Situational Analysis of Toyota in Australia - Essay Example

?Situational Analysis Report about Toyota in Australia Executive Summary Toyota Motor Corporation (Toyota Australia) deals with manufacture and sale of automobiles. Toyota automobiles are widely preferred due to their great efficiency in the oil system, which makes them cheap to maintain, and more environmental friendly. Toyota Motor Corporation (Toyota Australia) is a branch of Toyota Japan, a global company that deals with manufacture and sale of vehicles. Toyota Corporation is ranked as the largest automobile manufacturer in the world. It supplies car to several automotive companies across the globe. This paper will focus on present information about the market situation, Toyota share in Australia market, target market, trends that bear on the company’s product line in future, and identify the (SWOT) strengths, weaknesses, opportunities, and threats facing the company. Introduction In Australia, the head office for Toyota Motors Corporation is located in Melbourne where all the manufacturing activities are conducted. However, the marketing and sales are done in Sydney. The Australian branch deals with manufacture of vehicles such as Camry and Aurion. However, Toyota Australia is also concerned with importing other models, which include Corolla, Toraga, Kluger, HiAce, HiLux, LandCruser, Yaris, Torago, RAV4, and Prius. Additionally, Toyota Australia is concerned with selling of other brands such as Lexus. Toyota Australia is performing considerably well. It was the best vehicle exporter in 2008 when it exported 101,668 cars. Toyota Australia markets its vehicle to more than 20 countries located in different parts of the world. Market Situation Toyota Australia leads the automobile industry in Australia in manufacture of environmentally friendly vehicles. One of the greatest successes was success of hybrid technology, which was used in Prius. Currently, Toyota Prius, the most advanced hybrid system in the world is the most selling product for Toyota Australia. After the 2008 economic crisis, has been experiencing decreased sales in vehicle sales resulting in reduction in profits. However, Toyota Australia remains the best performing Automobile manufacturer in Australia. It has a market share of about 23.7%. However, the sales are expected to grow as the global economy recovers from the recession. After the recession, the Australian dollar weakened resulting in increased prices for all imported cars (Deloitte, 2012). Toyota Australia is the largest automobile exporter in Australia and mainly exports its vehicles to Middle East, Pacific Islands, and New Zealand. However, Toyota Australia is facing grave competition in Middle East due to entry of automobile companies from China into this region. Although the market condition continues to become tougher, Toyota Australia is performing considerably well. The best performing car model include Corolla, Yaris, Corolla, and HiLux (IBM, 2011). Increase in the demand for car over the recent past has resulted in growth in market for Toyota Australia. Target market is the people working in the cities. The Toyota automobiles are affordable to people in middle and lower classes. However, Prius is quite expensive but being efficient in fuel use makes it favorable for different groups (IBM, 2011; Deloitte, 2012). Macro Environmental Situation Macro environment is the economic external market environment and the broad trends that may bear on product line (Woof, 2011). Increase in completion has obligated Toyota Australia to create more fuel-efficient cars, which emit fewer wastes hence environmentally friendly. This led to manufacture of Toyota Prius, which is considered the greenest car since it has reduced pollution and greenhouse effect. However, this model is facing competition from Honda Civic Hybrid and Ford Fusion Hybrid Car. The major competitors of Toyota Australia include Ford, GM, Mercedes, Volkswagen, BMW, and Honda (Mullins, Walker, & Harper, 2009; Silva, 2006), Politically, Australia is a democratic country. Australia is divided into 6 states and 2 territories and the legal system is based on English common law. There is no significant legal barrier, which makes Toyota operate freely in this region. However, the move by Australian Federal government to increase tax resulted in decreased sales by Toyota Australia. It has one of the best economies, which is characterized by stiff completion in the business sector (Solomon, Marshall, & Stuart, 2012). However, the economy is growing rapidly creating new opportunities for investment. The communication and information technology sector is advanced which creates room for innovations and business operations. World Bank reports show that Australia’s GDP is more than 1015 billion dollars, which counts for 1.16% of the world’s wealth. The automobile industry is one of the main contributors of economic growth in Australia. The fuel prices are quite high which makes car model such as Toyota Prius favorable due to their efficiency in fuel usage (Solomon, Marshall, & Stuart, 2012; Silva, 2006). Demographically, Australia’s population is high with an approximated growth rate of 1.19%. The population size was about 21,262,641 by 2009 with most of the population being 15-64 years. The target customers to Toyota Australia fall in persons aged between 15-64 who account for about 70% and the few aged above 65 years who account for about 13.5 5 of the population. Most people in Australia are literate but use different language the main language being English. However, other languages such as Chinese, Italian, Greek, and Arabic are used by a considerable size of the population. Major ethnic groups include Whites, Asians, and Aboriginal. Different religious group that are present in Australia include Catholic, Eastern Orthodox, Muslim, Presbyterian, reformed, and others (Silva, 2006). Australia is multicultural comprising of cultures from different regions of the world. The original inhabitants were Aboriginals and Torres Strait Islanders. Toyota Australia should adapt international Standard to cater for the diversity in culture, languages, and ethnic groups Cravens, & Nigel, 2009). Technologically, Australia is advanced. Examples of technologies related to the automobile industry include, Safety Technology, IT Based Approach, Environmental Technology, Fuel Cell Technology, Robot Technology, and Personal Mobility. Toyota Australia is already making use of these technologies. An example is in Toyota Pius, which increased the sales for Toyota Australia (Bayari, 2008). SWOT Analysis SWOT is an acronym for the strengths, Weaknesses, Opportunities and Threats that a company has. It gives an overview of the situation in a company. Toyota Motor is one of the major manufacturers of Automobiles and Australia is one of the major markets. Strengths Strong financial performance Toyota Australia is already established as the largest vehicle exporter in Australia. Its cars are environmental friendly (Deloitte, 2012). Strong brand recognition Weaknesses Fluctuations in economy in major markets Expensive prices for brands such as Toyota Prius Cultural diversity requires Toyota Australia to familiarize itself with too many cultures (Bayari, 2008). Opportunities Increase in demand for hybrid electric vehicles in Australia. Toyota Australia has built itself a good reputation in manufacture of environmentally friendly automobiles (Deloitte, 2012). Threats Frequent product recall due to various problems is a major problem for Toyota Australia. Increasing competition in the Australian automobile market with new entrants from regions such as China (Bayari, 2008) Increased fuel prices affecting the entire automobile industry (Deloitte, 2012) Conclusion Toyota Australia is a center for Toyota Motor Corporation. The center deals with manufacture of vehicles as well as importation of some brands into Australia. It manufactures several brand of Toyota vehicles, which it sell within Australia and other regions of the world. Currently, Toyota Australia is the largest car dealer in Australia. It makes use of technology to manufacture environmentally friendly vehicles such as Toyota Prius, which have enabled it gain wide acceptance in Australia. The major challenge facing Toyota Australia is the increasing completion in the automotive industry. However, Toyota cars are efficient in fuel usage, which makes them preferable to many people (Bayari, 2008; Silva, 2006). References Bayari, C. (2008). Japanese auto manufacturers in the Australian market and the government industry assistance spending. The Otemon Journal of Australian Studies, vol. 34, pp. 87?107. Cravens, W. and Nigel F. (2009), Strategic Marketing, 9th Edition, and New York: The McGraw- Hill Companies, Inc. Deloitte. (2012). Deloitte Motor Industry Services: Australian Industry Overview 2012. New York: Deloitre Motor Industry Services. IBM. (2011). Toyota Australia is on track to save a projected AUD$7 million over 4 years. Retrieved from Toyota: http://www-03.ibm.com/systems/au/resources/systems_ap_Toyota_Testimonial.pdf Mullins, J., Walker, O., & Harper B. (2009), Marketing Management: A Strategic Decision-Making Approach, 7th Edition, Australia and New Zealand: McGraw Hill, Silva, L. (2006). Direct Investment and Japanese Subsidiaries in Australia. The Otemon Journal of Australian Studies, vol. 32, pp. 93?110. Solomon, M., Marshall, G., & Stuart, E. (2012). Marketing: Real People Real Choices (7th Ed), Upper Saddle River, New Jersey: Pearson Education Inc. Woof, M. (2011). The Marketing Plan Handbook, (4th Ed), Upper Saddle River, New Jersey: Pearson Education Inc. Read More