This study will focus on market analysis and its various tools, which are used by various companies around the world. Of importance is the Toyota Motor Corporation, whereby the paper will take a critical review of the corporation’s market analysis, and it will define some of the corporation’s weaknesses and also some of the corporation’s strengths.
The paper will include a literature review of the market analysis field and will use this to help identify the market analysis of Toyota Motor Company as well as highlight some of the theories that have been put forward by some of the market theorists and past researches. The paper will use both primary and secondary sources; primary sources including the corporation’s journals and publications, while the secondary sources will include other sources like books, business journals and websites.
Introduction
The Toyota Motor Corporation is a multinational motor manufacturer corporation headquartered in Japan. In modern times, it is the leading global motor manufacturer and has under its employment over three hundred and sixteen thousand people who are located in almost all regions of the world. The company manufactured its first engine, known as Type A engine, in the year 1934, and it was a department of the Toyota Industries, which was also located in Japan. It would be founded three years later by Kiichiro Toyoda, who was the son of the Toyota Industries founder, and it was a spin off from the mother company to focus entirely on the manufacture of automobiles.
The corporation has been involved in the ownership of other motor companies as well as holding some shares in other companies. The company owns and manages the motor brands known as Scion and Lexus motor companies. The company also has controlling shares in such companies as Daihatsu and Hino motors. The company also own shares, although not in a controlling capacity, to such companies as Fuji Heavy Industries, Yamaha Motors and Isuzu Motors. The company is also an umbrella of five hundred and twenty-two subsidiaries.
The headquarters of the corporation is located in Nagoya City and Toyota City, which are both located in the country’s capital, Tokyo. The company has not restricted itself in the production of motor vehicles, and this can be evidenced by the fact that the company offers financial services through one of its divisions known as the Toyota Financial Service and is also involved in the field of robotics. The Toyota Industries and its other divisions form a conglomerate known as Toyota Group. This is one of the largest conglomerates around the globe.
However, like many other corporations of its size and which has a global outreach, the corporation has been adversely affected by the 2007 – 2008 financial crisis as well as the following global economic recession. This can be evidenced by the fact that the corporation made a loss of US$4.4 billion.
Background
By all means, the Toyota Motor Corporation can be said to be one of the most successful corporations in the world, and this can be evidenced by the fact that the company has formed one of the largest conglomerates in the world. This can be attributed to various forces that play in ensuring that the company achieves its objectives. One of the factors that can be rooted in the success of this company is the fact that the company has a very well organized marketing management, and this uses the most appropriate tools in its marketing endeavours.
This can be seen as one of the pieces of evidence that the company is the leading automobile manufacturer in the world, although there are numerous other automobile multinationals in the world (Marder, 1997).
Another factor to consider is the fact that the company has one of the best organizational structures, and it has assumed a combination of various organisational structures to suit its various management needs. The most notable of its organizational structures is the network organizational structure which affords the company to operate in various regions all over the world. This has been very instrumental in ensuring that the company has a wider global outreach that ensures that it has diversified its markets. This has also been enhanced by the fact that the company has been producing numerous models which are of very high quality and which ensure that the company is very attractive to a very wide range of customers who are looking for quality cars with a stylish outlook and which are affordable (Marder, 1997).
Objectives
The objective of this paper is to analyze the market analysis of the Toyota Motor Company because it is one of the most successful companies in the world, and this can be attributed to various factors which will be analyzed by this paper. This paper will look into the market research and the sales forecasting of the company, which plays a very important role in the market analysis of any company.
Literature Review
Market Analysis of the Toyota Motor Company can be said to be a documented investigation pertaining to a market, and this investigation is used to give information to the planning department of Toyota Motor Company (Bradley, 2007). This information is mainly concerned with the decisions that pertain to such aspects as inventories, workforce expansion and contraction, expansion of the facilities, purchasing capital assets, activities pertaining to promotions amid numerous other activities that the Toyota Motor Company is involved in (Balakrishnan, 2002).
Although not all managers in the Toyota Motor Company are required to perform a market analysis, all the managers are supposed to make organizational decisions based on the market analysis, and this means that all the managers must make sure that they know how the data of the market analysis have been derived. To this effect, all the managers of this organization must ensure that they have an understanding of all the tools and mechanisms that are used in the market analysis (Christopher, 2000).
Most of the methodologies used in the market analysis of the Toyota Motor Company, as well as all the techniques pertaining to market analysis, are linked to the forecasting of the sales of the Company (Christopher, 2000). The literature behind market analysis has identified sales forecasting, marketing strategy and marketing research as the main techniques of market analysis. Every manager in the Toyota Motor Company should have knowledge concerning market analysis as well as sales forecasting (Bradley, 2007).
In the marketing analysis of the Toyota Motor Company, sales forecasting has been very important in ensuring that the corporation is successful in achieving its objectives (Bradley, 2007). Sales forecasting can be done for a number of reasons which include if the corporation is willing to invest in new ventures, introduce new vehicle models in the market and remove some vehicle models in the market (George, 1994).
When Toyota Motor Company undertakes sales forecasting, there are various decisions that are enhanced, and they include such decisions as to the number of employees in a given facility or even in the entire corporation, mixes of promotions and the investment that is dependent on the capacity of production (Bradley, 2007).
There are various sales forecasting in the Toyota Motor Company, and they can all be categorized into two broad categories, namely macro forecasting and micro forecasting (Pedro, 1999). Macro forecasting is primarily focused on the entire market, and it is involved in the determination of the existing demand in the market and the future demand in the market and by what margin the demand will fluctuate (Young, 2005).
Micro forecasting, on the other hand, is mainly concerned with the exact units of sales in a given forecast of the Toyota Motor Company. This is mainly done through the determination of the vehicles’ market in the industry and also determining the fluctuations in the future (George, 1994).
Market research is also an instrumental part in the market analysis, and this involves the Toyota Motor Company researching what type of vehicles and models people want, need and believes in (Young, 2005). It is also an important aspect to look at how people act, and after that research is done, the Toyota Motor Company is left on a better ground of marketing its vehicles (Kotler, 2007). This can be achieved by using basic research materials such as questionnaires and surveys, but the company may apply other complicated methods of researching (Bradley, 2007).
Market research is also very beneficial to a company when the company intends to invest in new products, new markets and other activities that are carried out by the corporation. Market research can also be involved in researching the labour patterns of a given region or a particular country where the Toyota Motor Company seeks to set up new factories or facilities (Young, 2005).
Findings and Analysis
As far as the market research is concerned, Toyota has proved to be one of the leading companies in its market research, and this can be attributed to various factors. One of the factors is that the company has been able to research successfully in both developed and undeveloped countries and regions, and this has played a very important role in ensuring that it has a huge market base in all regions of the world hence making it the leading automobile manufacturer in the world.
The company has also invested in the technology factor that will appeal to most people, and this has ensured that it has come up with different models of vehicles that suit most people and their lifestyles. It has also ensured that it has diversified its markets to all regions in the world, and it has assembly workshops in many countries, both developed and developing. This means that the corporation has done market research that has enabled it to be one of the leading companies in the world, as well as ensuring that it has a wide customer base on the global market (Israelsen, 1998).
On sales forecasting, the company has also proved that it is one of the best companies as far as sales forecasting is considered. This can be attributed to the fact that it has maintained a steady market, and this is disregarding the fact that there have been numerous technological changes that have brought some problems to the automobile industry with the market shifts and the people feeling that new car models are better.
To this effect, the company has kept introducing new models to the market, and this has played a very important role in ensuring that the company sales have not fallen. Many of the models have been very competitive since the company was founded. The company has also been investing heavily in ensuring that it is an industry leader in the innovation and technological incorporation of its models (Dawson, 2004).
However, the company has also been badly affected by the financial crisis, and this means that the company has not been able to utilize its risk management department fully. This can be attributed to the fact that the company did not stand up to its stature of overcoming other obstacles. This is one of the reasons why the company should improve its market analysis because the company failed in anticipating an event of such magnitude. It is important to note that there are other companies in the world that were not affected by the financial crisis.
Another important aspect which the company needs to address is the fact that it has been introducing so many models and this has left the market in a dilemma of which vehicle is the best for their needs. This has resulted in the company’s inventories being messed up with overstocked warehouses.
Conclusions and Recommendations
The company has been doing very well for the period that it has been in operation, and most of its market analysis can be said to be perfect, although there is a need for the company to ensure that it engages in a more comprehensive market analysis so as to avoid the occurrence of financial problems as well as the overflowed inventories. This can be attributed to the fact that the company should ensure that it engages in market research which will also foresee some financial problems whether local, global or within the company. The market analysis should also address the models of the car that will appeal to the market and hence ensure that the cars are sold without necessary storing them under their inventories.
References
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Bradley, N. (2007) Marketing Research: Tools and Techniques. Oxford University Press, Oxford, pp. 123-125.
Christopher, W.F. 2000. A hands-on approach to profit management. Journal of Cost Management: 10-12.
Dawson, Chester (2004). “Lexus: The Relentless Pursuit”, Singapore: John Wiley & Sons (Asia) Pte Ltd, P 45.
George J. K. & Taryn W. & John S.(1994) Forecasting and Market Analysis Techniques: A Practical Approach Westport, CT: Quorum Books, pp 156.
Israelsen, P. and J. M. Reeve. 1998. Profit reporting and analysis in complex market and manufacturing environments. Journal of Cost Management: 16-32.
Kotler, Philip and Armstrong, Gary (2007) Principles of Marketing Pearson, Prentice Hall, New Jersey.
Marder, E. (1997). The Laws of Choice—Predicting Customer Behavior The Free Press division of Simon and Schuster, pp 109 – 162.
Pedro D. (1999) “The Long Run — Toyota: The first 40 years in Australia”, South Hurst Ville: Type Forty Pty Ltd, pp 156.
Young, Charles E, (2005) The Advertising Handbook, Ideas in Flight, Seattle, WA.