3.Assets & Resources
3.1 VRIO FRAMEWORK
VRIO stands for Value, Rare, Imitability and organization of a company.
Yes, Toyota has a lot of experience in designing, manufacturing etc. It has used its resources to enter many different segments. It has been able to keep its production costs low as well as increase the product quality.
Yes, Just-in-time production is used by a lot of companies but the way Toyota uses it is very rare. It's always looking forward to increase efficiency and lowering costs.
Many companies have tried to recreate the system but are unable to do so. Organizations like GM, Ford and Chrysler have tried to develop production systems like that of Toyota. It is not easy to imitate Toyota as its very difficult and costly.
Toyota has been using this system since the 1960's and is manufacturing vehicles and making improvements on the process. It has gained a large market share, increased its revenues. It has positioned itself for sustained future success.
Market Segmentation refers to dividing prospective buyers into groups or segments with common needs and on the basis of response to a marketing action (Staff, I., 2014).
1. WORLD REGION
Toyota has divided the market into the following regions
- North America
For customers of:
- Urban Areas
- Suburban Areas
Toyota mainly focuses on people of the age group of 18 and above. Its main markets are people of Upper high-income group and middle-income group who have ability and willingness to buy. For example, brands like corolla are for the mid-class people and brands like The Lexus are for the upper-class people.
Focus on higher class, upper middle class and middle class. For every type of lifestyle, be it adventurous, luxurious or formal. People with sporty attitude would settle for Toyota Altis or Fortuner and for luxury people would opt for SUVs or sedan like Camry.
During festive seasons people tend to go in for purchase because of low interest financing and discounts. Different benefits are durability, more power, fuel efficiency etc. People go for Toyota due to either executive look or sporty/ sturdy look.
Toyota works on the principle of “launching the right car for the right market”. It has launched various models for each market segment. For the ecologically conscious consumers it has launched its “hybrid” and “energy efficient and eco-friendly” models like Prius, Lexus etc.
Toyota's market can be divided into corporates, individuals, family oriented buyers. Normally, an individual buyer is in the range of 30-35 age group, likely to be married. The market can further be divided into the early buyers who tend to buy the latest products as soon as they release.
Toyota is operating worldwide and each represents a different market. In North America, it is capturing the younger market, truck owners and luxury car owners (Lexus). The largest market of Toyota is in The U.S. and second largest is in Japan. In Europe, it is focusing on customers with demands like fuel efficient, diesel engines etc. (Anon, 2016)
6. Recommendations and Conclusion
1. Toyota should focus on entering new markets and making use of the opportunities being given.
2. In already developed markets it should focus on launching new and innovative products as competition is increasing.
3. With the innovation of hybrid and eco-friendly cars Toyota can gain a larger market share.
4. It should work towards improving its organizational structure so as to reduce its weaknesses.
5. Adjusting its culture can lead to more flexibility and help in decision making and problem solving.
6. Toyota should focus of finding a solution for the threat due to the widening wealth gap.
7. Technological measures and can prove beneficial for Toyota in future.
8. Toyota has significant opportunities for growth and maintaining its stability as it was shown in the PESTEL analysis.
9. Toyota's current status has been maintained through its product quality and its focus on customer needs and therefore it should never compromise on quality.
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