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TOYOTA Case Study

Strategic Managment case study

DeeDee Watson

on 3 August 2013

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Transcript of TOYOTA Case Study

TOYOTA Case Study
Thank you for your attention
Pakistan Government
Changing tariff
Changing policies
Changing into yellow cabs
Respecting the culture
Corporate activities in the communities
Main source to increase productivity
Changing in the means used to motivate people
Porter’s Five Forces
There are a lot of substitutes in the automobile industry.

The substitutes of the Toyota Company are Honda, Suzuki.

When the price of the vehicles rises, the substitutes will emerge, there are many types of equipment that can take the place of vehicles, such bus, bicycle and even walking.
The competition is not only between the corporations, but between the governments.

Governments established protection laws to protect the products of each own production.

For example, U.S. government increased the additional tariffs on Chinese tires in 2009.
Buyers have a lot of information channel, such as the internet, where can easily find the proper vehicle.

The preferences of the private consumers are important to the vehicle corporations.

If automobile Company increases one type, they can also choose other type cheaper, or find a substitution such as: walking, and bus.
There are various types of suppliers in the vehicles industry, including the cooling system, electrical system, braking system and fuel supply system distributed across the globe.

Most vehicle manufactures own many interchangeable suppliers, and also have the ability to produce the components by their own in the short time. Thus, the suppliers do not own the power to change the price.
The entrants cannot enter to the automotive industry easily, as automobiles are special products that require a large amount of money on the design, electronic functions, and safety issues. And another important issue is the brand loyalty in the car market. Vehicle firms always benefit the brand value, and decrease the consumer sensitivity about the price.
1. Bargaining power of suppliers:
2. Bargaining power of buyers:
3. Threat of new entrants:
4. Rivalry among competitors:
5. Threat of substitutes:
Industry leader in production and sales. Toyota was the first company to introduce lean manufacturing and total quality management practices in manufacturing process. For some time, the company was the only practitioner of these practices and had the lowest manufacturing and production costs worldwide. Although many manufacturers were able to replicate Toyota’s lean manufacturing system, the company is still one of the most profitable manufacturers in the world.
Strong brand portfolio. Toyota currently sells about 70 different models of cars under its namesake brand. This does not only increase brands awareness but also satisfies nearly every consumer group needs. Toyota’s flagship models are Corolla and Prius.

The leader in “green” cars development.
 Toyota understands that environmental
friendly cars are the necessity nowadays.
Consumers are more selective in terms
of CO2 emissions and fuel-efficiency of
the cars they buy and Toyota’s early move
towards selling hybrid and efficient cars is
the strength few competitors can match.
Brand reputation valued at $30 billion. Toyota’s brand is the most valued automotive brand in the world. The business is known for its environmentally friendly, safe and durable cars that are sold in more than 170 countries.
Toyota SWOT analysis 2013
Innovative culture. Toyota is one of the most innovative auto companies and has a strong culture that is focused on constant innovation. The company was the first to introduce Kaizen, Kanban and Total quality Management systems widely in their organization. The company was the first to mass-produce and sell hybrid vehicles too.

Large-scale recalls. Toyota had quite a few large-scale vehicle recalls over the past few years. The business recalled 9 million vehicles in 2009-2010 and 7.43 million cars in 2012. Such recalls does not only hurt the firm financially but significantly damages firm’s brand.

Weak presence in the emerging markets.
Toyota’s main markets are Japan,
US and Europe, while such emerging
economies as China or India make only
a small percentage of all Toyota’s sales.
Due to poor presence in the largest
automobile market (China),
Toyota will find it hard to compete with
GM that has huge market share there.
acquired other car companies in the past and should continue doing so to grow
introducing new car models
4. Growth through acquisitions
3.Changing customer needs
Increasing fuel prices open up large markets for
2.Increasing fuel prices
consumers are more likely to buy new hybrid and electric cars
1.Positive attitude towards “green” vehicle
prices mean higher costs
and less profits for Toyota
More investments mean
less profit for Toyota
fuel-efficient hybrid and electric
cars will become less attractive
3.Rising raw material prices
2. New emission standards
1. Decreasing fuel prices
exchange rate against other currencies
means lower profits for Toyota
natural disasters that disrupt manufacturing in the facilities and decrease Toyota’s production volumes
more intense competition from other auto manufacturers
6. Appreciating yen exchange rate
5. Natural disasters
4. Intense competition
Opportunities and Threats
Toyota have turned a threat into a business opportunity, boosting their reputation both as environmentally conscious and as technological innovators and established themselves as leaders in this growing market.
The car industry faces many complex issues, but the introduction of the Prius provided Toyota with a competitive advantage.
Toyota set up a group tasked with meeting the challenge of creating a vehicle for the 21st century .
Toyota pioneered the concept of Hybrid (petrol/electric) technology to mass produce the world’s first eco-efficient vehicle, the Toyota Prius.

The vehicle featured the Hybrid Synergy Drive which integrated aspects such as an optimum mix of electric motor and petrol engine and electricity regeneration through the braking system. This allows the vehicle to run at an optimum level in terms of emissions efficiency
cutting the cost for customers as they had to buy less fuel .

While rivals in the US such as GM and Ford were forced to make major job-cuts due to the decline in popularity of their less efficient motor cars.
However the vehicle industry as a whole faced a huge threat to its survival. Oil accounted for 95% of global energy used for transportation (Energy Bulletin, 2007).
Also other factors including energy security, concerns over carbon emissions from burning fossil fuels and increasing demands for fossil fuels (and cars) in emerging economies are pushing and will continue to push, up the price of oil.
As a result of these factors the cost of petrol used to power Toyota’s cars was predicted to rise significantly making Toyota’s products less attractive to customers.
The company could predict that increased costs and changes in customer attitudes could damage their sales internationally, while governments were likely to penalize heavy emitters through taxes and legislation.
Toyota’s core business was manufacturing and sale of automobiles. Toyota Motor Corporation was founded August 28, 1937. By the year 2000, Toyota was the world's third largest car company and the largest car company in Japan. Toyota maintains a 9.8 percent share of the automobile global marketplace. The owner of Toyota was Kiichiro Toyoda, and the company’s name was kept on the family name but later they changed the name from ‘Toyoda’ to ‘Toyota’. In 1960 the business started to expand. The first Toyota was built in Melbourne, Australia in 1963. It is a successful company that has presence in more than 170 countries
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