Analysis of Toyota (USA) Current Strategic Position
Current Competitive Strategy
Toyota is now a highly profitable automobile company with a significant presence in the global automotive market. Amid the pandemic recession, management can maintain a high level of competitiveness. Consequently, there is no reason to fear the company’s profitability and prospects in the short and long term (Andaleeb, 2016).
Currently, Toyota is exhibiting innovative ways of interacting with other entities in the automotive market. This implies that management seeks to compete fairly and openly based on trust and mutual respect (Piatek, 2022). To assess the positioning of this company in the market, particularly in the U.S., it is necessary to analyze the portrait of the target audience of this business. Analysts say that Toyota customers strive for full self-actualization in all spheres of life. Often such individuals can be considered perfectionists, whose central values include reliability and safety (Popkova and Andronova, 2022).
Customers are people in their range from Toyota’s target audience (see Appendix III). They can allocate funds rationally, not following fleeting trends; in a sense, they can be considered conservatives. Stability is one of their own fundamental values when participating in their decision-making process. On this basis, it can be assumed that Toyota, based on the characteristics of its audience, seeks to position itself as a brand that combines quality, high technology, and stability (Mokudai, 2020).
Toyota occupies a significant place in the traditional media in the U.S. It can be considered one of the leading and most successful channels of the company’s promotion. Moreover, the company is active on social media, reaching a large audience, discussing its social initiatives, and increasing consumer confidence. Despite changing circumstances and values in the world, Toyota is committed to promoting vehicles whose primary indicator is reliability, which resonates with the values of its audience (Rentizelas and Trivyza, 2020).
Analysis of the Appropriateness of the Existing Competitive Strategy
Technologically, Toyota has chosen a strategy of creating barriers to market entry for new manufacturers (Rentizelas and Trivyza, 2020). By creating an exhaustive line of models with high quality and credibility and meeting the needs of all consumer segments, the company management prevented the painless emergence of new competitors in the industry. Moreover, an essential part of the production strategy is an intelligent engagement with suppliers (Wada, 2020).
Due to the shortage of domestic raw materials, the company is striving to source the necessary materials from its own resources, making the manufacturing process of cars much cheaper. A particularly significant and strong aspect of Toyota’s competitiveness is its involvement in negotiations. Management has to ensure that the customer always receives the most complete and understandable information about the models produced and the conditions of purchase (Ferrell and Hirt, 2019). With this move, the company has secured positive prospects for profit growth over the next few years. From a medium-term perspective, the current strategy is sound since it does not depend on third-party producers and the risks of unpredictable technology advances.
The only serious obstacle that reduces this manufacturer’s competitiveness is the low development of ecological production and the almost complete absence of Toyota models on the market of electric cars (Rentizelas and Trivyza, 2020). In order to enter this trend and earn the trust of the new segment of consumers, the specialist will need to find new investments (Nolan et al., 2020). Generally, it can be argued that the company uses all means of competition that are acceptable to the existing environment. Toyota’s methods of operation are based solely on open dialogue with suppliers, partners, and other automakers.
The segment in which the activities of the Japanese brand can be considered backward and inadequate to modern realities can be considered the electric car market, in which for the last five years of active development, Toyota has yet to present attractive models. At the same time, competitors have experienced many costs in meeting environmental protection requirements and principles (Abe, 2010). Consequently, the performance of Toyota and competitors entering the electric car market could be better compared since the Japanese company only had a meaningful channel for costs and investments in recent years.
Porter’s Generic Strategy
Regarding the Porter model, it can be noted that Toyota should develop an overall cost leadership strategy. This model is the most applicable to the brand’s positioning since broad differentiation can describe its market strategies in the most precise way (Nolan et al., 2020). Nevertheless, from a cost standpoint, there are challenges for the foreseeable future (Mokudai, 2020). While Toyota previously used a well-established “Just in Time” manufacturing system with relatively low costs, this will change considerably as it enters the automotive market (Yang, 2022). It will be necessary to expand or reorganize the system so that it is possible to produce radically new parts and materials, which may require an exchange of experience with European companies.
Unsuitability of Other Strategies
Consequently, the construction of the overall strategy must consider the need to find new ways to produce ecological equipment. Other strategies according to Porter, including focus, market segments, and competitive advantage, do not apply to Toyota’s development (Mokudai, 2020). The first focus area contradicts the company’s entire focus on providing as wide a range of products as possible to different customer segments (Nolan et al., 2020). The competitive advantage of Toyota in recent years is not evident, as the cars were not sufficiently represented in the European market and could not compete equally in electric cars (Popkova and Andronova, 2022). In terms of market segments, the development strategy for this company is also not applicable.
This is because consumers within the same area may behave differently in the automotive industry, which makes such a strategy based on the stability of customer actions untenable. Thus, the main justification for the recommended strategy is the need for management to compete with electric vehicle manufacturers and thus secure a decent niche for itself in the field of environmentally friendly transportation. The sustainability of this path lies in the fact that the environmentally friendly direction has great prospects and will concentrate more and more financial volumes.
Analysis of Toyota (USA) Value Proposition
As Toyota expands, it is bringing more and more employees and customers on all continents into its orbit, facing a diversity of mentality and attitudes. This makes it harder for groups of people to hear and understand each other, and harder for the company to coordinate their work on different products for different markets (Toyota tech for European hydrogen clusters, 2020). To define how Toyota gets around the pitfalls of constant change and expansion, the managers identified three forces of integration that allow it to stay true to its mission (Mokudai, 2020). They reinforce its culture and values and create a core of stability in all transformations.
Staying true to the values of the founders. Several people have shaped Toyota’s value system for decades: Sakichi Toyoda, founder of Toyota Motor Corporation, and Tachi Ono, creator of the PCT. The company’s value system includes:
- the attitude to continuous improvement,
- respect for people and their abilities,
- teamwork,
- modesty,
- the “customer first” principle
- the importance of direct experience,
- first-hand information.
Toyota instills its values in its employees through on-the-job training, they see firsthand how these principles work in their daily lives. Each successive generation of employees hears about them from veterans (Popkova and Andronova, 2022). For all the complexity of the corporation, we believe it stays on the right track thanks to just four simple tenets. Tomorrow is better than today. Toyota owes its long-term success to its naive optimism (Mokudai, 2020). Obstacles only cheer up employees and make them want to do even better. People actually believe that tomorrow’s Toyota will be better than today’s (Khwaja and Yang, 2022). This attitude to continuous improvement, to perpetual dissatisfaction with what is, explains why employees are endlessly experimenting.
The hallmarks of Toyota managers and partners are the following:
- They are willing to listen to others and learn from them.
- They are enthusiastic about improving their work.
- They are good at teamwork.
- They are good at solving problems quickly.
- They are interested in teaching others.
- They are humble.
The canvas of value proposition can look as follows:
In working for the long term, Toyota considers customers its top priority. By developing high-quality products and services, managers make sure to identify what problems customers are trying to solve when they contact the company (Vanichinchai, 2022). Based on this, a system of relevant offerings is developed to fulfill consumers’ demands on a functional and emotional level (Urbanek, 2021).
In addition to customer orientation, the company also looks at what features make it stand out from the competition and how this can improve its service (Larue, 2023). This last component is reflected in high-quality post-sales service, providing a long-term guarantee and a program of preferential technical service (Bhattacharya, 2021). Thus, it is possible to draw a conclusion that those steps that Toyota takes within the limits of service and manufacture completely correspond to how this company positions its audience.
Recommended Value Proposition
Nevertheless, a new model can also be proposed as part of value positioning. It is believed that against a background of high reliability and quality, the losers are design and the involvement of new customer segments (Wada, 2020). For this purpose, it is important that the goal setting becomes more specific and is based on the pain of the buyers (Sam Kilimvi and Nshyira Owusu-Antwi, 2023). Moreover, a futuristic perspective, which includes entering the eco-car market, should be on this company’s value map.
Finally, an important point that should have a strong influence on the value positioning is the region of production. The U.S. market has its own unique characteristics, determining the special behavior of customers, suppliers, and staff (Piątek,2022). It is important to consider the tax policies of a particular country as well as possible subsidy programs (Larue, 2023).
Moreover, it is important for managers to monitor the country’s changing cultural background on an ongoing basis (Mokudai, 2020). For example, realizing that the share of the target audience in society is steadily changing over time, it is necessary to be flexible and change strategies to attract customers (Nolan et al., 2020). Based on the factors described above, it is possible to present the company’s values as follows:
It is important to note that the company needs to remain committed to some of its core values within the team. For example, at Toyota, employees are not afraid and even consider it their duty to express opinions that do not coincide with the manager’s opinion and to argue with their superiors (Curtis, 2022). The company wants everyone to act the way, as one imagined it would be right (Ferrell, Hirt and Ferrell, 2019).
To argue with the boss is quite acceptable; to tell them bad news is necessary, but not to pay attention to them can be forgivable. An imperative practice for Toyota is to focus on a self-learning organization, namely the ability to accumulate successful experiences and immediately disseminate them throughout the company, as well as frequent meetings of significant employees, which is very important for the growth and prosperity of the business. It makes it possible to avoid future mistakes based on the experience accumulated within the company.
One more element of the system of Toyota is the transformation of deep, based on-experience, hidden knowledge, which is kept in open accessible to all. Under President Fujio Cho, the company was concerned about recording the wise thoughts of the founders, previously passed on by word of mouth. The leaders collected sayings and stories, identified two fundamental values – in “The Toyota Way 2001” they were called the main precepts: continuous improvement (kaizen) and respect for people (Hasegawa, 2018).
It is necessary to continue to create support and structures, including the Toyota Institute and the Global Knowledge Center: one in Toyota City (Japan), the other in Torrance (Wada, 2020). These structures, like Toyota University, founded in Torrance four years before Toyota Motor Sales allows managers to spread knowledge, values and best practices throughout the organization (Hamed, 2020). It is also customary here to join some sort of informal group. Each employee participates in several committees and problem groups. This creates a multilayered system of connections.
Most businesses stop developing because they cling to processes and methodologies that proved successful in the old days. But working on the beaten track robs the organization of flexibility. For Toyota it is possible to gain the former mobility by conquering new markets and responding to the challenges of time (Tolegen, 2022).
What’s more, you need to develop a way to resolve contradictions, and Toyota has many methods for doing this (Wada, 2020). If one restructures production in terms of lean thinking, the main potential for improvement is the elimination of the huge number of operations where no added value is created. At the same time the time it takes to create added value is also reduced. In lean manufacturing, jobs are organized and operate according to a sequence of process operations. This is necessary to ensure the flow of unit products and services that go through various process operations one after the other.
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