(7a): What challenge does Toyota face?
The market for automobiles is mature and the intensity of rivalry is only going to increase as the industry continues to age. Therefore to be successful in the auto industry, a company must focus on a variety of changing factors or challenges that continue to include demographic, geographic, and technological factors. Another challenge could be the furtherexpansion of its lean low cost manufacturing process. Looking at demographic factors, age is important to the car industry due to the global population being older than younger. According to the case, J.D. Power estimated that the average customer for Toyota was 44 years old, compared to 38 for Volkswagen and 41 for Honda (Hill et al., 2015). Therefore, …show more content…
Also, the company should continue to invest capital into alternative forms of cars or try making a joint venture with a firm such as Google or Apple to make the first automated car a reality. The investment in the automated market could ensure that Toyota will be able to continue to stay the largest auto company by sales and market cap. Finally, the company should look into Tesla’s direct dealer model, however this could be expensive to adopt at this stage. Reaching out, the company should look to expand to markets that are not entirely saturated by its competitors or to so-called third world countries, which are growing at faster paces than developed countries. According to charts 1 and 3, it appears that Toyota has the ability to expand its sales in Europe, which appears to be undersold compared to its other sales regions. However, the disparity between Toyota’s sales in its other regions as compared to Europe could be that the European economy is still in poor shape from the 07-08 financial crisis. In addition to geographic expansion, the company should continue to invest in the younger generation to ensure that its customer base stays younger than its competitors. A younger target market could create the potential of increasing its already elevated market share. On a final note, the company appears to have its lean production challenge under control for the time being, but will need to continue to, as mentioned, provide itself with opportunities for superior
The market for automobiles is mature and the intensity of rivalry is only going to increase as the industry continues to age. Therefore to be successful in the auto industry, a company must focus on a variety of changing factors or challenges that continue to include demographic, geographic, and technological factors. Another challenge could be the furtherexpansion of its lean low cost manufacturing process. Looking at demographic factors, age is important to the car industry due to the global population being older than younger. According to the case, J.D. Power estimated that the average customer for Toyota was 44 years old, compared to 38 for Volkswagen and 41 for Honda (Hill et al., 2015). Therefore, …show more content…
Also, the company should continue to invest capital into alternative forms of cars or try making a joint venture with a firm such as Google or Apple to make the first automated car a reality. The investment in the automated market could ensure that Toyota will be able to continue to stay the largest auto company by sales and market cap. Finally, the company should look into Tesla’s direct dealer model, however this could be expensive to adopt at this stage. Reaching out, the company should look to expand to markets that are not entirely saturated by its competitors or to so-called third world countries, which are growing at faster paces than developed countries. According to charts 1 and 3, it appears that Toyota has the ability to expand its sales in Europe, which appears to be undersold compared to its other sales regions. However, the disparity between Toyota’s sales in its other regions as compared to Europe could be that the European economy is still in poor shape from the 07-08 financial crisis. In addition to geographic expansion, the company should continue to invest in the younger generation to ensure that its customer base stays younger than its competitors. A younger target market could create the potential of increasing its already elevated market share. On a final note, the company appears to have its lean production challenge under control for the time being, but will need to continue to, as mentioned, provide itself with opportunities for superior