Toyota Motor Corporation

Introduction

    Toyota Company is the largest car corporation in Japan and it holds the third position globally. Its headquarters are located in Toyota, Aichi locality in Japan and it was established in the year 1937. The company is regarded as the leading vehicle manufacturer in as they conduct their operations in more than fifty overseas manufacturing corporations in over twenty-six nations and localities. They offer employment to a large group of employees as the numbers of employees employed are approximately 338,875 employees across the globe.  Toyota industries over time have developed and thus they have been able to diversify their operations as well as expanding the extent of their business. The company’s production, as well as their performance, has improved over the years (Lavanya et al 9). It basically specializes in the automotive industry but it also incorporates their business with finance and other industries. The company’s sections involve the automotive section, financial service section, and other sections. Their operations on the automobiles are based in Japan, Asia, North America, and Europe. This automotive section involves the designing, manufacturing, assembling, and selling of passenger cars, minivans, and business cars, for example, the trucks, interrelated car parts and accouterments (Chart et al 1). They have subsidiaries that include the Daihatsu Motor Corporation which basically deals with the production and selling of the mini-cars and the compact ones. Another subsidiary of the company is the Hino Motors Corporation which is involved in the production and the selling of the money making cars such as the buses and the trucks (Malloch et al 246). The company is also involved in the manufacturing of the automotive parts, machinery, and accouterments for its own personal use and for sale to other people and businesses.

The company produces three types of cars that are categorized into three that is the hybrid vehicles, conservative engine cars, and fuel cell cars (Griffin 243). This paper therefore will major it’s discussion on the mission and visions of the company, SWOT analysis, company’s analysis using the Porter’s five forces and the net assessment of the company’s strategies and recommendations for the company.

    Mission and vision analysis

The company’s vision is to be the most esteemed as well as the most successful business that delights their clienteles with a wide variety of merchandises and elucidations in the automobile production with the preeminent employees and the finest technology. The company’s mission is in the provision of safe as well as the sound journey. Thus it is developing innumerable new technologies from the view of saving energy and diversification of energy sources. Environmental sustainability has been the most prioritized and essential issue of the Toyota Company and thus the company has been determined to work towards the creation a successful society as well as a clean world. The company thus ensures that they focus on the demonstration of a responsible corporate conduct all through the whole continuum of its activities and functions. The company’s concern goes far beyond the production of good cars as they make efforts towards meaningfully contributing towards the development of healthy living standards of all of their customers and the public in general. Thus they focus entirely on producing a clean as well as providing far above high quality and safe merchandises (Toyota Motor Corporation 1). The company is a respected as well as a corporate citizen in the UN Global Compact and they continually undertake social initiatives that assist them to strengthen societies and thus the contribute towards the betterment of the entire community.

The company thus uses the IMC that usually realizes the attainment of the company’s communal social obligation which is a multidimensional model which is the foundation of the sustained as well as the long-term development. The company, therefore, considers the CSR as an essential strategic tool rather than perceiving it as an obligation and it is used for the sustenance of the social strength. The company thus practices socially responsible management with an aim of developing and sharing their values with their employees, customers, partners, shareholders and the society at large in which the company operates (Toyota Motor Corporation 1).

External environment of the Toyota motors corporation

    Industry analysis

    Toyota Company is one of the companies that compete in the automotive industry. The past five years for the automotive companies were unrestrained. So many changes have occurred within the industry and this has adversely affected the company. For instance, the rapid increment of the fuel price and the rise in environmental concerns have diverted customers predilections away from the fuel consuming pick-up truck vehicles to smaller more efficient and conserving vehicles. Some of the automakers incorporated the changes through the enlargement of the small car assortments and the diversifying of their operations into the production of the hybrid electronic motor cars. Another category of the automakers was slow to adapt to the changes as they waited for the fuel prices to go down and thus they brought the customers back to the large vehicle fold. As the fuel expenses went down through the second part of 2008, it was owing to the United States shredding of the financial crises into the worldwide economy (Nkomo 2). This, therefore, affected both the developed and the emerging states where the western nations followed the United Nations into collapse.

The industry revenue fell and all through the five years, the development in the BRIC nations reinforced the production. As the income rose among the people, the demand for the motor cars also increased. However, the western automotive companies relocated the production operations to BRIC nations so as to tap into these marketplaces and also profit from the low rate of production. In the succeeding five years, the developing economies will continually grow and thus the ultimatum for these automobiles in the western countries will recuperate. The business is however in the mature phase of its life progression (Nkomo 2).

    Industry demands factors

    The request for the motor vehicles globally is basically connected to the motor car prices, for every capita disposable profits, fuel charges, and the merchandise invention. On the supply side, the car values increases from the material as well as tools costs with high steel and also plastic cost that raise the producers, buying costs and eventually the merchandizing prices. For the earlier years, the automotive manufacturers have been overwhelmed with high steel and plastic costs which have in turn resulted to their high cost of expenditure as they purchase those goods and this has raised the production and the manufacturing costs. The affordability for the consumers is determined by the amount of per capita disposable income. The susceptibility of the customers to purchase the motor cars increases the income of the consumer's increases as well as the affordability (Nkomo 2). Generation of sales is done using the incentives during the low periods of economic growth there has existed records of a substantial growth in the number of the vehicle funding businesses that have been recognized in the BRIC. This has led to the increase in the number and extent of the automobile loans which has resulted to the increment in the industry demand.

The general improvement in the quality of their products in developed nations has attributed to the freer feeling of the buyers as they use price so as to distinguish similar products. Customers are well informed of the vehicle's actual cost and they, therefore, fail to accept any rapid increment in price per year. During the period of the low price increases, consumers who are familiar with the vehicles actual cost details from the consumers’ publications and the internet sources have become shrewder especially while negotiating the buying of the vehicle. In this manner, customer awareness and admittance to the information can govern the demand of the motor cars. Fluctuation in the fuel prices also generally affects the demand for the vehicles basing on the type of the car. During those periods when the fuel prices are very high, more vehicles which are fuel resourceful are in high demand. For the earlier years, the prices of the fuel have increased which has stimulated the acceptance of the hybrid and new models that are fuel effectual (Nkomo 4). Lastly, the product invention and innovation can stimulate demand especially with respect to more fuel efficient cars, for instance, the hybrid and the electric car models. Most of the customers are willing to purchase a car that is more fuel-efficient as it will potentially save on the cost of fuel while the vehicle is on the road.

Porter’s five forces: Toyota motors industry

    Risk of the new entry

• The quantity of capital that the company requires is large.
• The products of the company are distinct from other products by use of design and the manufacturing quality.
• There is the high retribution possible from the existing corporations, while the new entrants are expected to bring inventive products and ideas to the company.
• The government regularly protects their home markets through the introduction of the high import taxes.
• There are few legal barriers that protect the existing companies from the new entrants.
• It is however too hard to attain economies of scale from the small companies.
• All the automotive corporations have recognized brand image and reputation.
• All the new entrants in the company could easily be able to access the suppliers and the distributors.

    Supplier control

• It involves a large number of suppliers.
• Some of the suppliers are large but most of the suppliers in the company are small.
• The company uses one metal instead of another type of material but only to some degree, the plastic material is used as an alternative to metal.
• The materials are widely available
• The distributors do not position any danger of frontward incorporation.

    Consumer control   

• In the present, there are too many buyers.
• Most of the purchasers are persons who purchase only one compartment while there are other buyers who purchase large convoys and are able to bargain-basement for lower charges, for example, the government and corporates.
• The cost of consumers to adjust to a new brand of car or to start consuming other modes of conveyance is low cost.
• Buyers easily chose alternative vehicle brands.
• Buyers are however price conscious and their decision are majorly determined by the extent to which a car costs.
• Buyers do not threaten of the backward assimilation.

    Threats of substitutes

• There exist so many alternatives of the types of transportation.
• Substitutes rarely provide similar convenience.
• There are alternative forms of transportation that almost cost lesser and at times they are more environmentally eco-friendly.

     Competitive rivalry

• There are reasonable numbers of entrants.
• Once an industry decides to dispense a business it would experience a huge amount of losses thus in greatest time, the company is either in the bankruptcy situation or rather they stay in the automotive industry for the rest of their lifetime.
• The industry is relatively large and as well as mature.
• The size of the competitors in the competitors’ environment varies but they mainly compete for various consumer divisions.
• There is the reasonable risk of being developed by a contestant.
• The marketplace share absorption of the company is low and thus the business is considered to have low intensities of attentiveness while the other four principal manufacturers approximately justifies for around a one-third of the worldwide returns.

    Main success of the company

    The company is flexible in determining the expenditure hence they are able to control the employee interconnected costs which make the manufacturers in the developed world more competent. The company establishes the export markets and thus they are able to repudiate any recessions that may occur in the local markets. The company also uses some of the most efficient work practices, for instance, the use of the good industrial associations through the use of the motivated labor force that enables the minimization of the industrial disputes. The company also has effective cost controls where a close relation is established with the suppliers thus allowing a good distribution channel that assists in the control of costs. The company is also able to access the latest available and most effective technology band methods thus enabling the company to be competent amongst their competitors. With a high technology that is technologically enabled, the company’s competitive edge is acquired. The company has an optimum capability of utilization this is because the industry’s success heavily relies on the excessive high firm utilization in any modern automobile and the light duty motor car manufacturing firm (Nkomo 2).

 

 

 

Internal environment

    Competency

    The main proficiency of the Toyota motor company is its aptitude to create vehicles that are of great eminence and at affordable charges thus offering the consumers a value for money. This main competency on quality can be accredited to its inventive manufacture performances. This quality aspect in the company has transformed the motors in the preceding years and as a result, nearly all of the automobile corporations had to work hard to attempt and improve the superiority of their manufactured merchandises. This is a foundation of the cost management approach pursued by the corporation (Nkomo 3).

    Its distinct competence is evident in the production system which is established on the lean industrial model. This model correspondingly involves the inventive practices, for example, the just in time, the six sigma as well as the kaizen (Borowski et al 4). This makes them outstand among all the other automobile manufacturers. It is through this distinct competence that the company has been able to attain the competitive advantage that has enhanced the company to have a sustainable le brand name and a leading market position.

    Organization structure

    The organization structure of the Toyota motor corporation is formed on the different business operations of the corporations around the globe. The company being one of the leading automotive companies in the business, it engages its organization structure with an aim of associating the company’s goals and direction. The company effectively sustains a strong worldwide presence which portrays its capability to utilize its organizational structure so as to maximize the effectiveness and the capacity usage.

In quintessence, it is through this organizational structure that the company’s success is determined in the international market (Liker et al 46).

    The company basically has a divisional form of organizational structure. The change has undergone important changes over the years and especially in 2013. This was attributed to the safety issues which caused the change as a response to the situation and a corresponding recalling of the products (Nkomo 3). Traditionally, the organization structure had a strong centralized organization structure where the company’s headquarters were in charge of making decisions while the communication flowed from the headquarters. However, this form, of organizational structure was not good and it was criticized thus making the company to reorganize its structure and thus an improved structure was put in place in 2013. The organization structure as at now basically is composed of three elements that are the geographical category, the product-based categories, and the worldwide hierarchy.

    The company therefore upholds its worldwide hierarchy notwithstanding its restructuring in 2013. However, in the company’s current organizational structure has increased the decision making supremacy of the regional management and the business unit leaders. Hence the company’s decision making process is less centralized while all the business managers’ reports to the firm’s worldwide global headquarters located in Japan (Iyer et al 22).

    The company operates in eight regional detachments where each of the region’s head reports to the headquarters of the company. This enables the company to be able to develop products as well as services basing on the regional market situation.  Product based category involves four divisions which are tasked with the role of engine, transmission and other interconnected operations. This helps the company to advance brands and product lines.

    The Toyota company’s organizational structure offers the company greater flexibility as compared to the traditional organizational structure. The new structure therefore is able to respond to the regional market situation. It is through this flexibility that the company is able to speedily respond to matters and offer high-quality products, however, with the increased decision-making authority of the regional managers, has reduced the control of the headquarter over the worldwide organization. Thus the organization structure therefore assists the resilience and the continuous grow (Iyer et al 22).

 

SWOT ANALYSIS

    Strengths

    The company holds a strong market position and brand acknowledgment. Within the different geographical regions across the globe, the company holds a strong market position. It is through this resilient market situation that the business is able to gain the competitive advantage and correspondingly grow into the transnational markets. Also, the company embraces an assortment of resilient brands in the motorized business. Hence, the corporation resilient markets situation provides it with an important competitive advantage that assists it to be able to record greater sales development in the national and the worldwide marketplaces (Liker et al 46).

    The company has a strong focus on the R&D with an aim of expanding its products selection and developing the functionality, eminence, safety as well as the environmental suitability of its production. The organization’s R&D efforts concentrate on developing new products and processes and the advancement of the abilities of the available products. The company thus operates its activities at all the facilities globally (Nkomo 3). More strong concentration on the R&D has assisted the company in the integration of the innovative structures to its already prevailing choice of merchandises and also conveying out the up-to-date expertise in the different extents. It is through this strong focus on the R&D that the company is able to maintain the industrial management in most of its merchandise division. It correspondingly enhances the Toyota Company to progress inventive merchandise that leads to resilient sales.

    The company also offers extensive production as well as a distribution system. The company together with its associates produces automobiles and related parts and components through more manufacturing corporations within different regions and nations (Nkomo 3). The company has a well distributed geographical production base which broadens the horizons of the business uncertainties; its extensive distribution system offers wider reach thus boosting the returns.

    Weaknesses

    Product recall that is carried out by the company may affect the image of the brand and the overall sales of the products. The decline in the sales in the main geographical areas has adversely affected the company. This is viewed from the continuous decline of sales in different geographical regions and this creates pressure that affects the division of profit making and the overall returns of Toyota. The company has a low apportionment of resources as compared to other corporation (Nkomo 3). This is witnessed from the low profit on equity and the profit on assets as compared to other companies. This is to show that the company has failed to use the shareholder's money effectively and it fails to generate high profits for its shareholders. Hence poor distribution of the resources may hurt the shareholders worth and thus lead them to lose confidence in the long run.

 

    Opportunities

    The international automotive business was severely affected by the economic recessions with the decline in the revenues that were being recorded over the years. Thus the recovery of this international automotive business offers the Toyota Company a chance to gain more consumers and revenues. Toyota Company is self-assured of the advantage from the developing conglomerate with the BMW. Both the BMW and Toyota companies contracted a memorandum of understanding between the two (Nkomo 3). This was aimed at long-term strategic cooperation, especially on the technological sector. As portion of the arrangement, the two corporations will significant each other for the shared improvement of a fuel compartment structure, shared improvement of the structural design and mechanisms for a impending sports vehicles, integration of the powertrain electrification and shared exploration and improvement on the light weight expertise. The growth of the corporation between the two enterprises is anticipated to increase the technological knowledge of the corporations and may possibly lead to the improvement of new merchandises so as to intensify returns in the long-term. While in the short-period, the corporation will lead to important cooperation and cost saving enhancing the operational margins. Another opportunity is on the strong outlook for the international new car market. With the moderate growth over the years in the worldwide new car market, there are chances of acceleration towards a strong double-digit development. Hence, the strong outlook of the worldwide market, attached through the company’s new invention launches offers an improvement chance for the business.

 

 

    Threats

    The global motorized industry is extremely competitive. Therefore, the Toyota Company encounters a tough struggle from the motorized producers in different markets. The competition among different companies is likely to increase with the continuous globalization and the partnerships in the line of automotive business. Quality, features, pricing, development, safety, fuel efficiency, and financial issues are some of the factors that determine competition (Nkomo 3). The amplified rivalry may result in inferior motor cars unit sale and enormous inventory which may lead to recession valuing pressure thus influencing the economic situation and the outcome of operations of the organizations.

    Toyota Corporation is so profound to the variations in the overseas currency exchange charges and is standardly uncovered to fluctuations of the other states. The US dollar fluctuation in the foreign exchange rates would affect the Toyota operations which eventually impact the valuation of the corporation. The Toyota Company suffers disruption of production because of the natural disaster. This company therefore primarily operates mainly in Japan which is highly higher. Generally, the company has outperformed in the business over the years (Nkomo 3).

    Recommendations

    The company should continually carry out the concerted efforts so as to strengthen its management as well as rising of the corporative value. In dealing with the immediate tasks, the company should ensure that they promote business and the cost of organization reorganizations so as to realize a firm organization stage with an aim of responding quickly to the evolving market situations.

Thus the company should sustain a rationalized arrangement through the decrease of the stable costs and the enhancement of its industry in the reputable markets mostly in the industrialized states (Toyota Motor Corporation 10). The company should also hasten the industry’s development into global rapid developing nations by carefully and accurately monitoring of the market condition in relation to the areas and the introduction of the products that are appropriate to the features and the necessities of each and every market. The company should thus be determined in establishment of the production and supply arrangements so as to be able to attain the optimum product pricing as well as delivery upon the valued chain so as to offer a wide selection of customers’ services on each and every geographical region (Nkomo 4). The company should also make considerations where they should consider making the Lexus a priority in the Chinese marketplace (Liker et al 46). This will enhance the company to become competent with other car producers in the luxury category. The increase in the production functions in Asia will enhance the company to have cheap transfer networks and it will come closer to the emergent market consumer. The company should also cut out stratum of the middle management with an aim of allowing the engineers to have more control and power than the specific consumers’ needs which are answered in the designing and the development of the new vehicle. The company should also follow the improvement of the environmentally friendly operations, energy saving merchandise while integrating the functions and the services that are demanded by the by the consumers and delivering these services to the worldwide market extent (Toyota Motor Corporation 10). The Toyota Company should focus on the growth in the three business segments. One of these segments involves the solution where the material and equipment are handled.  Logistics and the textile machinery is the other unit which is the main component of especially when it comes to the vehicle conditioning compressors and the vehicle electronics. The third unit is on the mobility which is involved in the division of the vehicles as well as the engines. The corporations should also maintain the amalgamated international scale where it enhances the power of its working place and the diversity that is there to the employees and strive towards the nurturing of the international human resources (Toyota Motor Corporation 10). It is also important for the company to prioritize safety issues as they enforce on the thorough acquiescence that involves the implementation of the law and regulations and actively involvement in the social contribution in the community. The company should also aim at supporting the businesses and the social infrastructure around the globe through the constant distribution of the products and services that antedate the consumer’s needs so as to contribute to the engendering of the compassionate community. Generally, the company has overpowered the businesses in this line over the past years and thus it has gained the market shares. The company has adopted the Modification towards smaller and more fuel-efficient cars which the Toyota vehicle manufacturers can manufacture at relatively lower prices. This will enable development in America (Nkomo 4).

    Conclusion

    It is important to note that the company has made tremendous progress over the years and their success is attributed to their quality services and products. Their success is also attributed to the well-organized structure that is effectively and efficiently organized in a better way that supports the success of the company. The company honors the language and each and every law that is set in every nation and they usually carry out open as well, as fair corporate activities of being a good corporate citizen globally. This company has also shown evidence of harmonious growth that involves the innovative management within the global society. 

The company has also shown strength in the way in which they create and improve technologies and offers outstanding products and services that fulfill the needs of its consumers. The company also is involved in partnering with other companies in research and creation of the partnership so as to attain a long-term growth and a mutual advantage as they keep the company open for more partnerships. According to the analysis of the strengths, weaknesses, opportunities and threats it is evident that this company faces so many challenges within and outside the company. There are internal forces that affect a business performance and the company should thus focus on the improvement of the strengths and the change of weakness into strengths. For the company to continue realizing more advantages and more return there are so many factors to be worked on so as to ensure that the company is able to meet its obligations. The company is devoted towards not only producing goods of high quality but they usually goes beyond as they ensures that their products are healthy, safe and clean. This enhances the company to ensure that they offer quality living standard through their operations. The company offers so many benefits to the society as they employ so many employees in their company. This therefore allows the people to have better living standards as they are able to get food to eat. The company uses alternative sources of energy that saves on the energy that is used and this enhances the conservation of the environment. The company is also proud since it has a dynamic mix and diversified operations across the globe.  Toyota industries over time have developed and thus they have been able to diversify their operations as well as expanding the extent of their business. It is through this diversity that the company is able to compete with other companies and to respond to the situations facing the company. It is this diversity that the company is able to continually sustain skilled, able and enthusiastic workforce that is drawn from the background, know-how and perspectives.

Over the years due to the company’s success and effectiveness in their operations, they have been able to develop their name and brands and thus making them competent in the competitive environment. Thus they have earned a reputation due to their quality services and products as well as their integrity during their operations. They are therefore committed towards responsible management and environmental activities. The company holds upright their ethical conduct that goes beyond the legal requirement. The company integrates all the stakeholders in its operations which are an important thing as it enhances its success. Once the stakeholders are involved, they are always able to share the company’s values, beliefs, and goals and this helps them to work as a team so as to be able to meet the common goal of all in the company. Customers are prioritized first in the company and thus this allows the company to be more interested in making their customers happy through meeting all of their needs and requirements. They also sell their products at affordable prices which in turn attracts more customers into the business. All their operations clearly portray that the company is doing all their best so as to be able to continually improve and innovate and this has created loyalty among their customers. The company should therefore continue to carry out the concerted efforts so as to strengthen its management as well as rising of the corporative value. The company is flexible in determining the expenditure hence they are able to control the employee interconnected costs which makes the manufacturers in the developed world more competent. The company has adopted the Modification towards smaller and more fuel-efficient cars which the Toyota vehicle manufacturers can manufacture at relatively lower prices. They major on fulfilling their obligations to the people and this is an indication of their respect for the people. They also focus on globalizing their operations with the reduction in the cost of expenditures so as to maximize the profit.

 

References

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            Liker, Jeffrey K, and Michael Hoseus. Toyota Culture: The Heart and Soul of the Toyota Way. New York: McGraw Hill Professional, 2011. Print.

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