Toyota Psa Case Study - Aygo

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Toyota Motor Corporation is a Japanese multinational corporation. It is currently the world's largest automaker.


"Toyota Motor Corporation is a company devoted to enhancing the quality of life for people around the world by providing useful and appealing products" (Toyota Motor Corporation, 1994).
Its mission has not changed much in the past few years, for the current mission of Toyota can be characterized as becoming the world's leading vehicle manufacturer, which means that it expects to sell more cars than any competitors, whilst setting benchmarks on product quality and production efficiency. Toyota also aims at providing good quality cars at competitive and affordable prices in order to well establish
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Switching costs are low; the price of a train ticket can sometimes be more attractive than taking his car.

Bargaining power of suppliers : very low
A car producer works with many suppliers since it needs many different items to produce a car. This means that there are many suppliers on the market and therefore that their bargaining power is very low. Switching costs for car producers are really low.

Bargaining power of buyers : moderate
Buyers do not purchase a car frequently and in large volumes. There are many buyers on the market which considerably reduces their bargaining power. However, switching costs for the customer are low. In fact, a customer can easily decide to sell his car and buy a new one as well as he can decide to take the train or the subway without many costs.

Threat of new entrants : very low
The automotive industry is not attractive for new entrants. A new entrant would have to invest a lot of money in capital and R&D to start a new business and it would have to acquire a specific and technical knowledge. The market is mature; car producers already make economies of scale by producing cars in large quantities. New entrants would also have difficulties to access distribution channels. Key Success Factors (KSF)

It is a crucial element for car producers. Consumers want to buy reliable cars with many safety features and systems such as ABS or Airbag that could save their lives. Car

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