Toyota Business Model Analysis

MN3345 Assignment One

In this essay I am going to be interrogating the business model of Toyota Motor Corporation. To do this I will first of all introduce and provide a background of the company. I will then delve deeper into the company to understand how the firm operates and makes it money. I will then analyse how the company is performing and where it needs to continue to improve.

Toyota Motor Corporation began in 1933 as the new automobile segment of Toyoda Automatic Loom Works. There original growth was slow; Toyota produced there first car and Truck in 1935 and there second car in 1936 (Model AA). In 1937 it became known as we now know it, Toyota Motor Co. Ltd. From 1936 to 1947 only 1,757 cars were produced. At this time Toyota was proving more successful in the production of trucks and buses. However, by 1955 Toyota had gradually increased their popularity and productivity with 8400 cars being produced. Within the space of ten years this figure significantly increased to 600,000 cars produced. Since then Toyota’s productivity has continued to soar at a rapid rate. This is shown by the fact that in fiscal year 2013 Toyota produced 8.7 million vehicles. As a result it is one of the largest automobile manufacturers in the world. According to the latest OICA data (2012), in terms of production figures, Toyota is the largest automobile manufacturer, with 10.1 million vehicles produced in the calendar year 2012.

As outlined above Toyota’s main operation is in automobile manufacturing. They do however have a financial sector (which includes automotive financing) and a non-automotive sector (including housing, biotechnology, communications etc.) as well. In this essay though, I will mainly focus on the automotive sector as it is their main area of operation. In order to maintain its product market Toyota has not focused heavily on mergers and acquisitions like its rivals GM. Toyota has instead chosen to grow more organically, using its business model and...