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Executive Summary

Toyota Motor Corporation is a leading automotive manufacturer. The current paper provides an analysis of the company and its industry through the presentation of its strengths and weaknesses. Also, it assesses the competition the company faces from other companies. The plan further evaluates the factors that have led to the success of the company. The plan offers the strategies that the company can employ and implement to successfully market its products.

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Situation Analysis

Company Description

Toyota Motor Corporation is a top car manufacturer and distributor worldwide that is headquartered in Japan. It was established in 1937. The company functions through three business directions that are the automotive, finance and other segments. The automotive section deals with manufacture, design, and sale of car products. The finance section focuses on financial services offered on the sale of the products. The other segment entails manufacture, design, and sale of housings and the company’s communication and information area.

Toyota is a dominant automotive manufacturer that has expanded its markets over the years. It has several distributors and assembly plants in various countries. The corporation operates several subsidiary companies involved in the manufacturing of various products such as steel, rubber and woolen goods.

Toyota’s global mission entails leading the way to mobility’s future and providing the safest methods of transporting people (Farfan 2015).

Industry Analysis

The automobile industry is one of the world’s largest industry and important economic sector. The industry manufactures motor products as well as does marketing and selling globally.

The industry involves the use of high capital and intensive labor. Materials, labor, and advertising are important factors entailed in the production and sale of automobiles in the industry.

The industry has a large global market with revenues mostly generated from the sale of automobiles and parts. It is dominated by major companies including Toyota Motor Corporate, General Motors, Honda Motor Corporate, Ford and Chrysler.

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The industry is affected by several forces, including competitive rivalry experienced by the dominant companies. The organizations are in constant competition for the same consumers (Uzwyshyn 2012). Also, the increasing rate of growth in the market forces the companies to compete for market share. The companies operate in diverse cultures and, therefore, offer different services to the consumers increasing their rivalry (Muller 2015).

The threat of substitute products also affects the industry. The companies manufacture similar products for the same market. Therefore, product differentiation is a key factor that drives the growth of each company.

The bargaining power of buyers also affects the automobile industry, though moderately. Buyers are mainly influenced by the quality, price, appearance and environmental effects of the products offered. The buyers, however, can affect the profitability of the industry through their capability to choose higher quality, better service and lower prices of the products. The various models and brands of automobiles provide the buyers with the ability to choose according to their preferences, thereby lowering the effect of their bargaining power (Mohd 2015).

The bargaining power of suppliers also affects the industry but at a lower degree. The industry is characterized by various suppliers of raw materials for the manufacturing of automobiles and parts. Thus, the companies give the power to different suppliers based on their quality, delivery, and cost of products (Hajar 2014).

The industry, however, has recently experienced unevenness in the global market. Change in consumer demand is one of the causes of the unevenness, where consumers are demanding for more refined automobiles at low prices. Expanded regulatory requirements also have led to the unevenness in the market as regulators are demanding for the addition of equipment on the automobiles. The aspect adds more costs in their manufacture (Maverick 2015. The market also has expressed the need for more information on the automobile industry, which gives the buyers higher bargaining power as they can access information on the quality, prices, and performance of the automobiles. The outcome is the high costs incurred in the industry by the companies, where they have to introduce new features that eventually alter their design. The companies are forced to change the processes of the dealership to provide the consumers with more information (Strategy 2015).

Company Analysis

Toyota is a dominant company in the automobile industry. As of 2013, the company’s revenue was $233 billion, and it had 333498 employees. Its external environment is characterized by several key players in the automobile industry such as Ford, General Motors and Honda. It, therefore, faces serious competition. Its external environment has several success factors that have aided in its growth (Kumar 2013).

Key Success Factors

The company has been able to achieve success in the global market due to several key factors, including the availability of quality production and manufacturing facilities. Toyota has several manufacturing plants around the world. The company further assembles and manufactures automobiles for local markets and has been identified as a leader in manufacturing and production worldwide (Collins 2015).

Another key success factor for the company is its extensive research and development. The company focuses on quality, reliability, and durability for its research and development. It has introduced several technologies such as the hybrid gasoline-electric automobile that generated high sales for the company. It produces several brands of high-quality vehicles such as Lexus and Scion through its research and development.

The company’s strong management and capable workforce have also enhanced success. Toyota has several principles for the workforce to facilitate its performance that include teamwork, respect, challenge, and improvement (Takeuchi et al. 2008).

Its distribution and marketing activities have also served as key success factors. The activities entail effective sales, services, and meeting the diverse needs of consumers. The company emphasizes on placing its customers first to ensure effective marketing.

Innovative activities present in the corporation also serve as a key success factor. The company is involved in several innovative projects to improve worldwide manufacturing and supply of its products through the development of multipurpose automobiles and pickup trucks.

Customer Analysis

The company has a wide range of customers, including low-income and high-income earners. The consumers are from diverse cultures, geographical locations, and age brackets. Consumers purchase different Toyota products based on their preferences. The company increases awareness among the customers through various sources, including advertisements, the company’s website and also newsletters. Customers are also exposed to complementary products manufactured by the company.

Consumers can access the company’s products from several retail outlets worldwide and also online. They can order items from stores of the company (Booz 2007). Toyota sells its products throughout the year. The high quality of service and products offered by the company attracts more customers and ensures that its current customers remain satisfied.

Competitor Analysis

The company faces great competition from General Motors, Ford, and Honda. The competitors offer similar product quality, features, fuel economy, reliability, safety, pricing, and also customer service.

Macro-Environment (PESTEL Analysis)

Political instability in oil-producing countries increases the oil prices, reducing the demand for cars and, therefore, affecting the company. Toyota is also affected by the new European regulations on emissions of gases from vehicles, which has led to it developing hybrid cars (Ferguson 2015).

Economic assessment proves that the power of the Japanese yen affects the company. A collapse of the international economy led to the fall of the Japanese yen that evaluates the company’s share prices on the stock exchange (Mullins et al. 2010).

The decline in the economy has led to fewer people purchasing cars as most use alternative means of transport to avoid high fuel prices. The aging population also reduces the size of the market available. The social changes affect Toyota in its strategies and lead to excess production capacities for the company.

Technological analysis proves that the company aims to develop more hybrid technology to encourage zero gas emissions and zero waste, which contribute to the innovation activities.

Environmental evaluation of the company recognizes it as the most environmentally friendly automotive company. The organization focuses on investing in the development of vehicles that have low carbon emissions such as the Toyota Prius.

The company benefited from the regulation limiting the emission of gases from vehicles that was enacted by the United Nations Economic Commission for Europe as it developed innovations focusing on the regulation.

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SWOT Analysis


The company has a strong market position and a wide recognition of its brand. Toyota has penetrated the global market holding a market share of 12.2% in North America, 4.3% in Europe and a big market share in the Middle East, South and Central America, and Africa (Sulaiman 2013). The strong market position enables the company to expand in the international market and provides it with a competitive advantage. Its brands are also globally recognized increasing its strength in the market (Jurevicius 2013).

Extensive production and distribution networks also increase the company’s strength. It has several manufacturing plants dedicated to the production of vehicles and related parts. The corporation operates several distribution networks globally increasing its revenues.

Research and development conducted by the company also add to its strength. Toyota invests in extensive research and development to improve its products quality, functionality, environmental capability, and safety. The intensive research and development have further enabled the introduction of new technology by Toyota, and thus increasing its sales (Kirrane 1990).


Decreasing sales in several geographic areas is a major weakness of the company. Toyota experienced several losses in sales across regions, including Europe and North America. The continuous decline in the sale of its products could eventually lead to significant losses on the company’s overall returns.

Another weakness present in Toyota is its poor allocation of resources in comparison with other companies. Toyota has minimum returns on assets and returns on equity as compared to major competitor Honda. It indicates that the company is inefficiently using its shareholders’ finances and not producing high returns for the shareholders (Negi 2015).

The company also experiences several products recalls which affect its image. Toyota conducted a recall of 111000 vehicles in 2011 because of the shutdown of the hybrid system. Government investigations were also conducted on the company due to its product recalls. The brand’s image could be ultimately damaged due to the situation experienced.


The company’s focus on developing vehicles that are environmentally friendly could lead to an increase in the market of consumers, who are concerned about the environment. The consumers could purchase Toyota hybrid and electric cars that are environmentally friendly.

The rise in fuel prices also offers an avenue for a large market in the hybrid and electric vehicles produced by the company (Thompson 2015).

The shifting consumer needs provide the company with the opportunity to develop new car models to satisfy the different consumer preferences.


Intense competition from other auto manufacturers is a major threat to the company. The availability of differentiation in the products through several factors such as quality, fuel economy and pricing offers a basis for competition. Increased competition affects the overall returns received by the company.

The appreciating Japanese Yen exchange rate is also a major threat to the company as revenue earned from foreign countries would present lower profits if the Yen exchange rate appreciates against other currencies.

Natural disasters present in several regions, where Toyota has manufacturing facilities, could disrupt their operations. The cases include Indonesia and Japan, which are prone to natural disasters.

Decreasing fuel prices also pose a major threat to the company due to the decrease in the number of consumers purchasing a hybrid.

Marketing Strategy

Toyota has a large market with each of its products targeting a specific group of consumers. The segmentation of the market aids in the proper targeting of the market to offer quality services to the consumers. It has segmented nearly all the world’s countries to make its market. The focus markets are the United States, China, and Canada. The company has also targeted the economy class and lower class to ensure proper provision of products.

Toyota has two market segments, through which it forms its strategies that are demographic and psychographic segments. The demographic segment targets the family size in the upper-middle-income class with products such as Toyota Camry, and the psychographic segment targets the high class with products such as Toyota Altis.

The segmentation and targeting of markets encourage the employment of differentiation strategy to provide diverse products with different prices suitable for market segments (Strategy 2015). The company can employ various strategies through the 4ps that are the product, pricing, promotion and place/ distribution to enable proper marketing of its products (Rowland 2015).

The products of Toyota are various and different giving the company a large audience in the market. Its products include automobiles, spare parts, and accessories. The products are differentiated to target specific markets.

The distribution of various products can be accessed through various dealerships and retailers, from which the consumers can obtain the products. The positioning of the company in various countries gives it an opportunity to obtain global coverage and recognition.

In promoting its products, several strategies are employed such as advertising through media. Personal selling conducted by sales personnel can also be employed to promote the products. Public relations also provide an avenue for the promotion of the brand.

In regards to pricing, Toyota employs pricing strategies, including value-based and market-based pricing. The market-based approach enables the company to set its prices for various products based on market conditions and its competitor’s prices. The value-based method enables the company to establish the prices on products with regard to their perceived and actual value.

Marketing Implementation Analysis

The implementation of the strategies provides the company with an opportunity to increase its revenues. The availability of financial and management staff will ensure that the strategies are completed on time.

The company should ensure that the staff has the required technical knowledge for the quality manufacture of the products. Regular HR development and proper training contribute to the effectiveness of the business.


In conclusion, a monitoring and evaluation team should be established to control the company’s progress in implementing marketing strategies. The marketing strategies are essential in ensuring that the company remains relevant in the market and gains a competitive advantage.

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