Toyota Motors Analysis

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 Summary of AFI Framework
• AFI strategy framework involves three strategic
management tasks that help a firm implement its
strategies.
• The three tasks are analyzing, formulating and
implementation.
• Toyota uses the AFI framework to
I. Perform external environmental analysis
II. Analyze its business strategy and corporate level
strategy
III. Put its strategies into action.
Internal Analysis Results

• Due to a high level of trust among its customers,

Toyota has managed its value chain very well.
• Value chain comprises of a complete cycle starting
from product conception to after sales services.
• Toyota’s value chain comprises of primary activities
and support activities.
 External Analysis Results

• Toyota’s external analysis results are defined by the

PESTEL analysis and the 5 forces analysis.
• PESTEL analysis helps in identifying the external factors
that affect the firm.
• The management is then able to understand the market
dynamics and their relationship to the firm’s performance.
• The 5 forces analysis comprises of external factors that
influence Toyota’s strategic direction.
SWOT Matrix for Toyota
• SWOT matrix analysis helps Toyota managers
to carry out a situational analysis of the firm.
• It acts a strategic planning tool.
• It evaluates the strengths, weaknesses,
opportunities and threats Toyota might be
facing.
• Strength and weaknesses are internal factors
while opportunities and threats are external
factors the firm is facing in its current
business environment.
 Toyota Strategies

• Toyota’s strategies have enabled it have a

competitive advantage in the automotive
industry.
• Its main strategy is differentiation which has
enabled them produce variety of products for
their customers.
• The firm also uses cost-leadership strategy
which lowers their cost of production and as a
result, help them gain competitive advantage.
• Toyota should not change its strategies.
 Toyota Strategies

• Some of the strategies that will move Toyota

forward include forming global alliances.
• Global alliances involve Toyota joining with
other firms dealing with similar products, but
are located in other regions where the company
is interested to do business.
• Toyota will then have a smooth entrance into a
new market and develop new skills and increase
its sales.
Recommendations
• My recommendation aligns with the organizational structure and
governance for Toyota in the following ways
I. It intends creating sustainable growth and enhance corporate value
II. It involves building positive relationships with business partners
and customers.
III. It involves creating products that will consistently deliver customer
satisfaction.
 Ethical Responsibility
• The ethical responsibility for Toyota is having an
honest and fair business activities with its partners.
• Their main aim is to have cooperation with its partners
as well as improve the business environment.
• My recommendations reflect ethical responsibility
since they are in line with the aims and goals of Toyota.
• Creation of global alliances is one of the ways Toyota
can improve the business environment for itself and
that of its partners.
References
• Chaturvedi, N. R., Dutta, S., & Institute of Chartered Financial Analysts of
India. Center for Management Research. (2005). Knowledge management
practices at Toyota motors.

• Gao, S., & Low, S. P. (2013). The Toyota way model: An alternative
framework for lean construction. Total Quality Management & Business
Excellence, 25(5-6), 664-682. https://doi.org/10.1080/14783363.2013.820022
• Yang, C. C., & Yang, K. J. (2013). An integrated model of the Toyota
production system with total quality management and people factors. Human
Factors and Ergonomics in Manufacturing & Service Industries, 23(5), 450-
461.