INTERNATIONAL STRATEGY- TOYOTA

International Strategy- Toyota

International Strategy- Toyota

Strengths of Toyota

Strong Market Position and Brand Recognition

Toyota has a strong market position in different geographies in the world. The company's market share for Toyota and Lexus brands, (excluding minivehicles) in Japan was 47.3% in FY2011. Similarly, Toyota has a market share of 14.3% in North America, 13.7% market share in Asia (excluding Japan and China), and 4.4% market share in Europe. In addition, the company holds a 7% share of the Chinese market and a significant market share in South and Central America, Oceania, Africa and the Middle East regions (Jeffrey, 2011). Such strong market position would allow the company to gain competitive advantage and also expand into international markets. In addition, Toyota holds a portfolio of strong brands in the automotive industry.

Strong focus on R&D

Toyota has a strong focus on research and development (R&D) to expand its product portfolio and to improve the functionality, quality, safety and environmental compatibility of its products. Strong focus on R&D has helped the company in incorporating newer features to its existing range of products and also in bringing out latest technologies in the varied areas. For instance, in June 2011, the company developed a charger for electric vehicles and plug-in hybrid vehicles (PHVs). In the same month, Toyota developed a deodorizer specifically for use on composting swine manure. The company's strong focus on R&D allows it to uphold the technological leadership in most of its product segments. It has also enabled Toyota to develop innovative products, leading to strong sales (Cusumano, 2009).

Extensive Production and Distribution Network

In FY2011, this network consisted of 283 dealers, including 49 Toyota dealers, 52 Toyopet dealers, 74 Corolla dealers, and 108 Netz dealers. These dealers operate approximately 4,800 sales and service outlets. Toyota also operates 165 Lexus sales outlets in Japan (Yasuhiro, 2008). Outside Japan, the company's vehicles are marketed through approximately 180 distributors in approximately 170 countries and regions.Toyota network comprises 55 distributors in Africa, 42 distributors in Central and South America, 30 distributors in Europe, 16 distributors in Oceania, 14 distributors in Middle East, 12 distributors in Asia (excluding China), five distributors in North America, and four distributors in China.

Increasing Profits and Margins

Toyota has witnessed an increase in its profits and margins in the last few years. The company recorded an operating profit of JPY468,279 million (approximately $5,759.8 million) compared to an operating profit of JPY147,516 million (approximately $1,814.4 million) in FY2010 and an operating loss of JPY461,011 million (approximately $5,670.4 million) in FY2009. The increase in operating profit of Toyota in FY2011 was favorably impacted by JPY300 billion (approximately $3.7 billion) increase in the overall vehicle unit sales and changes in sales mix and other operational factors, JPY54.4 billion (approximately $669.1 million) increase in parts sales, JPY32.6 billion (approximately $401 million) impact of cost reduction efforts, financial services operations, and others (Jeffrey, 2011).

Product recalls could hurt the company's brand image and sales

Toyota conducted safety recalls recently that cover some of its most popular ...