Toyota 5 Forces Model

400 Words2 Pages
The Five Forces Model is an extremely useful tool to analyze and understand the company Toyota and the factors involved in the car industry relating to it. Threat of New Entrants: Toyota is a not only a company that functions out of Japan. It is a universally accepted standard for cars and it operates around the world. It epitomizes the global market and is extremely experienced and knowledgeable in its field. The threat of new entrants is almost non-existent. Through research and statistics, it is almost impossible that a new company will emerge to be a new threat to Toyota and its target markets around the world. There are many entrance barriers in this industry, and Toyota has been around for years, solidifying its reputation, experience, and knowledge. Bargaining Power of New Buyers: The bargaining power of new buyers is relatively strong. Toyota has fierce competition because there are quite a few companies that have similar cars that can target similar markets. Since the huge world-wide recall that Toyota executed, it has been harder to keep the ball in Toyotas court. Bargaining Power of New Suppliers: Toyota has many suppliers in its automotive manufacturing sector. Resources like metal, raw materials, leather, plastic, computers, electronics, etc are all bought from hundreds of different suppliers and different bargaining prices. Every supplier has different leverage, but on average they have high bargaining power. Threat of Substitutes: When many consumers think about buying a Toyota, they also think about buying a Lexus, as a higher end luxury model. If Lexus was a completely different entity with its own separate owners, there would be a very high threat of people substituting Toyota for Lexus, but since Toyota owns Lexus, there is virtually no threat in the sector. Other cars like Nissan and Infinity really deal with a higher end target
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