Toyota in the UAE
The United Arab Emirates, due to their prosperity and financial stability, form one of the most lucrative markets for cars in the entire region. From the position of the Porter’s five forces, the situation on the market is the following (Mind Tools):
Threat of new entrants. While all major upper-end car manufacturers, including Toyota, are already well represented in the UAE, the risk of the appearance of new international brands on the market is negligible. The competition may arise between manufacturers in case if new models are introduced.
Threat of substitute products and services. Given the fact that the system of public transportation cannot, as of now, cover the entire territory of the emirates, substitute services are highly unlikely to replace traditional vehicles. Present Toyota models, on the other hand, are not critically distinct from the competitors, therefore the substitute products are not unlikely to appear.
Bargaining power of suppliers. If it was possible for the suppliers to act unanimously on the market, their bargaining power might be considerable, however they are acting independently at the present moment, making themselves replaceable, which decreased their bargaining power.
Intensity of competitive rivalry. The main rivalry in the UAE is not between particular brands, but rather between particular distributors (Al-Futtaim). From this point of view, Toyota is not being considerably discriminated on the market, but is not greatly advantaged, either.
Bargaining power of buyers. The price sensitivity of buyers in the UAE is somewhat lower than in other countries of the region. Toyota is offering a wide range of SUV and crossover vehicles that form a trendy pool of models, which is quite popular in the country. While the bargaining power of generally affluent buyers in the UAE is strong, they happen to be benevolent to Toyota as a manufacturer and as a brand.
References
Porter’s five forces: Assessing the balance of power in a business situation. Mind Tools, 2016. Web. Retrieved from: https://www.mindtools.com/pages/article/newTMC_08.htm
Al-Futtaim automall. Web. Retrieved from: http://www.automalluae.com/store/ en/automall
