Competitive Strategy Of Toyota

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Here in the case to study the competitive advantage of Toyota measures on the following

Differentiation – Toyota is the largest auto maker in the world and the key reason for the companies success is as a result of their differentiation strategy this includes introduction of a highly efficient manufacturing model to increase the performance of its vechiles and offer offer their customers with increased value. Another differentiation strategy is the fact that the company was able to produce vehicles for many different market segment and price

Toyota has been one of the most trusted and dependable names in the automobile business. In late August 2009, Mark Saylor, an off duty cop, was traveling in Southern California with three of his family members, when his 2009 Lexus ES350 started to accelerate on its own. One of his family members called 911 and said the car had no brakes and they were going well over 100 mph. Mark’s car would hit another car and fall down an embankment where it would catch fire and kill everyone in the car. Investigating started and in mid the late September investigators believed the cause of the accident was wrong floor mats might have been installed in Mark Saylor’s Lexus. This was a shock to the US consumers that wrong floor mats were leading to fiery crashes. Toyota decided in late September that they were going to recall 4.2 million Toyota’s and Lexus because of faulty floor mats and sticky gas pedals. In October of 2009 the LA times published several stories that involved the accelerator problem with Toyota. There were nine separate investigating done by the National Highway Traffic Safety Administration (NHTSA), five cases that resulted in fatalities, and hundreds of complaints filed to the federal government. Toyota being one the best automobiles in the world let this go by the way side and it cost them dearly.

Employees: Toyota considers employees as its most important stakeholders. This stakeholder group aims for job guarantee, career future and fair employment treatments.

Toyota Motor Corporation is a Japanese automobile manufacturing company which was founded in 1937 by Kiichiro Toyoda from his father’s spinning and weaving company. The company rises after post war era and became the world’s largest automobile manufacturer in 2012 beating General motors and Volkswagen behind and is by revenue it stands at twelfth place. Toyota group presently consist of 15 companies involved in design, manufacture, and sales of all classes of automobiles and their parts, also steel manufacturing, and textile machine production. With more than 3 lakh employees, revenue around $210 billion and presence all across the globe with 14 overseas manufacturing facilities Toyota is competing to sustain the leadership position in the sector.

For the purpose of this assignment regarding to the company of Toyota is evaluate the strategy they used in a market. I prepared this assignment with specific purpose in mind. So where I will discuss about the Toyota Company’s background, strategy analysis, strategy formulation, strategy implementation and concl

Toyota Motor Corporation is an international car manufacturer that is based out of Toyota, Japan. Toyota started vehicle production in 1933 with the company being a division of Toyoda Automatic Loom Works devoted to the production of automobiles under the direction of the founder's son, Kiichiro Toyoda. Throughout the early years of Toyota, they were well known for making highly desirable vehicles that were efficient and reliable. However, in recent years Toyota has been plagued with recalls for various reasons. Many of these recalls are safety related issues that have tainted to company’s sterling reputation. For instance, in January 2010, Toyota suspended sales of eight recalled vehicle models to fix accelerator pedals with mechanical problems that could cause them to become stuck. In December 2012, Toyota announced an agreement worth more than $1 billion to settle a lawsuit involving unintended acceleration in some of its vehicles (Wikipedia, 2017). Business experts believed that it was not necessarily the recall that damaged Toyota’s reputation, but rather the way that the recalls were handled. Many individuals believe that Toyota executives were insincere in their apologies, and that they did very poorly at explaining the recalls and what the course of correction was for the problems (Kaufman, 2010). Toyota’s CEO, Akio Toyoda, stated in an inter interview that the company was growing to quickly and was putting growth-related goals above quality concerns

Toyota’s strength is creating the best cars at lowest cost and developing new concepts and products within shortest timeframe. To accomplish this, they use a quite unorthodox manufacturing system. The management of Toyota is convinced that success is not only achieved by striving to optimal efficiency. It seriously invests in their employees in order to ameliorate their capabilities and therefore as a final result improve the strength and capabilities of the entire company. Ideas are shared horizontally as well as vertically and management constantly stimulates the process. The company sees the employees as the essential key assets of their

It has conducted a numerous number of vehicle recalls over the last few years, which affected its brand image and its financial performance. For instance, during 2009 and 2010, more than 9 million Toyota and Lexus vehicles were recalled due to the wrong floor mats installed that were interfering with the gas pedal, and the firm suspended production and sales. In 2011, 111,000 vehicles from Toyota and Lexus were again recalled due to the damage to the element of the substrate shutdown of hybrid system. And later in the year, Toyota announced to recall 181,000 vehicles due to the non ordinary noise and oil leakage, which have resulted from the bolts that were loosely attached. (MacKenzie, 2015) Beside these recalls, there have been lawsuits for vehicle failure. Toyota has a lower return on equity (13.9%) and return on asset (4.9%) than other auto companies such as Honda and Nissan. If you compare Toyota and Honda, you can tell that asset turnover ratio for Nissan is 81%, while Toyota only has 60%. (Basu, 2015) This shows that Honda is using its asset more efficiently to make profits. Lower return on equity and asset shows that Toyota is not generating much returns for its shareholders compared to other companies and inefficient use of shareholders’

Toyota’s response in terms of public relations was slow and most Americans began to believe the company was hiding something. The company management, especially, the CEO, Toyoda waited until February 5 to make a statement regarding the recall. As a result, the American media blamed the company for a lack of action and transparency as the situation unfolded. Regardless of the blame, the CEO informed the media that action

Strategies used by Toyota in order to get success in international markets to develop business and to impose on these markets, are created by Japanese specialists. Strategy of Toyota and other most Japanese companies are generally based on KAIZEN strategy, which means continuous improvement and impact that it has on product quality. KAIZEN is a cross-functional strategy that appoints gradual improvements in management and business activities. The product strategy of Toyota for international operations is based on developing new innovative technologies with continuous focus on quality, productivity and competitiveness.

We will start the external analysis with the PESTEL analysis of the automotive sector followed by the Porter’s five forces analysis and we will end by having a look at the key competitors and competitor pricing.

The success of Toyota Company depends on the coordination capacities related to the production of car parts, assembly, store network administration, generation planning, and quality control techniques (Barney & Hesterly, 2008). With the current campaigns on an unpolluted environment, Toyota has fully embraced the production of modern fuel efficient and clean hybrid vehicles. Already, the car has launched the Prius and is working on other new efficient automobiles.

Toyota is a key player in global automotive market. Its structure constitutes if various production plants in different locations and a very strong branding which helps it capture a major market share. Like other enterprises, Toyota has several strengths and weakness which makes it what it is now. Toyota heavily invests in Research and development which helps it come up reputable product line which is spread out throughout the world because of its strengthening global distribution network however its recent product recalling, loose grip in key geographic areas and wrong allocation of resources shows that even a strong brand like Toyota has its weaknesses.