Toyota Case

TOYOTA IN 2009

OBJECTIVES:

-To fulfill its commitment to the highest standards for quality, safety, reliability and retained value (best overall values of the year; top safety picks by insurance inst. For hway safety)

-To contribute to the realization of the "vehicles for change" to the betterment of society

-To maintain the lead in producing hybrid cars and the pursuit of ultimate eco-cars to adhere to environmental responsibility

-To bring suppliers into design process and dealers be treated as "equal partners" in the Toyota family

-To weather the storm and return the company to its growth path, restoring its top position in the automotive industry

-To shave costs out of a production system that is already the world's most efficient

PROBLEMS:

-Arrival of the worst economic recession which a great crisis in American financial services industry reverberated around the world.

ALTERNATIVE COURSES OF ACTION:

-Pursue the plan to new co-operations with other automotive manufacturers to revolutionize the eco-friendly car segment.

-Continue the high investments in R&D and in sustainable facilities.

-Put higher importance to quality not just to meet but exceed its standard requirement to minimize if not put a stop on recalls.

-Retain, remain and acquire more technological collaborations with contractor companies.

METHODS OF ANALYSIS:

SWOT analysis

Porter's 5 Forces

Supply Chain

Financial Analysis

RECOMMENDATION:

-Continue engaging in discussions with top manufacturers for collaborations and co-operation

-Build up more confidence and establish a serious relationship with any of the Big Three and other first tier manufacturers including suppliers to more collaborative results.

-Increase investment and broaden the existing parameters for R&D, facilities and technology

-Must reinforce environmental management by business partners on a global scale (consolidated subsidiaries, suppliers, dealers and overseas distributors).

-A separate department for its quality checks and control to minimize product recalls

-Improve company image through CSR initiatives

IMPLEMENTATION:

METHODS OF ANALYSIS:

1 SWOT ANALYSIS

Strengths

 Global organization, with a strong international position in 170 countries worldwide.

 High financial strength (1997, sales turnover, £131,511 million), sales growth of 29.3%

 Strong brand image based on quality, environmental friendly (greener), customized range.

 Industry leader in manufacturing and production. Maximizes profit through efficient lean manufacturing approaches (e.g. Total Quality Management) and JIT (Just in Time) manufacturing and first mover in car research and development

 Excellent penetration in key markets (US, China, EMEA) and now the second largest car manufacturer in the world, surpassing Ford.

Weakness

 Japanese car manufacturer - seen as a foreign importer.

 Production capacity. Toyota produces most of its cars in US and Japan whereas competitors may be more strategically located worldwide to take advantage of global efficiency gains.

 Some criticism has been made due to large-scale re-call made in 2005, quality issues.

Opportunities

 Innovation -first to develop commercial mass-produced hybrid gas-electric vehicles (gas and electric), e.g. Prius model. Based on advanced technologies and R&D activity. With oil prices at an all time high - this investment and widening of product portfolio fits consumers looking to alternative sources of fuels away from gas guzzling cars

 To expand more aggressively into new segments of the market. The launch of Aygo model by Toyota is intended to take market share in youth market.

 To produce cars which are more fuel efficient, have greater performance and less impact on the environment.

 To develop new cars which respond to social and institutional needs and wants. The development of electric cars, hybrid fuels, and components reduces the impact on the environment. Toyota's Eco-Vehicle Assessment System (Eco-VAS) has helped in production, usage, and disposal

 Continued global expansion - especially in the emerging markets e.g. China and India, Russia, where population and demand is accelerating.

Threats

 Saturation and increased competition, intense marketing campaigns increasing competitive pressures

 Shifts in the exchange rates affecting profits and cost of raw materials.

 Predictions of a downturn in the economy e.g. recession, will affect car purchases (especially new cars). As household budgets tighten - this could lead a decline in new car sales and possible rationalization of dealerships.

 Changing