5 Forces Analysis Of Toyota

1687 Words7 Pages
First of all, let’s analyze the threat of the entry of new competitors. The threat of the entry of new competitors is moderate, that depend on 5 reasons. The first reason is that to join the mini car industry should have a cutting-edge technology. The EU Regulations obliged Carmakers to improve reduction of carbon dioxide (C02) emissions to 140 grams per kilometer by the year 2008, at that point, Toyota has a high-tech Production System that could make him easily eliminate the market barrier entrance. The second reason is due to the hug capital. As I have said above, to have a cutting edge technology needs a huge amounts of money to build the lab and to set up a new production lines and that make those small companies cannot easily enter this market. The third point is access to distribution. As far as we know, Toyota has a 50/50 joint venture with PSA, so they sell the mini cars in the Toyota/Peugeot/Citroën distribution channels and that hug distribution channels make the other car manufacture hard to compete with them. The forth thing is the industry profitability. According to the value chain system in the automotive industry, the value added related to distribution and marketing is about 31%. It is enough high to attack the manufacture to enter the market. The last point is that a strong competitive pressure. The number of global car manufacturers not already involved in the segment is high. As is known to all, there are 12 companies share the majority of the car market. Still some of them haven’t entered the minicar market, not to mention there are hundreds of other car makers in the world. Toyota is the only Asian player in the market to date. Other global manufacturers already possess many of the resources, competencies and competitive capabilities that are needed to enter the market and successfully compete for a share. So, to
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