Strategy Analysis: Fan Zhang
Strategy Analysis: Fan Zhang
Strategy Analysis: Fan Zhang
• Toyota Corporation
Toyota is the 3rd rank of the World’s largest vehicle. In the world largest
vehicle seller country: US Toyota has 8.5% market share as the highest foreign
automaker. It is the biggest car company in domestic car market shares.
Challenges and Problem Facing
EXTERNAL CHALLENGES FULLY MARKET COMPETITION INNER PROBLEM FACING
Threat of Setup costs are so high that the threat of new entry is low .
New
There are significant economies of scale, so the threat of new entry is low .
There is a significant product differentiation, and the threat of new entry is low.
Threat of Car has more utilities than other substitutes such as motorbike, the
threat of substitution is low.
Substitutes The price of substitutes is lower than automobile, such as train tickets,
the threat of substitution is high.
Bargaining Power The profitability of suppliers is significantly affected by the automobile industry,
because the inputs in our business is unique. The bargaining power of suppliers is low.
Intensity of rivalry
The competitors are diversified, for example, Ford is strong in trucks, BMW is more
focused on sporty function of cars. Intensity of rivalry among competitors is high.
among competitors
The whole automobile industry is growing rapidly, the forecasting shows that the
production will increase to 50% by 2010. Intensity of rivalry among competitors is
high.
• Best Fuel Efficiency of any midsize car • The cost was substantial since the technology was new
• Good performance compared to non- and most of the components had been developed from
scratch.
hybrid vehicles. • PROCO engine development stopped in the early
• Appeal of the most recent innovation. 1980s because PROCO could not be mass produced.
• The engineers were focused on developing the new
• Continuous R&D on technology technology and could not devote resources to cost
development. reduction.
SWOT
• The Car for the 21st century. • High price as compared to non-hybrid
• Marketplace acceptance. cars.
• Risk of failure.
• Commitment to environmental
• Competition in technology development.
protection.
• Government: increase the fuel efficiency of their vehicles, in part to control emissions and in part
to slow the depletion of oil supplies and mitigate concerns about reliance on oil imports.
• Foreign trade regulation: many nations adopted trade barriers to slow automobile imports,
especially from efficient Japanese.
• Political stability: There is a threat in the fuel shortage as it was in 1973.
• Lowering emissions and increasing fuel economy is the new trend for automobile industry as
people are concerning more and more about environment and efficiency. Some technologies
have been developed in order to meet this new trend, such as improved gasoline engines,
diesel engines, electric vehicles and fuel cell vehicles.
• Toyota believe that “resources” and “environment” should be the key concepts of new car in
the 21st century. And the hybrid technology is proposed by Toyota, which they called “Prius”,
to improve fuel efficiency and reduce particle emission which is environmental friendly.
Evaluation of Strategy