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Toyota Business Model

Toyota is one of the leading automakers in the world, and its strong brand recognition has assured a significant share of the worldwide market. Such a global position has made it a sustainable long-term business model . Let’s take a look at the Toyota business model .

A brief history of Toyota

The history of Toyota began in the 1920s, as a loom manufacturer founded by Sakichi Toyoda . In little time, Toyoda developed and sold the patent for an automated loom and, after that, decided to enter the automobile industry. The first vehicles were made in the early 1930s, but Toyota Motor Company would be established only in 1937.

The company started by manufacturing compact cars and, later, expanded to other types, such as pickups, SUVs, trucks, and sports cars. Nowadays, Toyota is one of the largest car manufacturers in the world, with more than 10 million vehicles sold annually. The multinational company is headquartered in Japan, but it has operations in 27 countries and sells to more than 170 countries in the world.

Who Owns Toyota

Toyota is a part of Toyota Motor Corporation, which has Takeshi Uchiyamada as the Chairman and Akio Toyoda as the President. Among many subsidiaries, the company has the following divisions: Lexus, Ranz, Scion (which had its activities suspended in February 2016), and Toyota itself.

Toyota’s Mission Statement

Toyota’s mission statement is “ To attract and attain customers with high-valued products and services and the most satisfying ownership experience “.

How Toyota makes money

It is true that 90% of Toyota’s revenue comes from automotive sales, but the company also generates revenue from other operations, such as financial services, investments, and machinery.

• Toyota’s Automotive Business: Most of Toyota’s automobile sales take place in Japan and North America. Its strongest and most profitable brand is Lexus, with more than 10 million sales all over the world;
• Toyota’s Financial Services Business: Its financial services division grows faster, but it still represents only around 6% of Toyota’s business model’s revenue. It focuses on automotive sales financing, credit cards, and others, operating in 30 countries (about 90% of Toyota Motor Corporation markets);
• Toyota’s other business: Toyota holds stakes in other automotive manufacturers, such as Subaru, Isuzu, and Mazda. It also has interests in biotechnology, robotics, aerospace, etc. Lately, the company has been particularly oriented towards developing hybrid electric vehicles and related technology.

Toyota’s Business Model’s Performance

Toyota invests in development, design, production, and after-sales in order to maintain top quality. That has put the brand among the top automotive ones in terms of reliability, quality, and durability.

Speed and dependability

Toyota has managed to reorganize its production flow, by focusing on simplicity, thus increasing the speed of delivery. Now, the company has a just-in-time production system, with a controlled cost structure.

Toyota aims at building a strong foundation at all stages of the supply chain, from development to after-sales. In order to reach that, the company has built close and trustworthy relationships with most of its suppliers, by minimizing the number of suppliers, thus creating a long-term partnership and, this way, achieving cooperation, cost reduction, and quick response to fluctuations and innovations.

Wide range and cost

Toyota’s business model is not based on just one car, instead, it provides a wide range of products to the customers, since the company produces different models for different markets, in a well-established flexible production system. Besides, Toyota has managed to manufacture high-quality vehicles at reasonable prices. The company has tested and implemented several initiatives to reduce its operating costs and focused on local production capacities to meet the customers’ demands.

Toyota’s Business Model Canvas

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Toyota’s Customer Segments

Toyota’s customer segments consist of:

• General worldwide public
• Freight companies

Toyota’s Value Propositions

Regarding Toyota’s value propositions , it can be described as reliable and high-quality cars at a reasonable price.

Toyota’s Channels

Toyota’s channels consist of:

• Service Centers
• Social media

Toyota’s Customer Relationships

Toyota’s customer relationships consist of:

• Delivery time
• Personal assistance
• After-sales

Toyota’s Revenue Streams

Toyota’s revenue streams consist of:

• Sales of products (automobiles, commercial vehicles, and engines)
• Sales of spare parts
• Services of banking
• Financing, leasing
• Commissions
• Sales from non-automotive businesses

Toyota’s Key Resources

Toyota’s key resources consist of:

• Human resources
• Intellectual property

Toyota’s Key Activities

Toyota’s key activities consist of:

• Manufacturing
• Engineering
• Supply chain

Toyota’s Key Partners

Toyota’s key partners consist of:

• Manufacturers of parts and components
• Distributors

Toyota’s Cost Structure

Toyota’s cost structure can be described as lean-oriented, with low-cost operational expenses, which include:

• Manufacturing facilities and operations
• Raw materials and components
• Distribution and logistics
• Staff compensation
• Investments in technology and R&D
• Maintenance
• Marketing and advertising

Toyota’s Competitors

• Ford: Founded in 1903 by Henry Ford, Ford Motor Company is a  multinational automobile manufacturer headquartered in Michigan. With an impressive number of 4.2 million sold units in 2020, it has a revenue of around US$ 136.3 billion;
• Chevrolet: The automobile division of the manufacturer General Motors (GM) was founded in 1911, in Michigan, just like its rival Ford. Chevrolet had around 2.4 million vehicles sold worldwide in 2021;
• Nissan: It is a Japanese multinational automobile manufacturer, based in Yokohama, Japan, and accounts for an impressive number of 4.75 million sold units in 2020, with revenue of around US$ 90.8 billion;
• Honda: Another Japanese multinational automobile manufacturer, Honda is headquartered in Tokyo, Japan, and it is also responsible for designing, manufacturing, and selling motorcycles and power equipment;
• Mercedes-Benz: Headquartered in Stuttgart, Germany, Mercedes-Benz is a luxury and commercial vehicle automotive manufacturer founded in 1926. Although it competes in the luxury segment, Mercedes was has sold over 2.1 million units globally in 2020, making it the largest brand of premium vehicles in the world;
• BMW: Another German luxury and commercial vehicle automotive manufacturer, BMW is headquartered in Munich, Germany, and it is also responsible for designing, manufacturing, and selling motorcycles, which — same as its vehicles — compete in the luxury sector of the market;
• Tesla: Last but not least, Elon Musk’s automotive and clean energy company aims exclusively at electric vehicles — but not just that. It also works with battery energy storage, solar panels, solar roof tiles, and related services. As far as it concerns Toyota, Tesla sold over 930,400 vehicles in the year 2021, and over 295,300 units of Tesla’s Model 3 and Model Y were sold in the first quarter of 2022, according to Tesla itself.

Toyota’s SWOT Analysis

Below, there is a detailed swot analysis of Toyota:

Toyota’s Strengths

• Comfortable and practical: Most of Toyota’s cars are well-equipped, with a spacious trunk and yet greatly comfortable, practical, and with technological interior space;
• Fuel consumption: Toyota’s vehicles usually present very relatively efficient results in terms of fuel consumption;
• Brand reputation: Toyota’s brand is a strong one worldwide.

Toyota’s Weaknesses

• Pricing: When compared to its close competitors, some of Toyota’s vehicle models can be seen as expensive for what they provide to the buyer;
• Conservative models: Toyota’s cars are often considered kind of conservative, usually linked to middle-aged guys.

Toyota’s Opportunities

• Hybrid and electric vehicles: As sustainability rises even further each year, Toyota can keep it going with its hybrid and electric models.

Toyota’s Threats

• Electric vehicle competitors: Tesla and other companies that emphasize their value for sustainability can be a thorn in the side of Toyota in the near future.

-> Read More About Toyota’s SWOT Analysis

Toyota has always followed its “Five Main Principles” since its foundation. They have been revised and, nowadays, the company has a set of values and guidelines that actually guide all of its decisions and operations. Besides, according to its Corporate Governance Report from 2019, Toyota has been focusing on innovative technology, especially in robotics and artificial intelligence, in order to follow any tendencies and to create new mobility services. Moreover, the company has been a leader in environmentally friendly vehicle technologies and has set a goal of killing off carbon dioxide emissions from its automobiles by the year 2050.

As to the challenges Toyota may face, its biggest one should probably remain competition from many well-established brands around the world, particularly because the company competes in all classes of vehicles, all over the globe. That’s why the company is always investing in innovation and in developing new products and tools, in order to keep adapting and anticipating how the automotive industry might change, react accordingly, and avoid losses.

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Home > Corporate

Toyota Motor Corporation – Integrated Report 2023

TOYOTA CITY, Japan (Feb. 20, 2024) — The Integrated Report is intended to communicate to stakeholders Toyota’s policies and strategies for addressing management issues to achieve its vision for the future.

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Toyota’s radical 3-year plan to redefine the company.

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The LF-30 Electrified concept car points to a future with autonomous driving, wireless charging and ... [+] front door pickup.

In January 2018 at the Consumer Electronics Show, Toyota president Akio Toyoda announced that his firm would shift from being an automaker to become a mobility company. 

And to achieve this goal, Toyota joined forces with SoftBank, which focuses on AI development, to create a next-generation mobility services company called MONET Technologies Corporation boasting investment and cooperative relationships with Uber and Grab among others.

However, Toyota crowning achievement as it slowly morphs into a mobility company will be its highly ambitious Woven City complex to be built at the base of Mt Fuji. This “living laboratory” will include full time residents and researchers who will live in a fully connected ecosystem powered by hydrogen fuel cells while they test and develop technologies such as autonomous driving, robotics, personal mobility and smart homes in a real-world environment.

That all sounds supremely impressive, and it is, make no mistake. But the Toyota Group, which includes Lexus of course, is a car company, and generates its profits from making and selling cars. So while it’s busy spending hundreds of millions of dollars on Woven City, it will still focus the bulk of its energy on making next generation cars and SUVs. And according to Toyota the four main strategies for the next three years are as follows: 1) to expand the number of SUV models; 2) advancing and improving hybrid models; 3) introduction of sports models; and 4) expansion of EV technology.

In the SUV genre, over the next year, Toyota Group will introduce a new Land Cruiser 300, the Corolla Cross, a new Lexus NX, Then, in 2022, the group will launch a new Land Cruiser Prado and a new super luxurious Lexus SUV.

Slated for a September 2021 debut, The Land Cruiser 300 will employ a Toyota New Global Architecture (TNGA) platform and a newly developed 3.5-liter V6 turbo and a 3.3-liter diesel turbo. A planned 3.5-liter V6 hybrid has been put on the back burner until at least 2022, according to one Toyota insider.

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An all-new Lexus NX crossover is expected to land in showrooms in October 2021 featuring slightly larger dimensions and the same TNGA platform as the RAV-4 and Lexus RX. The NX will offer a choice of either a new 2.5-liter hybrid or a 2.4-liter gasoline turbo.A plug-in hybrid version will come out a year later.

In terms of its second hybrid strategy, this phraseology actually refers to six powertrains—gasoline, diesel, hybrid, plug-in hybrid, electric vehicles and hydrogen-powered electric vehicles. From what we’re hearing out of Toyota though, the most effective way to reduce CO2 emissions is not to hybridize everything, but rather to improve the efficiency and emissions of the base gasoline and diesel engines. Toyota will also use its hybrid technology to boost the power of its high performance and racing engines that propel its World Endurance Championship entries, powerplants that have helped it win the famed Le Mans 24 hour race.

That brings us to the third strategy, that of sports cars. The firm will use its more than 24 years of hybrid knowhow—since the original Prius was launched—to build a new wave of sports cars. One example we could see as early as next spring is a next-gen hybrid-powered GT86 coupe. For 2022, we can also expect to see hybrid technology appear on the next Lexus IS F and a 660-hp LS F, a new Corolla Sports GRMN (short for Gazoo Racing Meister of Nurburgring), while in 2023, the Toyota Group is readying a GR Hyper Sports, and Supra GRMN.

While Toyota may have been late to the EV party, it will accelerate its electric efforts in the next few years starting with an EV SUV concept slated to be revealed at this year’s Tokyo Motor Show. It is also expected that Toyota will launch two EVs in the U.S. market this year and one plug-in hybrid. One of the EVs rumored to land in America by December is the C-HR EV, which is currently sold in China.

Toyota plans to sell at least 1 million EVs and fuel cell cars by 2030 with one of those cars being a production version of its radical LF-30 Electrified concept car first seen at the 2019 Tokyo Motor Show. Mirroring many of the technologies we can expect to see in future EVs and hybrids, the LF-30 employs wireless charging technology, in-wheel electric motors, self-parking and front door pickup. This is the future of mobility according to Toyota. And while most of this autonomous EV tech will probably be honed at Woven City, Toyota through its other ventures will remain a car company for the foreseeable future. There’s no doubt about that.

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Toyota’s Generic Competitive Strategy & Growth Strategies

Toyota’s generic competitive strategy supports the company’s competitive advantages and global growth. Founded in 1937, the firm is now a global force in the automobile market. This success is based on the effective implementation of Toyota’s generic competitive strategy and intensive growth strategies. This generic strategy represents the overall competitive approach that the automotive business uses to compete in the global market. On the other hand, the intensive growth strategies define the types of actions that Toyota uses to ensure business development and growth. Continuing innovation and success are an indication of the fulfillment of these strategies and Toyota’s mission statement and vision statement . The automotive company is effective in the simultaneous implementation of its generic competitive strategy and intensive growth strategies.

Toyota’s generic strategy determines the company’s overall approach to developing its competitive advantages in the global automotive industry. The intensive growth strategies are applied to ensure the company’s continued growth in markets worldwide, relating to Toyota’s marketing mix (4Ps) and associated marketing strategies and tactics.

Toyota’s Generic Competitive Strategy (Porter’s Model)

Toyota’s generic competitive strategy is a combination of the cost leadership generic strategy and the broad differentiation generic strategy. Cost leadership entails minimizing the cost of operations and maintaining competitive selling prices that add to competitive advantages and the business strengths shown in the SWOT analysis of Toyota . On the other hand, the broad differentiation generic competitive strategy requires developing business and product uniqueness to ensure the company’s competitive advantage over other automakers, such as General Motors , Tesla , Ford , and BMW . The combination of these generic strategies supports Toyota’s competitive advantages and global reach in all market segments.

A strategic goal corresponding to Toyota’s generic competitive strategy is to minimize production costs to attain cost leadership. The company does so through the just-in-time (JIT) manufacturing method, which is also known as the Toyota Production System (TPS). This method addresses the generic competitive strategy by minimizing waste, inventory cost, and response time in Toyota’s operations management . As a result, the firm achieves maximum business efficiency and competitive advantages. On the other hand, considering the opportunities, threats, and external factors noted in the PESTEL/PESTLE analysis of Toyota , innovation as a strategic goal based on these factors addresses the company’s generic competitive strategy of differentiation. Innovation leads to unique, attractive, and competitive cars for all market segments. Thus, the automotive company fulfills its generic strategy for competitive advantage.

Toyota’s Intensive Growth Strategies (Ansoff Matrix)

Market Penetration . Toyota’s main intensive growth strategy is market penetration. This intensive strategy supports business growth by reaching and attracting more customers in the company’s current automobile markets. This intensive growth strategy involves offering products for many market segments, while addressing tough competition, which is noted in the Five Forces analysis of Toyota . For example, the company has sedans, trucks, SUVs, luxury vehicles, and other product lines for every type of customer. This intensive growth strategy supports the cost leadership component of Toyota’s generic competitive strategy by enabling the company to maximize sales volume, which ensures profits despite relatively low selling prices.

Product Development . Toyota uses product development as its secondary intensive growth strategy. This intensive strategy supports the automaker’s growth by attracting customers to new products. The company uses this intensive growth strategy in the form of rapid innovation. For this purpose, Toyota’s organizational culture (corporate culture) supports innovation processes. For example, through innovative product development resulting in the Prius, this intensive growth strategy empowers the firm to attract customers concerned about the environment. This intensive growth strategy supports Toyota’s generic competitive strategy of differentiation by developing innovative products that are attractive based on uniqueness or advanced features.

Market Development . Toyota already has a global presence. As such, market development is just a supporting intensive growth strategy for the business. In this intensive strategy, Toyota grows by entering new markets or selling to new market segments. However, the company already has a presence in many segments of most automotive markets around the world. This intensive growth strategy employs Toyota’s generic competitive strategy of cost leadership for maximizing the company’s global market presence using cost-based competitive advantages.

• Liang, X., Luo, Y., Shao, X., & Shi, X. (2022). Managing complementors in innovation ecosystems: A typology for generic strategies. Industrial Management & Data Systems, 122 (9), 2072-2090.
• López, D., & Oliver, M. (2023). Integrating innovation into business strategy: Perspectives from innovation managers. Sustainability, 15 (8), 6503.
• Muzzio, M. (2023). Imagined futures of the automotive industry stemming from uncertainty. Joule, 7 (6), 1099-1100.
• Obu, O. C., & Ukpere, W. I. (2023). The effects of transactional barriers on the effectiveness of a firm’s competitive strategy. Journal of Economic Development, Environment & People, 12 (3).
• Toyota Motor Corporation – Form 20-F .
• Toyota Motor Corporation – Operations – Design, Engineering & Marketing .
• Toyota Production System .
• U.S. Department of Commerce – International Trade Administration – Automotive Industry .
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• Educators, Researchers, and Students: You are permitted to quote or paraphrase parts of this article (not the entire article) for educational or research purposes, as long as the article is properly cited and referenced together with its URL/link.

Toyota Motor North America, Inc. (TMNA)

One Toyota.

Toyota Motor North America, Inc. (TMNA), headquartered in Plano, Texas, brings together Toyota’s marketing, sales, engineering and manufacturing arms in North America on one shared, state-of-the-art campus.

6565 Headquarters Dr. Plano, TX 75024

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• 0 . Includes all dealers and suppliers.
• 1 . Data as of 1/31/23.
• 2 . Represents "Outside-Company-Time" for CY 2020.
• 3 . All data as of December 2021, except where noted.
• 4 . Toyota vehicles and components assembled using U.S. and globally sourced parts (CYE2022).
• 5 . Parts, materials and components (CY2021). Goods and Services (CY2021).
• 6 . Represents direct dealer and Toyota-dedicated supplier employees (CYE2021).
• 7 . Includes U.S. (not HI) and Puerto Rico.
• 8 . As of CYE2023.
• 9 . Includes direct, dealer and supplier employees and jobs created through their spending.
• 10 . All data as of December 31, 2021, except where noted. All figures are rounded and reported as U.S. dollars, except where noted. State and location investment figures are based on different parameters; therefore, figures may vary.
• 11 . CY 2020.
• 12 . Cumulative to Date.
• 13 . As of December 31, 2020. May represent more than one location. Canada dealer totals include Lexus and Toyota dealers.
• 14 . Represents only a selection of parts purchased.
• 15 . As of August 2023.
• 16 . Figure is projected.
• 17 . As part of the brand transition beginning in August 2016, model year 2019 Scion vehicles will be rebadged as Toyotas.
• 18 . Based on Toyota data. Includes direct employees and dealer employees.
• 19 . Shown in U.S. dollars to reflect investment from US based operations of TEMA.
• 20 . As of CYE2021.
• 21 . Including our joint venture plant in Alabama.
• 22 . 2015 Center for Automotive Research Study. Includes direct, dealer and supplier employees, and jobs created through their spending.
• 23 . Employment and Investment are reflective of the combined TMMMO and TMMTN numbers.
• 24 . Data is CYTD as of 2/6/23.
• 25 . Data is CYTD as of 1/31/23.
• 26 . As of March 1, 2022. Includes on-site suppliers.

Toyota Motor to close its factory in Russia

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additional reporting by Satoshi Sugiyama in Tokyo; editing by Kevin Liffey, Jason Neely and Jonathan Oatis

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Tech stocks drag, dollar plumbs lows on rate cut expectations

Tech stocks dragged on U.S. indexes and the dollar touched a more than one-year low against the yen on Monday as all eyes looked to a Federal Reserve meeting later this week that is expected to usher in a hotly anticipated easing cycle.

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Mar. 03, 2022

Toyota statement on Russian local manufacturing and vehicle imports

Like everyone around the world, Toyota is watching the ongoing developments in Ukraine with great concern for the safety of people of Ukraine and hopes for a safe return to peace as soon as possible.

As a company with operations in Ukraine and Russia, our priority in dealing with this crisis is to ensure the safety of all our team members, retailer staff, and supply chain partners.

We are also monitoring global developments and will make necessary decisions as required.

The business status of Toyota’s European operations is as follows:

• Toyota in Ukraine (sales and after sales operations; 37 retail locations) has stopped all activities as of 24 February.
• Toyota in Russia (sales and after sales operations; 168 retail locations; and one plant in St Petersburg manufacturing RAV4 and Camry models for the Russian market mainly): Toyota Motor Russia will stop production at its St-Petersburg plant from 4 March and has stopped imports of vehicles, until further notice, due to supply chain disruptions.
• Other manufacturing and sales operations in the rest of Europe are not impacted.

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Red Lobster exits Chapter 11 bankruptcy protection

FILE - Signage at a Red Lobster restaurant, May 20, 2024, in Lincolnwood, Ill. (AP Photo/Teresa Crawford, File)[ASSOCIATED PRESS/Teresa Crawford]

Red Lobster, known for its affordable seafood and cheddary biscuits, has exited Chapter 11 bankruptcy protection.

A U.S. bankruptcy judge approved the casual seafood chain’s reorganization plan earlier this month, which included a lender group led by asset manager Fortress Investment Group acquiring the business. The green light arrives under just four months after Red Lobster filed for bankruptcy protection as it pursued a sale, following years of mounting losses and dwindling customers while it struggled to keep up with competitors.

The Orlando, Florida-based chain, which lost $76 million in 2023, shuttered dozens of its North American restaurants over recent months — both leading up to and during the bankruptcy process. That included more than 50 locations whose equipment was put up for auction just days before the Chapter 11 petition, followed by additional closures throughout the bankruptcy process.

Red Lobster’s new CEO is Damola Adamolekun, former chief executive of P.F. Chang’s. Adamolekun was previously appointed to head RL Investor Holdings, the newly formed entity that acquired Red Lobster. He previously said that the company’s long-term investment plan included a commitment of more than $60 million in new funding.

“Red Lobster is now a stronger, more resilient company, and today is the start of a new chapter in our history,” Adamolekun said in a statement on Monday.

Red Lobster is now an independent, privately-held company with 545 restaurant locations in 44 states and four Canadian provinces.

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