Introduction
The international company of Japanese origin is known for its high-quality vehicles. The Japanese believe that nothing is so good that it cannot be improved hence they strive towards quality each day. The continuous improved on the already good vehicles is what makes them secure a top position in the global markets. As per a study that was done in 2016, the company is the largest automotive manufacturer and is significantly associated with adoption of hybrid vehicles across the globe. The firm has generic and intensive growth strategies that enable them to reach the current market positions (Liker & Franz, 2013). These strategies focus on the company's approach to the automotive industry. The continued improvement and innovative measures implemented by the company is a reflection of how effective their policies are and their ability to fulfill them.
Toyota’s Generic Strategy (Porter’s Model)
According to Porter's generic strategy, there are three main areas that companies should focus on when aiming at reaching the global markets. These are differentiation, cost leadership, and focus. The three steps require full internal focus, outward-facing, and highly creative approach. It is important to analyze both the weaknesses and strengths of each strategy to be sure of the best depending on the type of company being addressed. The TMC strategy combines both the leadership and differentiation models as per the porter's description on the two. The differentiation focuses on producing unique products that will compete effectively in both the domestic and international markets. In line with differentiation, the company focuses on making small amendments to the products they have rather than making big changes. An example of change is the shift of vehicles from electric and hybrid to fuel cell technology (Liker & Franz, 2013). There is also the implementation of automated driving to ensure safety on roads. In cost leadership, TMC focuses on market-based pricing and manufacturing on time. The benefits associated with these two steps is the ability to compare their product with those of other competitors and the ability to minimize waste in production. Other advantages include minimized inventory cost and response time.
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Figure1: Toyota’s best provider strategy for its Lexus line – generic competitive strategy (M urray, 2015).
As a result of effective implementation of their strategy, Toyota has something for everyone at any time of need. They have models for those living in remote areas where weather conditions are severe like the four-wheel drive trucks, environment-friendly drives, leisure cars as well as the standard drives. They are also known for their superior designs and quality as well as favorable prices (Murray, 2015).
Toyota’s Intensive Strategies (Intensive Growth Strategies)
It consists of three main areas that are most important in market development. Since entry into the main markets in the world, TMC has developed a diverse business portfolio with its brands that are known globally. The sectors covered in this are:
Figure 2 : intensive growth strategies: Toyota Corporation (Hugos, 2016).
Market penetration- they aim to reach the top and new markets by attracting more and more customers. This is done through the production of enticing high-quality brands such as the Lexus and sedans. Every market segment is covered with a variety of products being made available depending on the different customer preferences. Their market share rates as:
European countries- rated second global car manufacturer
U.S market- rated first
Australian market- rated first
Other markets – rated first in majority countries
In line with market penetration, the associated product strategy of Toyota is based on high quality, developing new innovative technologies, focusing on further research and creativity. Their slogan when reaching the new markets is "Think global, act locally."
Product development- this is viewed as a second intensive strategy where the development of new products is used as an attractive measure. The new products are associated with high technological innovative features and improved performances. An example is the development of the Toyota Prius which is eco-friendly. The brand attracts all the users who work towards environmental safety. It is also recommended by countries that have ecological degradation crisis. Additionally, the company also operates on improving their old brands to something better (Liker & Franz, 2013). In majority market coverage, the company is known for product development in line with their uniqueness or advanced features.
Market development- This is all about supporting their global presence. Market development is all about improving the current already acquired zones and also penetrating to new ones. Selling to new market segments enhances the company's appearance around the world with huge profits being realized. Most users appreciate and look forward to the new brands that the company is manufacturing every day because their drive is quality. The current market positioning of TMC in most countries is associated with the implementation of the market development strategy (Hugos, 2016). Additional steps in the market acquisition are offering of employee education and clear mission statement. A combination of the generic and growth strategies increases the company’s global market presence.
Conclusion
The Toyota company is one of the known organization in automobile manufacturing. Their growth and great market share are associated with the full implementation of their business strategies. Having started in early 1930, the company has severally been ranked as a top manufacturer globally. The Ford and General Motors are some of the leading competitors. Their logo and branding are what distinguishes them from these competitors in the worldwide marketing campaigns. Deployment of strategic business models and plans is so beneficial to an organization. The ability to work on these strategies is what brings expansion.
References
Hugos, M. (2016). Business agility: sustainable prosperity in a relentlessly competitive world . Hoboken, N.J: Wiley.
Liker, J. K., & Franz, J. K. (2013). The Toyota way to continuous improvement: Linking strategy and operational excellence to achieve superior performance . New York: McGraw-Hill.
Murray, A. I. (2015). A contingency view of Porter's “generic strategies”. Academy of management review , 13 (3), 390-400.
