BusinessStrategyRevision_Assessment1

Ashley Timberlake

MBA-FPX5006

Capella University -FlexPath

January 6th, 2021

Appendix.

Executive Summary……………………………………………………………3

Value chain Analysis…………………………………………………………..4,5

Pestle Analysis…………………………………………………………..,…………..5.6

Five Forces Analysis…………………………………………………………………..7

References……………………………………………………………………………8

Executive Summary.

In recent times there has been a tremendous increase in the number of companies across the world. For this reason, the managers and owners of these companies need to find ways to differentiate them in the market so that they can fit there. In the past years, these organizations have been using some of these ways, which helped them a lot. Due to advancements in technology, they have become outdated, forcing these companies to get methods that are up to date. For a company to achieve its set goals in the current world, it must perform an analysis that would help it perform its activities. In this case, a company does analysis using the value chain, pestle, and the five forces model. In this assignment, I will provide a comprehensive company description of Toyota Motor Corporation along with a thorough analysis and assessment of their business activities. The main parts will include the value chain analysis, which consists of the primary and support activities that help the company maintain its operations, meet consumer expectations, and gain a competitive advantage. The second is pestle, which helps identify the external environmental factors that might affect the company. The third is the five forces model analysis, which allows a strategic analyst to find its profitability and develop an accurate and firm strategy. The fourth part of this report provides the role of leadership in the strategic planning process, highlighting leaders' ethical responsibilities. Lastly, the report provides recommendations that may help Toyota Motors maintain productivity and attract more clients.

1. Value Chain Analysis.

Value Chain analysis is a tool used to examine the micro-economic activities of the company. Its primary objective is to point out which activities are the most treasured by the company and which need improvement to provide a competitive advantage. It consists of the primary activities and the support activities (Gereffi, 2019)where the primary activities are directly concerned with creating and delivering a product as well as adding value to the final product while the support activities are indirectly concerned hence increasing efficiency

Primary activities:

First, these activities include inbound logistics, where goods are received from the organization’s suppliers and stored. When it comes to Toyota, it obtains raw materials from third parties around the world. The company uses a Just in Time technique for handling raw material. The second is operations where manufacturing occurs. In this case, Toyota uses various systems such as Just in Time management that regulate the production procedure according to the consumer's requirements. The third is outbound logistics, manufacturing ends, and the suppliers, wholesalers, and consumers are free to get them (Myerson, 2015). The company ensures that the products get to the parties on time. Toyota sends cars directly to the dealers, or it uses containers to transport to dealers overseas

Support activities:

First, these activities include firm infrastructure where Toyota executes the management information system and other techniques used for organizing and controlling in various departments. The second is human resource management, which is an important area in an organization. Toyota considers its employees as human capital, and it uses methods such as recruitment, selection, educating, development, remuneration, and maintenance to ensure that it always has employees (María, Edward, & Wolfgang, 2016). The last is technology advancement, which is an integral part of competitive advantage. Toyota Motors introduced production technology, social media marketing, and client relationship management. Therefore, using value chain analysis, Toyota Motors can request its suppliers to improve the quality of raw materials to improve cars' production, hence minimizing the risk of defects from happening while clients use their products.

2. PESTLE Analysis.

A pestle is a tool that analyses and monitors the external environmental forces that may affect an organization's performance. This tool collaborates with other tools such as the swot model and the five forces to explain a situation and related internal and external forces (Rashain, 2017). It stands for political, economic, social, technological, environmental, and legal forces.

Political factors: Toyota is subject to the impacts of the political condition. The company has the following political macro-economic factors: political stability in most major markets, which becomes a great opportunity, free business agreements, and government support for eco-friendly goods. The company grows in that it operates in minimal political tensions, and it gets to penetrate the markets easily.

Economic Factors: through pestle analysis, an organization can identify the effects of economic situations. Toyota has economic factors, including the rapid growth of developing nations and the American economy's gradual expansion, where both are opportunities. Through this, Toyota can grow its business in the United States and developing countries.

Social factors: Toyota Motors faces social factors where pestle analyses their impact on the company. These forces include; increased interest in hybrid vehicles and electric vehicles and a widening wealth gap, a threat to the company. Through this, the company has the opportunity to satisfy its customers' high interests. However, the organization has to take into account the widening gap, which strikes a significant threat to the company as it corresponds to a decreasing middle class.

Technological factors: pestle analysis determines the influence of technologies on the company. The technological factors include; increased use of e-commerce and mobile technology, great opportunities, and cybercrime, which is a threat.

Ecological factors: the company should include environmental concerns in its strategic decision making, and through pestle, it can identify problems regarding the natural environment of business. Some of the external environment's ecological factors include; climate change and global oil reserves decline.

Legal factors: pestle analysis helps Toyota identify laws and regulations that affect the business. Some of the legal factors that are most significant include; rise in complex environmental laws and complex laws, which are great opportunities for the organization.

The macro-economic forces highlighted in this pestle analysis of Toyota create opportunities for the organization. Toyota can develop business activities and market presence to exploit market opportunities based on external economic forces. On the other hand, Toyota must address the threat depending on the widening wealth gap's external forces and the increased cases of cybercrime. Therefore, pestle analysis indicates that the company has excellent opportunities for development and stability.

3. Five Forces Analysis.

Five force analysis is a tool that helps in analyzing the level of competition within a particular company. Toyota Motors faces significant effects of external factors as shown in the five forces model. First, these forces include the bargaining power of consumers where the clients of Toyota directly affect the business operation through revenues (Alexandre & Anne, 2014). In this case, consumers can easily switch to the competitors' products if the company increases its prices. In Toyota's case, customers have high bargaining power since they have advanced knowledge regarding their purchases. The second is suppliers' bargaining power, which is insignificant because of the numerous suppliers present in different parts, and the significance of volumes for suppliers is paramount. In Toyota's case, suppliers have high bargaining powers since they work closely with the manufacturing units. The third is threats of new entrants, which is low due to high capitalization and access to distribution channels. Toyota achieves economies of scale because of its market size and operations in the global market, thus reducing benefiting the consumers through a reduction in prices. The fourth is the threat from substitute products whereby Toyota faces low threats. The last is the rivalry of existing parties where competition from existing organization is aggressive due to the many competitors in the automotive industry competing with Toyota. Toyota continues to lead in sales globally as it has the advantage of differentiated products and new product designs in the company. Therefore, through the use of the five forces analysis, Toyota motors should improve on quality so that its competitors cannot overtake them in the market.

References

Alexandre, O., & Anne, G. (2014). Managing supply chain networks : building competitive advantage in fluid and complex enviroments. Upper Saddle River, NJ : Pearson Education. Gereffi, G. (2019). Global Value Chains and Development: Redefining the Contours of 21st Century capitalism. New York: Cambridge University Press. María, C. J., Edward, C., & Wolfgang, W. (2016). New Horizons for a Data-Driven Economy : a Roadmap for Usage and Exploitation of Big Data in Europe. Cham : Springer International Publishing : Imprint : Springer, . Myerson, P. A. (2015). Supply chain and logistics management made easy : methods and applications for planning, operations, integration, control and improvement, and network design. Old Tappan, New Jersey: Pearson Education. Rashain, P. (2017). The PESTLE Analysis. Nerdynaut.