ASSIGNMENT 1 FRONT SHEET

Qualification BTEC Level 4 HND Diploma in Business

Unit number and title Unit 32: Business Strategy (574)

Submission date 10/8 Date received (1st submission) 10/8

Re-submission date 11/8 Date received (2nd submission) 11/8

Student name LE TRUNG NGHIA Student ID GCD17226

Class GBD0804B Assessor name Badraoui Badr

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I certify that the assignment submission is entirely my own work and I fully understand the consequences of plagiarism. I
understand that making a false declaration is a form of malpractice.

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Nghia

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Table of content:
I. Introduction:............................................................................................................................5
II. The strategic context of toyota:..............................................................................................5
1. Toyota’s Mission Statement:...............................................................................................5
2. Toyota’s Vision Statement:..................................................................................................2
3. Core values Statement:........................................................................................................2
4. The define and role of Business strategy:...........................................................................3
III. Implement the macro environmental audit for the chosen organization by using
PEST/PESTLE framework.................................................................................................................5
1. Describes the model PESTLE:...............................................................................................5
2. The application to the Toyota organization:.......................................................................7
IV. Critically analyze the macro environment to determine and inform strategic
management decisions:................................................................................................................10
1. The influences the macro-environment may have on the particular market sector:.....10
2. The importance of macro environment analysis for the strategic development of
Toyota:.......................................................................................................................................10
V. Toyota company swot analysis:............................................................................................11
1. Definition:...........................................................................................................................11
2. Opportunities:....................................................................................................................11
3. Threats:...............................................................................................................................12
VI. Porter’s five forces model:.................................................................................................12
1. Definition:...........................................................................................................................12
2. Porter’s Five Forces Model Of Toyota:..............................................................................13
3. The industry life cycle analysis of Toyota:........................................................................16
4. The important of stakeholders directly affects:...............................................................19
VII. Devise appropriate strategies to improve competitive edge and market position based
on the outcomes:..........................................................................................................................22
VIII. Recommendation:..............................................................................................................24
IX. Conclusion:.........................................................................................................................24
X. Reference:..............................................................................................................................25

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 I.

II. Introduction:
Toyota Motor Corporation, headquartered in Aichi, Japan, is a Japanese vehicle
manufacturer. Toyota's supply chain management strategy has resulted in the firm
becoming one of the world's major vehicle manufacturers, with over 500,000 employees
working in its factories around Japan and the world. Kiichiro Toyoda founded Toyota in
1937, and the company has since evolved to become the world's largest vehicle
manufacturer. Toyota now produces approximately 10 million vehicles in a variety of
categories, including personal, luxury, and commercial vehicles. Aside from the Toyota
brand, the business also produces vehicles under the Lexus, Ranz, Scion, and Hino
brands, all of which are well-known globally and cater to diverse countries and terrains.
Toyota has developed a strong reputation among automotive consumers worldwide as a
result of the vehicles' robustness and affordability, resulting in Toyota becoming the
world's largest automobile manufacturer and brand.
This study will examine Toyota's strategic business techniques to identify specific
aspects affecting the company's operations and success. This data will be methodically
structured to assist in providing techniques that other companies can use to improve
their operations and growth success. In addition, the report applies appropriate
frameworks to analyze the impact and influence of the macro environment on Toyota
company. Analysis of Swot model to assess opportunities and risks for the company's
development strategy. In addition, the report also identifies the macro environment and
stakeholders to come up with measures for a new strategy.
III. The strategic context of toyota:
1. Toyota’s Mission Statement: Toyota’s corporate mission is “to make ever-better cars, to
build a future where everyone has the freedom to move.” This mission statement is a
combination of the company’s official statements regarding the mission of its business:
“to build a future where everyone has the freedom to move” and “to make ever-better
cars.” (Greenspan, R., 2020). Toyota’s corporate mission statement has the following
key elements that reflect the enterprise and the purpose and goals of its business:

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 Make ever-better cars
 Build an inclusive future
 Freedom to move for everyone
2. Toyota’s Vision Statement: Toyota's corporate vision statement outlines the company's
long-term automotive strategy. “Toyota will lead the future mobility society, improving
lives throughout the world with the safest and most responsible ways of moving
people,” reads the vision statement. We want to surpass expectations and be rewarded
with a smile by committing to quality, continuous innovation, and environmental
stewardship. We'll achieve difficult objectives by enlisting the talent and enthusiasm of
people who believe there's always a better way.” This vision encompasses industry
leadership as well as the company's many values and goals for ensuring the
competitiveness of its automotive goods. The following main parts of Toyota's corporate
vision reflect the company's future strategic direction:
 Global leadership in safe and responsible mobility
 Exceptional quality, innovation, and respect for the planet
 Engagement with talented and passionate people
3. Core values Statement:
Even after being on the world stage for more than a century, Toyota's number one
position as the "MOST ADMIRABLE CAR PART SELLERS" according to the FORBES 2019
list is an exceptional testament to the values and culture that the firm instills in every
one of its employees. The company's core values are outlined in the table below:
 Professional Excellence
 Customer Oriented
 Teamwork
 Welcoming new challenges
 Global Perspective
These five values are instilled in every employee in order to foster a culture that benefits
not just consumers but also employees and the organization as a whole. Toyota has a
"customer first" policy and addresses consumer demands in all of its decisions.

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 The organization promotes a culture in which top-tier workers, who are motivated and
open to change, are always given first priority. Toyota believes that employees should
consider coworkers as family and make the office into a home-like environment so that
they may work in a quiet, collected, and tranquil atmosphere.
4. The define and role of Business strategy:
 Definition:
Business strategy is a plans, choices and decisions used to guide a company to greater
profitability and success. An inspired and clearly considered strategy provides the
impetus for commercial success, whereas a weak or misunderstood strategy may lead to
a company going out of business. Understanding what consti-tutes ”strategy” is
therefore crucial in developing a successful business, as is avoiding the tendency to label
every plan and decision “strategic” . When most are about implementing strategy rather
than setting it. Equally important is for a strategy to be clear and effectively
communicated to everyone with a role in implementing it and to shareholders and other
stakeholders [ CITATION Kou09 \l 1033 ].
 The role of strategy to obtain business objectives and goals:
Essentially, the role of business strategy is to represent the firm's strengths and
weaknesses, as well as to answer how the company intends to respond to threats and
opportunities in the market. A strategy considers the available resources and how to
best deploy them in order to meet the goals (Heubel, M., 2021). That is why a strategy is
sometimes referred to as a company's lighthouse: it unifies the work of all functional
areas and provides employees with a Northstar to guide their everyday decision-making.
In the absence of such a design, each department's actions would be disorganized,
limiting the organization's overall performance. This incoherence inevitably leads to a
loss of competitive advantage, which will be exploited in the market.
 Business strategy examples:
I've selected two examples of organizations that have effectively applied their general
business strategy to illustrate the previously outlined principles: Amazon and Reckitt
Benckiser.

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Example 1: Amazon
Amazon is well-known for its excellent customer service and quick delivery options.
While Amazon's mission is to be the world's most customer-centric corporation, it
achieves this by constantly innovating in both existing and new areas. What's the end
result? Increased shareholder value as a result of increased growth. Jeff Bezos described
the four principles that guide the company in his first shareholder letter from 1997:
client obsession rather than competitive focus, enthusiasm for creation, commitment to
operational excellence, and long-term thinking (Heubel, M., 2021). Amazon's general
business strategy aims to acquire a competitive edge through lowering costs (cost
leadership) and innovating in competitive markets. The goal remains the same: to meet
the needs of end-users. This enables Amazon to leapfrog its competitors, who
frequently struggle to catch up to the tech behemoth in a matter of years (ST-Strategy).
Its lower-level strategies (operational, marketing, etc.) all follow the basic strategy of
creating value for customers by focusing on choice, pricing, and economies of scale.
Amazon has become one of the most successful internet corporations of the twenty-first
century thanks to this strategy structure.
Example 2 : Reckitt Benckiser
Reckitt's brand portfolio includes big household products including Finish, Dettol,
Nurofen, Vanish, and Durex, despite the company's name being unfamiliar to many
customers. In 2012, the company had to adjust its business strategy in order to return to
a strong growth path due to sluggish sales and growing competition. Under the new
strategy, RB:
Focused on R&D developing new product lines, which allowed it to meet its high-level
sales and margin targets.
To drive additional growth, the company increased its budgets in markets that grew
faster than the average.

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 Brand and marketing strategies were overhauled, and funds were boosted in those
areas.
Set and continuously monitored various key performance measures with the goal of
increasing net revenue growth by +200bps annually compared to the market average till
2017.
Reckitt didn't meet all of its goals, but the changes to its business approach allowed the
company to outperform the market in terms of sales and profitability. As a result,
between 2012 and 2017, the value of RB increased by £33 billion for its owners.
IV. Implement the macro environmental audit for the chosen organization by using
PEST/PESTLE framework
1. Describes the model PESTLE:
 Definition:
PESTEL Analysis is a strategy framework that breaks down possibilities and hazards into
Political, Economic, Social, Technological, Environmental, and Legal elements in order to
evaluate a company's external environment. PESTEL Analysis is a useful tool for
determining the benefits and drawbacks of a business strategy in corporate strategy
planning. This framework is an extension of the PEST strategic framework, with a focus
on environmental and legal variables that can have an impact on a company. The major
elements of each of the PESTEL framework's 6 Factors are broken down below (Political,
Economic, Social, Technological, Environmental, and Legal). When appropriate, PESTEL
Analysis points can be included into other strategic frameworks such as SWOT Analysis
and Porter's Five Forces.

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 Figure 1: PESTLE model analysis- Corporate Finance Institute

 Political factors: The political factors include political stability/instability, political

consequences, changes in government constitutions, changes in political and national
policies, government actions, government stability, government support to the industry
and the organization, impact of governmental policies sush as monetary policy, fiscal
policy, supply-side policy, exchange rate policy, foreign trade policy etc [ CITATION
Per17 \l 1033 ] …on business activities. The political environment is a highly significant
consideration to a business especcially if it is a foreign company where in general,
political support is essential for the success and penetration of the market.
 Economic factors: Economic factors are critical to organizational success and can be
considered to be of most significance. Some of the critical economic factors includes
age-related factors, age structure, income levels, the disposable income of the country,
poverty considerations, employment and unemployment rates, tax rates, gender
distributions, inflation rates, exchange rates, population growth, literacy rates,
educational levels, customer attitudes, perceptions and purchase behavior etc
[ CITATION Per17 \l 1033 ] …When the economic factors are favorable, the risk of
survival is ensured and where the economic conditions are unfavorable, the industry is
unattractive for new investments, growth and survival.
 Social-Cultural factors: The traditions, cultural aspects, norms, myths, religious values
are to be considered here. Ethical values, perceptions and attitudes towards the
business and the industry within the operating market should be considered here. For
example, prostitution, ethical and encouraged in one business environment but not in
another.
 Technological factors: This is highly relevant for a technology-based industry. However,
technology has become a vital part of every business today where most of the
operations are over the internet and over technological use. Therefore, the importance
of the technical environment is critical. Factors such as technical upgrades, the
productivity of technology, hardware and software should be considered here.

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 Legal factors: The laws and regulations, rules, acts should be considered under legal
considerations. Legal factors highly vary from industry to industry. For example,
considering a hotel chain the laws relevant would be consumer affairs related laws and
regulations, food related laws and regulations, service quality related laws etc… these
laws, regulations can have a critical control of business activitives that should be looked
into
 Environmental factors: These issues have just recently gained prominence in the last
fifteen years or so. They've grown in importance as a result of rising raw material
shortages, government-set pollution targets, ethical and sustainable business practices,
and government-set carbon footprint targets (this is a good example where one factor
could be classed as political and environmental at the same time). These are just a few
of the challenges that marketers face when it comes to this component. Consumers are
increasingly expecting that the things they buy be supplied ethically and, if feasible,
sustainably.
2. The application to the Toyota organization:
The PEST model takes into account macro-environmental elements that have an impact
on corporate operations, and Toyota is no exception. These elements' impact on Toyota
in Japan and worldwide will be discussed in turn.
 Political factors: The political-legal environment in Japan has the greatest impact on
Japanese companies' operations, particularly Toyota's. Japan's political situation has
been tumultuous recently. Presidents Shinzo Abe, Yasuo Fukuda, and Taro Aso all
resigned in the three years between 2007 and 2009, before incumbent Prime Minister
Yukio Hatoyama seized power. The cabinet's key locations were also altered as a result.
Toyota is a firm that receives a lot of support from the Japanese government, so any
changes in Japanese politics will mess up that relationship (Nguyen, H., 2019).
The Japanese government's policy is also a critical issue. Japan's trade policy is mostly
focused on exports. Japan uses tariff policies to limit and defend its economy, lowering
the purchasing power of its citizens, lowering imports, and increasing exports.
Furthermore, the Japanese government established a regional import-export bank to

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 facilitate finance for high-turnover projects such as vehicles. To retain its reputation,
Japan maintains a strong policy of inspecting the quality of exported goods to prevent
inferior goods from entering the overseas market. Importers trust Japanese products
because of the thorough scrutiny of their quality, which helps to promote the country's
export growth. Toyota obtains numerous incentives from the Japanese government as a
result of its preferential export strategy. As a result, Toyota enjoys a number of benefits
in terms of the country's political-legal framework.
 Economic factor: Recently, US President Donald Trump encouraged Japan's government
to negotiate an agreement with the US to protect the country's automobile sector. If the
agreement is reached, it will be a major setback for Toyota, which is the largest
Japanese automaker in the United States. The trade war between China and the United
States has had a considerable influence on Toyota's sales (Team, M., 2019). The trade
war between these countries resulted in weak GDP growth, which impacted automobile
demand in these countries. Customers may be forced to buy cheap cars or cars with
high fuel efficiency as oil prices rise. Since 2011, the Malaysian government has granted
more than 100 exemptions for electric vehicles, giving Toyota the possibility to produce
completely electric vehicles instead of hybrids.
 Social factors: Consumers are becoming more environmentally conscious, and they are
expecting cars that are not only cost effective but also energy efficient. Environmentally
friendly automobiles are becoming increasingly popular on the market. Customers value
safety features in their vehicles, but Toyota recently faced public backlash after some
Toyota vehicles lost control owing to malfunctioning pedals and acceleration (Team, M.,
2019). Many customers began to see the brand adversely, and sales plummeted as a
result. It took the corporation a long time to regain customer trust. Toyota is well-known
in India for their Innova automobile, which is ideal for lengthy journeys. Toyota Innova
was launched with characteristics that are ideal for Indian conditions, knowing that the
majority of Indian families are joint families. It also maintains the car's pricing low in
order to appeal to India's price-conscious consumers.

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 Technological factors: Companies must refresh themselves on a frequent basis to stay
competitive in today's market because technology is advancing at such a quick rate. The
more advanced the brand technology, the more likely it is to succeed. Toyota adheres to
the kaizen philosophy, which emphasizes continuous improvement. Toyota is the
world's first manufacturer to introduce a hydrogen vehicle. It is constantly attempting to
develop alternative fuel vehicles that are both efficient and environmentally friendly.
 Legal factors: When Toyota had to recall its vehicles owing to improper acceleration, it
received a lot of flak. It is facing a class action lawsuit and will be required to pay 1.2
billion dollars to resolve the case. Toyota lost a trademark infringement case using its
Prius tag in 2019. It filed a lawsuit in the Delhi high court in 2009, alleging that ‘Prius
Auto Industries' had infringed on its Prius trademark. However, the high court
determined that ‘Prius Auto Industries' had acquired the right to use the ‘Prius'
trademark in 2002, while Toyota only launched its hybrid section in 2010.
 Environmental factors: Toyota announced the Toyota Environmental Challenge 2050 in
2015, with the goal of going beyond zero environmental effect to a net positive impact.
It defined six goals, including zero CO2 emissions from new vehicles, zero CO2 emissions
from the life cycle, zero CO2 emissions from plants, minimising and optimizing water
use, developing a recycling-based society and system, and establishing a future society
in harmony with nature. Toyota established an environmental management system in
Australia to manage environmental hazards and comply with the law.
 Toyota’s PESTEL/PESTLE Analysis – Recommendations:
The external elements revealed in this PESTEL/PESTLE research of Toyota's distant or
macro-environment primarily create opportunities. For example, the company could
concentrate on product development in order to take advantage of market
opportunities. Toyota can also strengthen its business operations and market presence
in order to capitalize on opportunities created by external economic variables. Toyota,
on the other hand, must deal with dangers posed by external causes such as the
widening wealth disparity and the increasing incidence of cybercrime. In this attempt,

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 technological advancements and product innovation may be advantageous. As a result
of this PESTEL/PESTLE research, Toyota has tremendous growth and stability potential.

V. Critically analyze the macro environment to determine and inform strategic

management decisions:
1. The influences the macro-environment may have on the particular market sector:
The macro-environment refers to how a company's or sector's performance is
influenced by the macroeconomic conditions in which it operates. Macroeconomics, as
opposed to specific industries and marketplaces, is concerned with aggregate
production, consumption, and price levels in an economy (Khartit, K., 2020). The macro
environment's influence is proportional to how much of a company's business is reliant
on the general economy's health. The macro environment has a big impact on cyclical
businesses, but not so much on fundamental staple industries. Changes in interest rates
and global financial markets have a significant impact on industries that rely heavily on
credit to finance purchases and corporate expenditures. Consumers' capacity and
inclination to spend can also be influenced by the macro-environment. Consumer
spending changes can have a significant impact on the luxury goods and big-ticket
consumer goods businesses. Businesses and economists regularly monitor consumer
reactions to the broader macro-environment as a barometer of an economy's health.
2. The importance of macro environment analysis for the strategic development of
Toyota:
Macro-environmental analysis is important to Toyota's growth in the automotive sector;
Knowledge of the surrounding factors can help Toyota design appropriate strategies for
greater growth. Toyota is heavily influenced by this factor in politics, so Toyota must be
politically stable in many parts of the world in order to be able to develop the lowest
level of political tension. Toyota can also strengthen its operations and market presence
to leverage capabilities based on external economic variables. Toyota's SWOT analysis

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 helps to assess a number of opportunities and challenges for the organization to grow
and to reduce the risks of some problems. In addition, Toyota must maximize the
company's competitive advantage to make decisions and solve problems in a way that is
conducive to the overall growth of the organization.

VI. Toyota company swot analysis:

1. Definition:
SWOT analysis is an effective framework for analyzing the Strengths, Weaknesses,
Opportunities, and Threats of an organization (or a project) that helps to address the
effectiveness of a project planning and implementation. The acronym comes from an
old term from the strategic planning field that is concerned with the content and the
objectives of the project, and with identifying the right things to do. What is right
depends on the specific interface between the project, the objectives it serves, and its
environment (target groups, market, law and regulations, etc.). Strengths would define
any internal asset (expertise, motivation, technology, finance, business model, etc.) that
will help to meet demands and to cess probability depends on whether its strengths not
only match the key success requirements for operating in the target environment but
also exceed of those of project threats[ CITATION Sab04 \l 1033 ]. Threats define any
external circumstance or trend (establishment of strong competitors, government
deficit, or regulations that limit free distribution of our products or buying our services,
etc.) that will unfavorably influence demand for an organization’s competence.
2. Opportunities:
In a world where gasoline prices are rising, car owners are increasingly opting for
products that save fuel or use renewable energy. Toyota is working on a project to
develop cars that run on gas and hydrogen, using cutting-edge technology and R&D
findings from throughout the world. This was a profitable project for the organization, as
the customer was looking for an alternative to oil.

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 Many countries are currently experiencing high demand for autos, yet supply is still
restricted. Toyota has the ability to expand its market into these countries. Toyota can
boost its market share by developing additional vehicles to fulfill the needs of different
geographic regions and by introducing new target customers to the modern world.
Besides, the growth of Developing Nations– Perspectives is changing, and now, people
are more inclined to buy cars. In the developing nations, the demand for cars is
exuberating.
3. Threats:
These are the variables that can make a business face downturn if not taken into
consideration early. In this way, the potential threats of Toyota are :
 Toyota competes against a slew of big brands in the industry, including Volkswagen,
Ford, Mitsubishi, and Hyundai. It makes establishing stable footing in the market
extremely challenging (Bhasin, H).
 Expensive Raw Resources: As the cost of crude materials rises, so does the cost of the
final product.
 Lower Profits: The danger of fluctuating exchange rates is always present. When the
earnings are returned back to Japan in Yen, it turns out to be a much lower advantage in
comparison to other monetary standards (Bhasin, H).
 Government Norms are also a big threat.
 Changes and developments in Automobile Sector are a major threat.
VII. Porter’s five forces model:
1. Definition:
The threat of new entrants, the negotiating strength of suppliers, the bargaining power
of buyers, pressure from substitute products, and the intensity of competitive rivalry are
all depicted in the five forces framework. The structure is used to illustrate industry
profitability and to help a company differentiate itself from its competition. In addition,
Michael Porter's five forces framework depicts and explains industry structure and
profitability. Industry structure research has ramifications for both industry incumbents
and enterprises considering entering the industry (Baburaj, Y., 2016). The profitability

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 potential influences an entrant's decision to enter the sector, while incumbents may
build effective tactics to deal with the risks from various causes. This contribution
examines the framework's origins and elements, as well as its major flaws.

Figure 2: Five Forces Model

2. Porter’s Five Forces Model Of Toyota:

Competition and customer bargaining power, which are the strongest external elements
in the automobile industry environment, are the most critical concerns, according to
Toyota's Five Forces research. The five forces influencing Toyota are as follows, with
their respective intensities:
 Competitive Rivalry or Competition with Toyota (Strong Force):
Toyota must contend with a formidable competitor. The impact of firms on each other is
determined by this component of the Five Forces analysis. In Toyota's example, the
following external variables are the primary contributors to the industry's high level of
competitive rivalry:
High aggressiveness of firms (strong force)
Firms with a lot of diversity and differentiation (strong force)
A small number of large businesses exist (moderate force)

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 In terms of innovation and marketing, automotive companies compete aggressively with
one another (Ferguson, E., 2017). Toyota also competes with a wide range of companies
that differ in price, electronics, fuel efficiency, style, brand image, and other factors.
Despite the fact that there are numerous little auto companies, Toyota competes with
only a few huge companies. Nonetheless, this component of Toyota's Five Forces
research demonstrates that the corporation needs comprehensive measures to deal
with the powerful force of competitive rivalry.
 Bargaining Power of Toyota’s Customers/Buyers (Strong Force):
Toyota's customers have a direct impact on the company's revenue. The influence of
buyers on company is depicted in this component of the Five Forces study. The following
external elements are the key contributors to purchasers' strong force or bargaining
power in the automobile industry environment in Toyota's case:
 Low switching costs (strong force)
 Information of excellent quality (strong force)
 Availability of substitutes is moderate (moderate force)
Customers can simply migrate from Toyota to competitor enterprises at no additional
expense because of the low switching costs. Customers frequently experience this
change when they purchase a new vehicle. Furthermore, Toyota customers may choose
the best alternative with ease because they have access to precise information, such as
product information from companies' websites (Ferguson, E., 2017). Alternatives are
available, yet cars from companies like Toyota are still more convenient. The aggregate
influence of these external elements is the strong force or bargaining power of
customers in this part of Toyota's Five Forces study. Toyota must make certain that its
products correspond to the desires and expectations of its target market.
 Bargaining Power of Toyota’s Suppliers (Weak Force):
Toyota's suppliers hope to persuade the company to help them better their businesses.
The relationships between enterprises and their suppliers are reflected in this
component of the Five Forces study. External variables in the automotive industry
climate contribute to suppliers' weak force or bargaining strength in Toyota's case:

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 Suppliers in a moderate number (moderate force)
 Overall supply is plentiful (weak force)
 Suppliers with a low forward integration (weak force)
Because of the small number of suppliers around the world, Toyota is influenced by a
moderate force. Theoretically, when there are fewer suppliers, this bargaining power is
greater. Suppliers' authority is weakened by the high availability of supplies used to
manufacture Toyota's products. Furthermore, the bulk of global automotive suppliers
lack forward integration, ownership, and control over the distribution of materials that
reach companies like Toyota. As a result, this section of Toyota's Five Forces analysis
emphasizes the company's relative ease in dealing with suppliers' weak force or
bargaining strength.
 Threat of Substitutes or Substitution (Moderate Force):
Substitutes have a negative impact on Toyota's business because they compete with the
company's products. The influence of alternative products is determined in this
component of the Five Forces study. External elements in the automobile industry
environment are the key contributors to the moderate force or threat of substitution in
Toyota's case:
 Low switching costs (strong force)
 Moderate availability of substitutes (moderate force)
 Low convenience in using substitutes (weak force)
Customers can usually switch from Toyota to a substitute pretty easily. Public
transportation, bicycles, and other modes of transportation are among the alternatives
to Toyota products. These alternatives, however, are only somewhat available. In some
regions, such as some suburban areas where public transportation is scarce, there are
no substitutes for Toyota's products. Furthermore, these alternatives are frequently less
convenient than using Toyota's products. In this part of Toyota’s Five Forces analysis,
the combination of such external factors in the automobile industry creates the
moderate threat of substitution that Toyota must address by making its products more
accessible, affordable and convenient.

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 Threat of New Entrants or New Entry (Weak Force):
Potential competitors, such as new entrants, pose a threat to Toyota's business. The
impact of new entrants is depicted in this component of the Five Forces study. External
elements in the automobile industry environment contribute to the weak force or threat
of new entrants in Toyota's case:
 Capital costs are high (weak force)
 Brand development is expensive (weak force)
 Supply chain costs are high (weak force)
Toyota is vulnerable to new entrants. The high costs of starting, running, and growing a
business in this area are significant entry obstacles. These barriers reduce the impact of
new entrants on established enterprises such as Toyota. On Toyota's business, this force
is less important than competition and customer bargaining power. Thus, the threat of
new entrants is among the least of Toyota's concerns in growing its business and
keeping its position as one of the world's top vehicle manufacturers, according to this
component of the Five Forces analysis.
3. The industry life cycle analysis of Toyota:
The assessment of the stage an industry is in at a specific point in time is part of the
fundamental analysis of a company's industry life cycle. An industry's life cycle has four
stages: expansion, peak, contraction, and trough (Chen, J., 2019). An analyst will figure
out where a firm is in the cycle and utilize that information to forecast future financial
performance and value it.
The life cycle of an industry is determined by the increase in revenues throughout time.
Introduction, expansion, maturity, and decline are the stages of an industry's life cycle.
Sales usually start slowly during the introduction phase and then explode during the
growth period. After reaching a plateau at maturity, sales begin to fall gradually. Profits,

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 on the other hand, typically increase over time as companies in a given industry take
advantage of knowledge, economies of scale, and scope to reduce unit costs.

 The study is applied to Toyota:

Toyoda Kiichiro created the Toyota Motor Corporation in 1933 as a division of the
Toyoda Automatic Loom Works, Ltd. (later Toyota Industries Corporation, now a
subsidiary) founded by his father, Toyoda Sakichi. The Model AA sedan, the company's
first production car, was introduced in 1936. The division was renamed Toyota Motor
Company, Ltd. the following year, with Kiichiro as its president. Toyota went on to
develop a number of similar businesses, including Toyoda Machine Works, Ltd. (1941)
and Toyota Auto Body, Ltd. (1945). During WWII, the business stopped producing
passenger automobiles and instead focused on trucks (Gordon, J., n.d). The business did
not resume building passenger automobiles until 1947, when the Model SA was
introduced, due to ruined infrastructure and an unstable economy in the aftermath of
World War II.
 Toyota's automotive production factories were back in full operation by the 1950s, and
the business began a comprehensive study of American automobile manufacturers to
improve competitiveness, owing to projected technical and economic supremacy in the
United States (Gordon, J., n.d). Toyota officials toured firms' production facilities,
notably Ford Motor Company's, to observe the latest vehicle manufacturing technology,
which they then incorporated in their own facilities, resulting in a near-instant boost in
efficiency.
 Toyota Motor Sales, U.S.A., Inc. was founded in 1957, and the Toyopet sedan, the
company's first model to be offered in the United States, was produced the following
year; it was badly regarded due to its expensive price and lack of horsepower. The Land
Cruiser, a four-wheel-drive utility vehicle introduced in 1958, was a bigger hit. The
Toyopet was re-released as the Toyota Corona in 1965, totally tailored for American
drivers and marking the company's first big success in the United States.

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 During the 1960s and 1970s, the company grew quickly and began exporting
considerable quantities of cars to other markets (Gordon, J., n.d). Toyota bought Hino
Motors, Ltd., a bus and large truck manufacturer, Nippondenso Company, Ltd., a
provider of electrical car components, and Daihitsu Motor Company, Ltd. in 1966.
(1967). Toyota was Japan's largest vehicle manufacturer for decades. The firm thrived in
the American market as well, earning a reputation for producing low-cost, fuel-efficient,
and durable vehicles like the Corolla, which was introduced in 1968.
 When Toyota Motor Company and Toyota Motor Sales Company, Ltd. amalgamated in
1982, the company was given its current name. Toyota joined with General Motors
Corporation two years later to form New United Motor Manufacturing, Inc., a dual-
brand manufacturing facility in California, where Toyota began U.S. production in 1986.
 In 1999 Toyota was listed on both the London Stock Exchange and the New York Stock
Exchange. The company continued to expand to new markets—specifically targeting
younger buyers with the launch of its Scion brand (2003) and unveiling the world’s first
luxury hybrid vehicle, the Lexus RX 400h (2005).
 However, the company faced significant financial difficulties following the global
financial crisis of 2008, including declining sales as a result of the global financial crisis,
as well as an international safety recall of more than eight million vehicles in 2010,
which forced the company to temporarily halt production and sales of several of its top
models (Gordon, J., n.d). Regulators in the United States began recalling millions of
Toyota and other automobile makers' vehicles in 2014 due to potentially faulty airbags
supplied by Takata, a Japanese automotive components supplier.

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 Figure 3: Model operating Profit of Toyota

4. The important of stakeholders directly affects:

 Definition stakeholder:
stakeholder is a party that has an interest in a company and can either affect or be
affected by the business. The primary stakeholders in a typical corporation are its
investors, employees, customers, and suppliers. However, with the increasing attention
on corporate social responsibility, the concept has been extended to include
communities, governments, and trade associations. Stakeholders can be both inside and
external to a company. Internal stakeholders are those who have a direct interest in a
firm, such as through employment, ownership, or investment (Fernando, J., 2021).
External stakeholders are people who do not work for a company but are impacted by
its actions and consequences in some way. External stakeholders include suppliers,
creditors, and public organizations.
 Example of an Internal Stakeholder:
Internal stakeholders who are considerably impacted by the linked concern and its
performance are known as investors. If a venture capital firm invests $5 million in a
technological startup in exchange for 10% ownership and significant influence, the firm
becomes an internal shareholder of the company. The success or failure of the startup
determines the return on the venture capitalist firm's investment, hence the firm has a
vested interest.
 Example of an External Stakeholder:
Internal stakeholders have a direct link with the company, but external stakeholders do
not. An external stakeholder, on the other hand, is typically a person or organization
who is impacted by the company's operations. When a corporation exceeds its carbon

22
 emission limit, for example, the town where it is located is considered an external
stakeholder because it is affected by the additional pollution.
 Identify the various stakeholders of the Toyota company:
Because of their involvement in developing Toyota's policy and strategy, stakeholders
are critical to the company's operational growth optimization. It's critical to recognize
that Toyota faces challenges in terms of economic, social, and environmental
sustainability. Stakeholders are concerned about sustainability difficulties, and Toyota
has recognized this (Abbas, Z., 2020). Toyota has taken many initiatives to alleviate
stakeholder concerns by incorporating CSR and business ethics norms into its operating
settings. The following are some of the actions Toyota has done in recent years to
proactively address current issues:
 Employees:
In the broad worldwide organizational culture, Toyota recognized that employees face
various acute issues such as job uncertainty, unfair treatment, and limited prospects for
career growth. Toyota has coached its executives on how to lead in a revolutionary way.
It has started an on-the-job-development (OJD) program, as well as various other
managerial and technical development programs, for this goal. Furthermore, Toyota
provides financial aid to its employees for formal education in order for them to succeed
in the competitive market (Abbas, Z., 2020). All of these actions demonstrate that
Toyota is pursuing CSR solely to alleviate employee concerns so that they can contribute
to the company's operational progress.
 Customers:
Customers are considered the backbone of Toyota because of their direct impact on
sales. Toyota has implemented several initiatives under the umbrella of CSR, such as
Toyota Production System (TPS) and Toyota Way, to ensure that product efficiency and
quality are maintained, and customer trust is not jeopardized. As a result, Toyota is
working hard to safeguard customer satisfaction, which has a significant impact on the
company's operational growth.
 Investors:

23
 Toyota recognizes the significance of investors because they are the ones who drive the
company's financial success. Their enthusiasm aids the organization in launching various
new enterprises, allowing the corporation to expand. Toyota has always stood by its
investors, as evidenced by examples from the 2008 Great Recession (Abbas, Z., 2020).
As a result, Toyota's CSR strategy contributes to the company's continued growth and
development in a competitive business climate.

 Environmental activists groups:

Toyota is well aware of the negative consequences of global environmental change, and
it has implemented initiatives to assist it in conducting environmental protection
programs, ensuring its long-term viability while also conserving the environment. The
Toyota Environmental Activities Grant Program is one of the most well-known instances.
This initiative assists in the donation of hybrid cars and $1 million for the conservation of
Everglades National Park. As a result, these activities demonstrate that Toyota's CSR
strategy is in accordance with environmental standards.
 Government:
The government is concerned about environmental changes and has taken a number of
legislative steps against the firm. Toyota is adhering to government regulations for
environmental protection and tax adjustments in order to maintain its consumer market
image.
 Explain the significance of stakeholder analysis when formulating new strategy:
Because of the concentration of participants, the automobile industry is regarded one of
the world's major industries. It is critical to comprehend its significance because it
creates jobs for millions of people. Because of the large consumer market, this industry
has a large number of businesses. Every business is attempting to gain the greatest
amount of market share in order to improve its profit potential. These rich potential
enticed a slew of new companies to enter the market, as seen by investors' interest in
the area. Customers, employees, management, investors, suppliers, government, and
other pressure groups are all stakeholders who have a significant impact on a company's
operational progress in a competitive business environment. The company's

24
 management must maintain stakeholder satisfaction in order to maintain a competitive
advantage over competitors by keeping expansion streamlined. Toyota's management
employs a corporate social responsibility (CSR) approach to address any current
challenges that threaten the trust and happiness of its stakeholders.
Stakeholders' main worry is Toyota's long-term viability, given the increasing hurdles to
its operational growth in a competitive business climate. Changes in the environment
are forcing Toyota to undertake radical changes in its tactics in order to stay relevant in
the consumer market by demonstrating compliance with environmental legislation.
Furthermore, due of the multi-ethnic personnel, stakeholders are concerned about
cultural diversity in the organization. Organizational conflict is unavoidable in a multi-
ethnic workplace, and it's difficult for corporations like Toyota to maintain a positive
workplace culture.
VIII. Devise appropriate strategies to improve competitive edge and market position based
on the outcomes:
 Synchronization and standardization of processes – Lean manufacturing:
Toyota's strong focus on lean production is one of its most significant advantages. Lean
manufacturing aims to eliminate waste in all aspects of production, including customer
relations, product design, supply chains, and plant management (Kumar, N., 2015. ). Its
purpose is to reduce human effort, inventory, product development time, and space in
order to become more responsive to client demand while manufacturing high-quality
products in the most efficient and cost-effective manner feasible.
Toyota pioneered and used a number of extremely efficient solutions in order to attain
these objectives. For example, in the 1970s, Toyota developed Just-in-Time (JIT), an
inventory strategy aimed at increasing a company's return on investment by lowering in-
process inventory and related carrying costs, based on the fundamental premise that
inventory is waste (Kumar, N., 2015. ). Signals between different stages in the process,
which instruct production when to manufacture the next part, are one of the major
instruments of a JIT system to fulfill its objectives. Such signals provide an orderly and
effective flow of materials throughout the manufacturing process, boosting a company's

25
 return on investment as well as its quality and efficiency. The company's outstanding
supply chain management is closely tied to Toyota's JIT principle, as the high efficiency
and effectiveness of a JIT inventory system is significantly dependent on the smooth
coordination of a company's supplier network. Through the so-called keiretsu, Toyota
and other Japanese automakers are able to assure such seamless coordination and
close, trustful collaboration with their suppliers.
 Avoiding errors:
When working with a low inventory of materials and JIT inventory systems, it's critical to
ensure that each part entering the next stage of the manufacturing process satisfies the
highest possible quality requirements. Taking samples isn't enough to meet this criteria.
In reality, all staff involved in production and logistics should be trained and aware of
these issues (Kumar, N., 2015. ). The so-called Total Quality Management (TQM)
methodology at Toyota ensures this. W. Edwards Deming created the term "total quality
management" (TQM) in the 1940s. Edwards Deming is a statistician, educator, and
consultant from the United States. It can be defined as a collection of management
techniques used throughout an organization to ensure that the organization meets or
exceeds customer expectations on a continuous basis. As a technique of continual
improvement, TQM places a high emphasis on process measurement and controls. One
of TQM's main goals is to keep faults to one per one million units produced.
 Improvement of the production lines:
The constant upgrading of the production line and facilities is another crucial pre-
condition for a highly efficient and successful output. Only by ensuring that the
machinery and equipment are at the cutting edge of technology and are working reliably
without any defects or failures can it be ensured that the machine uptime is predictable
and the process capability is maintained, avoiding the need for extra stocks to buffer
against any uncertainties and the process flow being disrupted (Kumar, N., 2015. ). This
is ensured at Toyota through the use of Total Productive Maintenance (TPM). TPM is a
proactive technique that attempts to prevent slack from occurring in the first place, and
it was the first tactic Toyota adopted to boost its global position in the 1950s.

26
  Employee training and qualification:
Workers are regarded as the most crucial aspect in the entire production process at
Toyota's factories. Toyota, more than anybody else, has recognized that investing in
personnel training and qualification is a vital success factor in the battle for quality and
cost control (Kumar, N., 2015. ). Toyota, for example, offers trainings for its assembly-
line workers in its own training centers to ensure that they are able to meet the
company's standards before they start working on the actual assembly line, based on
the understanding that continuous process improvement means continuous employee
qualification. This technique aims to reduce employee frustration as a result of excessive
performance expectations, ensuring a high level of commitment and motivation within
the workforce.
IX. Recommendation:
One suggestion for Toyota is to use its early leadership in the commercialization of
hybrid systems and electric vehicle technology more ruthlessly. Despite the fact that
every other major automaker is planning to debut new hybrids and all-electric vehicles,
Toyota believes it is still ahead of the pack. There will be a hybrid version of every car
Toyota sells in a few years, and there are plans to expand the Prius brand to include a
range of new low- and zero-emission vehicles. To avoid bad press, the business needs to
focus more on safety requirements. It can also buy a few small businesses to strengthen
its market position and grow the business. Another strategic possibility for Toyota is to
divide its hybrid models into their own brand, which would cater to environmentally
conscious buyers. Given that the globe is still recovering from the financial crisis, a new
brand that offers a reasonably priced, ecologically friendly, and efficient vehicle would
be well received.
X. Conclusion:
To summarize, auto sectors are currently confronted with trade obstacles, and
worldwide competitiveness among vehicle makers has intensified. Toyota's ambition is
to become the world's top automobile manufacturer and to achieve significant success
through the use of various marketing methods. Furthermore, Toyota values are

27
 exhibited via anticipating consumer requirements and producing great goods and
services that enrich people's lives, all of which are fueled by a customer-centric mindset,
innovation, ingenuity, and entrepreneurial spirit. Toyota's marketing efforts have an
impact on the car industry's globalization potential.

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