1.

Introduction
This project is about a strategic plan for Toyota Motor. In order to produce this project
plan two basic methods are going to be used. The first one is Pestle analysis; it will be
used to define the political, economical, sociological, technological, legal and
environmental effects, and afterwards to lead for strategic decision-making. While the
second one is SWOT analysis; it will be used to understand the strengths and
weaknesses, as well as identify the opportunities and the threats that the company
face or will face in the future.

Then a strategic and technologicalroadmap will be produce to present the path that
the company requires to follow in order to achieve its goals; the main reason of this
technique is to ensure that the company goes in the right direction.

2. Company Background
Toyota Motor Corporation is an automaker company from Japan, and its main
headquarter is in a city named Toyota located in Aichi Prefecture of Japan. The
establishment of the company was on 28th of August, 1937, by Kiichiro Toyoda. In
2012, Toyota is a multinational company consisted of 325,905 consolidated employees
and 69,148 unconsolidated.

This year Toyota’s capital is considered as 397.05 billion Yen, while the net revenue,
operating income and net income were 22,000, 1,320 and 962 billion Yen respectively.
Also, it should be mentioned that Toyota Motor Corp has 507 consolidated subsidiaries
and 57 affiliates.

2.1. Historical Review& Goals

In 1924, the Toyota founder’s father (Sakichi Toyoda) invented the Toyoda Model G
Automatic Loom; an automatic high-speed loom featuring with the ability to change
shuttles without stopping. In 1929, the patent rights were sold to a British company
(Platt Brothers) and as a result, the capital gained due to start researching into a
gasoline powered engine and develops an automobile production. [1]

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 Strategic Technology Management for Toyota 2013

In 1933, Toyota was a division of Toyoda Automatic Loom Works, specialized on the
production of automobiles. A1 prototype passenger car and G1 truck were completed
in 1935 and one year later the first passenger car, Model AA Sedan, produced, with
sales price approximately 400 yen cheaper than the competitor’s cars (Ford, GM, etc.).
Also, AB phaeton and GA truck produced the same period.

One year later, 1937, the company became independent and then,almost 10 years of
successful business development followed, where many facilities and plants were
established, as well as new models were produced and new technologies were
imported as well. [1]

However, this development stopped by the beginning of the World War II. When the
war ended Toyota had 3000 employees and no working facilities. But, 1947, the design
of a new postwar automobile leaded to an increment of company’s income. Two years
later, Japanese economy was continuing to suffer and raw materials were in short
supply, as well as the government taking measures which affected negatively Toyota’s
economy. The result was the company requested 1,600 voluntary retirements.
However, the company was continuing not to meet its goals; the president of Toyota
resigned and a greater number of employees than requested began leaving the
company voluntarily; 2,146 voluntary retires.[5][6][7]

In 1957, Toyota eventually entered in the American market and by the early 1980s
began building plants in the US.While, in 1990 Toyota Europe Marketing & Engineering
was established due to help vehicles market in the continent and two years later the
first base was set up in the UK; Toyota Manufacturing UK.

Some of the most important achievements are presented briefly below:

o In 1999, Toyota decided to list itself on the New York and London Stock

o In 2002, Toyota entered Formula 1

o In 2003, Toyota produced cars in France
o In 2005, ranked 8th world’s leading companies

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 2.2. Guiding Vision
The Toyota way is five core values to express the beliefs and values of the company.
These values are as follows:

o Always be faithful to your duties, thereby contributing to the company and to

the overall good.
o Always be studious and creative, striving to stay ahead of the times.
o Always be practical and avoid frivolousness.
o Always strive to build a homelike atmosphere at work that is warm and friendly.

o Always have respect for spiritual matters, and remember to be grateful at all
times.[2]

Toyota as global company has a system of ideas and ideals regarding economics,
politics and management. It honors the language and the spirit of the laws of every
nation that operates and supports open and fair business activities; as well as it
respects the culture and customs and contributes to economic and social
development. Also, it targets to produce clean and safe products due to enhance the
quality of life. Its priority is to create and develop advanced technologies in order to
produce outstanding products and services according to the customers’ needs around
the world.

Moreover, Toyota supports that the individual creativity, the value of teamwork, the
mutual trust and the respect between labor and management are factors which have a
key role in order for the company to be successful.[2]

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3. Competitors Environment
According to the 2013 Car Brand Perception Survey, which is conducted by the
Consumer Reports National Research Center, Toyota, Ford, Honda, Chevrolet,
Mercedes-Benz, Volvo, Cadillac, BMW, Dodge, and Tesla are the best brands globally.

The scores that were given by the consumers are presented below: [39]

Figure 1. Top 10 car brands

Regarding quality, road tests and reliability, Toyota was ranked 2nd: [39]

Figure 2. Quality results

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Concerning value, consumers are looking to get the most for their money. The
survey shows that Toyota ranked 1st. [39]

Figure 3.Value results

While, when they were asked about technology/Innovation, their answers were shown
below: [39]

Figure 4. Technology/Innovation results

8
Other statistics, regarding the global market shares in 2013, shows that Toyota
ranked 1st and it is considered as the best auto seller globally. [40]

Figure 5. Global automobile market in 2013

Regarding the net income concerning Volkswagen, Toyota and Ford, Toyota has the
highest for the years 2009, 2010 and 2012, while only on 2011 Ford is achieved a
higher one than Toyota. [40]

Figure 6. Toyota, VW and ford net income comparison

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4. Toyota PESTLE Analysis
PESTLE is an acronym for Political, Economic, Social, Technological, Legal and
Environmental, all factors to take in consideration when making external analyses .
This tool has been designed and improved especially for scanning markets and
environments and can be used as input to the SWOT analysis.

Figure 7. PESTLE Analysis

The group understanding of the PESTLE Analysis tool leads to the conclusion that to
obtain more consistent results it would be important to keep a broad horizon. Toyota
as a whole company is present in many parts of the globe, which causes it exposure to
several different contexts and different products, leading to superficial results.
Therefore, the group decided to approach Toyota globally without exploring deeply
specific topics, regions of the globe or restricted markets and to always keep the
Toyota Prius perspective for the technology topic but without missing global scenario.

To use the tool, the group organized a workshop, after individual reading, and trough a
brainstorming, generated the following results:

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Table 1. Political, Economical, Social, Technological, Legal and Environmental issues are considered.
Afterwards, actions can be defined

PESTLE ANALYSIS
Issue Time Importance Action
Short Reduce car cost/more efficient car;
public transportation Low
term less consumption of oil
Short
oil crisis High more efficient car
term
Political Long
middle east unstable countries medium understand the local market
term
Short
emission laws high reduce emission
term
Long
Energy rising cost High more efficient car
term
Global crises medium High Focus on another market
Economical Long better advertising and improved
competitive/volatile market medium
term products
Long Import from low cost market and
Import/Export medium
term export to rising economy market
Brand exposure (Recall2009- long
high Improve the quality of products
2010&2012-2013) term
New energy source improves life Long hybrid technology targeting low
medium
quality term emission
Short Improve the social presence by events
Exploring social networks low
Social term and media
Efficient strategic plan; consider all
Emerging markets medium medium
parameters deeply
Low skilled society medium medium Provide educational assistance
Individualization and women Short
high More customized products
empowerment term
Long
Development of hybrid car high Research/Education
term
Long
Focus on new energy sources high Research/Education
term
Technological Focus on quality control Short medium Research/Education
techniques term
Innovation is crucial medium medium Research/Education
Short
Cost of R&D (Design) medium Research/Education
term
Subject to different countries Short Efficient strategic plan; consider all
Low
regulations term parameters deeply
Short
Legal proceedings Low Hire legal consultants
Legal term
Incentive to produce eco cars medium medium Further legal research
high Develop Taxation consulting
Taxes high
term department
Short mechanism to recover quickly after
Japan Earthquake medium
term environmental disasters
Long Improve technology to reduce gas
Gas Emissions High
Environmental term emissions
Long mechanism to recycle battery or
Battery disposal High
term limiting its impact to environment
Oil crises Long High Hybrid and electric car technology

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The analysis of the table is structured bellow. The Technology and the Environmental factors
were put together due to its proximity in the Toyota strategy context.

4.1. Political
In many countries, the public transportations networks are receiving a lot of investment,
decreasing customer necessity of purchasing a personal vehicle. It is a global tendency even
if it is still concentrated in developed and developing countries. This might demand more
effort in advertising and price strategies.

Oil increasing prices and political instability in the Middle East are some factors that can
cause impact in the entire automotive sector. With another oil crisis, demand for cars
powered by gasoline might decrease. A good strategy though, is the development of eco-
cars and alternative energy sources. Toyota is already working on hybrid cars that need
much less fuel and use nickel metal hydride batteries as their main power source .

4.2. Economical
Rising energy costs caused by long term investments to modernize energy production in
Europe may impact both car production and attractiveness of electric and hybrid cars [22].
In a place still recovering from crisis and with a still crescent unemployment rate, high cost
of production and, therefore, products, is a critical factor . Markets are competitive and
volatile and consumers are more aware and demanding. In order to survive in such a hostile
environment is important to try mitigating those economic factors with cost reduction.

4.3. Social
Toyota is in a delicate position regarding their image. There have been recalls in 2009-2010
in the US and, again, in 2012-2013 in Canada, Mexico and Saudi Arabia [16]. Those recalls
showed decrease of reliability and low quality standards, factors that, in the past, were part
of Toyota Production System foundations [17].

Nevertheless, Toyota’s research on alternative energy sources cause good social impact and
media repercussion. Actions to improve life quality and reduce pollution are not just
restricted to law obligations but also are a market trend and very consumer appealing [23].

12
To get even more connected to its consumers, Toyota started using social media data
collection and analysis. They are monitoring social networks like Facebook and twitter to
identify consumers’ needs and their thoughts about Toyota products *18].

By 2015 Toyota intends to have 50% of its vehicle sales in emergent markets. These markets,
inserted in developing countries, benefit from it as it generates income job positions. Health
and safety and employee satisfaction are part of Toyota’s values towards their employees
[19].

4.4. Technological&Environmental
Toyota is one of the car companies that are heavily investing on sustainability and
environmental performance improvement. The company focus is to develop new
technologies for eco cars and automotive power sources *24+. Prius, Toyota’s hybrid car is
part of this environmental initiative but note the whole program. Toyota also research
electric and fuel cell vehicles. The electric car, the Toyota FT EV III is a small 100% fuelled
vehicle and the fuel cell vehicle is said to be the “ultimate eco-car”, practically reducing the
gas emissions to zero [20].

4.5. Legal
Due to its presence in several countries (Japan, Brazil, Mexico, United States, Belgium,
France, Portugal, Poland, Australia, Czech Republic, United Kingdom, etc.), Toyota is subject
to many governmental regulations [21]. Safety and environmental laws may change from
one country to another and it increases difficulties in product development. It is important
to adapt their cars to each market. Trade taxes can be an issue also, since it affects directly
the decision process when it comes to entering new markets or installing new facilities.

Another issue is the recent recalls that might lead to legal proceedings. As a multinational
company, Toyota may be subject to law proceedings due to various causes, intellectual
property and product liability for instance which could have considerable financial impact.

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 4.6. PESTLE Analysis Conclusion
Toyota has many opportunities and threats in all five topics analyzed. Most of Toyota’s
concern should be around their failures, cause of several recalls. Actions regarding recovery
of the brand’s liability might be fundamental to regain customers’ trust.

The group found it difficult to utilize the tool considering data gathering and narrowing the
object of analysis. It was fundamental to reduce the subject of analysis in order to produce a
more accurate environment reading. It was also challenging to relate data regarding
European countries political and economic situation and Toyota’s performance.

5. Toyota SWOT Analysis

5.1. Value Proposition of Toyota
The value proposition is described as being the unique competitive offering that your
company provides that allows you to stand out amongst your competitors. Within value
proposition there are three main categories that companies fall under which are Product
Leadership; Operational Excellence; and Customer Intimacy. Toyota comes under the
category of Operational Excellence as they strive to produce quality products across
numerous countries with varying economic climates. Due to this they have a high variety in
their portfolio to accommodate the many different countries they provide for.

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 5.2. SWOT analysis
Table 2. Strengths, Weaknesses, Opportunities and Threats are considered in order SWOT
analysis to be applied

Strengths Weaknesses
 Strong/Recognized Brand  Large scale recalls due to manufacturing
 Varied portfolio of products  defaults
 Highly innovative  Not capitalizing on emerging markets

 Leaders in the fields of manufacturing  Smaller share of the European
 and production automotive market compared to
 Correct types of products for  its other competitors
 the markets they are involved in  Heavily focused on Japanese and US
 Knowledgeable in the areas of hybrid markets therefore exposing the
 technologies company to the fluctuating
 State of the art research and economic and political conditions of
development facilities  those countries.

 Market leader in environmentally  Therefore Toyota have focussed on
friendly car development producing cars for US and Japanese
consumers that are not as desirable in
other markets
Opportunities Threats
 Increasing interest in green cars  Fluctuating automotive market
 Rises in fuel prices resulting in over or under capacity of

 New emerging markets (India and  manufactured vehicles
 China)  High levels of competition from equally
 Ahead of competitors in hybrid  successful automotive companies
 technology  Rising fuel prices
 Selling of hybrid technology  Government legislation changes to
 to competitors  levels of emissions
 Increasing market share in European  Increase in raw material costs
market (developing models that  Natural disasters
appeal to this market)

5.2.1. Strengths
Toyotas main strengths are their brand, their position in the automotive industry and their
manufacturing and production capabilities. The strong brand image they have created is due
to their extensive portfolio that includes 70 different models that cater for the requirements
of their numerous customers [27]. Providing this variety of vehicles not only allows Toyota
to satisfy numerous consumer groups but also increases their brand awareness. Toyota has
become a world class company for production and sales through adopting manufacturing
and quality management processes before its competitors [24]. Through utilizing total

15
quality management processes Toyota are continuously researching new methods of
improving the overall quality of their products and by doing so are maximizing their profits

[27]. The benefits of using manufacturing and quality management processes saw Toyota
become the top global car producer until 2011 when unforeseen damages were caused to
their manufacturing facilities in Japan which allowed General Motors to reclaim the top
spot. [30]

5.2.2. Weaknesses
The most well know weakness that Toyota has is its record of vehicle recalls. In the period of
2009-2010 Toyota recalled 9 million vehicles while in 2012 that number was at 7.43 million
(a slight decrease) [24]. In November of this year they have recalled nearly 900,000 vehicles
with faulty air condition units that could compromise the deployment of the vehicles air bag
system. In October they recalled 780,000 recalls were announced due to faulty suspension
and in September another 615,000 were recalled due to faults with the parking system. A
mass recall from a manufacturer can be manageable however Toyota has been consistently
recall different models and with different faults which has severely compromised its image
with its consumers [31]. Another weakness of Toyota is its level of attention towards the US
and Japanese markets which has caused them to disregard emerging markets such as China
and India. Due to this neglect they have allowed one of their largest competitors, General
Motors, to claim a huge market share in these emerging economies. [27]

5.2.3. Opportunities
Emerging economies such as China and India provide huge opportunities for Toyota to
expand their market share. Along with China and India there is also a number of emerging
African nations with high population that desire cheaper vehicles. The experience Toyota
has in assessing what needs individual markets want and creating products that fit these
descriptions (such as they have done in the US and Japanese market) give them a significant
advantage over their rivals in establishing a majority market share in the new African
markets. Another opportunity for Toyota is the increase in interest from consumers in the
area of eco-friendly vehicles. Toyota is already one of the forerunners in eco-friendly cars
which would mean this opportunity would be ideal for them to capitalize on. [27]

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 5.2.4. Threats
One of the main threats to Toyota is the area in which it conducts the majority of its
manufacturing (Japan, China, Thailand and Indonesia). These areas are subjected to natural
disasters which can disrupt Toyotas manufacturing processes [24]. Entire facilities could be
rendered inoperable due to these natural disasters which, if there are any weaknesses in
Toyotas supply chain, could halt manufacturing throughout the company. One example of
this in recent years was the tsunami that hit Japan in 2011. A supplier of Toyota was
destroyed during the tsunami which stalled Toyotas manufacturing as this supplier was the
only company that produced this specific item. Toyota had to invest money to help the
supplier rebuild its facility. After this Toyota and other companies in high risk natural
disaster areas have had to improve their approach to supply chain risk [30].

6. Balanced Scorecard
Balanced Scorecard is a strategic planning tool in which the entity has clearly defined its
goals and strategies. It is a technique that aims to measure business performance using the
integration and balancing of all key performance indicators existing in a company, since
financial and administrative to those relating to internal processes. [32]

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 Table 3. Balanced Scorecard

Strategic Measurements
Strategic Objectives
Lag indicators Lead indicators
Financ

• Profit margin growth;

• Increase profitability;
ial

• Sustainable financial growth.

• Participation on emerging • Mix revenue;
• Increase sales on emerging
markets; markets; • Marketing investment;
• Cash flow.

• Regain customers’ trust;

us
to

er
m

• Establish a worldwide brand • Brand trustworthiness

C

sold
• Overall customer
leader; • Brand Recognition
• Improve communication satisfaction
• Feedback answered x Car
channels and feedback; • Marketing investment;
• Ethical approach towards
customers.
• To strengthen the
establishment of internal
Intern

systems aimed at quality • Time invested on

al

improvement; • New product revenue; employees training;

• Improve product development
• Customer satisfaction. • Time to get the product
processes;
• Increase R&D results with to the market.
sustainable products;
• Innovative products.
• To improve the ability to
respond quickly to market
nin
Le

quality issues from the

ar

• Improve employee recognition;

customer's perspective; • Employee improvement; • Objectives to achieve;

• Empowerment; • Employees satisfaction; • Teamwork rewards.

• Training programs to improve

employee’s abilities.

The method determines in a balanced mode connections of cause and effect relationship
between the four indicators to evaluate the companies, which are:

o Financial: create new performance indicators so that shareholders may have better
return on its investments.
o Customer: knowledge about customer satisfaction with the company.

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 o Internal processes: the company must identify if there are any products with
problems, if they were delivered on time and focus on innovation of its products.

o Learning and Growth: refers to the ability and motivation of employee, and a better
information system in the company. [33]

Two kinds of key indicators were used in the strategy map, lead and lag indicators. Lead
indicators measure actions that lead or induce future results. Lag indicators are based on
results' measures and are applicable to examine information regarding past actions, events
that already happened. In this perspective, lead indicators measure cause while lag
indicators measure effect. [34]

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7. Strategy Roadmap
In order to pursue primary objective goals within a company, whether it is a financial,
growth, processor customer goal, they need to be documented. This is done in the form of a
strategy map. A strategy map will highlight the key areas that a company should focus on to
achieve goals that are desired. An important aspect of the map is that goals are set through
all aspects of the company and none are forgotten, failure to do this could result in an
aspect of the company being forgotten about resulting in a drop in performance elsewhere.
All goals in a company that are set generally benefit the company finically, making a larger
volume of money and improving its market share. This measures the company’s success
rate; therefore all goals should lead to this.

Through using the Pestle and SWOT tools, key areas within the company that need to be
focused on can be identified.

7.1. Toyotas Strategy Roadmap

Toyota is a very innovational company, by striving ahead in ‘green’ technology. They are
succeeding in boosting their brand image as well as creating a next generation niche that is
expected to change the car industry. This is achieved through the use of hybrid, electric, and
hydrogen fuel-cell engines. It is also achieved through ‘green’ manufacturing, being able to
produce the car as efficiently and as kind to the environment as possible. In order to keep
this image, focus must be set on maintaining and bettering this aspect.

The next objective Toyota should be focusing on is marketing and internationalization. As

stated in the SWOT analysis, Toyotas focus has been set on specific countries around the
world, but as fail to capitalize on others, this has allowed other companies to stamp their
mark and benefit. Toyota needs to focus attention on designing, marketing, and supplying
cars all over the globe. By focusing on more countries will lead to a greater market and thus
creating a larger number of customers, leading to higher sales, however by expanding this
could lead to designs which don’t meet the user’s needs and could be damaging to the
brand.

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Lastly Toyota needs to look at quality issues. Toyota are very well set up to recall and repair
vehicles, this is down to a good customer service division. However this service is very
regularly required. Due to design and build quality issues Toyota have to regularly recall cars
in order to keep customer satisfaction high. This has a toll and damaging effect on the brand
image. To keep recalls at a minimum Toyota has to focus on quality. By improving quality it
will also mean less money/resources will need to be put in mass car recalls.

Shown in the diagram below is the strategy map and how each of these aspects fit into the
overall strategy.

Figure 8. Strategic Roadmap

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8. Technology Roadmap
A Technology management methodology called as ‘Technology Roadmap’ is applied for
defining the Toyota’s technology evolution in advance. Technology road map is a tool that
provides a clear direction of action to a firm; it was first developed by Motorola in 1970s in
order to achieve their goals by strategy and technology development [35]. According to
Galvin *36+, “A roadmap is defined as an extensive look at the future of a selected field of
research framed from collective imagination and knowledge of the most promising drivers
of change in that field” *36+. Technology Roadmaps are adjustable “strategic lenses”
through which evolution of complex systems can be viewed, affirming dialogue and
communication. [37]

Two of the main extremes of Technology road map are Market ‘pull’ and technology ‘push’.
Market pull leads to the goals of a company and technology push provides the opportunity
to be raised in order to meet the goals [36]. Technology Road map takes in to account the
relationship between different technologies, services or products and target markets of a
firm; thus the technology status of a firm can be developed or maintained. It is a
demand/need forced technology planning method to help identify, develop and select
technology options in order to achieve a set of product needs. It is an expert team work for
future technology planning in order to take suitable technology investment decisions. Thus
with the help of Technology roadmap a collaborative technology planning and coordination
for TOYOTA as an industry is done in order to make better investment decisions [38].

There are many types of technology roadmaps but in order to deal with the strategies of
TOYOTA strategic planning roadmap [36] is used by us. It evaluates different opportunities
that business tendencies and markets can offer at strategic level. A standard format of a
strategic planning road map is shown in the figure 9. [35]

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 Figure 9.Strategic planning roadmap [35]

8.1. Technology Road mapping

For making the roadmap for Toyota a T-Plan approach is used [36]. It is divided in to four
different stages. In first stage the external and internal drivers depending upon market and
business are considered, second stage is the product oriented phase, third stage is focused
on technology which is pushed as a result of force from market needs. And the fourth stage
is mainly follow-up and bringing the first three stages together. [36][37]

Toyota’s technology road map is based on the two extremes market pull and technology
push as new technologies are forced to immerge as a result of market needs. The timeline
represented by columns used for the road mapping is divided in to three phases, 1) Current
situation (From now to 2016), 2) Plans and objectives (From 2016 to 2018) and 3) Vision
(From 2018 to 2020). The time line in the roadmap represents the targets and decision point
for Toyota.

The horizontal rows represent the different stages of strategy planning. First row represents
internal and external drivers depending upon market and business needs. The external
drivers are demands from customers, market, competition and surroundings. On the other
hand internal drivers are the business strategies dependent which includes budget, market
share, skills and a unified vision. The second row representing products is the result of pull
from the drivers. And the third row is technology which is either evolved or developed in
order to full fill the market needs and achieve the company vision. The last row consists of
other factors like skills, R & D facilities and overall customer experiences.

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 8.2. Technology Roadmap analysis
The final Technology road map for Toyota is shown in the figure 10. The external drivers are
based on the PESTLE analysis performed by the team; they are mainly European and energy
crises considering the current situation. Desire for personalization, sustainability and
emission laws are the drivers which will effect in the future and threat from the European
market will be one of the major influencing driver for long term.

Internal drivers are mainly derived from the SWOT analysis performed by the team. They
includes the problem of recall because of faulty parts, launch of new car models, increase in
market share and a unified vision of being a global automotive leader.

Aging population and desire for personalization creates the market pull for customized and
fully automatic cars, which in turn will provides the scope for driverless and accident proof
technology in the field of automobiles. Energy crises and the need for sustainable mobility
generates the market pull for producing zero carbon footprint and zero emission products
by providing the technology push of more efficient hybrid technology and forced to
research in renewable fuel based technology areas.

Now Current Situation 2016 Plans 2018 Vision 2020

European Crises Personalisation Threatfrom european competitorspetitors
Drivers Drivers

Energy Crises Sustainable Mobility Legislations:EmmissionissionLaws,VAT Aging Population

Market and

External
Internal

Investment: Buy other companies Increase european market share Shortage of high skilled staff
needs

Zero Recall LaunchNew Models Global Automotiveotiveleader

Better Designed Cars Customizded Cars Fully Automatic Cars

Products

New Hybrid Models Zero Carbon foot print products

High Quality products (To avoid recall) 100% Localized Products Zero Emmission Cars

Renewable fuel based technology (eg.

Technology

More efficient Hybrid Technology Hydrogen fuel based technology

Biodiesel, Solar energy etc.)

Fully Automated Manufacturing Plants Driver less technology Accidents proof technology

Renewable/Sustainable material use Leaderininnovation and R&D

Customer feedback
Others

New R&D, Skills and knowledge centers

Social /online presence
More Service centers and retail outlets

Maintainance and after sales service MaintainingBrandimageage

Figure 10.Technology Roadmap for TOYOTA

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European crises and future threats from other European competitors will force TOYOA to
stay ahead in the market by launching new affordable car models, 100 % localization and
establishment of new R&D and knowledge centers in order to launch new innovative
products. Lack of skilled staff is also a driver which creates a market pull for fully automated
manufacturing plants.

Other factors like after sales service, maintenance and customer feedback also evolved as a
result of external drivers. Maintaining brand image of Toyota and an active social and online
presence will also act as an important factor in order to reach the final vision of Toyota.

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9. Recommendations
Based on extensive research, (by PESTEL analysis, SWOT analysis, Strategy map and
technology road map) recommendations for Toyota have been developed by the team. As
shown in the opportunities and threats analysis there are many key issues on which Toyota
must work out to get back on top as a global automotive leader. We divided the
recommendations in to two main categories as Financial/Business level and Functional level.

Financial/Business level recommendations:-

Toyota can improve its competitive strength by using its core competencies in order to
overcome the threats from European rivals. Various strategic actions recommended are:

Focus on hybrid, efficient and sustainable vehicles as Toyota’s future specialization

strategy: Toyota already has ground breaking achievements in the field of hybrid car
technology. But considering the future energy crises and increasing demand of energy
efficient products we recommend Toyota to improve and increase its hybrid cars production
by launching new models. The best strategic option would be to separate its hybrid models
in to a separate brand focusing on green technology. Considering the global financial crises,
a new brand offering moderately cheap, eco-friendly and efficient cars would be
comprehended very well.

Focus on emerging markets and enhance global market share: As a major point emerged
from the detailed analysis in the report, most of the Toyota market is based in Japan and
US. But in order to be a global automotive leader Toyota should also target the most
emerging markets of the world like India, China and Brazil as its focus. As these markets
offer maximum opportunities for growth in the future and in turn help Toyota to get extra
edge over its competitors. This can be achieved by developing research and manufacturing
facilities in these regions and focus on segmentation of market as the customer
requirements are different in these regions as compared to developed countries. Also the
European market share can be improved by better localization of child parts and
incorporating the strength of Toyota (like “The Toyota Way”) in Europe as did in Japan.

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Functional level recommendations:-

On the basis of strategic and technology road maps we came up with the point that Toyota
should focus on the functional level in order to achieve more profit, more operational
effectiveness and gain the competitive advantages. Following strategic recommendations
are suggested.

Operation strategy: - Focus on product quality control: Inadequate quality control which
results in many recalls is emerged as one of the major weakness of Toyota. In our analysis
we find that Toyota is deviated from its quality focused approach in the race of chasing the
increased global market share and profit. We recommend Toyota to stick to its core values
of maintaining quality by the implementation of Toyota way. Root cause analysis and
continuous improvement by learning from the mistakes are the main quality controlling
points Toyota must use.

Marketing strategy: - Maintaining the brand image: No doubt Toyota is one of the most
valuable automobile brands but due to recent circumstances like recalls, customers are now
thinking twice before purchasing a Toyota car. Thus Toyota marketing strategy will play an
important role in regaining its brand image. We suggest three main factors where Toyota’s
marketing efforts must be focused. Firstly, by reinforcing Toyota’s brand association with
quality. Secondly, by enhancing the brand loyalty with efficient customer service and
rewarding the loyal customers. Thirdly by increase the brand awareness by continuing
selling the reliable products to customers and creating a strong social presence.

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10. Conclusion
To conclude, presently Toyota has a strong competitive position globally. But major recalls
and certain quality issues, global financial crises and intense competition from global rivals
have created many challenges for Toyota to maintain its position in the future. Thus strong
actions are required to counter these challenges. Focus towards more emerging markets
and sustainable mobility will act as the core strategy for their future success.

The strategies designed and recommended by us will benefit Toyota to further heighten its
competitive position and increase the market share, in turn enhance its position as a global
automobile leader and achieve new heights in the future.

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