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Natasa Pristovsek

on 24 October 2012

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Transcript of Toyota

Andreja Kavka Benjamin Dié Ivan Stancin Nataša Pristovšek Tine Lisjak TOYOTA Presentation Vid Doria BY
In 1983 Toyota established a joint venture New United Motor Manufacturing, Inc.(NUMMI) with General Motor , which created knowledge & experience about local conditions

Today US presents strategically very important market

Toyota uses american born designers to design trucks for american market

More americans climb up the corporate ladder: new design ideas, marketing and innovation

Example of: global strategy adaptation to changing market mix & world-wide learning Americanization of Toyota Israeli/Arab conflicts
in 1970’s Oil prices went up, Toyota suffered. Asked employees for ideas to cut costs - received 247,000 ideas.
Toyota transferred knowledge from Japanese market (low natural resources) to american market
Smaller cars with fuel-efficiency
Still had to be designed for american market

Example of Toyota’s transnational mentality = world-wide learning Entered US market in 1957
Standarized vehicles due to economies of scope and scale = cost reduction & standardization
Failed because different taste of american consumers
Toyota used feedback information to design vehicles which fit american market
In late 1960’s Toyota start selling well in US and continued reducing costs
Example of Toyota’s transnational mentality = global efficiency + local responsiveness (assisted by worldwide learning) Toyota entering US market
in 1950’s Source: Toyota suitability report 2010 The toyota way 2001 Global integration &
local responsiveness Three sides of preasure Solution: Reducing costs via ec. of scope and scale = GLOBAL EFFICIENCY
Automotive industry is born for global market:
High competition
Demand for cost reduction
Fast quality upgrades Tansnational
mentality Different national markets:
Variation in consumer taste
Government regulations
Solution: Differentiation of products among national markets = LOCAL RESPONSIVENESS Source: Ichijo & Kohlbacher, 2008

Highly centralized power structure
Strong dependency of subsidiaries on HQ
Communication and cooperation among subsidiaries
Subsidiaries role as implementers Formalization

Weak management – meeting in Davos while crisis in USA
Lack in total quality management even though it should be one of the best one in the world
Supply-chain management (recall was connected with bad parts prescribed by supplier)
Costumer complaints - bad customer service Strengths

“The Toyota Way 2001” – guidelines for all employees, code of conduct
Total quality management (even though it is shown it has space for improvements) Manegerial
process Weaknesses

Relatively rigid corporate culture
Hierarchy of seniority
Slow reactions when irregularities occur
Sales regions low local authority Strengts

Org. Matrix work well but in a case of crises slows down the processes (recall of the cars)
Team work (4-5 people which helps with excellence) Organizational
structure Weaknesses
Single supplier philosophy
Lean production
(may be also perceived as a weaknesses
for recalls of all vehicles –
aggressive cost cutting) Strengths
Single supplier philosophy (trust)
Strong marketing strategy because of being leader in R&D
„Open door strategy“ – competition for new suppliers (low cost and lean flows)
„Just in time“ production – pioneers
Constant learning and continuous improvement Three strategic goals Strategy Company Overview Economies of scale
A certain amount of cars is produced at a specific time.
Economies of when a certain number of cars are ordered
No waste
perfect use of resources.
Economies are mainly made
with the absence of losses and wastes
Experience Efficiency concept Porter’s generic Competitive Strategies

Lean flows 
No waste
Economies of energy, electricity
Good amount of labor, no employee burnout

Cost leadership does not come from the low prices
But from a lower amount of internal costs Competitve advantage Primary activities
Inbound Logistics
Increasing price of raw material.
Investors have a increasing power on prices
Suppliers opened-door competition
Small warehouse as lean flows, no need for big stocks
Toyota Product System (TPS)
Outbond Logistics Competitve advantage Support activities Organization: Automatic loom, chain conveyor into assembly line, TPS (Toyota Production System),"automation with a human touch and Just-In-Time
Human resources: The Toyota Way, principle 9,10,11. constant learning
Technology : Principle 8, pull technology, Leader in R&D
Purchasing: Strong relationships with suppliers, but also opened-door strategy for supplier competition (Quality, price, lean flows) Competitive advantage Toyota’s organizational
structure Relationship between HQ
and subsidiaries Changing environment
New technologies
Innovations becoming important source of competitive advantage
Solution: Enable the company to gain share knowledge and experiences in all markets where it is present = WORLDWIDE LEARNING Toyota started in 1933 as a devision of Toyoda Automatic Loom Works
Launched the first car in 1947
First global expansion (to Brazil) in 1959
Toyota today employs 325,905 people worldwide
Facilitates 33 regions worldwide, selling 6-7 mio cars a year

Complex matrix organizational structure
Coordination among products, functions and geographic areas
Each employee reports to a functional manager and to a chief engineer
Fairly flat organizational structure
Groups and teams within departments
Greater flexibility, effective communication
Constant learning, continuous improving Weaknesses Pionner of Just-in-time
Perpetual learning
Procurement costs
Open-door strategy for suppliers
Have to deals with many stakeholders
for the best prices
Innovation of product and Process.
Huge competitive advantage Output not sent overseas, huge network, lot of subsidiaires
Toyoa cars sold in more than 160 countries
Marketing and Sales
Leader in technology helps having a strong marketing strategy
Positive message
« Best Total Ownership Experience »
Really focus on customer needs.
Learning company, really cares about problems to fix it quiclky Competitive advantage Suggestions: More decentralization be able to respond faster to local changes Better costumer service. (slow responsiveness complaints)
Improve TQM and better control of suppliers (due to the recalls)
Revise Supply Change management. (aggressive cost cutting could be on expenses of quality). Centralization/decentralization

Formal written policies (Toyota Way, Code of Conduct, Toyota Production System)

Decision authority are delegated to subsidiaries to some extend while the final exclusive decision remains at the HQ
Normative integration
Transfers of managers to other regional subsidiaries and HQ in Japan Governance mechanism Thanks for listening!
Chain Value,
Quality of plant&equipement
Long experience
Pioneer of Just-in-Time

Huge financial resources Leading technology
Small competitors can hardly innovate
Culture/history and social complexity
Training and learning company Value Rarity Long experience of Just-in-time
Huge network
Skilled labour
Technology Non-Substitutability Car remain main transport industry
Crisis Different way of travelling

Inimitability Source: Toyota.com Source: Toyota Global web site - www.toyota.com Source: Toyota Global web site - www.toyota.com Funny
Toyota Ad Company should also focus on electronics/integration with car- as most cars today are becoming very high-tech. (Google plans on making cars with no driver - potential threat at one point or oppurtunity to take them as partner)
http://www.toyota-global.com/company/profile/overview/The Toyota Way, 14 Management Principles from the World's Greatest Manufacturerhttp://www.toyota-industries.com/corporateinfo/purchasing/policy/Porter. M.E. Competitive Advantage: Creating and Sustaining Superior Performance , (Revised edition), The Free Press, 2004.Porter, M.E. (1985) Competitive Advantage, Creating and Sustaining Superior Performance Free Press, New York, 1985. Sources: Source: Ichijo & Kohlbacher, 2008 Abilla, P. (2011). Toyota organizational structue: Balance between centralized and decentralized controle. Retreived on October 20, 2012 from http://www.shmula.com/toyota-organizational-structure-centralized-decentralized/8750/
Bauer, T., & Erdogan, B. (2010). Organizational structure and change. Retreived on October 19, 2012 from http://catalog.flatworldknowledge.com/bookhub/4?e=fwk-122425-ch14a_s01
Ichijo, K. & Kohlbacher, F. (2008). Tapping tacit local knowledge in emerging markets – the Toyota way. Knowledge management research & practice. Retrieved on October 19, 2012 from http://www.google.si/url?sa=t&rct=j&q=&esrc=s&frm=1&source=web&cd=2&sqi=2&ved=0CCYQFjAB&url=http%3A%2F%2Fwww.dijtokyo.org%2Farticles%2FKMR_08-6_Kohlbacher.pdf&ei=Cq2GUJ-jJ8zZsga8uoBY&usg=AFQjCNEh50B-VvgMtZj93wZYBG28WhENBw
Nobuaki, N. (1999). Parent-subsidiary relationships in Japan: some observations from financial statement data. SAM Advanced management journal. Retrieved on October 19, 2012 from http://www.freepatentsonline.com/article/SAM-Advanced-Management-Journal/55804649.html
Toyota Culture. (2012). Retrieved on October 20, 2012 from http://recruitment.toyotauk.com/about-us/our-culture.jsp Source: http://www.toyota-global.com/company/profile/facilities/ Source: http://www.toyota-global.com/company/profile/facilities/ Source: http://www.toyota-global.com/company/profile/facilities/ Source: http://www.toyota-global.com/company/profile/figures
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