Toyota Motor Corporation Supply Chain Management

Executive Summary

This report is basically prepared for highlighting and providing a detailed external and internal environmental analysis of one of the giant company in the automobile industries. In the report, the detail description of Toyota Motor Corporation along with detailed analysis of the business environment has been done. The introduction of the report includes the background and the history of the company. The major part of the report includes the External environment analysis in the form of PESTEL model and POSTER’s 5 forces model. The report continues to highlight the internal environment of the company by highlighting core competencies and the key resources. The main idea is to analyze the competitive advantages of the company developed due to the above mentioned parameters. In the conclusion we suggested some recommendation that can be followed by the company to maintain the leadership in the market.

Contents

Executive Summary        

Introduction        

External Environment Analysis-        

PEST Analysis of Toyota        

Politic        

Economic        

Social        

Technology        

Environment-        

Legal-        

Porter’s 5-Force Analysis of Toyota        

Threat of New Entrants – Low        

Threat of Substitutes – Medium        

Rivalry Among the Competitors – High        

Buyer Power – Moderate        

Supplier Power – Low        

Internal Environment of Toyota        

Core Competency        

Distinctive Competency        

Recommendations        

Conclusion-        

Bibliography        

Appendices-        

Introduction

The Toyota motor corporation was founded in the year 1937 which is a Japanese based company that engaged themselves in designing, manufacturing, assembly as well as sales of the cars, commercial vehicles, passenger minivans and the accessories as well as the parts mainly in North America, Japan, Europe and Asia. The founder of the company was Mr. Kiichiro Toyoda in the year 1937 with the spinoff of his parent’s company and therefore Toyota industries started creating automobiles. Before that in the year 1934 while there was still a department of the Toyota company, they created the first product i.e. the Type A engine and further in the year 1936 they innovated a passenger car namely Toyota AA. Basically Toyota motors produce motor vehicles under five different brand names i.e. Ranz, Lexus, Scion, Toyota brand and Hino.  It is one of the leading manufacturers of the automobiles and stands 8th largest company in the entire globe.  According to the report developed in March 2013, the annual revenue of Toyota Motor Corporation was approximately 213 billion USD and it also gave employment to about 333,498 people in the world. In that year about 200 millionth vehicles was produced by the company. It is the first automotive company that manufactures more than 10 millions automobiles per year. In this report, the external environment and internal environment analysis of the Toyota motors has been done along with few recommendation.  (G Zandi, 2013) (JH Wesseling, 2013)

External Environment Analysis-  

The Toyota Corporation is the major competitor in the automobile industry across the world. In the past 5 years, it was tumultuous for the automobile manufacturers. Due to the increase in fuel prices as well as the growing concern towards environment shifted the customer’s preferences and the demand of fuel efficient cars increased.  Some of the automobile manufacturers started manufacturing hybrid electric motor cars. The company was reluctant to shift their focus towards manufacturing small cars as they expected to price of fuel contraction eventually and that will bring back the customer back to big cars. In this section we will discuss about the PEST analysis of Toyota followed by the Poster’s forces model of the Toyota Motor Corporation.

PEST Analysis of Toyota

 There is a highly competitive market for the automobile companies.  The Toyota is out of world’s largest automobile industries and is very successful in the current market. To become successful and maintain these profit margins, the companies constantly have to monitor the external environment and respond to changes immediately. There are several environments that are covered under PEST analysis.  (Q Zhu, 2013) (MJ Epstein, 2014)

Politic

The political mainly includes various policies, measures and the government standards implementation. The strategies and the decisions of the company are highly influenced.  Various governments are making an offer on tax rebates and also providing incentives to customers for buying cars from Toyota. The UK government in the year 2006 offers relaxation in tax ranging from 5-15% on the company with less amount of CO2 emission.  The government of United States also imposed new fuel standard efficiencies. These actually causes problem for the car manufacturer but Toyota always believe to capitalize as measures taken can boost up the sales.

Economic

The economic forces play a significant role on marketing of the products manufactured by the company as they determine buying decisions and the activities of the customers. The forces of economy include the condition that are general according to the current state of economy and power of consumer to willingly spend money on their products. It is basically affected by various factors including interest rates, cost of living and inflation too. Toyota’s marketing and financial strategies are hugely impacted by economics. There is a financial crisis in the world which actually stemmed after the collapse of United States investment in 2008. The word’s automobile industries are severely affected with decrement in the sales of cars in the year 2008-09. The Toyota Motors was badly affected due to the recession. As per the report approximately 6 billion USD losses was recorded after 59 years. It was also noted that although there was a rise in the price of petrol, various motorist were not buying Toyota cars as it tends to be very expensive for them.