Toyota New Zealand - Case Study Example

Toyota New Zealand Toyota Company is the leading automotive company in the world. Since its inception, the company has recorded immense growth and development in different markets, an aspect that has played a significant role in enabling the company to retain its competitive advantage in the market. One of the company’s best subsidiaries is in New Zealand (Liker, 2011). Although it has faced several challenges over the years, it has been able to navigate through the tough times to emerge the best car dealer in the country. In order to get an in-depth knowledge concerning Toyota New Zealand, this paper will analyze the company’s position in the market using situation analysis models. Situational Analysis Goal: The Company’s mission in New Zealand is to deliver outstanding automobile products and services to the local population and enrich the community, partners, and environment. This goal has been significant in ensuring that the company remains focused even in turbulent times. Therefore, even after the entry of the competitors in the market, the company remain true to its goal, an aspect that attracted customer loyalty towards the products and services that are provided by the firm. Strategies: The Company’s main strategy in New Zealand is to drive significant change across the business and to ensure a sustainable growth in the country. This is through providing high quality products that meet the tastes and preferences of the target market without compromising other important aspects such as environment. The company has so far been able to achieve this strategy through participating in corporate social responsibility. Environmental Analysis Economic analysis New Zealand has one of the stable economies in the world. However, the country was affected by the global economic crisis. This increased the inflation rate, thereby affecting the consumption behaviour of the customers. This had an impact on the overall performance of Toyota New Zealand but the strong financial position of the company enabled this subsidiary to overcome these tough times. This is because the company has diversified its operations to different markets across the world, an aspect that reduces the risks and uncertainties associated with concentrating on a single market. Although the economy is stable, New Zealand exchange rate keeps on fluctuating. This has a major impact on Toyota New Zealand especially due to the fact that it outsources some of the car parts from different parts of the world (Liker & Meier, 2006). The exchange rate affects the overall costs of the products and services. This has a major impact on the consumption behaviour of the customers. Social-Cultural Analysis Young population makes the largest market segment in New Zealand. These are people with a disposable income who are willing to purchase high quality products and services in the market. However, the local population is very sensitive on environmental issues. This has been having a major impact on their perception towards Toyota Company. This is because they feel that the company is not doing enough to reduce the level of pollution in the market. In addition, New Zealand population has a culture of wanting to associate themselves with products and services that have been produced locally. Although this company is located in the country, they feel that the brand attributes are not specifically designed for the local customers. This has had a major impact on the position of the company in the New Zealand market. Technological Analysis Toyota Company has been in the forefront when it comes to investing in the modern technology. With the increasing levels of globalization, the level of competition in the New Zealand market has increased tremendously. This results from the entry of multinational companies such as Ford Motor Company and Honda Motor Co. LTD. These are companies that have diversified their products and services in different markets across the world, an aspect that enables them to produce at very low costs. Therefore, they use the price strategy to drive Toyota products and services out of market. However, in the past five years, the company has invested in the modern technology in order to reduce the costs of operations and enhance the level of efficiency. This has played a significant role in enabling the company to regain its lost market segment. Political Opportunities and Threats The 1998 decision by New Zealand government to remove tariffs had a major impact on Toyota New Zealand. Through abolishing the existing tariffs on imported cars, the company had to shift from assembling the cars locally to importing fully built cars. In addition, in the past few years, the New Zealand government has been threatening that it might increase the taxes on imported cars. This might have a major impact on Toyota New Zealand. Nevertheless, the political environment has been serene. This has enabled the company to position itself strategically in the market. Industry Analysis Structure The Toyota Company has its headquarters in Japan. However, each subsidiary operates independently although they use the same business model (Williams, 2012). The top-level management of Toyota New Zealand is answerable to the headquarters. Therefore, it should champion the overall mission, vision, and objective of Toyota Inc. Evolution Over the years, Toyota New Zealand has evolved in order to reach the target market and satisfy the interests of the customers. For instance, the company has shifted from intensive use of traditional marketing strategy to the use of social media and interne in order to market its products and services. This has played an important role in reducing the budget that was earlier being directed towards marketing. Furthermore, the social media has provided the firm with an effective platform to conduct a research (Shenkar, Luo, & Chi, 2015). This has made it possible for the organization to note any changes in the consumption behaviour of the market. Competition The company is facing stiff completion from low-price brands. After the economic crisis of 2008, customers are more cautious with their spending culture. As a result, they are spending less on highly priced cars in the market. In addition, global brands such as BMW, Chevrolet, and Honda have penetrated the New Zealand market (Samson & Daft, 2011). In addition, more multinational companies such as General Motors are aiming the market in order to diversify its market. The level of competition is having a major impact on the overall performance of Toyota New Zealand. Competitive Analysis and Positioning Toyota is one of the oldest auto dealer companies in New Zealand. Therefore, the company was able to accumulate a huge amount of money which it has been using to create a barrier of entry to other investors. However, international companies have been able to break this barrier through intensive advertising and giving offers to the customers. This has threatened the position of Toyota in the market. Toyota New Zealand has been hit immensely by the quality and recall issues. Over the past few years, the company has recalled some models because they do not meet the required quality standards (Daft, 2011). This has affected the perception of the people towards the company’s products. In addition, the competitors have used these weaknesses as a strategy to overcome the company in the market. Company Analysis Toyota New Zealand is headed by Alistair Davis. The company is divided into different departments depending on the products or services being handled. The departments include; new vehicles, product and marketing, used vehicles, corporate resources and customer services. This structure enables the organization to handle products and services more effectively (Samson & Singh, 2008). This has played a significant role in enhancing the level of specialization among the subordinates Resources Toyota New Zealand accrues its resources from sales of cars and servicing of cars. However, in case it is facing a serious financial situation mainly emanating from intense competition, it may receive some funding from the Toyota headquarters in Japan in order to improve its market position. Processes The major processes in Toyota New Zealand involve marketing. The company receives already complete units. As a result, its main role is to ensure that the customers are aware of the existence of the product in the market. In addition, the firm provide various services. These play a significant role in diversifying the source of income. Staffing Staffing is done internally. The CEO oversees the hiring and firing of the employees. However, he is supported by the human resource department which is responsible for promotion and demotion of the employees. This department is also responsible for all issues related to the welfare of the subordinates in the firm. Strengths and Weaknesses Strengths The company has a strong financial base Toyota is a strong brand. This makes it easy for the company to segment the market The company has an experienced workforce. Majority of the employees have worked in other subsidiaries across the world. The company has a strong reputation in the market especially after investing in green cars Toyota New Zealand has an innovative culture Weaknesses Large number of recalls The company has a weak presence in New Zealand market, i.e. it has not been able to exploit the market effectively. References Daft, R. L. (2011). Understanding management. Mason, OH: South-Western Cengage Learning. Liker. (2011). The Toyota Way: Management Principles and Fieldbook. McGraw-Hill. Liker, J. K., & Meier, D. (2006). The Toyota way fieldbook: A practical guide for implementing Toyota's 4Ps. New York: McGraw-Hill. Samson, D., & Daft, R. L. (2011). Management. South Melbourne, Vic: Cengage Learning. Samson, D., & Singh, P. (2008). Operations management: An integrated approach. Cambridge: Cambridge University Press. Shenkar, O., Luo, Y., & Chi, T. (2015). International business. Williams, C. (2012). Effective management: A multimedia approach. Mason, OH: South-Western/Cengage Learning. Read More