Toyota. Hybrid electric vehicle

I. Brief background of Toyota’s company.The Toyota Motor Company is one of the largest automobile manufacturers in the world. The business is known for environmentally friendly, safe and durable cars that conducts their business worldwide with 52 overseas manufacturing companies in 27 countries and regions. Toyota’s vehicles are sold in more than 160 countries and regions. (1)

Toyota Motor Company was founded by Kiichiro Toyoda in 1937 as a development from his father’s company Toyota Industries. The first vehicles were the A1 passenger car and the G1 in1935. In 1958, Toyota has failed to export compact cars to the U.S because of low quality and styling. After redesigning their automobiles and improving, they made a second and successful. The company cans entry into the American market. Toyota added a hybrid option to their popular Camry sedan in 2006 and began building it in the United States at their massive Kentucky plant.

The company also opened up their 10th U.S. plant in San Antonio, Texas, to build pickups. In addition, the company launched the FJ Cruiser with a design that harkens to the early years of the rugged Land Cruiser, the only vehicle Toyota has continuously sold throughout its entire 50-year history in America. As a result, sales surged to more than 2.5 million for the first time and Toyota established them self as the third best-selling automotive company in the United State. (1) Toyota currently own and operators Lexus, Scions brands and has a majority shareholding stake in Daihatsu Motors, and minority shareholding in Fuji Heavy Industries Isuzu Motors and Yamaha Motors. (2)

II. Short market analysisThe main targets of Toyota’s company are Japan and North America, but recently they can see a strong growth in Asian and South America markets. (3)Toyota has three different divisions to target three specific segments. The first division, known as Scion, targets vehicles to people who value quality and looks at an affordable price. Second target are consumers with families in the middle market, who value practically and reliability more than sporty looks or high powered engines. Finally target is the Lexus division for people who seeking performance, reliability and luxury cars. (4)

III. Values proposition to customers* Perceptual valueThe customers will get environmentally friendly, efficiency, safety, durable, and luxury cars with high technology functions.

* Physical valueToyota offers the impressive car brand with rewarding after-sales services at reasonable prices to the clients.

IV. The evidence to support that the company is market orientated The Toyota Motor Company is proved as market-oriented. They know that people really care about the global warming as well as what cars consumers actually need in this time. In consequence, the company was the first to sell the environmentally friendly vehicles. (6)

V. Two Strongest Capabilities and one not so strong1. Brand reputation valued. Toyota’s company currently sells about 70 different models of cars under their brand. This does not only increase brands awareness but also satisfies nearly every consumer group needs. Toyota’s top models are Corolla and Prius. (6) 2. Innovative culture. Toyota is one of the most innovative auto companies and has a strong culture that is focused on constant innovation.

The company was the first to sell hybrid vehicles. Furthermore, it is researching and developing diesel engines that run on biofuels, fuel cells and other potential power sources of future vehicles. 3. Customers’ relationship lead. In this time, it seems to have a large number of competitors occur in the market. As a result, customers retention will not be strong due to it turns clients needs to consume the other brand.

VI. Strengths1. The head in “green “cars development. Nowadays, environmental friendly cars seem to be very important. Customers are choosier in terms of CO2 emissions and fuel-efficiency of the cars they buy and Toyota’s early shift towards selling hybrid and efficient cars is the strength few competitors can equal. (7) 2. Ability to keep costs low. Toyota uses a “Just-in-time system”, in which is process produces only what is needed by the next process in a continuous flow.

This system can allows them to save onto their costs and could increase more profits by using their strongly brand. (8) 3. Toyota never get out-of-date. When Toyota implements designs and innovations for a new model car, their manufactured in the time period to still keep up with its freshness and trend. Toyota’s average age for their lineup is about 38 months. (9)

VII. Two main Weaknesses1. The language barrier. A major weakness of Toyota’s information systems is likely the language barrier that the Japanese based company has with their international employees and customers. Toyota mainly uses the English language internationally but their company is primarily based in Japan and therefore Japanese is still a significant part of the sharing and using of information. 2. Toyota has had an increase in recalls for vehicles.

One negative aspect in the media today about Toyota is their major recall in the U.S. about their accelerator issues in certain Toyota and Lexus models. According to the media, the accelerator is a bit too long and when the accelerator is pushed down, it may get stuck on the car mat when coming back up. Toyota has recalled these vehicles and will fix the problems by shortening the accelerator. (10)

VIII. Three good opportunities1. Positive attitude towards “green” vehicles. Today, consumers are more aware of the negative effects (air pollution) caused by cars. Large quantities of CO2 emissions intensify greenhouse effect and negatively impact the life on earth. Thus, consumers are more likely to buy new hybrid and electric cars that emit less CO2. 2. Increasing fuel price. At the present time, we can see that the price of fuel continue to be increased.

As a result, it can be a great opportunity to open up large market for Toyota’s hybrid cars as client shift toward efficient cars. 3. Continued global expansion – At present, Toyota is successfully business and should continue doing so to grow, gain new skills, assets and access to new markets e.g. China and India, Russia, where population and demand is accelerating. (11)

IX. Three threats1. More competition. At the moment, there are many auto manufacturers including Ford Company, Volkswagen group, Honda and other manufacturers that have the same purpose and focus on market need like Toyota. Thus, the company will complete with them in order to gain more customers and profits.

2. Increasing raw material prices. The raw metals are the main components in car manufacturing. If the price of raw material prices is rising, Toyota will meet higher costs and less profit as well. 3. Natural disasters. Toyota’s has manufacturing facilities in Japan, Thailand, China and Indonesia. These countries are often matter to natural disasters that interrupt manufacturing in the facilities and decrease Toyota’s production volumes.(7)