STRATEGIC REVIEW OF
TOYOTA MOTOR EUROPE
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Word count: 2496
| Seminar tutor: Jonathan Cardy
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Table of Contents
Executive summary………………………………………………………………..2
1
Introduction to Toyota ........................................................................... 3
2
External environment analysis.............................................................. 3
3
2.1
PESTEL ..................................................................................................... 3
2.2
Porter’s 5 Forces ...................................................................................... 4
2.3
Industry Lifecycle..................................................................................... 5
2.4
Strategic Group analysis ......................................................................... 5
Internal environment analysis ............................................................... 6
3.1
Value Chain .............................................................................................. 6
3.2
VRIO .......................................................................................................... 6
4
SWOT....................................................................................................... 6
5
Foundations for future development .................................................... 8
6
Final recommendations ......................................................................... 9
7
Bibliography ......................................................................................... 10
8
Appendix ............................................................................................... 17
8.1
Appendix A: PESTEL analysis .............................................................. 17
8.2
Appendix B: Porter’s 5 forces ............................................................... 19
8.3
Appendix C: Industry Lifecycle ............................................................. 20
8.4
Appendix D: Strategic group analysis .................................................. 22
8.5
Appendix E: Value Chain ....................................................................... 24
8.6
Appendix F: VRIO analysis .................................................................... 25
8.7
Appendix H: Ansoff’s matrix ................................................................. 26
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Executive summary
This report strategically analyses the European section of Toyota Motor
Corporation and generates recommendations for future development. This report
looks at the external environment; tools such as the PESTEL analysis, Porter’s 5
forces, Industry lifecycle and the strategic group analysis have been used to assess
the external influences on businesses in Europe. Factors influencing Toyota directly
or indirectly are then described in more detail.
The Value Chain has been used as a form of determining the Strengths and
Weaknesses within the organisation. Then, the VRIO tool is used to asses six of
Toyota’s capabilities and competences. The environmental analysis is then
summarised using the SWOT technique.
Several options for future development are generated through Ansoff’s matrix,
which offers four general growth strategies. Four of the most viable options, such as
forming a joint venture, expanding electric and hybrid productions or creating a new
market for electric cars are discussed in more detail and evaluated using the SAFe
criteria.
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1 Introduction to Toyota
Toyota, founded in 1936 in Japan, moved into the European market in 1963.
In 1992 Toyota opened its first two manufacturing centres in the UK. Since then
Toyota has opened 7 more factories in Europe and HQ in Brussels, Belgium (Toyota,
2019). Toyota’s market share fluctuates between 4.5 – 5.5% as the biggest Asian
brand in Europe by volume (Bekker, 2018). However, Toyota is the biggest car
manufacturer worldwide, holding 9.2% market (Statista, 2019). As of 2018, Toyota is
the most valuable brand within the automotive sector worldwide with a value of
almost 30 billon USD (Satista, 2018).
2 External environment analysis
2.1 PESTEL
The major political and economic factor influencing Toyota at the moment is
the uncertainty of Brexit (Appendix A). Brexit will impact all business operating
across (and outside of) Europe as it will likely influence currency exchange rates,
taxes, tariffs etc. Notably, Toyota operates an engine manufacture plant in the UK,
which supplies car engines to assembly plants located across Europe, but also an
assembly plant which in-turn imports various parts from Europe (Toyota, 2019).
New tariffs are likely to influence consumer behaviour with products like gas
and petrol costing more (Foster, 2017). Halted investment into the UK market could
also lead to the stagnation or decline of the UK economy, which in turn could have
further negative impact on the company’s profits (Mullins, 2018). Apart from
negatively impacting sales, Brexit might disrupt Toyota’s operations and supply
chain, raise administrative costs, reduce reliability and prolong lead times (Foster,
2017). The renegotiation of contracts with suppliers or customers is also likely to
take place due to changes in legislation and costs (Burges Salmon, 2019).
The development of new technology has a major impact on the car industry.
According to research, electric cars owners are “frequently concerned about not
having enough of a charge to make it to their destinations” (Oloriz, 2018). Newly
developed, longer lasting batteries solve this issue and have major impact on the
sales of both electric cars and hybrids.
In addition, changing environmental attitudes of the population have influence
over changes in consumer behaviour. An increasing number of people is looking to
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purchase electric and hybrid cars. Forecasts estimate that by 2025, 20% of all cars
sold will be electric or hybrids, in comparison, in 2015 it was less than 2% (JP
Morgan, 2018).
2.2 Porter’s 5 Forces
Toyota puts an emphasis on maintaining good relationships with its suppliers,
mainly due to Toyota’s Just-in-time delivery system. Research shows a strong
partnership with suppliers is key to making this method work in practice, it “involves
close collaboration on product development and specifications, and on both product
and information flows” (Germain & Dröge, 1997). Toyota understands the importance
and acts accordingly; the evidence of this lies in the effectivity and efficiency of its
supply chain. Suppliers are invited to organise technical show in Toyota’s R&D
facilitates to “demonstrate their capabilities to Toyota engineers and to highlight
innovative ideas” (Deville, 2019). On the other hand, there is a limited number of
suppliers available to produce specialised parts and comply with Toyota’s terms,
such as the JIT delivery system. Overall, the supplier bargaining power is considered
low to medium (see Appendix B).
Buyers hold majority of the power as there are often high costs associated
with a purchase of a new car. Buyers are more likely to conduct a thorough research
before a purchase and the technological advancement facilitates this (VividFish,
2016; Chamberlain, 2018). The market is saturated and there is a number of
alternative brands or substitutes to choose from. Moreover, brand loyalty is quite
high, thus attracting new customers is more difficult. Moreover, there are no
switching costs, therefore Toyota needs to also work on retaining current customers.
Threat of new entrants is fairly low due to high cost associated with entering
the car industry; intensive amount of R&D is needed. Already established brands
benefit from both experiences, but also the economies of scale.
Toyota invented new production system (known as The Toyota Way) and was
one of the first ones to start selling electric, hybrid and hydrogen-fuelled cars. This
createed a unique competitive advantage compared to not only potential new
entrants, but also competitors (Toyota, 2019) (see Value Chain in Appendix E).
There are many brands competing in the same industry with overlapping target
markets, and high marketing spending. Overall, the competitive rivalry in the industry
is very high.
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2.3 Industry Lifecycle
The automobile industry is in the mature phase, which is characterised by
highly saturated market. High number of mergers and acquisition took place over the
last couple of year and there is only a small number of companies in the market, as
one company often represents more brands (Augsburg, 2016). This industry is highly
cyclical, possible decline is overturned by innovation and thus industry extension
(such as when steam engines have been replaced by petrol and diesel; see
Appendix C for additional information). It is also subject to economic conditions and
economy growth is often reflected by higher number of sales.
Since 1997 Toyota has been manufacturing hybrids and electric car which
suggests another industry extension (Toyota, 2019). In 2015 Toyota was the second
one to start commercially selling hydrogen-fuelled cars, thus inventing yet another
possible industry extension (Reuters, 2018). As one of the first movers into that
industry, this provides Toyota with a competitive advantage. This reflects on the
user’s rankings, as Toyota’s models take the top place amongst electric and hybrid
cars (U.S. News world Cars, 2019). Toyota is also investing in self-driving
technology and inventing 2 models of driverless cars (Hawkins, 2019).
2.4 Strategic Group analysis
Appendix D shows 3 different Strategic Group analysis graphs. It is revealed
Toyota’s closes competitors within this strategic group are Ford, Nissan and
Volkswagen. Whilst Ford offers wider range of products (ConsumerReports, 2018),
Toyota maintains lower price (Statista, 2017). Volkswagen’s cars are significantly
more expensive, whilst offering lower product range. This allows for higher margin
and leads to the highest investment in R&D. This is a threat for Toyota as it could
lead to high levels of innovation and thus the market share of VW could grow. Both
Ford and Nissan have higher R&D intensity than Toyota, however, overall the
investment is lower (Strategy&, 2018).
Arrow in Figure 6 suggests possible move within the strategic group to gain
bigger competitive advantage – higher investment in R&D, thus higher level of
innovation could allow Toyota to offer new high-tech models for higher price.
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3 Internal environment analysis
3.1 Value Chain
As mentioned above, Toyota invests high amounts of money into innovation
and new technology development. Toyota owns several research centres and
continues to invest in many technologies such as AI and robotics (Toyota, 2019).
This provides Toyota with a competitive advantage and successes such as hydrogen
fuelled cars add value to the company.
Toyota is also known for the most effective and efficient operations. The main
competitive priority of Toyota became flexibility – “short lead times and focus on
keeping production lines flexible leads to higher quality, better customer
responsiveness, better productivity, and better utilization of equipment and space”
(Liker, 2013). This not only adds value to the company on its own, but also offers
opportunity to teach Lean practices to other companies. For example, between
1984-2010 Toyota formed a joint venture with General Motors. Whilst GM used this
as an opportunity to learn about Lean, it allowed Toyota to establish a base in North
America (Toyota, 2019). See Appendix E for more details.
3.2 VRIO
Major resources have been analysed using the VRIO analysis (see Appendix
F). The most valuable resource to Toyota is the technology the company possesses.
It fairly rare and difficult to imitate. Electric cars offer Toyota competitive advantage,
however more and more companies are moving into that sub-industry. The
hydrogen-fuelled cars industry is still in the introduction phase and has fairly low
value, mainly due to under-developed infrastructure (Toyota, 2019). However, if the
technology succeeds, this will offer Toyota advantage in the future.
4 SWOT
Table 1 below summarises the environmental analysis using the SWOT
technique:
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Table 1
4.1.1 Strengths
4.1.2 Weaknesses



Unique position in the market (major
Lack of experience in European
market share)
market, holds weaker position which
Strong R&D focus, development of
is represented on low market share
new technology and products,
(in comparison with Toyota’s global
expanding capabilities in current
market share
products

Experience high product recalls

Recognisable and valuable brand
(could be seen as an advantage –

Toyota’s production system,
highly effective and fast at recalling
operations, efficient supply chain,
products), quality issues affect
Lean systems
brand image, could also cause legal
Technology – highly competent in
issues for the company when safety
electric and hybrid car production
requirements are not uphold



Marketing

Strong relationship with key
vehicles (invested in Uber, which
suppliers, technical shows for
had several self-driving cars related
suppliers
issues in the past)

Economies of scale

Experience curve in almost all
Lack of competence in autonomous
aspects of Toyota’s business
4.1.3 Threats
4.1.4 Opportunities

Uncertainty of Brexit

Hydrogen-fuelled cars industry

Petrol prices

Development of the infrastructure for

Possible changes in legislation

“car-free” movement

Environmental attitudes on the rise

Low unemployment rates could

Self-driving cars, rideshare apps
electric and hydrogen-fuelled cars
make it difficult to find staff

Highly competitive industry
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5 Foundations for future development
The Ansoff’s Matrix was used to generate suggestion for possible future
development; see Appendix H. Three suggestion are described in detail below:
(1) The UK government is targeting an 80% reduction in all greenhouse gases
by 2050, compared to 1990 levels (Parliament of the United Kingdom, 2008).
Subsequently, the UK government pledges £290 million boost for low emission
vehicles. This includes an investment into an electric vehicle charging infrastructure
(Department for Transport, 2016). This would provide an opportunity for Toyota to
expand their electric & hybrid line as having the appropriate infrastructure in place is
likely to lead to higher demand.
(2) Toyota has been researching hydrogen vehicles since 1990s. Hydrogen
has the highest specific energy density of any non-nuclear power source. It is
inexhaustible and non-toxic; it can be created using many sources, stored indefinitely
and can be shipped relatively easily (Toyota, 2019). Although going through testing
and R&D is costly, Toyota may look to move into hydrogen powered vehicles in a
similar fashion to their earlier innovation with their hybrid vehicle the Toyota Prius in
1997. Prius changed the public perception of hybrid vehicles and its use was
popularised by Uber (Bell, 2017). Expanding the hydrogen line and establishing
cooperation with companies such as Uber could improve public perception of
hydrogen cars. It could also function as a marketing technique.
(3) However, Toyota could also form a strategic alliance with Honda, who was
the first one start commercially selling hydrogen cars (Washington Times, 2009). The
two companies could join their resources and invest in R&D together. This could not
only make innovation faster, but also less costly.
(4) New marketing strategy could be a way to penetrate existing markets.
Toyota holds quite a low position in the European market, and although the
European market growth is slowing down, there is still room for Toyota’s market
share to grow. PESTEL analysis has revealed new trend of sustainability and
environmental tendencies. Marketing electric vehicles as not only cheaper to
operate, but also environmentally friendly to this market could be a way to get ahead
of competitors selling conventional cars (Carrington, 2019).
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Figure 1 below uses the SAFe criteria to evaluate these four options. Whilst
Toyota might be standing at the beginning of a new sub-industry with high potential
with its hydrogen technology, there is a high level of risk related to it. Innovation
bears high costs and the return on investment is not certain. Joint venture with
another company, which is conducting research in hydrogen fuelled cars for
commercial use, would speed up research and split the costs. However, forming a
joint venture is also risky as companies are required to share confidential information
and risk losing control (Jin, Zhou, & Wang, 2016).
The SAF matrix
Suitability Acceptability Feasibility Total
(1) Expand electric & hybrid
10
9
8
27
(2) Form a joint venture
7
3
8
18
(3) Expand hybrid line and market it
8
1
3
12
9
5
7
21
(4) Market electric cars to a new
audience
Figure 1 The SAFe criteria
6 Final recommendations
Expanding the electric and hybrid line scores the highest on the SAFe criteria.
As mentioned, the demand for more environmentally friendly cars is growing and the
government bodies such as the UK or the EU are starting to implement laws with
stricter requirements for both car manufacturers and users. As a result, the
governments are forced to invest in the appropriate infrastructure. This in turn allows
for more possibilities and brings down the barriers for electric car users. The demand
for electric and hybrid cars is steadily growing and there are only a few car
manufacturers, thus this option possesses fairly low risk. However, to overcome the
risk Brexit possesses for the two manufacturing plants in the UK, and also to cope
with higher demand, opening a new manufacturing plant in Europe should be
considered. This plant could focus purely on the manufacture of the electric, hybrid
and hydrogen cars. At the same time, it would be advised to continue investing in the
vehicle charging infrastructure to support the demand.
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United Nations, Department of Economic and Social Affairs . (2017). World
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a search engine. Retrieved from VividFish:
https://www.vividfish.co.uk/blog/89-of-customers-begin-their-buying-processwith-a-search-engine-source-fleishman-hillard
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Wallace, T. (2018, September 19). Cost of going out goes up as petrol, transport and
theatre prices jump. Retrieved from The Telegraph:
https://www.telegraph.co.uk/business/2018/09/19/cost-going-goes-petroltransport-theatre-prices-jump/
Washington Times. (2009, August 24). Hydrogen-powered vehicles on horizon.
Retrieved from Washington Times:
https://www.washingtontimes.com/news/2009/aug/24/hydrogen-poweredvehicles-on-horizon/
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8 Appendix
8.1 Appendix A: PESTEL analysis
Political
• Brexit – thousands of jobs at risk (O'Carroll & Topham, 2018)
• uncertainty around Brexit is halting investment (Mullins, 2018)
• exchange rates might promp exporting, however, that is likely to lead to
iflation; cost of imports are also likely to be high (Burges Salmon, 2019)
• reducted migration may reduce available workforce and have negative
impats on the skills pool (Mullins, 2018)
• new legislative - EU law no longer applies
• Trade Tariffs - world trade organisation tariffs 4 (wine) - 34 (gas)% (9.8% on
cars) (Foster & Kirkup, 2017)
• Sanctions - US sanctions on Iran are likely to influence the prices of oil,
however, US is considering reducing the number of waivers which limit oil
export from Iran, this could lead lower prices (Tan, 2019)
• Government Instability - Countries such as the UK, Spain, Spain or Greece
have lower political stability (BMI Research, 2018)
Economical
• Economy growth - 3.73% in 2017, predicted growtt is slowing down (Statista,
2018)
• Uneployment within the EU has reached all time low in 2017 (7.3%),
increasing disposable income (Menéndez-Valdés, 2018)
• Fuel Costs - UK are experiencing the fastest rise in fuel prices for 18 years
(Wallace, 2018)
• Income Rates - Wage increases in Europe may lead to increase in
disposable income (TradingEconomics, 2018)
Social
• Health Awareness - people becoming healthier and living longer (Barratt,
2017)
• Demographic Change - Europe has seen an increase in population (United
Nations, 2017)
• More cars - 47% of UK families own 2 cars, 1/3 one, 16% three, 6% four cars
(Collinson, 2013)
• Social Media - Use of social media has continued to rise in recent years, new
marketing techniques (Forbes, 2014)
• Empowered consumer - buyers are likely to do thorough research, acces to
sources, reiews etc. to make an informed decision (Bannister, 2017)
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Technological
• Trends - electric vehicles, self-driving cars, rideshare apps, UBER, Lyft shaking up the industry (Isaac & Boudette, 2016; Zurschmeide, 2018)
• Production Methods - New technology advancements, fast-improving battery
technology (Cartwright, 2018), hydrogen-fuelled cars
Ecological
• Environmental beliefs and attitudes change consumer behaviour and move
the consumer towards sustainable and more environmental friendly trends,
growth in electric vehicle demand (Oloriz, 2018; Gadenne et al., 2011)
• Although it has become a standard for a family to own two or more cars,
increasing environmental awareness is often at the beginning of a decision
not to buy a car. The “car-free” movement is gaining on popularity. Cities such
as Paris, Madrid, Oslo or London are banning cars in certain areas, imposing
higher congestion chargers, and are promoting the use of public centre or
bicycles to reduce air and noise pollution (Bendix, 2019).
• Carbon Emissions - Shift in trend towards low carbon emission vehicles
such as electric cars and hybrids (Oloriz, 2018)
• Raw Materials - The raw materials initiative that came in during 2008
indicates that there must be a fair and sustainable supply of raw materials
(Commission to the European Parliament and the Council, 2018)
• Waste & Noise - There has been an increase in awareness regarding noise
pollution (Barnard, 2016)
Legal
• Advertising Laws- Under EU law misleading advertisement is not allowed
(European Parliament, 2006)
• Employment Laws- Conditions of employment must be followed, e.g. equal
pay, working hours and working conditions all need to meet EU regulations
(European Parliament, 2018)
• Health & Safety- Health and safety legislations must be followed by
businesses when operating within the EU (European Parliament, 2018)
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8.2 Appendix B: Porter’s 5 forces
Bargaining power of suppliers: low to
medium
• Small compared to big companies such
as Toyota
• Strong relationships and trust neccessary
(Germain & Dröge, 1997)
• Certain part may be difficult to make,
need specialisation
• Cost of switching may be high,
negotiating contracts time-consuming and
costly
Threat of entry: low
• Economies of scale, experience curve
• Lots of capital required, extensive R&D
needed
• Importance of brand image- crucial within
the industry in relation to quality and
reliability (Malhan & Tandon, 2017)
• Market saturated
• Distribution channels - need relationships
with suppliers
Competitive rivalry: high
- major players possess similar or same technology, production
methods, supplier relationships, distribution systems
- market is saturated, many brands aiming at the same target market
(high development and production cost - aiming at larger groups of
people)
- growth, but slow, dependent on the situation of economy
Bargaining power of buyers: high
• Many alternatives, saturated market, very
little diversification (Augsburg, 2016)
• High access to information (Bannister,
2017)
• High level of brand loyalty (Roy Morgan,
2013)
• No switch costs
• High costs associated with purchase
• Low cost cars and eco friendly
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•Threat of substitutes: medium
• Trains, planes, buses, public transport,
walking
• healthy living, excercise, switch to cycling
etc. (Barratt, 2017)
• apps such as Uber, Lyft
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8.3 Appendix C: Industry Lifecycle
Figure 2 Industry Development (created by team member UP807150)
Figure 2 shows the development of the automobile industry from the early 20 th century up to present and highlights major
turning points for the industry.
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Figure 3 Life cycle (created by author) - Circle marks the position of the industry and the line predicts
future move.

The car industry is of one of those who stay mature it seems forever - For
the last 50 years, the car industry has been in the mature phase of its lifecycle. "The mature phase of the industry life cycle is one in which the
opportunities for product innovation are low. Demand is centred on
replacements for what people already own. Manufacturers concentrate
their efforts on improvements to the manufacturing process, advertising
and price competition. Price wars create further barriers to entry for new or
smaller firms, and existing firms tend to keep their market
share." (Mazzucato, 2005)

Possible product extension as hybrid cars are the future of the industry first movers therefore have an upper hand against competitors.

Toyota company lifecycle indicates the establishment, growth and
optimization stage of the company’s performance, which is conventional in
the entire industry
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
However, Toyota makes strategic decisions that disrupt this flow,
especially with their lifecycle-based carbon emission credits model that
improves the performance of cars and the company’s positioning

The company’s growth has been informed by the adoption of the
differentiation strategy (electric, hybrids, hydrogen)

Mergers (Augsburg, 2016): 2008 – Tata Motors & Ford; 2009 – Ford &
Chrysler; 2012 – Volkswagen & Porsche; 2016 – Nissan & Mitsubishi;
2018 – Nissan & Renault (talks)
8.4 Appendix D: Strategic group analysis
Figures 4-6 show the strategic group analysis. In all 3, the size of each bubble
represents the market share each brand holds (Statista, 2019) and the vertical axis
shows the average price (including tax) of passenger cars in the EU in 2017
(Statista, 2017). Figure 4 compares this to the number of models each brand offers
(ConsumerReports, 2018). Figure 5 compares the price to R&D expenditure
(Strategy&, 2018) and Figure 6 to R&D intensity (R&D expenditure as a percentage
of Revenue).
Originally included Mercedes had significantly higher price and much lower
investment in R&D, which suggested Mercedes is not a direct competitor and
belongs within different Strategic group.
Strategic group analysis
30500
Volkswagen
7,38%
Average Price (€)
28500
26500
Nissan
5,42%
Ford
5,83%
24500
22500
Toyota
9,46%
Kia
3,08%
20500
5,50
Hyundai
4,76%
7,50
9,50of models 11,50
Number
13,50
Figure 4 Price x Number of Models
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Strategic group analysis
31000
Volkswagen
7,38%
29000
Average Price (€)
27000
Nissan
5,42%
25000
Peugeot
Kia 2,10%
23000 3,08%
Hyundai
4,76%
21000
Ford
5,83%
Toyota
9,46%
Honda
5,39%
19000
17000
0,00
5,00
10,00
R&D ependiture (billions USD)
15,00
Figure 5 Price x R&D expenditure
Strategic group analysis
31000
Volkswagen
7,38%
Average Price (€)
29000
27000
Nissan
5,42%
25000
23000
Kia
3,08%
Ford
5,83%
PeugeotToyota
2,10% 9,46%
Hyundai
4,76%
21000
Honda
5,39%
19000
17000
0,01
0,02
0,03
0,04
R&D intensity
0,05
0,06
Figure 6 Price x R&D intensity
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8.5 Appendix E: Value Chain
8.5.1 Logistics and Operations
Toyota is known for the most effective and efficient operations. It has
developed its own unique approach known as the Toyota way or Lean after
observing the manufacturing methods of Ford. Repeatedly, Toyota has been voted
as the company with the best lean manufacturing system in the world, which other
companies aspire to replicate (Manufacturing Global, 2014). Continuous
improvement leads to reduction of waste - less inventory, less human effort,
decrease time for the manufacturing of the product, product design and factory
management (Kariuki & Mburu, 2013). Re-engineering also plays a major part. For
example, when a model fails in the market Toyota re-engineers it by altering that fail
model using the same production facility (Express&Star, 2019). All this adds value
whilst also decreasing costs.
Main aspects of the Toyota’s way (Liker, 2013):

Just-in-time (reducing times within production system and response times
from suppliers and to customers)

Kaizen (continuous improvement - promotes teamwork, multiskilled staff)

Jidoka (quality control process – when abnormality is detected production
line stopped and problem solve immediately)

Kanban (pull system throughout operations)
However, despite how many quality controls Toyota has in place, the
company has experienced several quality issues in the past. For example, 2.8m
vehicles were recalled due to safety issues in 2016 (Davies, 2016)
8.5.2 Marketing and sales
Toyota invests heavily into marketing and promotion, especially in the form of
advertisement. This can be seen as in 2015 and 2016 the company invested $4
billion in advertisement and is the 8th most advertised brand in the world (Neustar
Marketing Solutions, 2017). It’s due to high level of advertisement the brand is well
known and well represented. Apart from traditional marketing techniques, Toyota has
also been investing in events like races and motor shows (Pratap, 2018). On the
other hand, Toyota has been cutting on marketing expenses to invest more in
innovation (Shirouzu, 2018).
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8.5.3 Technology development

Hydrogen fuelled cars in development since 1990s

Investment in self-driving technology

Electric cars & hybrid– new battery development
8.5.4 Human resource management

Unique company culture
Elsey & Fujiwara (2000) claim there are 2 main factors weighting into Toyota’s
success – innovation and qualified human resources. Principle such as
“continuous improvement and learning, respect for people and mutual trust,
teamwork and long-term thinking” aid the company when penetrating new
markets and developing new cars at low cost (Strategic Direction, 2008).
Journal Strategic journal further claims, “most people have work for Toyota for
10 years or longer.”
8.6 Appendix F: VRIO analysis
Resources Is it
& Valuable
Is it
Costly/difficult Is the
Rare
to Imitate
capabilities
Production Y
Organisation
capable
Y
Y
Y
systems
Hydrogen N
sustained
advantage
Y
Y
Y
cars
Electric cars Y
Implications
Future
advantage
N
N
Y
Temporary
advantage
Technology Y
Y
Y
Y
sustained
advantage
Low cost Y
N
N
Y
Temporary
advantage
HRM Y
N
Y
Y
competitive
parity
Figure 7 VRIO analysis
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8.7 Appendix H: Ansoff’s matrix
Existing products
Existing a) Improve overall service to
Markets
raise level of loyalty and to
attract more customers
b) Develop marketing
New Products
a) Expand infrastructure for hydrogen
fuelled cars – higher sales
b) increase their production of electric
and hybrid cars of this product
strategy, invest in brand
within Europe to meet the surge in
promotion in the European
demand for electric vehicles,
market to raise
extend the line
awareness, promotions
c) Competitive pricing
c) form a strategic alliance and
expand hydrogen line
strategy
New a) focus marketing on a
Markets
a) Forward Integration – expanding
particular segment of
control over Toyota’s distributors
population (can market
could improve Toyota’s activities
Toyota for example as a
marketing techniques
second family car)
b) New distribution channels
b) Market hydrogen cars to
environmentally focused people
– social media? To reach
who do not own cars (not typical
first time drivers etc.
customers)
c) develop new vehicles to
offer to apps such as Uber
c) Increase investment in
Autonomous vehicles
or Lyft – adapted to the
needs of the drivers
Figure 8 Ansoff's matrix
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