BCG Matrix (Toyota's products) The BCG model depicts that how much priority should be given to the particular business unit. Following is Toyota BCG model: The BCG Model Of Toyota Company Business growth Rate High Stars (Corolla) Question Mark (Cuore) Low Cash Cows (HiLux) Dogs High Low Relative Position Market Share The BCG Model Of Toyota Corolla Business growth Rate High Stars (2.0 D, 2.0 D Saloon) Question Mark (SE Saloon, GLi) Low Cash Cows (Xli 1.3) Dogs High Low Relative Position Market Share Toyota Resources School of Strategy: The Resource strategy is based on the argument that some companies develop a collection of their key competencies in which they can differentiate themselves from their competitors. The Toyota is known for its quality which they have developed after the hard work and commitment of decades. They have invested a lot in their employees, in their structure, in their manufacturing units, and most importantly in their products in order to reach this skill level. Porter's 5 Forces and Generic Strategies (on Toyota) Threat of New Entrants: In Automobile business the threat of new entrance in the industry are very low because it is a high tech industry and needs huge amount of capital and innovative technology to establish a manufacturing unit. Bargaining Power of Suppliers: Toyota is one of the leading automobile manufacturers and holding a major share in the global market, so it has dominant role on its suppliers but it does not manipulate the rights of suppliers it take cares them and their needs as well. Intensity of Rivalry: The competition is very high in the Automobile industry the larger Automobile companies are General Motors, Ford and Honda are its main competitor. They are having large resources and they can any strategy to have customer without taking care of capital back up. Bargaining Power of Customers: As there is a large no. of substitute available in the market and the bargaining power of customer is high. Threat of Substitutes: Due to many substitutes available in the market for Toyota products as other manufacturers are producing same quality products as well. 7S Model (7s strategies of Toyota) Strategy Share Values System Style Structure Skills Staff Western Management of the Toyota is giving more importance to the hard side of the seven S’s model which includes structure, strategy and system. They give their more intentions towards day to day activities and daily events and to develop a better organizational structure in order to have and maintain competitive advantage. On the other hand Japanese management of Toyota pay more value to soft side of seven S’s model which includes sills, shared values and staff etc. They pay more intentions to get competitive advantage through their employees, they provide them training and different skills to enhance their working power and they have unique leadership style and unique shared values. DEMAND AND SUPPLY FOR TOYOTA In the market the price is totally depended on the price which is offered by the seller and the prices on which the buyer is willing to buy the product that is called market price. Here we will discuss the Toyota’s demand and supply side factors which are the essential elements of the automobile market. The Following factors influence the demand and supply of automobile: 1. The price at which seller is ready to sell in the market after bargaining. 2. The price which at which any potential buyer is ready to buy from the market. In the market the Buyers make an offer for car and the seller has right either to accept it or reject it. Proofread and Marking ServiceEssay Writing Service This is not an example of our work.Find out more Analysis of the Factors which affect the demand and supply of Toyota: The main factors which affect the demand of the Toyota in the UK are population, Income POPULATION The increase in population will result in increase in demand for the products. The increase in the population will increase the long run demand for Toyota cars. When the population increases the people will go for new product this will automatically increase the demand for products which are prevailing in the market. Following charts will show the rightward shift in the demand of the Toyota products which will cause due to the increase in the population around the world. P S D1 D When demand goes up Toyota has to increase its supply to cope with market needs. The New demand for Toyota products is depicted through D1 curve. INCOME Other determinant of demand and supply is the Income of adult. The Toyota Company has to look the income rate of adults before setting their prices. To increase the market share the Toyota has to look the right segment for the right products. As income level goes up the demand for the products also increases. Following charts will show the rightward shift in the demand of the Toyota products which will cause due to the increase in the income level of the population. P S D1 D When demand goes up Toyota has to supply to cope with market needs. The New demand for Toyota products is depicted through D1 curve. Why is Toyota leading from others? The rise of Japanese manufacturers in the positions of global hegemony in the decades after World War II is well known. In recent years, despite the known problems for Japanese companies like Nissan and Toyota cars worldwide, including continued and even increased its competitiveness. This is based on the philosophy of a competitive advantage, such as the Toyota Production System that is well known. System depends in part on the management of human resources policies, promoting creativity and loyalty of employees, but also and above all, a very efficient network of suppliers, manufacturers of components. Toyota is second on the list, which includes fourteen world’s best manufacturers, including General Motors and Ford. While Honda and Nissan are now also considered high quality cars manufacturers but they can never defeat the Toyota in advantages of supplier’s networks, Human resource management and distribution systems in World and in also in the most competitive market United States. Critical Analysis of Toyota: The technology is found all over the world and it is important to experiment for the company is recognized worldwide. In the world of automotive industry, Toyota is considered is to be a leading automobile company from Japan. This status they achieved by spending billions of dollars on new design and innovations in car and mass marketing campaigns. Toyota is in the eyes of consumers has emerged, many cars in the world. Toyota is enjoying a global reputation by building new, innovative and best quality products in affordable prices. As compared to its competitor Toyota is offering lower prices. The quality is the core strategy of the Toyota they do not compromise on it. They believe on a long term relationship with suppliers and with all other stake holders. Typically, the companies do not want to reduce their returns and follow the target strategy is for sale at cost price + profit = Sales prices. But Toyota's is having different approach a bit ', which is devised in the car price - cost = profit. Proofread and Marking ServiceEssay Writing Service This is not an example of our work.Find out more Strategic management in all organizations on their activities has a direct impact. "This is the reason due to which Toyota is the leading car manufacturer’s policy; strategic management is attractive which has established in the world. It is easy for your new employees and managers, such as design and installation of the new car, get Training in the Centers which are located near to them. Toyota plans to build more new plants. Toyota is now one of leading automobile dealers due to its strategic management. The result of this strategic architecture, are based on a thorough analysis of corporate resources and skills, as well as the orchestration of strategic resources and capabilities over time in measures of productivity. Product quality of Toyota was compared with five other companies including Nissan, Honda, GM, Ford and Volkswagen. In vehicles problems that Toyota received are one on per hundred vehicles that make top ranked company among industry giants. This is harmonized by a recent test conducted on truck safety, Trucks Insurance Institute of America. In this study, rating of the Toyota Tundra was a “good one” amongst all its competitors. Impact of additional Assets The Following chart shows the data of productivity of the cars over 6 years from 2003 to 2008 amongst 6 giant car producers including, Ford, GM, Honda, Toyota, Nissan and Volkswagen. Sales Per Employee (Hundred $) Company 2003 2004 2005 2006 2007 2008 GM 100 103 105 102 104 125 Chrysler 103 120 135 110 156 108 Ford 156 180 175 215 225 250 Toyota 425 385 510 590 610 625 Honda 135 145 163 186 195 230 Nissan 135 156 210 150 186 205 Volk Swagen 80 85 95 105 115 125 Source: Fortune Five hundred various Issues Above figure shows the employees productivity over 6 the years for different car producing countries. GM motors show very low productivity in terms of per employee. They start from 10,000 $ per employee which is very low they improve over the years but not as compared to others. In the end of 2008 they can just touched the 12500 dollar per employee productivity. The second company is also showing low results in terms of the productivity for per employee. They have fluctuations over the last 6 years. They started with 10300 $ and in the 2007 they crossed 15000 for per employee. But they went down in 2008 to 10800 $ productivity for per employee. Next company is Ford they are showing good growth over the years. The good thing was its having constant growth. They started with 15600 $ and after a constant growth ended with 25000 $ for per employee at the end of 2008. The Toyota is leading amongst the all; they are showing very good results over the 6 years from 2003 to 2008. They started good and end is also good. Toyota started with record opening of 42500$ per employee productivity. They are improved over the years. In the second year they went down little bit but they recovered from the very next year. They ended with the remarkable ending of 62500 US dollar per employee productivity. Even the world No. 1 company cannot compete with Toyota in terms of productivity. Proofread and Marking ServiceEssay Writing Service This is not an example of our work.Find out more Honda is also showing very good results like the Ford Motors. They started very low from 13500 $ and ended with 23000 $ after 6 years. Nissan is also showing fluctuations over the years and the Volkswagen shown very low results as compared to all. BCG model Analysis: According to BCG analysis we can see Corolla line of products of Toyota is falling in stars that show the high growth rate and high market share as well. In needs a lot of investment because every new cent invested in this category will result in high returns. When we make further BCG matrix of Corolla line of product we found that 2.0 D and 2.0 D saloon these two models fall in stars it means these models are having high growth rate and high market share as well. They can earn much more results. SE saloon and GLi lies in question marks they need analysis to increase market shares. Xli 1.3 falls in cash cows and it has slow growth rate and having high market share. The Cuore Line of products of Toyota are having very high growth rate but very less market share as compared to Corolla line of products. Hilex line of products lies in Cash Cow category that have high market share but now low growth rate. It is also about to saturation point. Conclusions & Recommendations
