Toyota's Strategy and Initiatives

What is competition like in the mini-car segment of the European
automobile industry? What do we learn about the nature and strength of
the competitive pressures Toyota Motor Europe (TME) faces from doing a
five-forces analysis?
Competitive Rivalry – Major European competitors include VW, BMW, Ford, Fiat, and
PSA (the holding company that owns the Citroen and Peugeot brands). Toyota
enjoys a very loyal customer base. The company has consistent, high-ranking
quality marks.
New Entrants – The mini-car segment is undergoing renewed growth due to global
economic factors. To sustain market position in a slow growth market, many brands
have tried or will try to enter this segment. New entrants to this segment have
tried various strategies without much success.
Buyer Power – The European mini-car segment represents low buyer power. That is,
the switching costs are high while the average length of ownership is long. Also,
reputation and services/features are important to buyers, which further weaken
buyer power.
Substitute Products – Toyota is a leader in hybrid technology, environmental
initiatives, and quality. These facts coupled with the narrow selection of
substitutes, decreases the competitive pressures associated with substitute
products.
Supplier Power – Because Toyota is one of the few firms that produces mini-cars in
the target price range (10,000) with suitable features, it enjoys relatively strong
supplier power.
The competitive outlook for Toyota in the mini-car segment of Europe remains good.
While competition is strong, Toyota has key competencies that allow the company
to succeed in this environment.

Is competition in the mini-car segment of the European automobile
industry best described as global or multi-country? Why? Which type of
international strategy is TME using in its international operations?
Competition in the mini-car segment of the European auto industry is best
described as multi-country because:
•
Buyers... [continues]

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