Toyota's Core Competency

Toyota Motor Manufacturing (TMM), USA Inc. is formed by Toyota Motor Corp (TMC) in 1985 by investing $800 million to build a Plant at Kentucky, USA which will starts production in 1988 of around 200,000 units of Camry Sedan car. The purpose of building a plant is to compete in US market in midsize car which is comprise of one third of total US car market. TMM producing the cars on the same philosophy, methodology and technology, which TMC used to produce cars at their best quality and lowest cost in Japan.

Landon Orchard 292 Windermere Court West, London, Ontario, Canada 519-661-7006 Landon Orchard is currently an undergraduate business management major at Ashland University, Ashland, Ohio North Central Ohio APICS Chapter Full-time undergraduate student

Toyota is the world’s largest car manufacturer beating out Volkswagen, BMW and Daimler. They had double digit gains in April of 2014 delivering an impressive 13.3 percent more automobiles than April of the previous year. Despite the recall debacle that happened, they have been able to hold the No. 1 spot this year (Le, 2014). Toyota has numerous comparative benefits over their competition. They have a solid working model that produces high margins, a strong international brand that is known for quality and a business model that permits them to produce multiple car models for a very low amount of money while doing it at a fast pace and producing the best quality.

Honda’s current supply management strategy is consistent with Mr. Honda’s history. There three factors about Honda’s supply management strategy, focus on local market, emphasis on competition and reliable suppliers.

Toyota has many strengths. It has a strong global position and cars manufactured by Toyota have been sold in many places in the world. It sold 9.7 million cars and trucks, and had 45.5% of the market share in Japan in 2012. It has a market share of 12.2% in North America, 13.4% in Asia and 4.3% in Europe. (Anon, 2015) Such strong global position is because of company’s high quality products and strong brand recognition with its well known environmental friendliness, durability, social responsibility, reliablility and value. Toyota also has been the most valuable auto company

Amongst which, “jidoka” uses automation to immediately pause machinery which has problems. This stops defective products from being made and thus reduces wastage. As such, only products meeting their strict quality standards will continue onto the next stop on the production line.

Toyota has various global branch offices in the world and it supports the company by having a strong market position. Toyota’s markets for two most recognized brands Lexus and Toyota and could be considered as great market share in different regions such as in North America, in Asia excluding Japan, in Europe, in China, and etc. This helps Toyota have a better competitive advantages and opportunities of growing in global marketplace. Toyota also concentrates on Research & Development in the global facilities in order to enhance quality of service and product functionality, thus increasing product safety. A good strength is based on the innovation of current products, development of new products and manufacturing process. This strength supports Toyota in incorporating modern attributes such as technology to current range of products and other related fields, maintaining technical and innovative leadership in its automotive

Nowadays, due to globalization, local markets have strongly expanded and became part of global markets, which lead to a strong increase in competition between organizations. They now do not only have to compete with other local organizations, but with organizations globally. This makes it necessary for organizations to keep up with the increasing speed of innovation. In order to deal with the increasing global competition, one must distinguish him by taking the importance of diversification seriously and be aware of the importance of creating a strong identity. The famous British psychologist Edward de Bono once said:

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.

Lean manufacturing originated long before Toyota and Ford, however the thought that it originated with Toyota is flattering since they are the ones who perfected it. By creating the Toyota Production System (TPS), Toyota found a better way to produce large quantities of product efficiently with eliminating the waste factor and while cutting down cost. Taiichi Ohno a former Toyota vice president promoted the idea of JIT (Just-in-Time) which means “producing the necessary units in the necessary quantities at the necessary time.” (Monden) Which leads to Toyota’s ultimate goal in the TPS is to improve productivity for better return in investment. To have continuous flow in a production system Toyota sought out to achieve the concept of JIT and autonomation . Since the TPS is what creates the parts who monitors the JIT system? The kanban system which is an informational system that controls quantities being produce in each process. As the discussion carries on throughout this paper about Toyota and their use of the kanban system the topic

Supply chain management (SCM) is a core part of organizational effectiveness in order to achieve goals characterizes efficiency. Globalization and international agreement led Toyota to develop it is SCM process to increase outsourcing supply raw materials from foreign market that are low cost and high quality.

The Purchasing at Honda has the option of adding a second source of supply and ultimately for disqualifying suppliers from additional business with Honda.

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.

While there are opportunities for Toyota; also, there are the threats. They are as follows:

The early twentieth century was dominated with several multibillion companies. Some of these companies included the three major motor companies often named as the (Big 3). These were the General Motor, Chrysler and Ford. Toyota came up and replaced Chrysler and became the world number two after knocking out Ford in the year 2003. Since the year 2008, Toyota has remained on the world charts as the largest automaker in the world.