Case Study Analysis ofToyota Company

Case Study Analysis of Toyota Company 1.0 Introduction: Toyota Motor Corporation could be a Japanese international automotive manufacturer headquartered in Toyota, Aichi, Japan. Toyota is that the world's market leader in sales of hybrid electrical vehicles and one in every of the most important firms to encourage the mass-market adoption of hybrid vehicles across the world. Toyota is listed on the London exchange, big apple exchange and Yedo exchange. In 2017, Toyota's company structure consisted of 364,445 staff worldwide and, as of September 2018, was the sixth-largest company within the world by revenue. As of 2017, Toyota is that the largest automotive manufacturer. Toyota was the world's 1st automobile manufacturer to provide over ten million vehicles p.a. that it's done since 2012, when it conjointly reported the assembly of its 200-millionth vehicle. As of Gregorian calendar month 2014, Toyota was the largest listed company in Japan by capitalisation and by revenue. Toyota is additionally a market leader in gas fuel-cell vehicles. additive world sales of Toyota and Lexus hybrid railway car models achieved the ten million milestones in Gregorian calendar month 2017.Its Prius family is that the world's top-selling hybrid plate with over half dozen million units sold worldwide as of Gregorian calendar month 2017.The company was founded by Kiichiro Toyoda in 1937, as a spinoff from father's company Toyota Industries to make cars. 3 years earlier, in 1934, whereas still a department of Toyota Industries, it created its 1st product, the kind A engine, and its first passenger automotive in 1936, the Toyota AA. Toyota Motor Corporation produces vehicles below five brands, as well as the Toyota complete, Hino, Lexus, Ranz, and Daihatsu. It conjointly holds a sixteen.66% stake in Subaru Corporation, a 5.9% stake in Isuzu till 2018, a 5.5% stake in Mazda, similarly as joint-ventures with 2 in China (GAC Toyota and Szechuan FAW Toyota Motor), one in Republic of India (Toyota Kirloskar), one within the European nation (TPCA), beside many "nonautomotive “firms. TMC is an element of the Toyota cluster, one in every of the most important conglomerates in Japan. Toyota is headquartered in Toyota town, Aichi. the most headquarters of Toyota is found in a four-story building in Toyota. As of 2006, the pinnacle workplace has the "Toyopet" Toyota brand and the words "Toyota Motor". The Toyota Technical Centre, a 14-story building, and also the Honsha plant, Toyota’s second plant participating in production and once named the Koromo plant, are adjacent to at least one another in an exceedingly location close to the headquarters. In 2013, company head Akio Toyoda reported that it had difficulties retentive foreign employees at the headquarters thanks to the shortage of amenities within the town. Mission Statement of Toyota: Toyota mission statement is “To attract and attain customers with high-value products and services and the most satisfying ownership experience in America." Vision Statement of Toyota: Toyota vision statement is “"To be the most successful and respected car company in America." Products of Toyota: Automobile Materials Handling Textile Machinery Vehicles Equipment TOYOTA Products Spinning Machinery Engines RAYMOND Products Weaving Machinery Car Air-Conditioning Compressors Car Electronics AICHI Products From Raw Cotton to Cotton Fabrics Types of Looms Battery Stamping Dies Case Summary: Toyota Motor Corporation was instituted within the year 1937 in Japan. it's twelve plants in Japan also as fifty-four producing corporations in 27countries; it additionally markets its vehicles in additional than one hundred sixty countries worldwide. within the year 2010. Toyota used close to three hundred,734 individuals globally. it's the second-largest automobile manufacturer worldwide and the ninth-largest globally by its revenue. In 2002, its calculable capital was concerning 397 billion yen. the first plan behind the foundation of the Toyota Motor Corporation came from the inventive mind of Toyoda Sakichi. Toyota was started in 1933 as a division of Toyoda Automatic Loom Works dedicated to the assembly of cars beneath the direction of the founder’s son, Kiichiro Toyoda. Its 1st vehicles were the A1 railcar and G1 in 1935. The Toyota Motor Corporation was established as associate degree freelance company in 1937. once the top of war II, Kiichiro was resolute that Toyota ought to restore itself as a manufacturer of cars. In 1950, the new Japanese government prohibited direct foreign investment within the industry and obligatory high tariffs on the importation of foreign cars. This protection, however, did very little to resolve the opposite issues facing the corporate. Then Toyota had to limit its production of cars. Toyota had to cut back started times for various constraints. Toyota Motor Corporation uses lean production as some way of increasing its profits. Lean production is termed because the approach within which operational prices are decreased. during this sense, Toyota Motor Corporation is seen to be exploitation low-cost labor to meet its policies of lean production. regardless of however economical this method works for Toyota, it's evident that their revenues ar boosted more by tax abatements and therefore the reduction of operational prices. They maintain their low labor prices by subverting the organisation of the laborers. In November 2004, Hiroshi Okuda, Chairman of Toyota Motor Corporation of Japan, declared that the corporate was about to build another manufacturing plant in North America, raising the quantity of factories manufacturing elements and assembling cars and trucks in North America. In 2004-2005 Toyota sold seven.4 million vehicles worldwide. Toyota is understood for its commitment to affordable, top quality, and just-in-time inventory. And so, Toyota rise as a world corporation. SWOT Analysis of Toyota Company SWOT examination (qualities. shortcomings, openings and dangers examination) is a system for distinguishing and dissecting the interior and outside factors that can affect the reasonability of a venture, item, spot or individual, incorporates interior and outer investigation too. Here is an in-depth Toyota SWOT analysis. Strengths of Toyota The Toyota Way: Toyota’s operations follow the principles of continuous improvement and respect for folks. These principles boost productivity and foster innovation. They conjointly galvanized the idea of lean management. for several decades, these principles have fashioned the core strength of Toyota. Fuel Cell Patents: Automobile corporations square measure following the vision of zeroemission vehicles through 2 main technologies – chemical element fuel cells and electrical vehicles. Toyota owns around five,680 international patents associated with chemical element fuel cells. These patents place Toyota in an exceedingly robust position within the zero-emission vehicles market. Solid-State Battery Pack: additionally, to fuel cells, Toyota is additionally actively researching and developing technology for electrical vehicles. Toyota is unveiling its revolutionary solid-state battery in 2021. the corporate claims the new battery pack can extend the utmost work unit vary to five hundred kilometers on one charge. Plus, it charges from zero to 100% in ten minutes. What’s even a lot of spectacular – Toyota developed the technology four years prior schedule. Hybrids: whereas Toyota develops competencies in clean energy vehicles, it’s consolidating its position in hybrid vehicles. Toyota makes a number of the foremost reliable inexperienced cars within the market. till the reliance on fossil fuels may be eliminated, Toyota’s hybrids are going to be a lovely possibility for environmentally aware patrons. Strong Stock Performance: The pandemic-triggered economic holdup hit automakers exhausting. Despite this, Toyota’s stocks fared higher than most automotive makers. whereas General Motors’ stocks fell sixty fourth from peak to trough, Toyota’s stocks showed solely a 15 August 1945 fall. This shows the company’s resilience. Weakness of Toyota Recalls: though Toyota sets the standards for internal control, its style and production aren’t unflawed. for example, early this year, Toyota recalled 700,000 vehicles thanks to a faulty fuel pump. Such things devalue the people’s trust within the complete and might undo decades of goodwill. Strikes: Adhering to strict internal control standards whereas maintaining high productivity and profit from time to time puts the management at odds with the labor. Recently, the staff at a Toyota mill in Republic of India went on strike thanks to labor issues. Such problems weaken the company’s ability to satisfy market demands. Rigid Hierarchy: Toyota follows a rigid hierarchy wherever the orders flow in one direction – prime to bottom. The rigid hierarchy permits higher management, it will stifle power and suppleness. Partial world Presence: Toyota has robust sales within the America, Europe, and Japan. However, it doesn’t boast similar sales figures in Africa, South America, and therefore the Mideast. For Toyota to be a really world company, it cannot leave these regions undiscovered. Technology Gap: As way as future-tech goes, Toyota is enjoying catch up with Tesla. in an exceedingly teardown of the Tesla Model three, engineers found Tesla’s technology six years prior to Toyota and Volkswagen. Opportunities of Toyota Flying Car Project: Japanese startup SkyDrive with success conducted the primary manned check flight of its flying automotive. Toyota is one among the businesses backing SkyDrive. though SkyDrive needs to overcome several technological and regulative hurdles, Toyota believes its investment within the company would pay off. Smart Cars: Toyota is functioning on self-driving systems like the Guardian and also the Chauffeur. These systems aim to create driving safe and convenient for folks not older enough to drive (Guardian) or able to drive thanks to adulthood (Chauffeur). Toyota remains unsure however the markets would react to its self-driving choices. But, with technology in each space moving towards sanctioning convenience and ease, Toyota’s arrange for autonomous vehicles could be a sensible one. Nanomaterials: Toyota AI ventures recently invested with in Carbice, associate degree Atlanta-based nanotech developer. Nanomaterials have a large vary of applications starting from creating vehicles lighter, stronger, additional sturdy, quieter, cooler, and safer. as an example, Toyota has invested with in Carbice to assist solve problems that prime temperatures cause within the car’s physics. Toyota ought to continue creating such investments. Cloud and AI Technology: several sectors area unit investing the mix of cloud-based and AI technology to boost ways in which within which it serves its customers. Automotivebased cloud technology is growing at nineteen.88% and is projected to the touch nearly $70 billion by 2022. So, cloud and AI area unit vital opportunities Toyota ought to get to leverage. Big Data: Automakers area unit exploitation vehicle-generated knowledge in attentiongrabbing ways in which like prophetic maintenance, use-based insurance, and autonomous driving. mutually of the biggest automotive makers within the world, Toyota is sitting on a goldmine of information. Threats of Toyota Brexit: With simply days for the United Kingdom to barter a trade upset the EU, a no-deal Brexit would add 100% to the price of foreign cars. Also, enhanced tariffs can negatively impact Toyota’s automotive factories within the United Kingdom of Great Britain and Northern Ireland. Trailing Tesla: Toyota could also be one in every of the most important automotive makers within the world. But, it isn’t the foremost valued; Tesla is that the most valued manufacturer. At the time of this writing, Tesla’s market cap is a hundred and seventy fifth above Toyota’s. though the President of Toyota laid-off Tesla for not being a “real” auto company, Tesla certain is giving Toyota stiff competition within the post-fossil fuel technical school. COVID-19 Restrictions: Japan, the USA, and Europe account for sixty-six of Toyota’s sales. The pandemic has severely compacted these regions. Measures to stop the unfold of the virus have caused economic recession and state. till the governments administer the immunogen on an oversized scale, COVID-19 would still threaten Toyota’s growth. Economic Crisis: within the second quarter, Toyota’s profits born by seventy-four. during a statement Toyota issued, the corporate expects the weakness to continue impacting performance within the predictable future. Competition: Toyota’s rivals Tesla and Volkswagen area unit matching Toyota’s stride for stride. Toyota can’t afford to slide. Falling back currently would be a important hit. for example, a speculator capitalist says Tesla’s analysis might soar to $2 trillion within the next 3 years. What would Toyota do to match this growth? Porter’s Five Forces Model of Toyota Automobile Company: Porter 5 Forces could be a holistic strategy framework that took strategic choices aloof from simply analysing the current competition. Porter 5 Forces concentrate on - however Toyota Motor Corporation will build a property competitive advantage in automotive vehicle makers - Major business. Managers at Toyota Motor Corporation can't solely use Porter 5 Forces to develop a strategic position among automotive vehicle makers - Major business however can also explore profitable opportunities within the whole goods sector. Threats of New Entrants (Low) New entrants in Auto Manufacturers- Major brings innovation, new ways in which of doing things and place pressure on Toyota Motor Corporation through lower rating strategy, reducing prices, and providing new price propositions to the purchasers. Toyota Motor Corporation must manage of these challenges and build effective barriers to safeguard its competitive edge. How Toyota Motor Corporation will tackle the Threats of recent Entrants By innovating new merchandise and services. New merchandise not solely brings new clients to the fold however additionally provide previous customer a reason to shop for Toyota Motor Corporation ‘s merchandise. By building economies of scale in order that it will lower the fixed charge per unit. Building capacities and pocket money on analysis and development. New entrants are less probably to enter a dynamic trade wherever the established players like Toyota Motor Corporation keep process the standards often. It considerably reduces the window of extraordinary profits for the new corporations so discourage new players within the trade. Bargaining Power of Suppliers (Low) All most all the businesses within the manufacturers- Major business purchase their stuff from various suppliers. Suppliers in dominant position will decrease the margins Toyota Motor Corporation will earn within the market. Powerful suppliers in commodity sector use their negotiating power to extract higher costs from the corporations in machine makers Major field. the general impact of upper provider dialogue power is that it lowers the general gain of machine makers - Major. How Toyota Motor Corporation will tackle dialogue Power of the Suppliers By building economical offer chain with multiple suppliers. By experimenting with product styles exploitation completely different materials in order that if the costs go of one stuff then company will shift to a different. Developing dedicated suppliers whose business depends upon the firm. one in every of the teachings Toyota Motor Corporation will learn from Wal-Mart and Nike is however these firms developed third party makers whose business alone depends on them therefore making a state of affairs wherever these third-party makers have considerably less dialogue power compare to Wal-Mart and Nike. Bargaining Power of buyers (High) Buyers ar typically a tight heap. they require to shop for the most effective offerings offered by paying the minimum value as doable. This place pressure on Toyota Motor Corporation profitableness within the end of the day. The smaller and a lot of powerful the client base is of Toyota Motor Corporation the upper the talks power of the purchasers and better their ability to hunt increasing discounts and offers. How Toyota Motor Corporation will tackle the talks Power of buyers By building an outsized base of shoppers. this can be useful in 2 ways in which. it'll scale back the talks power of the buyers and it'll give a chance to the firm to contour its sales and production method. By chop-chop innovating new merchandise. Customers typically look for discounts and offerings on established merchandise thus if Toyota Motor Corporation carry on arising with new merchandise then it will limit the talks power of buyers. New merchandise also will scale back the defection of existing customers of Toyota Motor Corporation to its competitors. Threats of Substitute Products or Services (Low) When a replacement product or service meets an analogous client wants in several ways in which, trade profitableness suffers. as an example, services like Dropbox and Google Drive ar substitute to storage hardware drives. The threat of a substitute product or service is high if it offers a worth proposition that's unambiguously completely different from gift offerings of the trade. How Toyota Motor Corporation will tackle the Treat of Substitute Products / Services By being service oriented instead of simply product oriented. By understanding the core want of the client instead of what the client is shopping for. By increasing the shift value for the purchasers. Rivalry among the Existing Competitors (High) If the contention among the existing players in associate degree business is intense then it'll drive down costs and reduce the general profit of the business. Toyota Motor Corporation operates terribly} very competitive motorcar makers - Major business. This competition will take a toll on the general semi-permanent profit of the organization. How Toyota Motor Corporation will tackle Intense contention among the existing Competitors in motorcar makers - Major business By building a property differentiation By building scale so it will contend higher Collaborating with competitors to extend the market size instead of simply competitor for tiny market. BCG Matrix of Toyota BCG Matrix assists businesses in analysing growth potential by examining market growth and product market share, as well as selecting where to spend, discontinue, or develop products and the BCG Model divides a company's operations into four groups which are Cash Cows, Stars, Dogs, and Question Marks were the titles given to the various categories[ CITATION Stu21 \l 1033 ]. The four categories are depicted in the BCG Matrix graphic below: Every giant uses the BCG matrix as it helps with long-term strategic planning and Toyota is one of them. Toyota's BCG Matrix will aid in the implementation of business-level strategy for its business units[ CITATION Glo21 \l 1033 ]. They can expand their market to a greater extent because they are one of the top leading industries in the world due to their vast selection of products and this method can also be used to evaluate a product's market debut for Toyota[ CITATION Glo21 \l 1033 ]. Toyota likes to create their recognition, not as a whole company using their name “Toyota” rather they want to create recognition for their brands by branding their vehicle brand name as they have a vast number of vehicle brands, for every type of customer, under their umbrella and they can do it and in the whole world people recognizes Toyota company by their vehicle brand name such as Rav-4, Highlander, Fortuner, Crown, Corolla, Prius, etc. As Toyota emphasizes individual brands, they use the BCG matrix for their vehicle brands to know what brand is in what position, invest in what brand, eliminate what brand, what brand needs an update, or what brand’s status should remain the same. The analysis will begin by determining where Toyota's strategic business units lie within the BCG Matrix. To understand which brand placed were and based on what in the BCG matrix for Toyota a small demonstration is given below: High Relative Market Share Star High Market Growth Relative Market Share Question Lexus Camry Prius Harrier Land Cruiser C-HR Corolla Aqua Cash Cow Low Market Growth Low Dog Alphard Celica Vellfire Tundra Esquire Rush Crown Estima Star and Question go under high market growth criteria as these units are profitable as these generate more profit and within these, there are two more criteria, high relative market share and low relative market share. Lexus is a luxury brand that has huge demand because of its reasonable price rather than its competitors such as AMG. Prius and Corolla are hybrid non-hybrid cars with very cheap prices along with durability along with good re-sale value and Land Cruiser is a durable fullsize SUV with high market demand because of its reasonable price than competitors such as Jeep Wrangler. These brands have huge recognition and demand across the globe for their characteristics and quality. As these brands are most profitable Toyota invests in them rather than any other brands. Therefore, these brands fall into the star category with high market growth and high relative market share. Camry and Harrier are mid-size luxury sedans and cross-over which brings sustainable good profit but containing market share is a bit low, for example, Camry has good market demand in US market and Harrier got in Bangladesh and vice-versa. C-HR and Aqua are small size cross-over and the car contains good demand in east and south Asian markets. These brands generate good profits from particular regions and their market share is a bit low as most people go for star category brands such as Toyota Corolla. But the demand for these question category brands is not going down because Toyota invest in these brands after a certain time and those came out very well and these brands can continue their business in a certain region as people want and like this kind of vehicle. Thus, these brands fall into the question category with low market share and high market growth. Alphard, Vellfire, Esquire these are Toyota’s luxury MPVs and Crown is a full-size luxury car. These brands’ market growth is low because these brands are only popular mostly in the East Asia market, for example, Japanese Domestic Market and few popularities got in south Asian market. These brands got limited opportunities as they are most popular in a certain market that’s why the market growth is also low as other country’s people such as US people like Ford’s and Mercedes’s MPVs which also comes at cheap price with higher quality than these brands in their countries. There is the same scenario with Crown. In Europe and US market they have their domestic car brands for luxury cars and they like to rely on those as those come at cheap prices in their country and the quality is higher than Toyota. For having significant market share and demand in the Asian market of these brands these brands generate a consistent cash flow for Toyota. Hence, these brands fall into cash cows with high relative market share and low market growth. Tundra is a pick-up brand of Toyota that fails to serve its purpose compared to a competitor such as Doge T-Rex and Ford Raptor. Tundra is not that durable and works efficiently and it also comes with a similar price as competitors. Celica is a sports car brand which Toyota cannibalized their own brand GT-86. The same happened with Estimate, which is an MPV brand and got cannibalized by Toyota’s own brand Noah. Rush is a small-size SUV which the market fell because people like mid-size or full-size vehicles for SUVs. Moreover, Rush failed to serve the purposes of SUVs. In these circumstances, Toyota stopped the production of the Celica and Estimate line-up and invests very little in Rush and Tundra. It is very difficult to make a profit from Rush and Tundra but Toyota still hasn’t stopped their operation because Toyota wants to fill every gap in the vehicle category. Therefore, these brands fall into the dog category containing low market growth and low relative market share. Problems Findings & Solutions Problem:1) How Toyota was able to produce a more diverse product range at a lower unit cost? product line in large volumes in order to obtain the most profit Scale economies are important. The savings come from spreading the fixed costs of establishing the specialist business. Problem:2) For the first time in 70 years in 2008, Toyota faced loss in their business. Their sales dropped to 33.9%. There is this quote that, “In the midst of every crisis lies great opportunity”. Toyota believed that and tried to turn a global crisis into opportunity. Steps Toyota took to overcome the recession, Idling production line in Texas. Putting hold on a new production plant in Mississippi. Production was cut by 40% in japan. Temporary workers were laid off .Sending an underutilized employee to training sessions. Strategies for cost reduction and cost saving. Motivated employee to save money as much as possible. Launched emergency profit improvement committee. Toyota is known for treating its staff as investment assets. They did not lay off any permanent employee as a matter of fact. They also did not pressure suppliers like other companies. However, the company decreased employee working hour and implemented temporary wage cutbacks. Toyota took advantage of the chance to work on projects targeted a increasing profitability and efficiency, which includes lowering the net profit cost of its facilities from 80% to roughly 70% of capacity. For a corporation known for running lean production it’s a tremendous task. Problem:3) Despite Conclusion: This report has analysed the strategic analysis of a number one company of the world automotive market – Toyota, that manufactures a good of differentiated motorized vehicles and undertakes varied promoting and property ways to fulfil market demands and satisfy the target customers by providing safer and quality product at reasonable worth. From the on top of discussion, it is said that the business surroundings is unfavourable for increasing ratio attributable to having several challenges together with the world economic downswing, earthquake in Japan, volatility of the worth of raw materials, and alter of rate of exchange have forced the corporate in sacrificing a larger portion of revenues and market share in 2009. However, this paper represented that the auto trade is a particularly competitive trade thanks to the presence of many sturdy competitors within the international market, that creates pressure on Toyota to vary its strategy overtime to carry market share, such as, it introduced variety of eco-friendly hybrid product and followed completely different whole growth ways together with a venture to enter the potential market. Recommendation: Toyota has to guarantee timely response and higher delivery of services designedly for maintenance of client loyalty Toyota has to open additional client care centres to require the services to the individuals through interaction Toyota has to increase necessary client service needs particularly direct lines for easier access to client service representatives Toyota ought to benefit of matters goodwill reservoir to revive the loyalty that its customers have lost. Additionally, there's a necessity for Toyota to develop and implement a comprehensive client communication strategy. client communication are going to be crucial to overcoming the challenges expose by the recall and also the erosion of trust Toyota ought to have in situ a technique supported assured quality to draw in each their former customers also as new ones. throughout the crisis, Toyota rivals like Nissan, Hyundai, and Ford offered money incentives to defecting Toyota customers, a technique that had wide success. However, money incentives will solely work effectively within the short Toyota ought to still undertake cooperative efforts to strengthen its management platform and lift company worth. To support consolidated management on a world scale, Toyota ought to enhance the ability of the geographic point and variety within the use of human resources, and attempt to nurture international human resources. Overall, Toyota has outperformed the business over the past 5 years and gained market share. A shift toward smaller, additional fuel-efficient vehicles, that Toyota will manufacture at a comparatively low value, can support growth within the us.