Original ArticleSummary
Toyota announced that they are going to launch into aircraft industry on 5th of March. Toyota plan to invest the company that is set up by Mitsubishi heavy industries for private aircraft. The money Toyota will put up will be around $97 million.
Toyota announced that they are going to launch into aircraft industry on 5th of March. Toyota plan to invest the company that is set up by Mitsubishi heavy industries for private aircraft. The money Toyota will put up will be around $97 million.
Sociocultural Forces
There are getting more and more demands of private aircraft. Therefore, you can see some of automobile company such as Toyota, Honda and Subaru are launching into aircraft industry and the people who can afford private airplane are showing their interests. However, many environmentalist criticize that private airplane could accelerate not only fuel consumption but also air pollution.
Economic Forces
The reason why Toyota launched into aircraft industry is they are having difficulty dealing with a slack domestic market. Therefore, they found an answer in aircraft sector which seems to have bright future. However, concerning skyrocketing price of fuel and raw material, many analysts are negative about launching high risk taking aircraft industry.
The reason why Toyota launched into aircraft industry is they are having difficulty dealing with a slack domestic market. Therefore, they found an answer in aircraft sector which seems to have bright future. However, concerning skyrocketing price of fuel and raw material, many analysts are negative about launching high risk taking aircraft industry.
Technological Forces
Toyota addressed that they will work with Mitsubishi Heavy Industries manufacturing aircraft. It is very positive combination because Toyota’s huge manufacturing capacity is going to be complemented by Mitsubishi Heavy Industries’s accumulated aircraft technology.
Political/ Legal Forces
Japanese government is analyzing that aircraft industry is highly profitable business and has a ripple effect on whole economic sector. For instance, to manufacture aircraft, they should apply high technology such as carbon fiber complex and it can propel development of Japanese high technology industries. For those reason, Japanese government plan to subsidize around $500 million. That is 33% of whole investment. So we can say Toyota and Mitsubishi are being financially and politically supported by their government.
Customers
I think Toyota is targeting at big corporation level clients and highly affordable individual customers. In my opinion, it would be really jack pot if they can attract the oil money.
Suppliers
Due to huge steel and oil consumption in China and India, securing raw material with stable price would be the key factor of success.
Potential Entrants
Launching into aircraft industry costs huge amount of money. However, upcoming countries such as China and Russia announced that they will get into the private airplane market. The matter of success will be how to differentiate from Russia and Chian in terms of technology.
Substitute
Once airplane industries are boomed, I don’t think it could be substituted by any other means of transportation soon in the future. Because private airplane is the most luxurious and convenient form of transportation which is targeting at highly purchasable consumers, it won’t be substituted by express train or something else.
Competitors
Private airplane market is currently divided by Canadian company, Bombardia and Brazilian company Embraer. In addition, Russian and Chinese company will join this market. It will be stiff competition. To succeed over those companies, it would be matter of how Toyota’s manufacturing capacity will make a synergy effect with Mitsubishi’s accumulated technologies and differentiate from their competitors.
Student ID : 20501034
#Reference
Chosun Newspaper
Business week
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