Toyota and mazda enter business and capital alliance
Corporate-Level Strategies
Networks, Partnerships and Alliances
Introduction
Strategic management is a process which involves the identification, description and application of the relative strategies to achieve specific goals, better performance and attain competitive advantages (Freeman, 2010; Wheelen & Hunger, 2011). Business strategies can be successful in the situation of strong competitive level, better financial performance and leading growth of business. The current report is based on the identification of business strategies of Toyota, Australia. In this context, analysis has been carried out for different types of strategies including business level, corporate, global and networking etc. Apart from this, suitable strategy has been selected for an organization and accordingly recommendations have been provided for continuous improvement.
Growth Strategy- This strategy is based on the concept of generating more profit and sales revenue from the existing goods and products. Growth Strategy mainly refers as vertical and horizontal expansion strategy where vertical strategy contains growth by taking over the various part of operational department, for example a restaurant decides to farm its own ingredient which means it is taking over the supply chain operation which results in better quality and supply needs (Prange & Verdier, 2011). In the same context horizontal strategy refers as business expansion of existing products and service in new geographical areas or to target new audience.
Stability Strategy- According to stability strategy, to maintain the market share, company leaders retain its present strategy at corporate level and continues focus on existing products. This neither ensure profit nor loss of the business rather concentrate on increasing the overall rate of return of the business. However, it proves to be effective in increasing the profitability of the business through customer retention (Lubatkin, 2013). At this juncture, businesses like Toyota focuses on increasing the customer satisfaction by offering the discount and other related lucrative offers.
(Source: Nandakumar, Ghobadian & O'Regan, 2010)
Differentiation strategy- The main aim of the strategy is to offer the product which is different from competitive items in the form of quality, uniqueness and specially with respect to cost etc. (Aaker, 2009). As per the differentiation, organizations like Toyota emphasizes on the high-quality products, rapid innovations and creativity, high customer service to present the products differentially. For example, Rolex company is using the differentiation strategy to grab the consumer market by offering the quality watches (Kapoor watch company, 2018).
These are the strategies used to get success in the competitive environment by developing network, formation of partnerships and alliances etc.
Network strategy-Networking strategies are used to generate new connections as well as retaining the existing networks for the growth of the businesses such as Toyota. With the help of these strategies’ organizations can be effectively communicate with expertise to know about potential customers. Further, it would be beneficial to the businesses in the form of achievements of targets and to reach at the level of expected potentials. These strategies involve the focuses on relationship building, enter into unknown branches of business and generate the social creeps to expand (Jennifer, 2018).
Evaluating Current Suitable Strategy of Toyota
According to several studies, Toyota is using different types of strategies such as generic-business level strategies, growth-corporate level and networking strategies (Toyota Annual Report, 2017; Andrew Thompson, 2018). Toyota motor corporation is a global force in the automobile industry of competitive business environment and success of the organization is based on the effectiveness of the generic and growth strategies (Andrew Thompson, 2018). In this regard, growth strategies have an aim to achieve the large market share with minimum expenditure for short-term earnings (Hill, 2017). As per the several studies, growth strategies have tremendous effects on the technological innovations of the products to achieve the competitive expansion against another firms (Boxall & Purcell, 2011; Rothaermel, 2015). In this context, Toyota is ensuring the benefits and high rate of technological advancements in comparison to Maruti, Suzuki and other automobile companies (Toyota Motor Corporation, 2018).
Recommendation
On the basis of the study, it has been found that Toyota is using almost all the required strategies involving business-level, corporate, networking, partnership, alliances and global to expand the business and create innovations in production of cars. Although, it has been recommended that Toyota should stay on the business level strategies- differentiation and networking strategy to achieve higher growth and fulfill the demands of customers.
References
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Nandakumar, M. K., Ghobadian, A., & O'Regan, N. (2010). Business-level strategy and performance: The moderating effects of environment and structure. Management decision, 48(6), 907-939.
PR Newswire, (2018). Toyota and Mazda Enter Business and Capital Alliance. [Online]. Available at: <https://www.prnewswire.com/news-releases/toyota-and-mazda-enter-business-and-capital-alliance-300499722.html>. [Accessed on 26th September 2018].
Steve, H. (2018). Mazda And Toyota Form Strategic Alliance With An Eye On Electric Cars. [Online]. Available at: <https://gas2.org/2017/08/04/mazda-toyota-form-strategic-alliance-electric-cars/>. [Accessed on: 24th September 2018].
Toyota Annual Report, (2017). The Changing Business Environment and the Expansion of Mobility Value. [PDF]. Available at: <https://www.toyota-global.com/pages/contents/investors/ir_library/annual/pdf/2017/ar17_2_en.pdf>. [Accessed on: 24th September 2018].