Toyota Motor Corporation is the world product quality leader in the automotive industry..

In the first quarter of

2008, Toyota sold 2.41 million vehicles in the worldwide and that data makes Toyota took General Motors'
position to suit the young leader of global sales in the automotive industry (U.S news, 2008). In 2009, Toyota's
global production jumped 22% from 2008 (McCurry, 2009).
Toyota in Europe is also a great mess. Since 1990, Toyota has placed over 7 billion euro, and currently delivers
about 80,000 employees throughout Europe. Its operations in Europe are supported by a network of 31
national marketing and sales companies in 56 states with a total of 3,000 sales outlets and 9 manufacturing
plants. In 2008, Toyota sold 1,112,021 vehicles in Europe (Toyota, 2008).
Toyota owns 2 manufacturing plants in the UK, respectively located at Burnaston in Derbyshire and Deeside in
North Wales, while Toyota has placed over 1.85 billion pounds and currently holds approximately 4,000
employees in the UK (Toyota, 2009).
Strategic analysis of Toyota:
It is a comprehensive way to analyses Toyota's macro business environment background by using PESTEL
framework.
Toyota as a global carmaker, is strongly affected by the vary politics in different countries. Referable to the fact
of oil shortage, some states such as U.S have to rely on foreign oil to meet their requirements; therefore, the
energy saving politics issued by governments may pass to consumers turning their demands to Toyota's oil
saving products such as plug-in hybrid (Berthiaume et al, 2007). However, some hostile governments have
interfered Toyota's operations with the political threat in order to benefit its local car industry; Venezuela
President Hugo Chavez announced that the government would take over Toyota's local assembly plant if
Toyota does not agree with transferring its new technologies to local car manufacturers and producing more
vehicles designed for Venezuela's rural areas (Molinski and shirouzu, 2009).
Referable to the realities of global financial crisis, Toyota has to narrow its reach of commercial enterprise and
concentrate on its core business; for example, Toyota has confirmed that withdrawal leaves from formula one
racing competition and change state to concentrate on its vehicle producing (BBC, 2009). On the other hand,
with the global economic recovery, Toyota will keep increasing its output to global markets; Toyota aims of 7.5
million outputs in 2010 (Economic Times, 2009). And certain countries' economic growth provides Toyota,
chances to develop products in new markets; for example, Toyota has purposed to occupy more than 10% of
India's car market by 2015 (Dhara and Kitamura, 2010). Summation, the global oil price changing may increase
consumers' desirability of Toyota's plug-in hybrid vehicles.
Social-ethnic elements are able to affect Toyota in a certain level. In addition to product quality leader, Toyota
has accomplished a full company image, though many social movement activities in different countries; for
example, Toyota has been working with Kirloskar Group on a rural drinking water project in Karnataka (a
country in the southerly region of India) (Business Standard News, 2006). This procedure not only worked a
large societal problem for local government, but also earned respect and cooperation from the local citizenry for
the company, also built a good company reputation.
Toyota's success cannot be distinguished from modern science and technology; the new technologies strongly
influence Toyota's future development. Such as "lithium-ion battery" technology, has been practiced by Toyota
in a new generation of plug-in Prius. Toyota will only produce 600 units in the first half of 2010 as a new product
test program (Wilkins, 2009). Yet, another fact is that Toyota has recalled 15.2 million vehicles in 2009 due to

technical errors like uncontrollable acceleration (Symes, 2010). Using technologies in the wrong way may
damage the Toyota's reputation and losing its reliability.
Referable to the realities of global warming, Toyota is required in concerned with producing vehicles that
increase the fuel efficiency and reduce discharges. Toyota has certain achievement in the environmental field
through research and develop hybrid vehicles such as gas-electric Prius (Nascar, 2004).
Toyota not only has many directly controlled suppliers, but also call for suppliers from outside in different
marketplaces. Thither is a strong supplier competition threat faced by Toyota. The evidence proves that Toyota
on US market comes from top of supplier working relation in 2009 as surpassed by Honda, and followed by
Nissan, Ford etc (Ortolani, 2009). (Form 1)

The following table shows how automakers fared in the Supplier Working Relations Index prepared by
consulting firm Planning Perspectives Inc.

2009

Automaker

Rank

2009

2008

Score

Score

1.

Honda

349

359

2.

Toyota

339

367

3.

Nissan

268

253

4.

Ford

232

191

5.

GM

183

163

6.

Chrysler

162

161

Figure 1: Supplier Working Relations Index (http://www.bloomberg.com/apps/news?

pid=20601130&sid=aUUU8Mjf6ej0)
Recommendation for future development:
In terms of the five forces analysis above, Toyota will keep facing a fierce competition in the industry.
Consequently there is no trend that Toyota becomes a monopoly company in the automotive industry due to
the constant price war and expensive marketing battles even it is leader at the moment. So, dealing with
existing market with existing product (Market penetration) may not effectively beat competitors who are able to
design and produce cars on a similar price and quality level. Plus, in terms of car markets, the existing products
may not fully meet consumers' demands such as more environmentally friendly vehicles.
However, product development may be a good option as Toyota already has huge existing markets like
America and Europe and earned considerable reputation. Despite there are growing competition, but
competition also can be kind of power to promote Toyota's innovation and development on new product. Also,
keep developing hybrid product and maintain its leading position is important because hybrid vehicles are
particular attractive to oil shortage countries with developed economy. Furthermore, Toyota underpinned by its
strong competence and resource therefore doesn't lack of new strategic capabilities and risk management
skills.

While, market development may suitable for poor countries such as Venezuela, dealing new but poor markets
with existing products can not only avoid transferring its newest technologies to outside, but also find new
consumers therefore increase output and sales.
Proper related diversification maintains Toyota able to control its suppliers and developing a wide range of
complementary to present business. But excessive diversification with bad economic environment may cause
resource wasting, such as fail running on formula one. Diversification must surrounding Toyota's core business
therefore benefits the company as a whole.

Vehicle Production, Sales and Exports

By Region
Production by region
Region

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

North America

1,278.4

1,444.0

1,535.1

1,519.3

1,636.9

1,404.8

1,189.1

1,404.0

1,206.1

1,720.6

Latin America

58.1

80.4

138.5

177.9

183.1

194.8

181.5

204.3

195.1

242.8

Europe

466.1

582.5

638.1

808.8

806.5

688.3

507.3

461.7

460.3

461.4

Africa

93.3

108.8

121.1

143.8

145.7

179.2

102.8

123.4

150.8

151.7

Asia

548.4

717.0

1,029.2

1,137.7

1,387.3

1,590.0

1,501.4

2,027.4

2,062.8

2,565.7

Oceania

113.6

109.9

109.2

111.6

148.9

141.4

96.8

119.4

93.7

101.4

Overseas total

2,558.0

3,042.7

3,571.2

3,899.0

4,308.6

4,198.4

3,579.0

4,340.4

4,168.8

5,243.6

Japan

3,520.3

3,680.9

3,789.6

4,194.2

4,226.1

4,012.1

2,792.2

3,282.8

2,760.0

3,492.9

Worldwide total

6,078.3

6,723.7

7,360.9

8,093.2

8,534.7

8,210.5

6,371.3

7,623.3

6,928.8

8,736.5

1 unit = 1,000 vehicles)

Note: Regional classifications are those of the Japan Automobile Manufacturers Association, Inc.
The number of vehicles produced includes the Toyota and Lexus brands. As a result of rounding,
the numbers do not necessarily add up to the total shown here.
(

Sales by region
Region

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

North America

2,031.3

2,230.3

2,436.1

2,738.3

2,822.2

2,441.8

1,975.4

1,935.5

1,806.9

2,274.6

Latin America

162.1

214.9

270.5

339.4

379.4

370.2

293.6

342.1

333.5

406.6

Europe

851.5

946.9

995.2

1,124.1

1,238.6

1,119.5

886.0

785.8

801.9

817.7

Africa

160.6

206.7

227.2

265.7

313.5

288.1

201.4

197.6

211.9

243.0

Asia

682.4

846.3

1,062.9

1,106.7

1,329.6

1,438.6

1,533.9

1,895.9

1,998.2

2,340.5

Oceania

215.1

232.8

236.9

250.3

275.9

277.7

231.2

249.6

215.9

258.8

Middle East

251.4

270.9

325.3

404.8

482.7

590.1

482.5

554.6

527.5

683.9

Overseas total

4,354.5

4,948.8

5,554.1

6,229.3

6,841.9

6,526.1

5,604.0

5,961.1

5,895.9

7,025.1

Japan

1,715.9

1,758.8

1,713.1

1,692.3

1,587.3

1,470.0

1,375.5

1,566.1

1,201.0

1,692.2

Worldwide total

6,070.4

6,707.6

7,267.3

7,921.6

8,429.3

7,996.1

6,979.6

7,527.3

7,096.9

8,717.3

(1 unit = 1,000 vehicles)

Note: Regional classifications are those of the Japan Automobile Manufacturers Association, Inc.
The number of vehicles produced includes the Toyota and Lexus brands. As a result of rounding,
the numbers do not necessarily add up to the total shown here.
Exports from Japan by region
Region

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

North America

782.8

813.5

939.6

1,344.7

1,244.1

1,124.2

574.0

628.2

494.7

704.6

Latin America

71.5

95.6

120.2

148.9

178.9

146.4

61.3

106.9

95.6

116.4

Europe

424.6

419.0

360.7

375.1

441.5

420.3

230.4

293.7

343.0

311.9

Africa

58.2

92.0

107.2

130.0

147.0

148.7

67.5

72.4

54.7

64.9

Asia

154.7

156.2

129.8

112.3

151.2

169.1

127.1

184.0

183.0

205.4

Oceania

154.1

164.6

159.2

171.6

175.2

184.2

144.4

165.8

146.3

174.3

Middle East

182.6

202.1

226.5

246.7

328.3

393.4

240.0

288.6

247.7

363.6

Total

1,836.0

1,951.7

2,043.2

2,529.3

2,666.1

2,586.3

1,444.7

1,745.0

1,568.9

1,945.7

(1 unit = 1,000 vehicles)

Note: Regional classifications are those of the Japan Automobile Manufacturers Association, Inc.
The number of vehicles produced includes the Toyota and Lexus brands. Excludes KD sets. The

total includes other regions. As a result of rounding, the numbers do not necessarily add up to the
total shown here.