Toyota Company’s Strategic Analysis and Marketing

Subject: Company Analysis
Pages: 5
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Study level: Bachelor


Toyota Company has been a leader in the motor industry for a long time. The company is renowned for the development of automobiles that are fuel-efficient and cheap. Toyota derives success from its mission and vision. Jayaram, Das, and Nicolae claim, “Toyota’s mission and vision statements emphasize a comprehensive approach that considers innovation and customers’ needs” (287). The mission statement mirrors Toyota’s strategic goals.

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Conversely, the vision statement points to the long-term direction of the automobile company. Toyota Company has various mission statements for different markets. Nevertheless, its overall mission is to develop cars that meet the needs of all customers. The company’s vision is “to be the most respected and fruitful enterprise and to delight clients with a broad range of products and solutions in the automobile industry with the best people and best technology” (Jayaram, Das, and Nicolae 289).

PESTEL Analysis

Many political, economic, social, technological, environmental, and legal factors impact the performance of Toyota Company. The global support of the production of environmentally friendly cars has prompted the company to venture into the manufacture of hydrogen cars. The company enjoys political stability in a majority of the markets, which facilitates its continued growth. Besides, Japan has signed free trade agreements with many countries (Jayaram, Das, and Nicolae 290).

Consequently, Toyota can invest in those countries with limited hindrances. Economic recession impacts the growth of Toyota. It affects the purchasing power of customers. Besides, fluctuations in the Japanese currency affect the sales volume of Toyota. The company does not export many cars when the currency appreciates it. The cultural factors that affect Toyota include the high demand for electric and hybrid vehicles (Hoyer 65).

The company has an opportunity to exploit this demand by manufacturing more cars. Conversely, the wealth gap continues to widen. Presently, the number of middle-class households continues to decline. It might have negative impacts on Toyota since it relies heavily on middle-income earners.

Technology is essential to automobile companies. Toyota has invested in technology. Technology has enabled the company to produce fuel-efficient and environmentally friendly cars. The company requires investing in mobile technology and e-commerce to increase its sales volume. One of the environmental factors that affect Toyota Company is the call for environment conservation. The company has initiated a campaign that seeks to minimize carbon dioxide emissions.

Toyota hopes to achieve zero-emission by 2050 (Shook 30). Intellectual property concern is one of the legal challenges that influence Toyota Company. Some automobile firms produce cars that are akin to those of Toyota to overcome competition. It affects the sales volume of Toyota Company.

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Porter’s Analysis

External factors like competition, bargaining power, the threat of new entrants, and substitute products affect the strategic direction of Toyota Company. The company faces stiff competition from other corporations like Ford and General Motors regarding marketing and innovation. Customers have a significant influence on Toyota’s success. The customers can shift from Toyota to other companies at no additional cost.

Additionally, they have access to a lot of information regarding cars. Hence, they have the power to do business with different companies based on their needs. Dyer and Nobeoka posit, “Majority of suppliers in the global automotive industry do not have forward integration or ownership and control of the distribution of materials that reach firms like Toyota” (347). Thus, Toyota has a noteworthy influence on its suppliers. Numerous substitute products threaten the success of Toyota Company. They include bicycles, motorcycles, and other means of transportation. The company also faces a threat from the used car industry. Toyota does not face the threat of new entrants due to the high cost of setting up and managing an automobile firm.

Value-Chain Analysis

Toyota Company applies a Just-in-Time management approach and lean production method, which help it to cut down on inventory cost. Additionally, the method helps the company to enhance the efficiency of its fabrication and assembly procedures (Mair 84). Toyota relates well to its suppliers. Hence, it is guaranteed of continuous supply of raw materials. The company has well-structured and coordinated operation processes that facilitate the production of superior cars. Besides, it oversees the distribution of its cars across the globe. Toyota Motor Sales facilitates the shipment of cars and spare parts to different markets. The company uses social media to advertise its products. It also runs numerous sales promotions and public relations.

Marketing Mix

Toyota Company uses a marketing mix that reflects its determination to serve all types of customers. The company sells different varieties of automobiles, which include Lexus and Toyota vehicles and Welcab series that target the physically challenged and elderly clients. The company distributes its cars through retailers and dealerships (Hoque et al. 228). Toyota has numerous dealerships across the globe.

Further, it uses personal selling, public relations, advertising, and sales promotions to publicize its cars. The dealerships have salespeople who reach out to potential customers. The company sets the costs of its cars based on the conditions in the market and well as the prices of rival companies. Besides, it sets the prices of some models of vehicles like Lexus and Prius according to their real and apparent value.

Competitive Advantages

One of the competitive advantages of Toyota Company is cost leadership. The company enjoys economies of scale, better access to raw materials, and customized technology that enables it to lower the costs of its products (Shook 31). Another competitive advantage is differentiation. The company is renowned for the production of fuel-efficient cars. Besides, Toyota focuses on the production of cheap cars that target the middle-class population.

SWOT Analysis


Strengths of Toyota Company include:

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  • International supply chain;
  • Superior brand image;
  • Fast innovation aptitude.


Toyota Company has several weaknesses that include:

  • Adverse effects of automobile recall;
  • Concealment in organizational culture;
  • Hierarchical organizational configuration.


Toyota can exploit various opportunities, which include:

  • Increased demand for cars in developing countries;
  • High demand for environmentally friendly cars;
  • Depreciation in Japanese Currency;
  • Increased demand for superior electronics in vehicles.


The threats that Toyota faces include:

  • Brisk innovation by rival companies;
  • Increase in the number of low-cost rivals.
Strengths Weaknesses
  • Introduce novel models of cars to the global market
  • Invest in technology to improve competitive advantage
  • Implement an aggressive promotion strategy to reach a broader market
  • Promote autonomy in overseas production plants to boost competition
  • Intensify production of hydrogen cars to meet the global demand
  • Enhance employee motivation to promote innovation
  • Relocate plants to sprouting markets to overcome currency instability
  • Increase the production of luxury cars to broaden the global market


Toyota Company continues to work towards the realization of its mission and vision. The company enjoys political stability and favorable government policies in a majority of its target markets. Besides, Toyota has a strong bargaining power over its suppliers, which guarantees a regular supply of raw materials. The high cost of establishing and running a car industry prevents potential investors from venturing into this sector. As a result, Toyota Company does not face a threat from new entrants. The company benefits from economies of scale that enable it to sell cars at competitive prices.

Works Cited

Dyer, Jeffrey and Kentaro Nobeoka. “Creating and Managing a High-Performance Knowledge-Sharing Network: The Toyota Case.” Strategic Management Journal 21.3 (2010): 345-367. Print.

Hoque, Imranul, Omar Faruque, Ellina Shahid, Syed Pasha and Syed Rahman. “Analysis of Toyota’s Marketing Strategy in the UK Market.” European Journal of Business and Management 5.20 (2013): 226-232. Print.

Hoyer, Karl. “The History of Alternative Fuels in Transportation: The Case of Electric and Hybrid Cars.” Utilities Policy 16.2 (2008): 63-71. Print.

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Jayaram, Jayanth, Ajay Das and Mariana Nicolae. “Looking Beyond the Obvious: Unraveling the Toyota Production System.” International Journal of Production Economics 128.1 (2010): 280-291. Print.

Mair, Andrew. “Just-In-Time Manufacturing and the Spatial Structure of the Automobile Industry: Lessons from Japan.” Journal of Economic and Social Geography 83.2 (2008): 82-92. Print.

Shook, John. “Toyota’s Secret.” MIT Sloan Management Review 50.4 (2009): 30-33. Print.