Strategy of Toyota

1. Introduction 
2. 1. Inception of Toyota – Founded by Kiichiro Toyoda, Japanese businessman in 1937  3rd positioned in automotive company in the current market  Competitors of Toyota - General Motors and Ford in United States and Honda in Japan.  Sale of Vehicle by unit- 8.871 million units  Net Income earned in 2013 - Yen 962.1 billion
3. 4. General Environment Analysis  The general environment analysis process has four steps: Scanning, monitoring, forecasting and assessing (Hanson et el. 2011).  Has six segments:  Demographic: Toyota faces a decreasing population in Japan (-0.1%)  Macroeconomic: -Interest rates, exchange rates & inflation. Rise in Yen makes Japan a high cost production location & requires Toyota to move production overseas
4. 5. General Environment Analysis  Political/Legal: - Laws enacted in some countries to reduce Cos create challenges to Toyota.  Socio-cultural: - Changes in values and preferences of customers and the society at large provides both threats and opportunities.  Technological: - There is a technological shift taking place in the automobile industry. while Toyota continues to stick with hybrid technology, other companies (such as GM with the Chevy Volt) are starting to introduce all electric vehicles.  Global: - The move toward the globalization of markets requires Toyota to become more of a global company.
5. 6. The Four Characteristics of global economy 1. The economic integration 2. The capital movements 3. Production has no correlation to the employment 4. The internet
6. 7. Porter’s Five Competitive Forces
7. 8. Competitive environment analysis 9.60% 7.60% 7.00%5.90%5.30% 5.10% 4.80% 3.10% 2.40% 2.30% Auto Industry Market Share in 2013 Toyota Volkswagen Ford Chevrolet Hyundai Nissan Honda Kia Renault Fiat
8. 9. n 2011, Toyota, along with large parts of the Japanese automotive industry, suffered from a series of natural disasters. The 2011 Tōhoku earthquake and tsunami led to a severe disruption of the supplier base and a drop in production and exports.^[41][42] Severe flooding during the 2011 monsoon season in Thailand affected Japanese automakers that had chosen Thailand as a production base. Toyota is estimated to have lost production of 150,000 units to the tsunami and production of 240,000 units to the floods.
   The automaker narrowly topped global sales for the first half of 2014, selling 5.1 million vehicles in the six months ending June 30, 2014, an increase of 3.8% on the same period the previous year. Volkswagen AG, which recorded sales of 5.07 million vehicles, was close behind.^[43]
   In August 2014, Toyota announced it would be cutting its spare-parts prices in China by up to 35%. The company admitted the move was in response to a probe foreshadowed earlier in the month by China's National Development and Reform Commission of Toyota's Lexus spare-parts policies, as part of an industry-wide investigation into what the Chinese regulator considers exorbitantly high prices being charged by automakers for spare parts and after-sales servicing.In October 2012, Toyota announced a recall of 7.43 million vehicles worldwide to fix malfunctioning power window switches, the largest recall since that of Ford Motor Company in 1996. The move came after a series of recalls between 2009 and 2011 in which it pulled back around 10 million cars amidst claims of faulty mechanics.^[47] In March 2014, Toyota agreed to pay a fine of US$1.2 billion for concealing information and misleading the public about the safety issues behind the recalls on Toyota and Lexus vehicles affected by unintended acceleration.
    Total equity ¥16.788 trillion (FY 2015)
   Slogans used: 
9. Leads You Ahead
10. Drive Your Dreams
11. Let's go beyond
12. Toyota sponsors several teams and has purchased naming rights for several venues, including:
    • Toyota Center, Houston, Texas
    • Toyota Center, Kennewick, Washington
    • Toyota Field, San Antonio, Texas
13. 11. Internal Environment Analysis To attract & attain customers with high-valued products & services & the most satisfying ownership experience in America To be the most successful & respected car company in America World domination with regard to car supply. The company seeks to achieve market leadership by delivering value to customers & providing high quality vehicles
14. 12. Internal Environment Analysis CORE COMPETENCIES Produce - What is needed - In the amount that is needed Total quality control All workers to meet customers’ needs Involve all workers in the company (BEING INCLUSIVE) - To achieve total effectiveness of the production system - To ensure total productive maintenance Computer integrated manufacturing to include: - Design - Production - Distribution - After sales service - Support in the field - Use computers & IT
15. 13. Internal Environment Analysis VALUE CHAIN OF TOYOTA1.Efficient & effective marketing and sales service a. Qualified staff b. Marketing program (Oh What a Feeling) 2. Supply after sales service a. handle complaints & provide solutions b. provide sales training 3. Efficient production method a. Toyota has quality instruments to assemble & tune new car engines b. Has an effective method of stopping work if there is a problem – therefore there is no poor quality 4. Upright inbound logistics ensures: a. The clients’ demands are met b. therefore there is no storage costs or wastage do to lack of demand 5. Good accessibility: a. Toyota manages its own showrooms in all countries b. Toyota does not outsource its services c. the products are easily accessible & their values are not inflated.
16. 14. SWOT Analysis
17. 15. Recommendation Business level strategy >>  Focus on technology and innovation of Hybrid vehicles as future differentiation strategy  Develop fuel efficient, compact vehicles for emerging markets Functional level strategy >>  Operation strategy : Focus on product quality control, continuous learning and improvement on manufacturing systems for efficiency  Marketing strategy : Reinforce Toyota brand image to restore reputation and build brand loyalty to increase value of Toyota
18. 16. Recommendation Enhance market share >>  Develop presence in emerging markets; China and India  Concentrate on USA market by Americanize the design, production and marketing  Invest and expand in European market  Continuous learning and improvement of Toyota product and process through technology and innovation  Increase customer responsiveness; identify and satisfy needs, improve support and after sale services
19. 17. Conclusion  Toyota has sources of strong competitive advantages in global automotive industry, such as TPM, value chain, strong brand, wide product offering and hybrid vehicles  Major recalls, economic crisis, natural disasters and intense global competition have posed serious challenge for Toyota  Growing emerging markets and shifting customers demands offer opportunities for Toyota to attain superior profitability and growth  Toyota must sustain its competitive advantages to retain its position and achieve future success