Strategy Memo for Toyota Prius

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STRATEGY MEMO
SITUATION: LAUNCH OF TOYOTA PRIUS – WORLD’S FIRST HYBRID CAR

BPSM
PGDM: 2009-11
TEAM: A9, MICHAEL PORTER

MEMBERS:
9020: KASTURAY ADITYA MANOHAR
9025: MOLKANTI PARIMAL
9036: PURNA CHANDRA SHEKAR
9076: GOKUL KRISHNAN B V
9100: ROHIT N
9103: SANTHOSH K.S.

SUBMITTED TO: Prof. GOVINDA SHARMA
DATE: 27-JULY-2010

Table of Contents
COMPANY DESCRIPTION3
Toyota: History and Growth3
Toyota Mission5
McKinsey 7S Model for Toyota6
THE ENVIRONMENT ANALYSIS OF JAPAN AND USA11
AUTOMOBILE INDUSTRY ANALYSIS15
Geography-wise Analysis15
Automotive Industry Life Cycle16
COMPETITOR ANALYSIS18
SWOT ANALSIS19
NEED FOR THE LAUCH OF PRIUS20
Competition Analysis for Prius20
Porter’s Five Force Model for Prius21
Toyota Prius: A Blue Ocean Strategy23
SKELETON FOR FINAL STRATEGIC MEMO25
REFERENCES26

COMPANY DESCRIPTION
Toyota: History and Growth
The company was founded by Kiichiro Toyoda in 1937 as a spinoff from his father's company Toyota Industries to create automobiles. Three years earlier, in 1934, while still a department of Toyota Industries, it created its first product, the Type A engine, and, in 1936, its first passenger car, the Toyota. Toyota Motor Corporation is headquartered in Toyota City, Aichi and in Tokyo. In addition to manufacturing automobiles, Toyota provides financial services through its Toyota Financial Services division and also builds robots. The Toyota Motor Company received its first Japanese Quality Control Award at the start of the 1980s and began participating in a wide variety of motorsports. By the early sixties, the US had begun placing stiff import tariffs on certain vehicles. The Chicken tax of 1964 placed a 25% tax on imported light trucks. In response to the tariff, Toyota began building plants in the U.S. by the early eighties. In 1982, the Toyota Motor Company and Toyota Motor Sales merged into one company, the Toyota Motor Corporation. Two years later, Toyota entered into a joint venture with General Motors called NUMMI, the New United Motor Manufacturing, Inc, operating an automobile-manufacturing plant in Fremont, California. Toyota then started to establish new brands at the end of the 1980s, with the launch of their luxury division Lexus in 1989. In the 1990s, Toyota added many larger and more luxurious vehicles to its lineup, including a full-sized pickup, the T100 (and later the Tundra); several lines of SUVs; a sport version of the Camry, known as the Camry Solara; and the Scion brand, a group of several affordable, yet sporty, automobiles targeted specifically to young adults. Toyota began production of the world's best-selling hybrid car, the Prius, in 1997. In 1999, Toyota set up a base in the United Kingdom, TMUK, as the company's cars had become very popular among British drivers. Bases in Indiana, Virginia and Tianjin were also set up and the company decided to list itself on the New York and London Stock Exchanges. In 2002, Toyota managed to enter a Formula One works team and establish joint ventures with French motoring companies Citroën and Peugeot a year after Toyota started producing cars in France. Toyota ranked eighth on Forbes 2000 list of the world's leading companies for the year 2005. The company was number one in global automobile sales for the first quarter of 2008. In 2007, Toyota released an update of its full size truck, the Tundra, produced in two American factories, one in Texas and one in Indiana. "Motor Trend" named the Tundra "Truck of the Year," and the 2007 Toyota Camry "Car of the Year" for 2007. It also began the construction of two new factories, one to build the RAV4 in Woodstock, Ontario, Canada and the other to build the Toyota Prius in Blue Springs, Mississippi, USA. The company has also found recent success with its smaller models—the Corolla and Yaris—as gas prices have risen rapidly in the last few years.

Toyota Mission
The Toyota Corporation Japan does not have Vision and Mission...
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