Research Paper on Toyota: From Loom Works to Global Automobile Giant

Paper Type:  Report
Pages:  7
Wordcount:  1817 Words
Date:  2023-04-24


Toyota Motor Establishment is an international firm, and it is known as Toyota in the international market. The headquarters of the Company are in Japan, and it is available in most of the international markets all over the world. The automobile's foundation was laid by Sakichi Toyoda, but later in 1933, an automobile department was opened by his son Kiichiro after investigating engines powered through gasoline. He named the Company as Toyoda Automatic Loom Works, Ltd. In 1935, an introduction of the first G1 truck ad A1 prototype was done (Baber, 2018). In 1937, the same son Kiichiro established the current Toyota Motor Company Ltd. Since then, and the Company has been bringing a renovation in the automobile industry by incorporating the growth in the business models. This paper has critically analyzed the competitive strategy of Toyota in terms of; Bowman's Strategy Clock, the key drivers, and recommendations that Toyota should adopt to improve the effectiveness of its operations.

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Critically Analyses the Company's Competitive Strategy

Currently, it is among the leading and most extensive manufacturing companies in automobile, in the whole world. Besides, it is also a pioneer in the innovation of automotive, which is the central value of the Company. Expertise in technology has been the prime competitive benefit that has enabled the Business to become international expertise. Since the foundation of Toyota, it has been committed to producing reliable as well as value-added brands. And this would not have taken place without innovation; innovation has been at the lead in the activities undertaken by the organization (Nkomo, 2013). Through technological expertise, innovation has enabled the Company to meet both environmental and social responsibilities.

For the Company to operate at global levels, it has formed guidelines ad principles. The principles are included with the ethics of the Business, respect as well as an honor for all countries together with their culture, as well as develop a growth-oriented company with business associates. In the first quarter of 2019, the Company was worth 407.05 billion yen of capital, with several affiliated companies and subsidiaries all over the world (Baber, 2018). Currently, it has 375 442 employees in all branches of the world (Jurevicius, 2020).

Total is not only using its innovation in improving their brands; it is also using it in bringing development towards the environment as well as society. It has also realized the increased rate of the negative impact as well as the emission of carbon from the vehicles. As a result, it is now concentrating on eco-friendly vehicles like electric and hybrid cars. Through this, it has identified various issues that relate to the means used in manufacturing, and therefore, it has incorporated multiple procedures in reducing environmental issues. First, it has made the transmission of engine efficiency more productive, through downsizing its measures. Second, it has enhanced energy management for the Company, and third, it has worked towards reducing the overall vehicle load. This has been achieved through the lessening of the rolling resistance, vehicle mass as well as air drag.

Bowman's Strategy Clock

Hybrid Strategy

This strategy follows cost leadership of the organization, to maintain a healthy competition as well as innovation of the products. The strategy provides the organization with opportunities in responding to different challenging within its operations. An approach is referred to as a means of determining or measuring where the Business is and where it wants to be at a particular time ("generic strategy clock | Bowman's Strategic Clock (Strategic Position," 2020).

Through innovation, it has been able to produce products that are of high quality, thus fitting their customer's desires. The employees are also trained to portray the best morals to their customers. They have the best customer care services that every customer can desire. Just from their first encounter with the customers, they have been trained to take the customer through the process of buying, by convincing them and helping them in making decisions. In return, Toyota has been able to attract a lot of customers, and this has enabled it to grow effectively and meet the demand and expectations of these customers.

No frills / Low Price Strategies

Price is the main contributor to the buying behaviors of most customers. The set price must, therefore, reflects the expected benefits by the customers ("generic strategy clock | Bowman's Strategic Clock (Strategic Position," 2020). Toyota ensures that it attracts the attention of customers, through providing the best services and products to the customers, and at favorable prices. It attracts many customers in the company, with limited funds. The no-frill prices include the elimination of costs in essential services like the car wash.

Focused Differentiation

Toyota enhanced focused differentiation through the initiative. It has been able to improve environmental sustainability as well as traffic safety ("generic strategy clock | Bowman's Strategic Clock (Strategic Position," 2020). As earlier, the Company has been able to do a modern innovation of its brands. For instance, the active development of advanced technology has enabled the Company in the manufacturing of electric cars. It has also been useful in the environment by reducing emissions. Historically, human has had a very negative impact on the environment. Therefore, switching to the electric vehicle has been observed as a way of reducing further damage to the environment. The traditional vehicles cause more damage to the environment; through contributing carbon dioxide that forms greenhouse gases towards the environment. These form the ozone layer that helps much towards environmental changes. Electric cars enhance environmentally friendly by use of batteries, which enable them to travel faster than cars using gasoline-powered engines.

Furthermore, they can be fueled through renewable sources like hydropower, wind as well as solar (Nkomo, 2013). In return, this made them more cost-effective and friendly as compared to gasoline-powered vehicles. Precisely, these strategies have fitted the Company's internal and external situations, by strengthening a sustainable competitive advantage as well as improve its performance. The policies have worked as mediation between Toyota and the surrounding, and this has also been used as a form to advertise itself to all people in the world.

Key Drivers


Toyota has become famous due to its innovative culture. The goal of the Company on being at the lead as compared to its competitors is introducing the most innovative brands in the market. Hence this has been achieved by carrying out several pieces of research on what is needed by the customers in the market (Jurevicius, 2020). The research and development have been based on developing environmentally friendly products, enhancing the safety of vehicles as well as information technology. Therefore, it operates as a significant study facility network amongst other automotive corporations in the world. Besides, it has been able to accomplish the best outcomes from its spending on research and development. It has a total of 15 research facilities from countries like; Japan, China, America, Australia, Thailand, France, Germany, and Belgium (Nkomo, 2013). The research is done in the country focus on three key areas; Basic research that involves the necessary technology of the vehicle, the development of forwards looking as well as leading-edge development that includes the newest and other components that outshine rival's technique. The last key area is product development that deals with the development of the new model as well as the upgrade for the existing fields. In 2018, the expenditures on research and development of Toyota approximated to US$9.613 billion (JPYEN1.064.2 billion), and in 2017, it was US$9.579 billion or JP YEN1,037.5 billion (Jurevicius, 2020).

Figure One: The Global Fleet of Electric Vehicles

Volume of Sales

Since the incorporation of Toyota Motor Corporation, it has been among the most recognizable companies around the globe. The Toyota brands are 7th and 9th valuable in the world, and they are worth US$50.291 billion and US$44.7 billion, respectively. The brand also has significant recognition and reputation, and this has improved the volume of sales that it has been making. For example, in 2018, the Company made sales of 8.964 million cars in 190 countries (, 2020). This was the highest sales that were recorded in the total sales. The most top deals that Toyota has been able to make the highest sales in the world, due to its unique way of manufacturing sales, its research and development as well as its sales operations in the world. The Company has been advertising itself ad; this has helped it to create and introduce more brands to the market to meet the expectations of the customers and with fewer costs.

Product Differentiation

Toyota has the most popular products in the automotive market. Over the past 75 years, Toyota has received a hundred awards in the design, manufacturing operations, safety as well as environment-friendly (Nkomo, 2013). In 2018 alone, it received seven insurance Institutes for Highway Safety (IIHS), and the top safety picks for its Camry, Prius, Corolla, Avalon, RAV4, and Highlander models, as well as for other awards of senior safety Lexus models (Nkomo, 2013). In 2017, it had also received more awards in Power Vehicle dependability than any other brand (Nkomo, 2013). Besides, it ranks position two on the 200 lit of the carbon clean that ranks companies concerning their efforts in making the environment clean, or in translating to clean energy. Precisely, the recognition of the brand provided by Toyota provides it with a competitive superiority over its rivals from other automotive products.

Figure Two: Most Valuable Brands of 2018

Economic Factors

The economy has played a substantial role in the development of the operation of the Corporation. It has a considerable impact on the marketing of Toyota's brand (Wilson, 2010). And this has involved the ability of the buyers to make orders and paying for them from the country. Over the last few years, the state of the economy has been stable in most of the country. A stable economy means that the country has been able to achieve the microeconomic objectives as well as stable prices.

In most cases, the stability of the economy is stabilized by; fiscal stabilizers, floating exchange rates, flexible employment markets as well as a monetary strategy (Rothaermel, 2016. Through these factors, it means that the cost of living of the people had been high, thus increasing their purchasing behaviors as well as money circulation in an economy. Besides, the Company has been having enough revenue, as obtained from more sales. In return, it has been able to make effective advertising and made more sales than expected.

Political Factors

Governments from different countries have played significant roles in contributing to the success of Toyota. Regulations from different nations impact product designs as well as the marketing strategies of various automotive companies. In cases where the government has been stimulating the economy, it has been reducing the prices of the cars indirectly. That to say, the government has been reducing the rates of taxation in the nations, not only for Toyota Brands but also for other products (Thompson, 2018).

On the other hand, policies have been having adverse impacts on car manufacturers ' revenue. For instance, the government I America has passed new efficiency in fuel recently, which has been forcing it to dr...

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