The Strategies Toyota Employs To Sustain A Competitive Advantage In The Automobile Sector (Case Study Sample)

TOYOTA Name: Course Tutor University City and State Date Table of Contents TOC \o "1-3" \h \z \u 1.0 Introduction PAGEREF _Toc516664598 \h 14 1.1 Internal Analysis PAGEREF _Toc516664599 \h 15 1.2 Historical Timeline / Analysis PAGEREF _Toc516664600 \h 15 1.1.1 Strategic Choices PAGEREF _Toc516664601 \h 17 1.1.2 VMOST PAGEREF _Toc516664602 \h 19 1.1.3 Product Portfolio PAGEREF _Toc516664603 \h 23 1.14 BCG Matrix PAGEREF _Toc516664604 \h 24 1.1.5 Market Definition and Location PAGEREF _Toc516664605 \h 25 1.1.6 Current Competitive Position. PAGEREF _Toc516664606 \h 26 1.1.7 Current Competitive Strategy PAGEREF _Toc516664607 \h 26 1.1.8 Green Strategy PAGEREF _Toc516664608 \h 28 1.1.9 Summary of Historical Analysis PAGEREF _Toc516664609 \h 30 2.0 Financial Analysis PAGEREF _Toc516664610 \h 32 2.2.1 Summary of Financial Analysis PAGEREF _Toc516664611 \h 35 2.3 Value Chain Analysis PAGEREF _Toc516664612 \h 36 2.4 Core Competencies PAGEREF _Toc516664613 \h 41 2.5 McKinsey’s 7-S Framework PAGEREF _Toc516664614 \h 42 2.6 Summary of Strengths and Weaknesses PAGEREF _Toc516664615 \h 45 3.0 External Analysis PAGEREF _Toc516664616 \h 48 3.1 Environment Basics PAGEREF _Toc516664617 \h 48 3.2 Customer Analysis and Market Segmentation PAGEREF _Toc516664618 \h 50 3.3 Competitor Analysis PAGEREF _Toc516664619 \h 53 3.4 Cooperative Environment PAGEREF _Toc516664620 \h 55 3.5 Competitive Industry Environment PAGEREF _Toc516664621 \h 60 3.6 Key Factors for Success PAGEREF _Toc516664622 \h 63 3.7 Industry Life Cycle PAGEREF _Toc516664623 \h 65 3.8 PESTEL Analysis PAGEREF _Toc516664624 \h 67 3.9 Degree of Turbulence in the Environment PAGEREF _Toc516664625 \h 72 3.10 Summary of Opportunities and Threats PAGEREF _Toc516664626 \h 74 4.0 Strategic Fit Analysis PAGEREF _Toc516664627 \h 75 4.1 SWOT Analysis PAGEREF _Toc516664628 \h 77 4.2 EVR Congruence PAGEREF _Toc516664629 \h 77 4.3 Balanced Scorecard PAGEREF _Toc516664630 \h 78 4.4 Summary of Strategic Fit PAGEREF _Toc516664631 \h 80 5.0 Trend and Sensitivity Analysis PAGEREF _Toc516664632 \h 80 6.0 Risk Management PAGEREF _Toc516664633 \h 81 7.0 Strategic Options PAGEREF _Toc516664634 \h 83 8.0 Strategic Direction PAGEREF _Toc516664635 \h 85 8.1 Suitability PAGEREF _Toc516664636 \h 85 8.2 Acceptability PAGEREF _Toc516664637 \h 91 8.3 Feasibility PAGEREF _Toc516664638 \h 97 8.4 Summary of Suitability, Acceptability, and Feasibility PAGEREF _Toc516664639 \h 101 9.0 Internal Development PAGEREF _Toc516664640 \h 101 10. E-Commerce PAGEREF _Toc516664641 \h 101 11.0 Implementation and Control PAGEREF _Toc516664642 \h 102 11.1 Alignment of Company Structure PAGEREF _Toc516664643 \h 102 11.4 Project Monitoring and Control PAGEREF _Toc516664644 \h 106 11.5 Green Strategy PAGEREF _Toc516664645 \h 106 11.6 Managing Change PAGEREF _Toc516664646 \h 106 11.7 Managing Strategic Leadership PAGEREF _Toc516664647 \h 107 11.8 Business Plan PAGEREF _Toc516664648 \h 108 11.9 Execution Plan for Chosen Strategic Option PAGEREF _Toc516664649 \h 110 Reference List PAGEREF _Toc516664650 \h 112 Abstract This study analyses the strategies Toyota employs to sustain a competitive advantage in the automobile sector. The world knows Toyota for the quality, affordable cost and constant innovation of its vehicles. Currently, Toyota is the global leader in terms of revenues worldwide. To achieve the success, Toyota implements strategies that guide its processes as well as its relationship with various stakeholders. The second section will analyze the viability, suitability and fitness of Toyota to venture into the drone making industry. The drone industry is a relatively new market which Toyota seeks to enter and manufacture Unmanned Aerial Vehicles for the Military. Recent political tensions in the Far East region have prompted the Japanese government to procure drones for surveillance hence a potential market for Toyota. The company has to develop a suitable strategy and assess its financial strength and feasibility of the market to determine whether or not to proceed with the project. Acknowledgement I am greatly indebted to my lecturer for the insightful guidance provided during the classroom sessions and during the process of preparing this paper. I also am grateful to my family for their encouragement and understanding during this period of preparing this analysis. To my classmates I say thank you for the support. Above all I thank God for watching over us on the many journeys made to and from college as required by this choice willingly made. Research Methodology The paper will make use of data triangulation to analyze and understand Toyota Motor Corporation. It will be inductive in nature. Finance is often a critical element in strategic management; it will thus be the measure of success to provide proof of stability. Cash-flow will, therefore, be the main focus for strategic direction. Lastly, a feasibility study will later follow the cash-flow section. Glossary of Terms KAIZEN Continuous improvement while ensuring small achievements HEIJUNKA It is levelling, and this is the reduction of wastes when working with different processes JIDOKA The pillars of Toyota that includes Just in Time KANBAN Management process of products that have been created GREEN STRATEGY One vital strategy that offers support to all the strategies Toyota is using during production. TOYOTA WAY This is usually the management philosophy of Toyota (List of abbreviations) ABBREV- Abbreviations USA- United States of America UAV- Unmanned Aerial Vehicle TQM- Total Quality Management EVR – Environment, Values, Resources BCG - Boston Consulting Group R&D- Research and Development PESTEL- political, environ, socio-cultural, technological, environ. Legal KFS- Key factors for success SWOT- Strengths, Weaknesses Opportunities, Threats JIT- Just in Time List of Tables Table 2.1 1: Analysis of Company's Corporate Definition/Vision and Mission.......................21 Table 2.1 2: Analysis of Company's Business Strategy............................................................22 Table 2.1 3: Analysis of Company's Tactics.............................................................................24 Table 2.1 4: Company's Product Portfolio...............................................................................25 Table 2.1 5: Global Product Sales 2015 by Relative Market Share..........................................27 Table 2.1 6: Company's Aggressiveness Strategy....................................................................28 Table 2.1 7: VRIO Framework Analysis for Company Inc........................................................28 Table 2.2 1: Extract of Financial Data .....................................................................................34 Table 2.2 2: Accounting Ratios for Company .........................................................................34 Table 2.2 3: Summary of Ratio Analysis..................................................................................34 Table 2.2 4: Evaluation of Company's Financial Position using the CAMELS Framework.......37 Table 2.3 1: Value Chain Analysis............................................................................................38 Table 2.4 1: Company's Core Competencies...........................................................................43 Table 2.5 1: Analysis of Company's management using McKinsey's 7-S Framework..............44 Table 3.1 1: Environment Basics.............................................................................................50 Table 3.2 1: Identification of Company's Customers and Potential Markets..........................52 Table 3.2 2: Bases for Market Segmentation (Consumer Products).......................................53 Table 3.3 1: Competitor Profile...............................................................................................55 Table 3.4 1: Company's Cooperative Network using the Four Links Model............................57 Table 3.5 1: Analysis of Competitive Industry Environment using Porter's 5 Forces..............62 Table 3.6 1: Analysis of Customers' Wants KFS......................................................................65 Table 3.6 2: Analysis of Competition KFS................................................................................65 Table 3.6 3: Analysis of Corporation KFS.................................................................................65 Table 3.8 1: PESTEL Analysis....................................................................................................69 Table 3.9 1: Degree of Turbulence of the Environment.….............….….....….....……………………74 Table 4.1 1: SWOT Analysis for Company…………..........................…….…...……………………………79 Table 4.2 1: EVR Congruence Analysis……….......................………..….….….….…………………………79 Table 4.3 1: Balanced Scorecard Analysis..........................................................................……80 Table 4.4 1: Trend and Sensitivity Analysis.............................................................................82 Table 4.4 1: Risk Management Analysis (PRAM)....................................................................83 Table 4.4 1: Evaluation of Emergent Strategic Options (PEARLS)...........................................85 Table 8.1 1: Suitability of Company's Resource Base..............................................................87 Table 8.1 2: Suitability Analysis using Resource-based View..................................................89 Table 8.1 3: Analysis of Suitability to Culture.........................................................................90 Table 8.1 4: Suitability to Purpose....................................................