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Toyota Motor Corporation

Strategic Analysis
by

Renee Roth

on 2 May 2013

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Transcript of Toyota Motor Corporation

Threats Japanese multinational automaker
3rd largest automobile manufacturer in the world
Saturated automotive market
Innovation and cost leadership
Lost competitive advantage Introduction Opportunities 1. Increased Tax Incentives Currency and interest rate fluctuations of global market.
Natural disasters
Global recession of 2008
Substitute modes of transportation due to high fuel costs Supplies are not highly differentiated
Many different suppliers
Toyota alone has over 200 suppliers
Substitute supplies readily available Buyers Low product differentiation
Fixed costs are high
Competitors are numerous and equal in size and power.
Low Switching costs Barriers Industry
Overview Economies of scale
New entrants could not possibly match the efficiency of the competitors
Cost advantages independent of size
Industry know how and brand recognition are key attributes new entrants cannot easily imitate. Suppliers Customers buy in different volumes.
Passenger consumers: limited volumes Government agencies and rental companies buy in fleets.
Products are undifferentiated and there are many producers.
Customers are more sensitive to price than quality, above a base quality threshold.
Buyers cannot backward integrate. Substitutes Technology and market trends are changing rapidly, but with different speeds in different markets.
In the U.S. for example, public transportation is used more frequently of higher quality on the East Coast.
More consumers use personal vehicles on the West Coast.
Low Switching costs Rivalry Strengths Weaknesses Product recalls damage reputation
+8 million (2010)
3.5 million (2011)
7.48 million (2012)
1.73 million (2013)

Ineffective Market Research: poor performance of new models in various markets
Lacking the 4th D: Deliverable
Value not being delivered to the right markets
Intrinsic value higher than perceived value Competitive Advantage Process Innovation Superior Efficiency Recommendations Emerging Markets Restore Quality Image Implement a branch dedicated to safety.
Create a new research center for safety while strengthening supplier quality controls.
Effectively marketing new safety measures to the public Implement manufacturing bases in China and India
China, along with rapidly growing economies of Brazil and India, are in the process of shedding bicycles in favor of more sophisticated transportation Bicycle use dropping.
Registrations jumped 27.5%, nearly half the year’s global increase.
World’s second-largest vehicle population with 78 million vehicles. China India Long Term Strategy Separate its hybrid models into a different brand, similar to the Lexus department. Green Market Trend Why? Erika Almanza, Morgan Irons, Renee Roth, Summer West, and Stephanie Yee Toyota Motor Corporation: A Strategic Analysis Low Moderate Moderately High High High 2. Sociocultural 4. Increasing Global Automotive market 3. Technological
Advancements the growing trend towards green products
Strong Focus R&D: large budget
JIT, JIDUKO, and TQM:Innovative process:
Superior efficiency and new manufacturing systems
Technological leaders in production
First to market with Hybrid Production: 7,435,781 vehicles manufactured in 2012.
Largest sales distribution network in Japan.
Wide geographic reach, diversified risk.
Efficient manufacturing: synergy that cannot be imitated. Extensive training and education.
"The Toyota Way": family like corporate culture: encourages responsibility and innovation.
Increased employee loyalty and productivity.
Hard for competitors to imitate.
High sales in both domestic and international markets
Market Share by country: Innovation and R&D Human Resources Production and Distribution Networks Market Position and Brand Recognition Safety Vehicle population has the second-largest growth rate, up 8.9%
-20.8 million unites compared with 19.1 million in 2009. Financial Crises increased the need for cheap renewable energy
Green Movement
Rising fuel prices
Pioneer of Hybrid Increase Toyota’s differentiation.
Boost Brand Image: Separating their hybrid models would make them more distinct and desirable in the marketplace.
Increased government incentives and tax breaks. Brands Results + Quality Toyota Lean Management System Supply chain management
Labor productivity
Greater utility Manufacturing techniques:
JIT, Jidohka
Self managing teams
Reduced set up times for complex equipment Distinctive Competencies Once considered a core competency
Price premium
Perceived quality reduced in value 45.5%: Japan
12.2%: North America
13.4%: Asia (excluding Japan and China)
4.3%: Europe
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