Introduction
In order to Toyota’s global strategy, we will employ the ‘nine strategic window to get an overview of Toyota within the auto manufacturing industry. A strategic window is a representation of a limited period during which the main requirements of a market and the best competencies of a firm best fit together (Kotler and Armstrong, 2007). The growth of global auto market has increased the number of windows as the demand for automotive increases in the global market. Toyota Corporation should use the ninth strategy, which involves strong honing of the company’s global position. The automotive industry is global as all major brands try capture markets in different parts of the globe, but fail because some prefer limiting their products to local markets. Toyota is a reliable automaker with a recognized brand and has a high brand image. This prepares Toyota for internationalization and position itself in ‘mature’.
The position of Toyota in the automotive industry and the landscape of the automotive market mean that Toyota has to think global and develop a global strategy to satisfy the needs of global customers. This paper aims to analyze the global strategy used by Toyota Motor Company and come up with recommendations. To help us do so, some marketing concepts and frameworks can help to analyze the company’s international strategy.
Toyota’s global strategy
A close analysis of Toyota’s regional websites for different countries indicates that Toyota offers different products to different regions at different prices (Iyer, et al., 2010). The company’s global strategy revolves around producing products adapted to the local demand. Toyota uses adaptation approach, with some cars similar across regions while some are only available in particular locations. For example, only four cars are similar out of twenty-four cars when comparing the company’s American and French websites. The four similar brands include the RAV4, Prius, Yaris, and Landrover. Even with the similar products, their prices vary and more adapted to different economic climate of each specific country. It is evident that the similar cars presented are cheaper in the US Toyota website when compared to the French Toyota website. In addition, most of the cars presented in the US website are Crossovers or SUVs, which consumers prefer more in the US rather than Europe where Toyota designs most cars for cities. In line with this idea, Toyota has operation in all continents including Asia, North America, Latin America, Caribbean, Europe, Africa, and Oceanic.
According to the EPRG framework, Toyota applies the region-centric approach to deliver its products globally (Kotler and Armstrong, 2007). Region-centric approach involves offering automobiles to continental regions with similar culture and economies. To this end, Toyota offers similar products to countries within Europe, and the same products to countries within North America or to countries within Asia because the economy of countries found in those regions share similarity or really near in terms of aspects such as behavior and culture. The company does not offer similar products across these regions because they would not be adapted to local demand.
According to (Hollensen, 2007), there exist three different approaches to global segmentation. Toyota has realized that different countries have a different standard and that customers from across the world display different responses to product. Toyota uses hybrid or universal segmentation. The company uses a mix of macro and microeconomic to gain a better understand its customers, deliver the expected product, and satisfy demand.
4Ps analysis of Toyota’s global strategy
Product
Toyota manufactures and sells a wide variety of cars ranging from small cards to SUVs. Toyota differentiates its products according to region bases on customer preferences and economic landscape of the each region and country. The company produces different cars for each region including Europe, Asia, North America, and Africa.
Price
Toyota uses price differentiation in pricing its products in different regions. For example, there can be a large price difference for the same make of car sold in France and the US. The Toyota Land Cruiser cost 20,000 Euros less in the US than in France. Toyota adapts its price range to economic situations and consumer expectations.
Place
Toyota has its own global automotive dealer that sells its cars around the world.
Promotion
Toyota conducts national promotions through each country’s head office. Each individual country makes its own promotional programs that correspond with the local market and better reach the local consumer.
Conclusion
Toyota has a comprehensive global strategy that has made it the global automobile manufacturer. However, the company should consider improving some of its strategies. To start with, the company should make changes to its pricing strategy. The company has huge differences in prices for similar car models sold in specific locations. These price differences between countries are not understandable, for example, the Toyota Yaris costs 3000 Euros more in Ireland as compared to Germany. In conclusion, Toyota has an impeccable strategy of adapting products to local demand, but prices adapted for different regions have differences. Toyota could consider improving making changes to its global strategy by concentrating in adapting to local demand.
References:
Hollensen, S. (2007). Global marketing: A decision oriented approach. 4th ed. Harlow: Financial Times Prentice Hall.
Iyer, A. V., Seshadri, S., & Vasher, R. (2010). Toyota Supply Chain Management. Toyota Supply Chain Management - Business Book Summaries, 1(1), 1-10.
Kotler, P. and Armstrong, G. (2007). Principles of marketing. 12th ed. Hempstead: Prentice Hall International.
