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Strategic Marketing January 29 2015 Strategy Development Report involving Customer Analysis, Competitor Analysis, Market Analysis, Environment Analysis Internal & Final Recommendation for Strategy Development. Toyota Innova Bhavika P. 13MBA1012 Ramya G. 13MBA1052 Karthik V. 13MBA1031 Vivian Marsh A. 13MBA1083

Toyota innova

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Page 1: Toyota innova

Strategic Marketing

January 29

2015 Strategy Development Report involving Customer Analysis, Competitor Analysis, Market Analysis, Environment Analysis – Internal & Final Recommendation for Strategy Development.

Toyota Innova

Bhavika P. – 13MBA1012

Ramya G. – 13MBA1052

Karthik V. – 13MBA1031

Vivian Marsh A. – 13MBA1083

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Introduction

Founded in 1937, Toyota Motor Corporation is a Japanese company that engages in the

design, manufacture, assembly, and sale of passenger cars, minivans, commercial vehicles,

and related parts and accessories primarily in Japan, North America, Europe, and Asia.

Current brands include Toyota, Lexus, Daihatsu and Hino. Toyota Motor Corporation is the

leading auto manufacturer and the eighth largest company in the world. As of March 31,

2013, Toyota Motor Corporation’s annual revenue was $213 billion and it employed 333,498

people.

The Toyota Innova is a compact MPV manufactured by Toyota. It is produced in Indonesia

under supervision by Toyota Astra Motor since 2004. As with Toyota Kijang, which it

replaced, the Innova is produced and first marketed in 2004 in Indonesia. The Innova is part

of Toyota's IMV program together with the Hilux Vigo pickup truck and the Fortuner SUV. Its

official name in Indonesia is Toyota Kijang Innova, while for other countries it is Innova.

The Innova is also sold in India (replacing the Toyota Qualis), Malaysia, Philippines ,

Taiwan, Vietnam, Jamaica and Thailand. Unlike some of its competitors, such as the TATA

Sumo Grande, Chevrolet Tavera, or the Mahindra Xylo, but like the newly launched Tata

Aria, the Innova looks more like a minivan. The Innova is also available in Brunei, Saudi

Arabia, South Africa, Oman and the UAE.

In India, the Innova is available with twelve variants. Three variants of the Innova come with

a petrol engine option which is powered by a 1,998 cc, 1TR-FE, gasoline, inline four-cylinder

petrol engine with electronic fuel injection. The diesel variants of the Innova are powered by

2,494 cc, 2KD-FTV Diesel with intercooler and turbocharger 4 cylinder engine. In 2012,

Toyota Bharat introduced a new grade "Z" in India which is placed above the VX grade –

making it the most expensive trim in the entire line up. The available grades are E, G, GX, VX

and Z.

Parent Company Toyota Motor Company

Category SUV

Sector Automobiles

Tagline/ Slogan All you desire

USP Luxurious, comfortable, family car

Toyota Innova

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SWOT Analysis

Strength

1. High brand awareness and market penetration

2. Wide range of available variants for the customers to choose from

3. Good penetration in Taxi and commercial segment

4. Good fuel efficiency both in city and on highways

5. It has a huge market in India, Middle East and south east Asia

Weakness

1. Limited presence in Europe and Americas, which can be good potential markets

2. Big size makes it less preferred for in city traffic

Segment SUV Segment

Target Group Urban families and businessmen

Positioning Positioned as a multi premium vehicle which provides premium style along with luxury and comfort

STP

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Opportunity

1. Expanding SUV segment to accommodation competition

2. Acquiring collaborations with automobile business entities

3. Augment distribution and servicing network

Threats

1. Intense competition in the market with international car manufacturers

2. Competition offering Innovative features at lower price

3. New entrants in the same segment with better features and lower price

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Strengths:

Strong market position and brand recognition: Toyota has a strong market position in

different geographies across the country. Such strong market position allows the company

to gain competitive advantage and also expand into international markets. In addition,

Toyota holds a portfolio of strong brands in the automotive industry. Thus, the company's

strong market position gives it significant competitive advantage and helps it to register

higher sales growth in domestic and international markets.

Strong focus on R&D: Toyota has a strong focus on R&D to expand its product portfolio

and improve the functionality, quality; safety and environmental compatibility of its

products. The company's R&D efforts are directed at developing new products and

processes and improving the capabilities of existing products. The company conducts its

R&D operations at 14 facilities worldwide. Strong focus on R&D has helped the company in

incorporating newer features to its existing range of products and also in bringing out latest

technologies in the varied areas. The company's strong focus on R&D allows it to uphold the

technological leadership in most of its product segments. It also enables Toyota to develop

innovative products, leading to strong sales.

Extensive production and distribution network: Toyota has an extensive production and

distribution network. Toyota and its affiliates produce automobiles and related parts and

components through more than 50 manufacturing companies in 27 countries and regions

besides Japan. In addition, Toyota has an extensive distribution network. While the

company’s geographically well spread production base diversifies business risks, its

extensive distribution network provides a wider reach, thus boosting revenues.

Weaknesses:

Product recalls could affect brand image: Toyota has conducted a number of product

recalls in the recent past, which could affect the brand image and overall sales of the

company. For instance, in 2011, Toyota recalled 111,000 models of Toyota and Lexus

brands’ vehicles due to the damage to elements of the substrate and potential shutdown of

the hybrid system. In addition, the company was involved in government investigations

related to product recalls. For instance, in February 2012, the National Highway Traffic

Safety Administration initiated a preliminary investigation of a potentially faulty power

window master switch in the driver-side doors in model year 2007 Camry. This could also

result in significant penalties, which could affect the operational margins.

Declining sales in key geographic segments: Toyota witnessed a decline in its sales in key

geographic segments. In FY2012, the company witnessed declining sales across Asia, other

geographic reasons, which together accounted for 60.8% of the total revenues of the

company. Thus, a continuous decline in the company's key geographic segments could put

pressure on the profit making segments and the overall revenues of Toyota.

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Poor allocation of resources as compared to peers: Toyota has low return on equity (ROE)

and return on assets (ROA) compared to its peer companies. The company's competitors

such as Honda Motor and Nissan Motor have more ROE when compared to Toyota. Honda

Motor's ROE was 4.8%, while Nissan Motor's ROE was 8% in FY2012. In contrast, Toyota's

ROE was 2.7% in FY2012. Lower ROE and ROA compared to its peers indicates that the

company is not using the shareholders' money efficiently and that it is not generating high

returns for its shareholders.

Opportunities:

Growing global automotive industry: The Indian automotive industry was severely

affected by the economic downturn, with a decline in revenues being recorded in 2008 and

2009. However, 2011 saw a strong rebound which has continued into 2012. According to

Market Line, the Indian automotive manufacturing industry grew by 8.9% in 2012.

Toyota poised to benefit from growing partnership with BMW: Toyota is poised to benefit

from the growing partnership with BMW. In June 2012, BMW and Toyota signed a

memorandum of understanding aimed at long-term strategic collaboration on technological

fields. As part of the agreement, the two companies will partner for the joint development

of a fuel cell system, joint development of architecture and components for a future sports

vehicle, collaboration on power-train electrification and joint research and development on

lightweight technologies. The growing partnership between the two companies is expected

to boost the technological know-how of the companies and may result in the development

of new products thus increasing revenues in the long run. Also, in the short run, the

combined partnership will result in significant synergies and cost-savings, boosting the

operational margins.

Strong outlook for the global new car market: The new cars market has experienced

moderate growth during 2008-2012. However, forecasts suggest this will accelerate to

strong double digit growth during the 2012-2016 periods. Thus, the strong outlook for the

new car market coupled with the company’s new product launches provides a growth

opportunity for the company.

Threats:

Intense competition: The Indian automotive market is highly competitive. Toyota faces

strong competition from automotive manufacturers in its various markets. The competition

among various auto players is likely to intensify in light of continuing globalization and

consolidation in the automotive industry. The factors impacting competition include product

quality and features, the amount of time required for innovation and development, pricing,

reliability, safety, fuel economy, customer service and financing terms. Increased

competition may lead to lower vehicle unit sales and large inventory, which may result in

downward pricing pressure, thus impacting the financial condition and results of operations

of the company.

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Industry Overview and Analysis

Toyota Motor Corporation competes in the automotive industry. The past five years were

tumultuous for automobile manufacturers. Skyrocketing fuel prices and growing

environmental concerns have shifted consumers' preferences away from fuel-guzzling

pickup trucks to smaller, more fuel-efficient cars. Some automakers embraced the change

by expanding their small-car portfolios and diversifying into the production of hybrid electric

motor vehicles. Other automakers were more reluctant to shift their focus from big to small

cars, expecting the price of fuel to contract eventually, bringing consumers back to the big-

car fold. When fuel prices did fall during the second half of 2008, it was due to the US

financial crisis ripping through the global economy. This had a domino effect throughout the

developed and emerging worlds, with many Western nations following the United States

into recession. Industry revenue fell about 15.4% in 2009. Pent-up demands will aid industry

revenue growth, estimated at 2.1% in 2013, thus bringing overall revenue to an estimated

$2.3 trillion. 3 Overall, the large declines followed by recovery are expected to lend the

industry average growth of 2.2% per year during the five years to 2013. Throughout the past

five years, growth in the BRIC countries supported production. Rising income in these

countries led to an increase in the demand for motor vehicles. Also, Western automakers

moved production facilities to BRIC countries to tap into these markets and benefit from

low-cost production. Over the next five years, the emerging economies will continue their

growth, and demand for motor vehicles in the Western world will recover. Industry revenue

is forecast to grow an annualized 2.5% to total an estimated $2.6 trillion over the five years

to 2018.

In India, the Innova is available with twelve variants. Three variants of the Innova come with

a petrol engine option which is powered by a 1,998 cc, 1TR-FE, gasoline, inline four-cylinder

petrol engine with electronic fuel injection. The diesel variants of the Innova are powered by

2,494 cc, 2KD-FTV Diesel with intercooler and turbocharger 4 cylinder engine. In 2012,

Toyota Bharat introduced a new grade "Z" in India which is placed above the VX grade –

making it the most expensive trim in the entire line up. The available grades are E, G, GX, VX

and Z.

Value proposition:

Wider range

TOYOTA INNOVA offers more models than any other make.

Lower operating costs

Running costs can double the price you can pay for a vehicle, and there are many hidden costs, which are revealed when accurate records are kept of all outgoings. TOYOTA INNOVA is dedicated to ensuring the lifetime cost of a vehicle is kept low through advanced engine technology which extends performance and efficiency across the entire range.

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Lower maintenance costs

TOYOTA INNOVA designs vehicles to be easy and fast to service and maintain. TOYOTA INNOVA Extra Care Extended Warranty cover can take the guesswork out of managing unexpected costs and provides an industry leading range of insurance, warranty and roadside assistance and products. This is designed to keep your business on the road when a breakdown occurs. High resale value TOYOTA INNOVA has a broad market acceptance and a reputation for retaining their value. The total cost of owning a vehicle isn’t known until the last transaction: disposal. If it holds value, you are that far ahead.

Quality and reliability

TOYOTA has a long-standing reputation for manufacturing excellence and for producing high quality vehicles such as INNOVA and Camry.

Fast parts supply

TOYOTA INNOVAS’ investment in parts supply systems means shorter waiting time for repairs and faster returns service. For every day you are without replacement parts, your investment lies stagnant.

Safety

Its tests are based on the toughest of both the current and anticipated, safety standards of Europe, Japan, Australia and the United States. The result is a unique benchmark of safety excellence known as Global Outstanding Assessment, GOA.

Customer analysis

Toyota Innova s primary target are building confidence for young parents. 35-45 year old

social class , married with kids are the PTM, while the growing families who wish to travel to

different destination with comfort are also target market. On evaluating with the Maslows

need theory, Toyota Innova attains the safety and self esteem status. Their main focus is on

comfort and giving options of interior and exterior.

UNMET NEEDS: Toyota Innova failed in their air bag safety provision. There have been

many deaths due to the failure of air bags for which Toyota had to give huge compensation.

The resale value of Toyota Innova is poor while compared to its competitors like Ertiga from

Maruti. All variants of Toyota Innova do not have a similar engine sound.

CUSTOMER CENTRICITY: One of the biggest advantages of Toyota Innova is their

suspension. The travel is so comfortable cause of these excellent suspension systems which

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they produce. Even aged people can have a comfortable journey as they do not feel the

tiredness of journey. Toyota Innova gives a standard mileage over a life span of the car

unlike Maruti Ertiga which gives good mileage initially and after a period of time the mileage

starts to decrease. Service check is made compulsory for every 10000 km by the service

station. The service they provide is excellent and the treatment is same throughout India,

irrespective of location. The customers feel that Toyota Innova causes lesser breakdowns

when compared to its competitor. On road tyre punctures and damages are very less, this is

cause of the wheel alignment and branded tyres that they use. Toyota Innova is better

suited for long trip. The service which is been offered after sales is extremely good in

Toyota. Toyota offers supreme after sales services were the time taken is hardly hour.

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Market Research

MARKET SHARE

Toyota Innova launched at a starting price of Rs.12.45 lakh. It has captured 33% market share of the MPV industry in the first year of its launch itself. However, Honda plans to bring globally successful MPV Freed to take on Toyota Innova in India. In recent days Innova has the fierce competition in its kind like Maruti Suzuki Ertiga, Nissan Evalia. According to IASI (India Auto Social Index), Innova faces many challenges and continued to strive for success in MUV kind.

Challenges

Toyota's rivals are ramping up capacity, and increasing the number of models in several

segments. M&M's refreshed Xylo and the new Maruti Ertiga are challenges for Innova.

Especially Mahindra xuv500 competes with the Innova. Toyota's utility vehicles could face

further pressure when M&M's South Korean acquisition, Ssangyong Motor, helps the Indian

carmaker introduce the Rexton, this year.

LEADERS

Category MUV/MPV - Toyota Innova continued to be the highest contributor to the overall

volume of mentions. It leveraged Welcome India’s No1 contest on Twitter, to promote the

newly launched Toyota Innova facelift. Nissan Evalia had high positive mentions under all

themes. Nissan Evalia’s facelift with a new front which was tested in China drove the highest

positive mentions for the car under ‘Features’. Nissan Evalia and Toyota Innova had the

highest share of positive mentions in November 2013; Chevrolet Tavera had the highest

share of negative mentions in this category

Followers

Despite several competitions Innova succeeds in owning the hearts of upper middle class family who are fond of having big family. The unique value proposition of Innova is MUV with maximum cubic capacity. It comes up with ABS and dual airbags. It provides the value for money. INNOVA is the only car provides the guarantee of five lakh kilometres and has wide boot space than any other MUV of its kind Automobiles are one of the most actively discussed and researched categories on social media. Auto manufacturers are increasingly leveraging platforms like Facebook, Twitter, YouTube, blogs and forums along with owned digital assets ahead of new product launches or as part of marketing initiatives.

WEB ANALYTICS

Web analytics is not just a tool for measuring web traffic but can be used as a tool for business and market research, and to assess and improve the effectiveness of a website. Web analytics applications can also help companies measure the results of traditional print or broadcast advertising campaigns. It helps one to estimate how changes traffic to a website after the launch of a new advertising campaign. Web analytics provides information about the number of visitors to a website and the number of page views. It helps gauge

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traffic and popularity trends which is useful for market research. Through web analytics company growth can be measured with the help of consumer’s reviews and likes.

FACEBOOK ANALYTICS:

The below graph was taken from the Facebook analytics to determine how actively Innova was followed by the people in one month.

From the above graph we can infer that Innova is followed by many people consistently over Facebook and they were actively engaged in discussion threads regarding Innova services.

TWITTER ANALYTICS:

Similarly twitter shows that 69 percent of people have Re tweeted for the Innova active tweets. It enables us to identify the market penetration of the company.

Study proves that people continously engaged in tweeting Innova updates are tend to influence other people who arent following Innova. Twitter is used as a marketing performance measuring tool in many companies . Through sentimental anlaysis twitter can give the five point scale rating for the company’s quality .

The below graph shows the total number of posts posted by the company and the re tweets. The grey colour indicates

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the posts by company and the blue bar indicates the replies.

Blog works India Auto Social

Index:

Moving away from the vanity indices, the ‘Blog works India Auto Social Index’ aims to correlate social metrics, consumer sentiment and sales data to provide marketers and brand owners with actionable insights.

Market Growth

The market growth has three phases, growth, maturity and decline. Through leader boards that IASI have create the report which help auto brands to monitor their performance vis-à-vis their competitors over a period of time. The report shows the overall rank holders in Automobile segments for the year of 2013. The following table shows that various brands been ranked according to the market share and customer reviews.

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Especially the multi utility vehicle segment Innova holds the top position in India. The following table has been recorded and given by Indian social Index.

Though Innova has a good market share in

India, it tends to decline in the sales due to

the arrival of numerous competitions in its

kind. This is because of personality of

many people who gets attracted to

newness and innovations. For the In line

with the global trend, Honda has also

started to launch vehicles in India soon

after global debut, while few models are

even being designed specifically for India.

This results Honda’s market-share in the

passenger vehicle market has more than

doubled from 3% in FY13 to 7% in April-

November 2015. It has also doubled

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output with the start of a second plant in Rajasthan in February, while a third unit in Gujarat

is also on its way.

In the same period, Toyota Kirloskar Motor, which till date relies on premium products like

the Innova, saw market share may drop from 6.2% in FY13 to 5.5% in April-November FY15,

and was struggling in the subdued market last year. A look at Toyota’s current scenario in

India tells us that it has a very limited product offering for the market and will continue to

depend majorly on the MPV segment for its growth. The Innova will, thus, continue to bear

the heavy burden, of sustaining the entire brand. However Innova strives to be succeeded in

MUV segment in order to not get declined. The above graphs and table proves that people

continue to value Innova in spite of increased cost. Thus proves that Innova is stagnant in

matured growth stage.

CORE COMPETENCIES OF INNOVA:

The core competence of Toyota Motor Corporation is its ability to produce automobiles of

great quality at best prices, thereby providing a value for money to the customers. This core

competence of quality can be attributed to its innovative production practices. The quality

aspect of Toyota’s products have revolutionized the automobiles in the past and almost all

the automobile companies had to try and better the quality of their products. It is a

cornerstone of the cost leadership strategy that the company pursues.

Anti lock braking systems

Brake assistant system

Traction control

Vehicle stability control

Lane-keeping assistants

Innovation of Innova

The form that design creativity can take for market leadership in India is well illustrated by

Toyota’s Innova. As the name suggests, it is indeed a unique vehicle even in the global

automobile industry. Despite retaining the same dimensional features as a 5 seater sedan

car, Corolla (which has dimensions of 4540, 1760 and 1480 mm in length, width and

height), Innova as a utility vehicle (4585, 1760 and 1850 mm in length, width and height) has

been engineered to accommodate 7 to 8 people with the requisite boot space as well as

seating and cargo flexibility. As a result, it meets both the urban and rural needs, as well as

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intercity and intra-city traffic and drive conditionsof India nicely. By offering, in addition,

diesel engine as a standard feature from early days of Innova’s introduction Toyota made

sure that Innova also emerged as a vehicle particularly low on driving costs. The product

profile backed by an impeccable service backup of Toyota ensured that Innova became the

choice vehicle in the UV market, with a pricing that is attractively pitched between the

home grown MPVs (like Tata Safari and M&M Bolero) and the imported MPVs such as

(Honda CRV and Mitsubishi Outlander). If smart dimensional packaging alone could deliver

such differential positioning to Toyota Innova, more fundamental innovations which are

customized to the multi-purpose India user needs could lead to additional successes (Toyota

sells around 80,000 Innovas ranking higher than any other UV in India and sharing the space

as one among the Top 10 cars in India).

Fundamentally, the ability to enhance the wheel base (for example, 2750 mm of Innova

compared to 2600 mm of Corolla Altis) while reducing the front track and enhancing the

rear track with comparable road handling and safety would be a vital benchmark of spatial

engineering. There could be other innovations too, such as a switchable all-wheel drive

option to make on-road off-road traction easy or a transverse mounted engine with front

wheel drive to further economize on dimensions. Whatever be the innovations “less is

more” needs to be the design mantra for UVs in the Indian market. It is important to

maintain a minimum seating capability of atleast 7 passengers, with adequate luggage

space, to make the UV a truly family vehicle in India, while optimizing all other performance

characteristics like ground clearance, turning radius, gradient management, cruising speed,

ride quality, road handling, vehicle and passenger safety, easy navigation, and interior

comfort. This requires companies to adopt a three tiered approach to design innovation that

optimizes exteriors, interiors and performance in one India-centric package. The Indian

automobile manufacturers would need to consider if they will be governed by current

market size and offer many “apparent variants” or a few “real options” customized for

multiple needs. The former may succeed with a “mix and match” or “cut and re-form”

approach which would be economical (as with Quanto) but would not drive the UV segment

to its full potential. In contrast, a design strategy of developing the right form, comfort and

performance combination on entirely different and discrete platforms like Toyota does

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(RAV4, Innova, Fortuner, Prado and Land Cruiser) could open up the UV segment in India to

unforeseen growth

COMPETITIVE INTENSITY:

Rivalry among the competitors is very strong is this industry. The major competitors are so

closely balanced that it increases the rivalry. In order to gain market share in the automobile

must gain market share by taking it from their competitors. One of the other reasons there

is such high rivalry is that there is a lack of differentiation opportunities. All the companies

make cars, trucks or SUV's. The competitors are compared to one another constantly. The

price, quality, durability, and many other aspects of different manufacturers are greatly

taken into consideration when deciding what type of vehicle to purchase. When the

different manufacturers advertise they even compare their products to their competitors.

For example, the commercials will focus on areas where the company outperforms its

competitors.

The three major rivals of Innova are

Scorpio

Ertiga

Xuv 500

The annual sales figures in Indai for the year 2013 is as follows:

Ertiga -7337

Innova-4682

Scorpio-4277

Xuv 500-4237

Comparison - 1 Ertiga Vs Innova :-

There have been many talks that Ertiga is Comparable to Innova.

We feel that Innova has much better styling, dimensions, better for long getaways

compared to Ertiga. Ertiga scores well in 2 critical parameters - Price & Mileage over Innova

If you compare Engine, Power, Torque, Dimensions, Features

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Engine & Power

Toyota Innova Diesel comes in 2.5 Lit Diesel Engine displacing maximum 102 BHP of Power

Maruti Ertiga Diesel is powered in 1.3 Lit Ddis Diesel Engine displacing maximum 90 BHP of

Power.

The torque of Innova is also better than Ertiga

Been smaller engine, Ertiga gives much better fuel efficiency compared to Innova. As per

ARAI Mileage - Ertiga diesel has fuel efficiency of 20.78 Kmpl, while that of Toyota Innova as

13.5 Kmpl

Dimensions

Innova - Length mm - 4580, Width mm - 1770, Height mm - 1755, Ground Clearence mm -

176

Ertiga - Length mm - 4265, Width mm - 1695, Height mm - 1685, Ground Clearence mm -

185

Innova is much spacious and can accommodate and is apt 7 Seater Passenger car compared

to Maruti Ertiga

Price

However - to tell you Innova Gx Diesel will atleast cost you Rs. 13 Lacs (On Road Price in

Delhi) compared to Ertiga Vdi which costs you Rs. 9 Lac (Middle Variant)

Ertiga is Value for Money deal. If you are budget friendly and look for feel of MPV - Ertiga is

your choice. However - if you are looking for a powerful car and ready to extend budget by

Rs. 4 Lacs with a real drive and power - Go for Innova.

Comparison - 2 Ertiga Vs Innova Vs Xylo:-

Option and Variants - Ertiga and Innova comes in both Petrol and Diesel Option.

Mahindra Xylo comes only in Diesel Option. However, in MPV segment, diesel

engine accounts for over 70% of the sales. Hence, it would be wise to compare all 3

cars in Diesel Option.

Engine - Eritga Models - Lxi, Vxi and Zxi having K Series 1.4 Litre Petrol Engine, while

Diesel has 1.3 Litre DDIS Engine as similar to Sx4 having models as Ldi, Vdi and Zdi.

Xylo comes in 3 Engine - 2.5 Litre Mdi Engine(for base models of D2 and D4), 2.5 Litre

M-Eagle Engine for its middle models (E4 and E8) and 2.1 Litre M-Hawk Engine for top

end model E9. Toyota Innova comes in 2 Litre Petrol and 2.5 Litre Diesel Engine.

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Power - Toyota Innova Petrol delivers 132 BHP power, while Diesel Innova gives 102

BHP of power. Mahindra Xylo in Mdi Engine delivers 95 BHP in Mdi Engine, 112 BHP in

M-Eagle and 120 BHP in M-Hawk Engine. Maruti Ertiga will deliver 95 BHP in Petrol

and 90 BHP in Diesel Engine.

Dimensions -

Toyota Innova has dimensions - Length mm - 4585, Width mm - 1770, Height mm -

1755

Mahindra Xylo has dimensions - Length mm - 4520, Width mm - 1850, Height mm -

1895

Maruti Ertiga has dimensions - Length mm - 4265, Width mm - 1695, Height mm -

1685

Mileage - Ertiga Mileage expected to be 16 kmpl in Petrol and 21 Kmpl in Diesel

Engine. Toyota Innova gives mileage of 10 kmpl in Petrol and 13.5 kmpl in Diesel.

Mahindra Xylo gives mileage of 14.88 kmpl in D2 and D4, 11.7 kmpl in E4 and E8 and

14.01 kmpl in E9 Model

Price - Toyota Innova price for Petrol Starts as Rs. 9.38 Lac for Petrol and goes till Rs.

12.54 Lac for top end Vx Petrol. While Diesel Innova starts for Rs. 9.91 Lac and goes till

Rs. 13.15 Lac for top end Diesel. Xylo has price starting from Rs. 7.38 Lac for base

model D2 in Mdi Engine, 8.11 Lac in M-Eagle Engine for E4 and top model E9 having

Scorpio M-Hawk Engine at Rs. 10.25 Lac. Ertiga Price expect to start from Rs. 7 Lac to

Rs. 9 Lac for top end Diesel.

Recent News - Maruti Ertiga Price

Maruti has launched Ertiga at starting price of Rs. 5.89 Lac for Base Model Petrol. The

Top End Diesel Model of Ertiga will cost Rs. 8.45 Lac . Stated Prices are Exshowroom

Delhi. Its a highly competitive price even beating the estimates. We expect Ertiga to

be a huge success keeping in the factor of Price, Mileage and backing of network of

Maruti Suzuki.

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MARKETTING CAPABILITIES:

Marketing plan :

1. Toyota Innova PTM are “Building Confidence for Young Parents”

2. For growing family and having new businesses.

3. Can choose from Mitsubishi Adventure, Isuzu Crosswind, Chevrolet Orlando, and

Nissan Grand Livina

4. Gap is all other brands are known for having the capacity for seating a number of

people and have spacious cabin.

5. Toyota’s market share is 40% and is about Php15B.

6. Toyota Innova is an AUV that has a lot of varieties to choose from. From standard

feature to luxury.

7. Comparing vehicles with engine displacement, price is 3% lower than Isuzu

Crosswind (AT) and 20% higher on the rest

8. Uses ads such as media, newspaper and magazine, websites, promotions, events &

experiences, and word of mouth

9. Stores are available nationwide

10. Uses supply and distribution leverage approach to win

What makes Toyota Innova different from other?

Only Toyota Innova has a variety of choices to choose from. Depending on the

capability and preference of the consumers.

From standard style to luxurious style

Regular chair to captain chair

Standard upholstery to leatherette upholstery

From 2.0 to 2.5 Engine Displacement

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From Automatic to Manual Transmission

And from Gas to Diesel Engine Type

Toyota Innova uses a variety of ads , discounts , promos, events & experiences and word of

mouth.

VRIO Framework Analysis

Valuable: Yes, many customers feel the better associated with the logo & finds value

in the offering.

Rare: Yes, just-in-time production is a popular strategy used by companies in all

industries; however, Toyota’s methodology is very rare.

Inimitable: Yes, many companies have tried to recreate the system; however none

have been able to do it in as efficient of a manner. The reason why competitors find

it difficult is the fact Toyota’s culture is integrated deeply in its operations. Hence it

is difficult to replicate.

Organization: Yes, Toyota has been using this system since the 1960’s and have been

perfecting it along the way.

Competitive Implication: This creates a sustained competitive advantage.

Porter’s Five Forces of the Automotive Industry

Threat of New Entry (Weak):

Large amount of capital required

Few legal barriers protect existing companies from new entrants

All automotive companies have established brand image and reputation

Products are mainly differentiated by design and engineering quality

It is very hard to achieve economies of scale for small companies

Governments often protect their home markets by introducing high import taxes

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Supplier power (Weak):

Large number of suppliers

Companies use another type of material (use one metal instead of another) but only

to some extent (plastic instead of metal)

Materials widely accessible

Suppliers do not pose any threat of forward integration

Buyer power (Strong):

There are many buyers

Most of the buyers are individuals that buy one car, but corporate or governments

usually buy large fleets and can bargain for lower prices

It doesn’t cost much for buyers to switch to another brand of vehicle or to start using

other type of transportation

Buyers can easily choose alternative car brand

Buyers are price sensitive and their decision is often based on how much does a

vehicle cost

Buyers do not threaten backward integration

Threat of Substitutes (Weak):

There are many alternative types of transportation, such as bicycles, motorcycles,

trains, buses or planes

Substitutes can rarely offer the same convenience

Alternative types of transportation almost always cost less and sometimes are more

environment friendly

Competitive Rivalry (Very Strong):

Moderate number of competitors

If a firm would decide to leave an industry it would incur huge losses, so most of the

time it either bankrupts or stays in automotive industry for the lifetime

Industry is very large but matured

Size of competing firm’s vary but they usually compete for different consumer

segments

Customers are loyal to their brands

There is moderate threat of being acquired by a competitor

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Sales Report of Toyota Innova in Comparison with Competitors in same segment.

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BCG Matrix – Analysis of Toyota

High Low

STAR QUESTION

*Prius Hybrids * Fortuner

* Land Cruiser * Camry/Corolla Hybrids

CASH COWS DOGS

* Innova

* Qualis - (Withdrawn)

* Camry

* Corolla Sedans

Relative Market Share

Mar

ket

Gro

wth

High

Low

Page 24: Toyota innova

Company Strategy

Toyota's management philosophy has evolved from the company's origins and has been

reflected in the terms "Lean Manufacturing" and Just In Time Production, which it was

instrumental in developing. Toyota's managerial values and business methods are known

collectively as the Toyota Way. In April 2001, Toyota adopted the "Toyota Way 2001", an

expression of values and conduct guidelines that all Toyota employees should embrace.

Under the two headings of Respect for People and Continuous Improvement, Toyota

summarizes its values and conduct guidelines with the following five principles:

Challenge

Kaizen (improvement)

Genchi genbutsu (go and see)

Respect

Teamwork

The Toyota Way in Sales and Marketing (TWSM)

The TWSM gives emphasis to the principle and values of placing the “customer first” and the

importance of integrated action by dealers, distributors, and Toyota. Distributors from

across the globe met in Los Angeles to talk about the potential of implementing the key

TWSM values around the globe. Toyota established the Global Knowledge Center (GKC) as a

platform for sharing and learning best practices from different regions.

Strategic Management critical success of Toyota:

1. Base your management decisions on long term philosophies, even at the expense of

short term goals

2. Create continuous process flow to bring problems to the surface

3. Use pull systems to avoid over production

4. Level out the workload

5. Build in a method to stop and fix problems when they are discovered, this ensures

quality the first time

6. Standardized tasks provide the foundation for continuous improvement and

employee empowerment

7. Use visual control so no problems are hidden

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8. Use only reliable, thoroughly tested technology that serves you people and

processes

9. Grow leaders who thoroughly understand the work, live the philosophy and can and

do teach it to others

10. Develop exceptional people and teams who follow your company's philosophy

11. Respect your extended network of partners and suppliers by challenging them and

helping them improve

12. Go and see for yourself so that you completely understand the situation

13. Make decisions slowly by consensus, thoroughly consider all options; implement

decisions rapidly

14. Become a learning organization through relentless self-examination and continuous

improvement

Voice of the Customer

Refusing to buy Innova for 3 Years! Finally Buys Maruti Ertiga

1. There are more Taxis running with Toyota Innova.

There is no difference between a taxi driver and an Innova

owner at a valet parking. 2. Sales team from Innova wasn’t warm as compared to

Maruti Ertiga where sales team frequently contacted

appropriately to close the sale. 3. Acquaintance who owned an Innova was charged a

sum of Rs. 60,000/- for lock replacement due to missing key. 4. Bad Ergonomics – Feels puking while a driver who

doesn’t drive the vehicle well due to improper balance of

centre of gravity associated with height of vehicle. 5. Better mileage with Maruti Ertiga costing Rs. 500 for a trip to Pondicherry. 6. Lower engine capacity compared with Toyota Innova as desired for usage of the customer.

Page 26: Toyota innova

RECOMMENDATIONS:

To survive in a market as India, Toyota must focus & strengthen itself to the key priority of

its customers, Mileage!

i. Toyota has sought help from Daihatsu, Japanese Auto Maker for partnership to

improve current poor sales performance, need to strengthen this relationship for

better sales, similar to its Indonesia Model, considering the Indian Market &

Consumers in Mind.

ii. Competitors such has Suzuki have set up comprehensive local supply chains for

cheaper costs, Toyota must consider the same.

iii. Can the Top Management change the Taxi Attitude for Innova?

iv. The Centre of Gravity issue pointed out by users who have compared Ertiga and

Innova needs to be sorted out.

v. Local suppliers can help reduce costs associated with parts and replacements for

customer.

CONCLUSION

Toyota has promoted diversification through continuous innovation all through its life and

expanded the scope of its business domains to include textile machinery, automobiles

(vehicles, engines, car air-conditioning compressors, etc.), and materials handling

equipment, electronics, and logistics solutions. All these Expansion Strategies adopted by

Toyota has resulted in making Toyota one of the largest Conglomerates.

Today Toyota is the largest carmaker in the world leading General motors and the top

selling automaker. The Japanese company has sold 9.7million cars and trucks in 2012 leaving

GM in second place with 9.29million cars.

The backbone of their success being their sharp, well thought out and excellently

implemented strategies. It yielded excellent result over the years it brought them to the No.

1 position and if maintained, there is no doubt about the fact that they’ll maintain their

position for years to come.