Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo

Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo Description

Toyota is one the most successful car companies in the world. The company set the ambitious growth goal of a 15% share of the global markets by 2010 (up from 11% in 2005). For this, the European market is becoming of strategic importance. The case outlines Toyota's global strategy before focusing on the European market in particular. Sales in Europe increased by over 50% between 2000 and 2005. In the process, Toyota's European manufacturing capacities more than tripled to over 600,000 units over the same period. Although Toyota was on the growth path, the launch of the Aygo posed many challenges. The segment was very price-sensitive and production cost had to be tightly controlled. Toyota decided to enter a joint venture with PSA, the maker of Peugeot/ CitroA?n. The case shows how cost reduction was the overriding principle and explains how both companies worked together. But selling a car with 93% parts commonality also posed many challenges on the marketing side: Toyota wanted to target younger customers in order to lower the average age of customers. Toyota had no experience in this segment and hence had to go new ways. The case takes readers through the various steps Toyota took in order to promote the Aygo. Learning objectives: Toyota is a latecomer to the European minicar segment. The case analyzes how Toyota changed the business system in order to deal with the various intricacies of this segment. On the manufacturing side, Toyota entered a joint venture with Peugeot/CitroA?n and built a new plant in the Czech Republic. The cars rolling off this assembly line had a parts commonality of 93%. But the innovations did not stop at the factory gate. Toyota invested in a massive Internet presence, meeting potential customers at locations of their preference and sponsorship of concerts etc. The case is a good platform for discussing Toyota's changes to the existing business system, both upstream and downstream.

Case Description Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo

Strategic Managment Tools Used in Case Study Analysis of Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo

STEP 1. Problem Identification in Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo case study

STEP 2. External Environment Analysis - PESTEL / PEST / STEP Analysis of Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo case study

STEP 3. Industry Specific / Porter Five Forces Analysis of Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo case study

STEP 4. Evaluating Alternatives / SWOT Analysis of Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo case study

STEP 5. Porter Value Chain Analysis / VRIO / VRIN Analysis Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo case study

STEP 6. Recommendations Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo case study

STEP 7. Basis of Recommendations for Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo case study

Case Analysis of Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo

Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo is a Harvard Business (HBR) Case Study on Organizational Development , Texas Business School provides HBR case study assignment help for just $9. Texas Business School(TBS) case study solution is based on HBR Case Study Method framework, TBS expertise & global insights. Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo is designed and drafted in a manner to allow the HBR case study reader to analyze a real-world problem by putting reader into the position of the decision maker. Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo case study will help professionals, MBA, EMBA, and leaders to develop a broad and clear understanding of casecategory challenges. Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo will also provide insight into areas such as – wordlist , strategy, leadership, sales and marketing, and negotiations.

Case Study Solutions Background Work

Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo case study solution is focused on solving the strategic and operational challenges the protagonist of the case is facing. The challenges involve – evaluation of strategic options, key role of Organizational Development, leadership qualities of the protagonist, and dynamics of the external environment. The challenge in front of the protagonist, of Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo, is to not only build a competitive position of the organization but also to sustain it over a period of time.

Strategic Management Tools Used in Case Study Solution

The Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo case study solution requires the MBA, EMBA, executive, professional to have a deep understanding of various strategic management tools such as SWOT Analysis, PESTEL Analysis / PEST Analysis / STEP Analysis, Porter Five Forces Analysis, Go To Market Strategy, BCG Matrix Analysis, Porter Value Chain Analysis, Ansoff Matrix Analysis, VRIO / VRIN and Marketing Mix Analysis.

Texas Business School Approach to Organizational Development Solutions

In the Texas Business School, Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo case study solution – following strategic tools are used - SWOT Analysis, PESTEL Analysis / PEST Analysis / STEP Analysis, Porter Five Forces Analysis, Go To Market Strategy, BCG Matrix Analysis, Porter Value Chain Analysis, Ansoff Matrix Analysis, VRIO / VRIN and Marketing Mix Analysis.

We have additionally used the concept of supply chain management and leadership framework to build a comprehensive case study solution for the case – Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo

Step 1 – Problem Identification of Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo - Harvard Business School Case Study

The first step to solve HBR Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo case study solution is to identify the problem present in the case. The problem statement of the case is provided in the beginning of the case where the protagonist is contemplating various options in the face of numerous challenges that Toyota Toyota's is facing right now. Even though the problem statement is essentially – “Organizational Development” challenge but it has impacted by others factors such as communication in the organization, uncertainty in the external environment, leadership in Toyota Toyota's, style of leadership and organization structure, marketing and sales, organizational behavior, strategy, internal politics, stakeholders priorities and more.

Step 2 – External Environment Analysis

Texas Business School approach of case study analysis – Conclusion, Reasons, Evidences - provides a framework to analyze every HBR case study. It requires conducting robust external environmental analysis to decipher evidences for the reasons presented in the Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo.

The external environment analysis of Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo will ensure that we are keeping a tab on the macro-environment factors that are directly and indirectly impacting the business of the firm.

What is PESTEL Analysis? Briefly Explained

PESTEL stands for political, economic, social, technological, environmental and legal factors that impact the external environment of firm in Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo case study. PESTEL analysis of " Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo" can help us understand why the organization is performing badly, what are the factors in the external environment that are impacting the performance of the organization, and how the organization can either manage or mitigate the impact of these external factors.

How to do PESTEL / PEST / STEP Analysis? What are the components of PESTEL Analysis?

As mentioned above PESTEL Analysis has six elements – political, economic, social, technological, environmental, and legal. All the six elements are explained in context with Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo macro-environment and how it impacts the businesses of the firm.

How to do PESTEL Analysis for Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo

To do comprehensive PESTEL analysis of case study – Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo , we have researched numerous components under the six factors of PESTEL analysis.

Political Factors that Impact Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo

Political factors impact seven key decision making areas – economic environment, socio-cultural environment, rate of innovation & investment in research & development, environmental laws, legal requirements, and acceptance of new technologies.

Policy Making Impact on Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo

Government policies have significant impact on the business environment of any country. The firm in “ Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo ” needs to navigate these policy decisions to create either an edge for itself or reduce the negative impact of the policy as far as possible.

Data safety laws – The countries in which Toyota Toyota's is operating, firms are required to store customer data within the premises of the country. Toyota Toyota's needs to restructure its IT policies to accommodate these changes. In the EU countries, firms are required to make special provision for privacy issues and other laws.

Competition Regulations – Numerous countries have strong competition laws both regarding the monopoly conditions and day to day fair business practices. Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo has numerous instances where the competition regulations aspects can be scrutinized.

Import restrictions on products – Before entering the new market, Toyota Toyota's in case study Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo" should look into the import restrictions that may be present in the prospective market.

Export restrictions on products – Apart from direct product export restrictions in field of technology and agriculture, a number of countries also have capital controls. Toyota Toyota's in case study “ Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo ” should look into these export restrictions policies.

Foreign Direct Investment Policies – Government policies favors local companies over international policies, Toyota Toyota's in case study “ Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo ” should understand in minute details regarding the Foreign Direct Investment policies of the prospective market.

Taxation & Regulation Impact on Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo

Corporate Taxes – The rate of taxes is often used by governments to lure foreign direct investments or increase domestic investment in a certain sector. Corporate taxation can be divided into two categories – taxes on profits and taxes on operations. Taxes on profits number is important for companies that already have a sustainable business model, while taxes on operations is far more significant for companies that are looking to set up new plants or operations.

Tariffs – Chekout how much tariffs the firm needs to pay in the “ Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo ” case study. The level of tariffs will determine the viability of the business model that the firm is contemplating. If the tariffs are high then it will be extremely difficult to compete with the local competitors. But if the tariffs are between 5-10% then Toyota Toyota's can compete against other competitors.

Government Scheme & Subsidies Impact on Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo

Research and Development Subsidies and Policies – Governments often provide tax breaks and other incentives for companies to innovate in various sectors of priority. Managers at Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo case study have to assess whether their business can benefit from such government assistance and subsidies.

Consumer protection – Different countries have different consumer protection laws. Managers need to clarify not only the consumer protection laws in advance but also legal implications if the firm fails to meet any of them.

Political System & Stability, and its Impact on Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo

Political System and Its Implications – Different political systems have different approach to free market and entrepreneurship. Managers need to assess these factors even before entering the market.

Freedom of Press is critical for fair trade and transparency. Countries where freedom of press is not prevalent there are high chances of both political and commercial corruption.

Corruption level – Toyota Toyota's needs to assess the level of corruptions both at the official level and at the market level, even before entering a new market. To tackle the menace of corruption – a firm should have a clear SOP that provides managers at each level what to do when they encounter instances of either systematic corruption or bureaucrats looking to take bribes from the firm.

Independence of judiciary – It is critical for fair business practices. If a country doesn’t have independent judiciary then there is no point entry into such a country for business.

Government attitude towards trade unions – Different political systems and government have different attitude towards trade unions and collective bargaining. The firm needs to assess – its comfort dealing with the unions and regulations regarding unions in a given market or industry. If both are on the same page then it makes sense to enter, otherwise it doesn’t.

Economic Factors that Impact Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo

Social Factors that Impact Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo

Technological Factors that Impact Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo

Environmental Factors that Impact Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo

Legal Factors that Impact Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo

Step 3 – Industry Specific Analysis

What is Porter Five Forces Analysis

PESTEL stands for political, economic, social, technological, environmental and legal factors that impact the external environment of firm in Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo case study. PESTEL analysis of " Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo" can help us understand why the organization is performing badly, what are the factors in the external environment that are impacting the performance of the organization, and how the organization can either manage or mitigate the impact of these external factors.

Step 4 – SWOT Analysis / Internal Environment Analysis

Step 5 – Porter Value Chain / VRIO / VRIN Analysis

Step 6 – Evaluating Alternatives & Recommendations

Step 7 – Basis for Recommendations

References :: Toyota's Strategy and Initiatives in Europe: The Launch of the Aygo case study solution