumes. Because of the Prius’ breakthrough technology, the media will be eager to cover this product, and even a certain degree of desired exposure may be feasible. Prius will be showcased at relevant automobile fairs and exhibitions to stimulate interest and equip the market before to its introduction. With its roots in public relations, sponsorship offers a great opportunity to raise awareness and improve the image of the product later in its lifecycle. This is particularly true for activities that offer the same social benefits as the Prius or are tied to the intended audience. In the future, advertising and public relations will be two of the most important methods of communication. Broadcast, print, and the internet advertisements appear to be the best ways to reach and influence the target audience. The creative method will be used to place advertising in target media, with somewhat varied executions for each, in order to reach each of the three perspectives in their appropriate medium. In order to generate a dealer visit, promotion will go through numerous steps of raising awareness, educating, and stimulate the enthusiasm of the target audience. When it comes to gaining new clients and keeping existing ones, nothing beats face-to-face interactions in the automotive sector. Internal communications must be coordinated and consistent with the rest of the company’s communications (Watono & Waton, 2013).
CONCLUSION
Toyota’s SWOT analysis has provided us with an insight into the most important aspects that might influence the company’s future development. However, regardless of the fact that the approach can only produce generic findings, we have discovered that one of Toyota’s primary worries is its current shortcomings, which are a result of the financial crisis of 2007.
Aside from that, Toyota appears to be capitalizing on current market trends in order to continue to expand and improve its operations and products. Possible plans for future expansion of the firm should be geared at repairing the company’s position following the crisis as well as responding to market difficulties in order to stay competitive. No matter how bad Toyota’s financial situation looks, the company cannot afford any form of reprieve from its obligations (50MINUTES, 2015).
REFERENCES
50MINUTES. (2015). The SWOT analysis: A key tool for developing your business strategy. 50 Minutes.
Anderson, G. (2013). How to analyze & plan your business idea: Look before you LEAP. Booktango.
Bartlmann, V. (2018). The PESTEL. Analysis through the example of Toyota motor. GRIN Verlag.
CORPORATION., T. M. (2018, 28). Toyota announces new global business plan. Toyota Motor Corporation Official Global Website. https://global.toyota/en/detail/7893567
Plummer, B. (2012). Leading a Kaizen culture. Toyota by Toyota, 177-188. https://doi.org/10.1201/b11902-15
Toyota and Mazda reportedly cooperating on green car technology. (2021, August 25). the Guardian. https://www.theguardian.com/business/2015/may/09/toyota-and-mazda-reportedly-co-operating-on-green-car-technology
(2021, May 9). Toyota Motor Corporation Official Global Website. https://global.toyota/pages/global_toyota/company/profile/overview/company_profile_en.pdf
write