Toyota Case Study Essay

965 Words 4 Pages
Question 1
Answer: In January 2004, Toyota became the 2nd largest automobile company after GM by selling 6.78 million vehicles replacing Ford.
Ford started to encounter various problems like high labor cost, lack of innovation and designs. They were also affected by the weak economy which made them vulnerable to competition in the automobile sector.
It entered the automobile market in 1935 and targeted the truck and bus segment during the Second World War. Eventually, in 1947 they launched SA Model but faced several financial problems. They also expanded its business in US market and Saudi Arabia.
There are various determinants that helped Toyota achieve the leadership position in Japan:
Firstly, Toyota focused on dealer network strategy. In
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Lastly, Toyota was constantly innovative. Their technologies were aimed at creating environment- friendly vehicles which gave them an edge over its competitors.
While they were using aggressive strategy to gain the market share they encountered few difficulties in achieving those:
• It was having competition from companies like Honda and BMW. They were catering the youth segment with a much more better product than Toyota and it was said that Toyota cars lacked attitude when compared to Honda or BMW cars.
• In its global market different demand was seen by Toyota according to the age demographic.
• There were other reasons like excessive capacity, intense competition, various demand by customer etc.
In order to combat these difficulties Toyota took various measures:
Firstly, Toyota restructured and established a new company, Virtual Venture in order to create and sell cars targeted to youth. It adopted strategies to improve Toyota brand image among the youth. It allowed people to create their own car design to increase participation among
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In terms of localization, they aimed to set up new plants in the region and also increase their existing plants capacity. Under this plan, Toyota increased their TMMK capacity from 400,000 units to 500,000 units. It also set up new plants in Europe. It also made progress in optimizing their global purchasing behavior.
Secondly, Toyota came up with another long-term globalization strategy i.e. global vision 2005. It wanted to gain an edge over its competitor via using technology and sustain their market leadership in Japan. It focused more on producing the vehicle to where it sold. This strategy was adopted to avoid the economic fluctuation problem. They also focused on more R&D to develop new products to meet their customer needs. For example, in order to appeal the European market, Toyota released Prius which was positively accepted.
Lastly, the third strategy was 2010 global vision which aroused from the previous strategy. It aimed to achieve fifteen percent market share by early 2010. The aim of this vision was innovation in the future. This vision had four

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