Toyota Strategic Management External Analysis Course Work Example

Published: 2021-06-22 00:45:30
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I) What are the current opportunities for Toyota?

The Toyota Automobile Corporation operates in a complex global industry. In order for this company to realize the current available opportunities for growth and expansion, Toyota Corporation has to take into account the entire global automotive environment. The company’s mission is to make better cars and contribute to society (Toyota Motor Corporation, 2010). To achieve this mission, Toyota offers quality cars at affordable prices, puts its customers first and practices good customer service to all the clients.
There are various current opportunities for Toyota. One of these opportunities is investing in the production of some of its own car parts. The sale of car parts will provide more profit for the company than if the company sold the complete cars to its target population.

The other current opportunity is innovation and invention. The invention and innovation of new car types will be of great value to the Toyota Company. Unlike most companies in the automobile industry, Toyota has overcome the current difficult operating environment (Toyota Motor Corporation, 2010). As a result, the company has a better opportunity for greater growth and expansion. Another current opportunity for Toyota is good management. Good management of the Toyota Company strengthens the use of new technology and the manufacture of better quality cars. The company can make use of the accumulated expertise in order to increase its sales and efficiency. The management team of Toyota has good experience which can be used to increase the company’s efficiency. Moreover, Toyota has a regional vision which helps it to realize that different regions are at different levels of economic development. The company can thus use such knowledge to know what brands to specialize on in every region in order to remain competitive (Toyota Motor Corporation, 2010). Toyota can therefore exploit the current opportunities in order to maximize on its sales.

II) What threats are they facing?

Despite the presence of diverse opportunities which can help Toyota Company to grow, there are various threats facing that company. One of these threats is the threat of new entrants. Currently, the company is facing the threat of fresh entrants in to the market which may make it hard for this company to advance (, 2011). For example, the entrance of Honda Motor Company in to the automobile market was a big blow to the existing similar industries. The new companies are getting into the market with the desired technologies and management skills which make the market more competitive. Competition is another threat faced by the Toyota Company. There are various companies which compete for customers with the Toyota Company (Jeffrey, 2008). As a result, the cost of competition is high thus making the Toyota Company to have reduced profits. Another more threat to the Toyota Company comes from the problem of power suppliers.

The automobile supply business is currently quite fragmented with many suppliers relying on different automakers to buy most of their products (, 2011). As a result, when automakers switch their suppliers, it could affect Toyota’s business. Moreover, there are many automobile substitutes which are available hence affecting automobile business in the Toyota Company. People can now buy different cars while others may consider other means of transport such as train and airplane. The increased costs of maintaining cars can also make people to consider the available substitutes. The other threat is that buyers can now use their bargaining power to have the prices of the vehicles lowered (, 2011). In this connection, Toyota has to address all these threats in order to enhance its competitiveness.

III) What actions are they taking to respond to these environmental contingencies?

Toyota is taking various actions in order to respond to the environmental contingencies which may affect its profitability. First, the company has tried to strengthen its technological development and productivity while focusing on customer satisfaction in order to remain competitive in the market (Hitokoto, 2010). As a result, the company’s management calls for product-oriented management and market-oriented management in order to remain competitive. Moreover, the company concentrates on the accumulated expertise in the different fields to enhance efficiency. The other action that has been taken by the company is the allocation of management resources to technology and product development. This will make the company to create more appealing and attractive cars. Attractive and appealing cars will be in high demand because many people will want to own such cars (James, & Jeffrey, 2007). This will help the company to deal with increased competition in the automotive industry.

Strengthened communication is another action taken by Toyota Company to respond to the current environmental contingencies (Hitokoto, 2010). Good communication will help the company to fully address and satisfy the needs of its clients hence increasing profitability. This is because, Toyota strives to create a corporate culture and structure that enables all its workers to focus on its customers as the first priority. In addition, the company listens to the opinions of its on-site personnel in order to enhance its competitiveness (Hitokoto, 2010). Finally, the company works towards refining its strengths in customer satisfaction and use of new technology in order to deal with the current environmental contingencies.

IV) Based on your analysis and findings, what actions should they take? Please provide some recommendations in brief.

The Toyota Company should take various actions in order to remain competitive in the automobile industry. First, the company should make use of the new technology to create cars which are exciting and fan to drive. With the current changes in tastes and preferences, car customers would like to purchase the new and classic cars which will satisfy their desires (Hitokoto, 2010). Toyota should therefore embark on manufacturing new cars which will fan and exciting to drive. It should also educate its staff on the best ways to handle customers in order to ensure adequate customer satisfaction. Customers will remain loyal to the car dealers who treat them well. In this connection, it is necessary for Toyota Company to increase its employee’s awareness of good customer service.

Toyota Company should also emphasize on good communication, cooperation and consideration in order to ensure effective operation. Moreover, the company should also increase client environmental awareness and government vehicle scrappage programs in order to replace old car models (Anonymous, 2010). This will pave way for the demand of the new car models which are required by many clients. Toyota car business should be based on each particular region in order to ensure that they take advantage of the economic development of every region. Such actions can help the company to remain competitive in the market.

V) What do you perceive you have learnt in Module 2 Case Assignment?

There are various lessons which can be learnt from this assignment. One of these lessons is that a company has to continue with its invention and innovation in order to remain competitive. The use of good communication and fresh technology is essential for the success of any business. This is because, good communication and new technology helps in achieving higher levels of customer satisfaction. It is thus good for any company to ensure that its clients are given the first priority in the business to ensure that they are satisfied.


Anonymous (2010). TrueCar forecasts April auto sales and incentives spending; Industry sales up 23%; Toyota incentives reach record highs. PR Newswire. Retrieved August, 2012, from library portal via coursenet.
Hitokoto, T. (2010). Big carmakers back on the road. Yomiuri Shimbun (Japan). Web. Retrieved on 27th July 2012 from library portal via coursenet. (2011). The industry handbook: Automobiles. Investopedia. Web. Retrieved on 27th July 2012 from
James, L. & Jeffrey, L. (2007). The Toyota Way to Continuous Improvement: Linking Strategy and Operational Excellence to Achieve Superior Performance. New York: Penguin Publishers
Jeffrey, L. (2008). Toyota Culture: The Heart and Soul of the Toyota Way. New York: McGraw Toyota Motor Corporation. (2010). The Right Way Forward. Web. Retrievedon 27th July 2012 from

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