External Environment Analysis Of The Toyota Motor Corporation
About the Company:
Toyota Motor Corporation is a Japanese automotive manufacturer having the headquarters in Toyota, Aichi, Japan. The company started with the manufacturing of Loom (Toyota Model G Automatic Loom) in the year 1924. The car manufacturing corporation was independently set up in the year 1937. The company has come a long way since then and in the process overtaking all its competitors in volume of sales and revenue. It has the highest market capitalization in Japan and is ranked eleventh in terms of revenue in the world.
External Environment Analysis of the Automotive Industry: Porter’s Five Forces
Threat of New Entry(Weak):
•Large amount of capital required
•High retaliation possible from existing companies, if new entrants would bring innovative products and ideas to the industry
•All automotive companies have established brand image and reputation
•Products are mainly differentiated by design and engineering quality
•It is very hard to achieve economies of scalefor small companies
•Governments often protect their home markets by introducing high import taxes
Supplier power(Weak):
•Large number of suppliers
•Some suppliers are large but the most of them are pretty small
•Companies use another type of material (use one metal instead of another) but only to some extent (plastic instead of metal)
•Materials widely accessible
•Suppliers do not pose any threat of forward integration
Buyer power(Strong):
•Most of the buyers are individuals that buy one car, but
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