2. Based on the strategic group map in Concepts & Connections 3.1, who are Toyota’s closest competitors? Between which two strategic groups is competition the strongest? Why do you think no automobile manufacturers are positioned in the upper right corner of the map? Which company/strategic group face the weakest competition from the members of other strategic groups?
Based on the strategic group map, Toyota’s closest competitors are Nissan, Chrysler, Mazda, Volkswagen, and Honda. Volkswagen and Honda are more similarly competitive with Toyota on moderate price/performance/reputation, and the Nissan group is more similar in terms of model variety. Both groups are relatively close to Toyota. Competition is the strongest among General Motors, Ford, Nissan, Chrysler, and Mazda. General Motors and Ford represent a low price/reputation with a wide variety of model offerings group while the Nissan group has a similar low price/reputation with less variety in models offered. Still, the strategies are similar and the firms are direct competitors. The upper right-hand corner focuses on a high price/performance image combined with a wide variety of model offerings. No automobile manufacturers are positioned in this area since it would be extremely difficult for a company to pursue this type of strategy due to the costs of producing a wide variety of models while sustaining high prices coupled with strong performance and a brand image cachet. A firm cannot aggressively pursue a strategy in which it offers a wide variety of models while commanding high prices and a premier reputation. In addition, if a firm were to offer a large number of models, its exclusivity and brand image may be sacrificed by such a strategy. Porsche and Ferrari operate in the highest price/performance, strongest reputation, and least number of models offered on the strategic map. While they face some competition from BMW and Mercedes, overall they encounter...
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