Category: Toyota

Inter-links and synergies of the five objectives of operations management

Operations management has become increasingly important over the last couple of years as a result of the changing business environment. The level of competition among organizations is becoming stiffer each day. The competition puts pressure on the organizations and the management to work tirelessly to gain and maintain a competitive edge. Any organization that is willing to succeed in the current business world cannot afford to relax in the competition (Slack, 2009).

Losing a competitive edge means that the organization loses its customers and sales. One of the ways that have the capability of guaranteeing the organization a competitive edge is customer satisfaction (Slack et al. 2012). Customers are always willing to get quality products and services from organizations. Therefore, quality production can increase customer satisfaction and an organizations competitiveness.

Operations management is the department that plays a major role in production and providing quality products and services. It oversees the design and management of processes, services, as well as the supply chains that are carried out as raw materials are converted into finished products ready for use.

It also oversees the movement of products from the location where they are produced to the point where they are consumed (Slack et al. 2012). The operations management acquires, develops, and utilizes resources that an organization requires to deliver the goods or the services to the customers (Mahadevan, 2010).

Operations management has 5 major objectives, which include cost, quality, speed, dependability, and flexibility (Slack, 2009). Most organizations that have been successful and able to win the competition battle have combined all the five operations management objectives effectively (Slack et al. 2012).

Toyota Motor Company is one of the largest companies in the automotive industry. The company has one of the best operations management departments. Toyota has been able to produce high quality vehicles and sell at low prices that are affordable to many people.

In addition, Toyota is able to deliver the goods to the desired consumers at the right time. The operations management is flexible such that it can adapt to the different tastes and preferences in the business world and produce different vehicles based on the customer needs. Toyota is further independent in that it can perform at a high level without necessarily depending on other companies (Slack, 2009).

Toyota Motor Corporation vehicles are relatively cheap compared to those of other companies, such as BMW, Mercedes Benz, Audi, Land Rover, and Ford, among others. This makes the Toyota vehicles more affordable to many people. The company produces cars that are meant for different classes of people, including high income earners, middle income earners, as well as low income earners.

It should be noted that most customers are able and willing to spend the least amount possible on a product. However, customers are also conscious about the quality of the products they purchase (Ahoy, 2009). Toyota has been able to address this need in that it produces goods that are of high quality. The low price by Toyota does not compromise the quality of its vehicles.

The operations management of the company has been able to secure low cost production and low prices for its products because it is located in a country where there is plenty of cheap labour. Toyota is based in Japan, a country that is ranked among the highest populated nations in the world.

A large percentage of the Japanese citizens have skills and knowledge that can enable them to participate in production activities. This has been an important factor to the operations managers in that they can easily reduce the production cost and the selling price of vehicles.

Toyotas operations management is already in a position of satisfying its customers in matters of quality and low cost production. However, it has adopted the Toyota Production System to further increase the level of satisfaction. This is a system that ensures vehicles are produced and delivered to their target customers in time.

The company does not hold too much inventory. This further helps in reducing operations costs and prices of vehicles. The Toyota Production System it is able to produce in a speedy and timely manner to deliver the vehicles at the right place and the right time without the need to hold stock (Wild, 2003).

One of the factors that help Toyota to deliver on time is its dependability. The company depends on itself for most of the production activities. Therefore, it is not easy for it to experience delays on grounds that it was inconvenienced by a third party (Slack et al. 2012). Dependability is an operations management objective that has been effective in increasing the production speed and efficiency of Toyota. The company has all the technology that it requires for its production. It also has sufficient labour and finances to fund its operations.

Finally, Toyota is flexible and able to address all the needs of the different customers speedily. Further, dependability facilitates flexibility in that the company has all it requires to respond to the customer needs. The business world today is changing rapidly. The needs of customers are equally changing fast and an organization should be in a position to address the changes as they come to maintain a competitive edge.

The advancement in technology further facilitates the increased changes in the business world. An organization should be flexible enough to adapt to the changes (Slack et al. 2012). Toyota is able to respond to the changes in a timely manner, given its dependability, the cost advantage, and its speed of production.

Recommendations

Toyota is among the largest companies in the world. Its success is linked to its operations management department. Toyota has been able to reduce the production cost of vehicles, thereby reducing the price at which it sells the cars to customers. However, Toyota should ensure that it is up to date with the changes in technology to maintain and improve on its current performance. It should also have the right employees all time to realize this objective.

Reference List

Ahoy, CK 2009, Customer-driven operations: Aligning quality tools and business processes for customer excellence, McGraw-Hill, New York, NY.

Mahadevan, B 2010, Operations management: Theory and practice, Pearson, Upper Saddle River, NJ.

Slack, N 2009, Operations and process management: Principles and practice for strategic impact, Prentice Hall/Financial Times, Harlow, England.

Slack, N, Brandon-Jones, A, Johnston, R, & Betts, A 2012, Operations and process management: Principles and practice for strategic impact, 3rd edn, Pearson, Upper Saddle River, NJ.

Wild, R 2003, Essentials of operations management, Thomson Learning, London.

Background

The recent rise in concern for the effects of industries on environment is far from being groundless  according to the state-wide statistics, the annual rate of CO2 emissions rose by 2% 2014 (US Carbon Emissions Rise 2% par. 1) (Fig. 1).

Figure 1. CO2 Emissions Increase

Source: U.S. Greenhouse Gas Inventory Report: 1990-2013 (Table 3)

Transportation, i.e., pollution with CO2 emitted by cars, takes the second place in the state-wide pollution rates, according to the chart above (Fig. 1). As the table below shows, very little success has been made in the reduction of CO2 emissions (Fig. 2).

Figure 2. CO2 Emission Rates in the USA in 20102014

Source: US Carbon Emissions Rise 2% (Table 1)

The few changes that have taken place despite the abuse of natural resources need to be attributed to the use of hybrid cars (Hybrid and Plug-In Electric Vehicle Emissions Data Sources and Assumptions par. 2). Researches show that hybrid cars, in fact, allow for a major reduction in CO2 emission rates, seeing that a hybrid vehicle requires only 24 pounds of CO2 equivalent per gallon (Hybrid and Plug-In Electric Vehicle Emissions Data Sources and Assumptions par. 4).

Introduction

Corporate social responsibility refers to all the activities that organizations undertake towards improving the welfare of the people where they serve. Corporate entities operate as responsible citizens by undertaking numerous activities with the goal of making profits. Such activities can affect the society positively and negatively.

In recognition of the impact of corporate entities on the society, many organizations have put in place important measures for ensuring that they not only gain from the people through profits, but also give back to the society, to improve the lives of the people they serve. However, other CSR activities are deeply enshrined in an organizations business.

They relate to the dedication of the organization towards an improved society through its activities. For instance, an organization that focuses on providing food products can carry out CSR activities by ensuring that the products offer important healthy benefits, as opposed to increasing lifestyle diseases or other related conditions that such foods can be associated with.

Another example of corporate social responsibility activities that are directly linked to businesses include the gradual improvement of electronics by a company to be more power efficient such that it can help the world in the push towards better energy-efficient and conscious world (Megumi and Takehara 3).

While CSR activities are always well intended, the outcomes of such activities vary from one activity to another and/or from an organization to another. This paper analyzes the hybrid car project, which is one of the most successful CSR activities by the Toyota Motor Corporation in terms of the positive impacts that the activity has had on societies and the business.

Toyota Motor Corporation

Toyota Motor Corporation is the worlds largest automobile maker and the 12^th largest corporation in terms of market capitalization in the world. In 2012, the company became the first automobile that produced more than 10 million cars in a year (Racz, Muntean and Stan 438). The company has retained this position up to date.

The business makes various models of cars, including SUVs, saloon cars, pickups, and trucks. The company has also invested widely in other automobile companies such as Daihatsu, FAW, Fuji Heavy Industries, and Isuzu among others, thus making it truly a globally significant and magnanimous automobile company. With revenues exceeding USD$ 252 billion as of the 2014 financial year, the Toyota Company is a highly profitable establishment.

It employs more than 330,000 employees in its plants and offices in Japan and across the world. As a responsible citizen, the Toyota Company has been at the forefront in advancing important projects that are aimed at improving the lives of the people it serves. As a business that is dedicated to making the transportation of people and goods easy through automobiles, the company has invested heavily in technology as a way of ensuring that its automobiles meet the customers needs at all times while at the same time guaranteeing that the clients get value for their money (Ghosh and Chitra 81).

CSR activities are mostly important in ensuring that the company can achieve credibility and customer loyalty. They are a good approach to confirming that the company uses its resources well to ensure that customers receive the best automobiles within their budget. In 2014, the company established the structure below where several officials were given strategic posts to work in collaboration with other stakeholders in addressing the companys CSR issues.

Figure 3. CSR activities

Source: (Vogel 5)

For instance, in the world that is marked by increasing concerns about energy consumption and efficiency, the companys technologies, research, and development have allowed it to produce some of the most fuel-efficient and affordable car designs in the automobile industry (Lindgreen and Swaen 3). This customer-focused business strategy can be viewed as an important CSR activity.

On the other hand, the company has undertaken numerous projects that are not directly linked to business and profitability, but also on the general improvement of communities. For instance, the company as carried many CSR activities that are focused on funding education in developing countries among other activities in the regions where it has operations across the world.

Hybrid Cars as a the Most Successful CSR by the Toyota Company

In a world where environmental consciousness has been more important than any other time, companies around the globe are required to exercise their role in a manner that will not contribute towards environmental degradation, but instead promote technologies and activities that will guarantee environmental protection and sustainability.

With the advent of mass production due to industrialization and the increasing population, industrial pollution because of human activities is the main contributing factor towards environmental undertakings that endanger the stability of the worlds environment. Greenhouse gases such as carbon dioxide, methane, and the hydrofluorocarbons (HFCs) are some of the most lethal environmentally degrading gases whose effects have been felt through global warming and its effects on the international climate (Barnea and Rubin 73).

One of the most contributors towards these greenhouse gases is the motor vehicle or automobile industry, which produces lethal combinations of gases through exhaust gases to the environment. This situation contributes to global warming and consequently environmental degradation. Currently, more than 1 billion cars roam the streets of the world.

Each car has its gaseous emissions, which add a share of greenhouse gases that are increasingly contributing towards global warming of the environment. Currently, the transportation sector, which is dominated by the automobile sector, accounts for more than 31% of the 30 billion metric tons of carbon dioxide that are emitted from human activities (Hopkins 34). Indeed, the emissions are increasing.

It is expected that if proper strategies towards the reduction of greenhouse gasses are not implemented through strict policy and legislation changes, the effects of greenhouse gases will make the environment almost inhabitable by 2050. The pie chart below shows the carbon emissions in the world based on the source using the 2014 estimates.

Figure 3: Chart Showing Carbon Emissions by Source

Source: (Hopkins 34)

The transportation sector takes 31%, which indicates a significant amount carbon emission into the atmosphere. In the wake of the dangerous phenomenon that the global warming is threatening to cause, many lobbyists and government agencies have put protracted measures towards reducing the usage of gasoline, which is a major cause of the gases that are emitted from industrial activities and automobile industries (Hopkins, 35).

The Toyota Company has been at the forefront in ensuring that it produces environment-friendly vehicles. Through such an approach, it has managed to reduce the gas emission to levels that the earth can cope with in order to ensure the sustainability of human activities and the environment. Many terms such as energy efficiency and fuel switching have been used to refer to environmental sustainability and responsiveness.

Carbon capture, sequestration, and energy conservation have emerged to provide an important opportunity through which environmentally degrading gasses and emissions can be reduced or controlled. In recognition of the need to put the world on a path towards environmental sustainability, the Toyota Company has invested heavily in cars that have better fuel efficiency and low emissions.

The company has invested heavily in delivering family-sized cars to the masses. Besides, based on the technology of fuel switching, the company has allowed a room for the switching of the cars engine between gas and electricity, hence reducing the amount of fuel that is consumed per mileage and consequently decreasing the amount of emissions to the environment (Barnea and Rubin 74).

The Toyota Companys most fuel-efficient and environmentally friendly cars are referred to as the hybrid cars, which have been at the forefront in revolutionizing the automobile industry towards environmental protection. So far, the company is the worlds leader in the manufacture of hybrid cars, which are majorly in two models, namely, the Prius and the RAV 4 EV. To date, the Prius is still in the production process while the RAV 4 EV was discontinued in 2003.

A brief history of Prius shows that the car was first mass-produced from the general market in 1997, following more than two years of intensive research and fine-tuning of the hybrid technology that incorporated gasoline and electricity. At the time, the Environmental Protection Agency (EPA) had put forward new guidelines for what a fuel-efficient and environmentally friendly car ought to have been in terms of emission and fuel consumption (Lindgreen and Swaen 5).

The Toyota Company was the first to meet these new guidelines. It was also the first to claim the first automobile ever to produce a hybrid car for the masses. It adopted a technology that was way ahead of its time as evidenced by the number of years it took other companies to begin mass-production of hybrid cars to the market (Lindgreen and Swaen 3).

As of 2014, more than 4 million hybrid cars of the Prius design by the Toyota Company have been sold, thus making the car the most successful hybrid car in the world, accounting for 67% of all the sales of hybrid cars in the world. This move is a major success story when it comes to upholding CSR goals of safeguarding the environment.

When the company launched its first hybrid car in 1997, the move was a clear sign of its dedication to providing the world with cars that were not only fuel-efficient but also environmentally friendly. Hence, this period ushered in a new era where a motor company was for the first time taking an important corporate social responsibility of ensuring that its activities did not come at a heavy cost to the global community (Racz, Muntean and Stan 440).

In the year that followed the launching, Prius was voted the car of the year in Japan. The award was a clear sign of the recognition of the positive impact that the company was dedicated to having on the society. The cars 1.5-Litre engine could clock 50 miles per gallon (mpg). This fete had not been realized on a commercially available car.

The car also used electricity power, which would be alternated with the gas, to make it the first car to use this fuel-switching technology on mass-produced cars (Ghosh and Chitra 85). After gaining popularity in Japan, the company extended this significant social responsibility beyond the borders. In fact, it began exporting the car in 2000 to global enthusiasts who were eagerly waiting to land their hands on the car. It became an internationally popular car.

Its success fuelled the Toyota Company to invest even more towards the development of new-generation models of the car. In 2003, the second-generation cars of the Prius model entered the market. It combined major improvements that strengthened the Toyota Company as a world leader in hybrid cars in terms of their popularity, profitability, and environmental friendliness.

While still maintaining the same gas capacity of 1500cc, the new model had a better battery output capacity that reached 50kW and hence a better performance of the car when using electrical charges to power itself (Ghosh and Chitra 84). In 2007, the company reached a major milestone where more than 1 million hybrid cars had been sold in the cars short history of 10 years.

The third generation of Prius hybrid cars debuted in 2009 with major improvements in energy consumption and gas emissions. For instance, the car, which then had an improved 1800cc capacity, had a better fuel efficiency of 72 mpg and a gas emission of only 82 grams per mile (Hopkins 39). This advancement was highly environmentally friendly.

After concentrating on the Prius model since 2010, the company has launched new models of hybrid cars, which are in line with its goal of being the leading car manufacturer of environmentally friendly cars in the world. Although other models of hybrid cars have come up from other automobile companies, the Toyota Companys hybrid cars account for more than 67% of all the worlds hybrid cars (Racz, Muntean and Stan 441).

Despite the fact that new models have emerged, the company has been instrumental in showing that the hybrid cars are the future of automobile industry and that other companies will have to follow suit if they want to remain relevant in the increasingly environmentally conscious world of today.

So far, in the footsteps of the Toyota Company, other companies have followed with their models. From 53.7 million hybrid cars in 2009, it is anticipated that over 80 million such cars will be on the roads as shown below.

Figure 4: Hybrid Cars Numbers 2009-2020

Source: (Racz, Muntean and Stan 441)

Toyota CSR Impact on Its Value

While the Toyota Company may have been driven by the need to develop a new technology that will promote better environmental friendliness of the car models, such an excellent move has acted to increase the companys profitability and reputation.

Through its hybrid car models that cover at least six car models, which include Avalon Hybrid, Camry Hybrid, Prius, Prius V, Prius C, and the Prius Plug-I, the companys hybrid line of cars is the most successful in the world (Ghosh and Chitra 82). It has positively influenced the companys profitability and revenues. In 2013, the company accounted for 80% of all hybrid sales of cars in the global market.

At the companys level, the hybrid cars accounted for more than 14% of the total car sales at the company (Racz, Muntean and Stan 439). This figure is expected to rise to 30% by 2020. The impact of the hybrid cars on the Toyota Company in terms of its value has been significant. The achievement has placed the company as a leader in the automobile technology that focuses on fuel efficiency and environmental friendliness as per the EPA guidelines.

The popularity of the car in both the domestic and international market is a clear sign that customers around the world view the companys cars as more environmentally friendly and fuel efficient as compared to other models that are available in the market. Generally, the companys hybrid cars have allowed it to be viewed as highly dedicated to the development and implementation of more fuel-efficient cars that are also affordable and responsive to the needs of the customers, as well as the changing world of environmental enlightenment.

Apart from the high reputation, the company has achieved high levels of profitability and production capacity, with more than 10 million cars being sold in 2012. This record is yet to be broken by any other company in the automobile industry. A good CSR does not just give value to the community, but also to its shareholders.

There is no better way to explain this claim other than using the Toyota Company as a working illustration. With a market share of more than 67%, the Toyotas hybrid cars account for approximately 14% of its revenues. This figure is expected to rise to 30% by 2020. The company sees a strong future in its hybrid cars based on their high efficiency, credibility, and the companys superior image in the sector (Ghosh and Chitra 84).

While this marker is rapidly changing with new entrants, as well as the reducing popularity of the hybrid models due to the low oil prices that are prevailing in the market, the Toyota Companys hybrid will continue to be popular to the extent of creating more value for the company in both the short-term and the long-term.

The companys investment and continued research on technology, research, and development has allowed it to be a pacesetter in the world, which is becoming increasingly environmentally conscious while calling for accountability of corporate entities as far as the impact of their activities on the environment are concerned. Overall, the company has done a commendable job that other organizations should emulate, especially in terms of balancing between profitability and benefiting the general society.

Relationships with Stakeholders at Toyota

According to the statement issued by the organization, managers in Toyota aim at satisfying the needs of customers in the first place, following the Customer first and Genchi Genbutsu principles (Relations with Stakeholders par. 1). However, it would be wrong to claim that the organization abandons its staff in pursuit of increased customer satisfaction rates  instead, the firm prefers to develop an elaborate strategy allowing for staff satisfaction and motivation.

The above-mentioned approach is based on recognizing the significance of diversity in the workplace: Toyota is working to develop human resources by seizing times of adversity as opportunities to learn, planning greater enhancement and reinforcement of educational programs (Relations with Stakeholders par. 11). As a result, the number of workplace conflicts is reduced to minimum. The specified strategy aligns with the principles of CSR, therefore, helping increase the corporate value significantly.

Stakeholders and corporate activity

Inside the company

According to the official statement issued by the organization, being a good corporate citizen of the world (Relations with Stakeholders par. 25) is currently identified as the goal of every corporate activity carried out in the company. When combined with the CSR principles, the notion of corporate citizenship helps establish the idea of social responsibility on a global level.

The specified factor affects Toyota in a very strong manner as far as the companys long-term development is concerned, since it helps build trustworthy relations with every single stakeholder involved.

Outside the company

As far as the corporate activity outside of the organization is concerned, the organization clearly respects its shareholders and is willing to create strong ties with the latter. The concept of CSR seems to be the key tool that allows for the promotion of improvements in the production process and the principles of organizational behaviour.

By introducing the staff to the concept of CSR, Toyota has designed the framework that sets proper corporate ethics and, therefore, provides the staff with the behavioural model that triggers increase in both staff motivation and customer satisfaction (Morck 297). As a result, the community receives a significant value due to the increased efforts of teh staff and thepromotion of teh CSR principles in the workplace.

Goods and service dealers

Although customers are the prime focus of Toyota, the relations with goods and service dealers also essential to the firms operations; therefore, Toyota provides support for the specified stakeholders as well. While admittedly time-consuming and requiring active use of the companys resources, the specified relations are likely to be of good use for Toyota, as the company may need support in the instances of a financial or any other type of crisis.

Global societylocal communities

As it has been stressed above, being a part of the global community, Toyota has a major concern for the impact of its production processes on the environment and health of the global community members. In other words, the company bases its innovative solutions on the current needs of the global community, such as the need to develop a sustainable approach towards the use of natural resources.

Stakeholder agent (NPO, NGP, government)

According to the analysis of Toyotas current policies carried out above, the organization seeks cooperation with major stakeholder agents; however, the organization does not seem to favour the idea of the government interfering the companys processes and prefers to maintain full control over the latter (UNEP Finance Initiative 25). The specified approach seems rather reasonable, as Toyotas leader needs to take the decisions that have a positive effect on not only the target population but also on the firm.

Stakeholders and Long-Term Development

The approach adopted by the organization towards managing relations with its key stakeholders affects the connection between the latter and the firm to a considerable degree. Specifically, the principles of customer satisfaction and staff motivation, which Toyota employs in its daily routine, facilitate long-term relationships with the aforementioned stakeholders and foster the environment, in which trustworthiness between the company and its stakeholders may exist.

As a result, the current partners are likely to maintain a contact with Toyota for several years. Moreover, the approach chosen by the organization helps invest into the organizations employees and partners, allowing for professional growth of both (Jensen 39).

Long-Term Development and Corporate Value

The corporate values that Toyota has created can be viewed as the key driving force behind the organizations progress. At first glance, the values that the organization seem rather typical for a company of a global scale; however, a closer look at the subject matter will reveal that the companys ethics incorporates a very unique component.

By explaining the switch from producing traditional petrol cars to making hybrid ones, the company made a very powerful statement concerning the wellbeing of the stakeholders involved; as a result, the newly acquired corporate value, which concerned caring about global health and environment, was transformed into one of the key premises for the companys ethics to develop on.

As Toyota switched to the principle of global wellbeing as the basis for its corporate ethics, the value of the organization seems to have increased several times. The phenomenon in question can be explained by the fact that it transferred to a new level of social responsibility, i.e., the stage, at which it views not only the target customers, but also the entire population as its stakeholders. With the acquisition of new responsibilities, Toyota has reached a new level of credibility that has increased its corporate value significantly.

Conclusion

Corporate social responsibility activities allow an organization to give back to the society by either providing products that benefit the organization while at the same serving customer needs in a responsible and effective manner or providing an assistance that goes towards elevating communitys problems or challenges. In other words, the CSR allows an organization to be a responsible member of a community by contributing positively to the betterment of the public where possible.

However, while the CSR activities are good intended, the outcomes of such activities vary from one organization to another and/or from one activity to another. As a global automobile company, the company operates in an environment where automobiles have been blamed for the increasing gas emissions that are causing global warming, which has been affecting the environment.

As a responsible citizen, the company has invested heavily in the availing of hybrid cars to masses. These cars are highly fuel-efficient. They combine the use of gas and electricity, thus ensuring more fuel efficiency and environmental friendliness. Concisely, the companys hybrid cars are an important example of a successful CSR activity, which has had a significant impact on the companys reputation. The activity has increased the companys value to become the worlds largest automobile maker.

Works Cited

Barnea, Amir, and Amir Rubin. Corporate Social Responsibility as a Conflict between Shareholders. Journal of business ethics 97.1 (2010): 71-86. Print.

Ghosh, Priyanka, and Charles Chitra. Hybrid Cars: The Chauffeur of Next-Gen Worlds Automobile Market (With Respect to Four Wheeler Cars). International Journal of Physical and Social Sciences 5.4 (2015): 80-100. Print.

Hopkins, Michael. The Planetary Bargain: Corporate Social Responsibility Matters. New York, NY: Routledge, 2012. Print.

Hybrid and Plug-In Electric Vehicle Emissions Data Sources and Assumptions. n. d. Web.

Jensen, M.C. (2001) Value Maximization, Stakeholder Theory, and the Corporate Objective Funciton. Journal of Applied Corporate Finance 22.1(2010): 32-42. Print.

Lindgreen, Adam, and Valerie Swaen. Corporate Social Responsibility. International Journal of Management Reviews 12.1 (2010): 1-7. Print.

Megumi, Suto, and Hitoshi Takehara. The Impact of Corporate Social Performance on Financial Performance; Evidence from Japan, 2013. Web.

Morck, Randall. Management, Ownership and Market Valuation. Journal of Financial Economics 20.1/2 (1998): 293315. Print.

Racz, Andrea, Ionuc Muntean, and Sergiu-Dan Stan. A Look into Electric/Hybrid Cars from an Ecological Perspective. Procedia Technology 19 (2015): 438-443. Print.

Relations with Stakeholders. n. d. Web.

UNEP Finance Initiative. Demystifying Responsible Investment Performance: A Review of Key Academic and Broker Research on ESG Factors. Macon, Georgia: Mercer.

US Carbon Emissions Rise 2%.The Guardian 14 January 2014. Web.

Vogel, David. The Market for Virtue: The Potential and Limits of Corporate Social Responsibility. Washington DC: Brookings Institution Press, 2005. Print.

Introduction: Toyotas Strategic Management

SWOT analysis can be used for strategic planning for almost any kind of companies (Simerson, 2011). In this paper, it is going to be applied to the current situation of the Toyota Company that is still recovering from the major crisis that began in 2007. Although SWOT analysis cannot be used to provide a detailed description of the companys expected strategies, it can offer a generalized interpretation of the current situation along with the possible opportunities for future business growth.

Toyota Motor Corporation: Case Study

History

The Toyota Motor Company (Toyota) was established in 1933 when it used to create trucks for military purposes (Heller & Darling, 2012, p. 157). Since the end of WWII, Toyota started to produce non-military cars, both cheap and elite versions. It entered the world market in the mid-1950s and by the end of the 1960s it possessed manufacturing facilities in the USA, Brazil, South Africa, Thailand, and Malaysia (Heller & Darling, 2012, p. 157). Apart from that Toyota started to acquire car manufacturing companies back in Japan (for example, Hino) as it expanded rapidly.

The key points of Toyotas international marketing included adapting its products to suit the needs of the local customers and paying particular attention to the suppliers. It was the chain of suppliers and its effective management that allowed the rapid growth of the company. Still, in the end it was the mismanagement of the chain that led to the infamous Toyota crisis of 2007 (Andrews, Simon, Tian & Zhao, 2011).

Toyota Supply Management

One of the most prominent Toyotas achievements is the supply chain it has established. There are four tiers of suppliers in Toyota, the fourth including more than 40,000 entrepreneurs (Andrews et al., 2011, p. 1068). Toyotas supplier association was the tool used by the company to unite the partners and encourage knowledge sharing between them, to coordinate, supervise them, and to ensure the high quality of the supply. Toyota has always aimed at a long-term partnership, and the association aided achieving this.

Fast Growth

In 2000, the program named the Construction of Cost Competitiveness in the 21st century (CCC21) was launched by Toyota (Andrews et al., 2011, p. 1069). It was aimed at decreasing the price of the products by 30 % which was achieved through the expansion of the chain of suppliers (among other improvements). This lead to the increase in sales and Toyota started to grow rapidly. In April 2007, Toyota excelled General Motors and became the largest car manufacturer in the world (Heller & Darling, 2012, p. 159).

Toyota Crisis

The fast pace at which Toyota developed did have its drawbacks. As the chain of suppliers was increasing, it was becoming harder to control. New suppliers were not supervised enough and as the result the quality of the product decreased.

This problem was officially admitted to the public in 2006, but it was not fixed. Since 2007 Toyota car owners started to report having accelerating problems (Andrews et al., 2011, p. 1070). Still, even then Toyota did not appear to direct enough efforts at changing the situation. The displeasure of customers increased, and in 2007 Toyota had to recall 55,000 automobiles, but the problem persisted (Heller and Darling, 2012, p. 159).

It should be pointed out that other large car manufacturers, including the main Toyota rival General Motors, have also recalled their vehicles (Rankin, 2014). Still, the 2007 Toyota recall cost the company more than 2 billion dollars along with its reputation (Andrews et al., 2011, p. 1065).

Toyota was admittedly slow to respond to the crisis and became notorious for it. The first significant effort at rectifying the situation was made in 2010 when the Automotive Center of Quality Excellence was created (Heller and Darling, 2012, p. 166). However, the damage to the companys reputation was immense, and part of it was caused by the companys neglect of customers needs and its failure to meet its own promises.

Toyota Way

The Toyota Way is the code of conduct that the company adopted in 2001 (Heller & Darling, 2012, p. 157). It consists of a number of philosophical guidelines that included, for example, an instruction to continuously improve the quality of the product, to thoroughly test new technology before implementing it, to learn by reflecting on the past experience, to make decisions slowly but implement them rapidly, to respect the stakeholders. In general, the Toyota Way includes 14 principles that appear most reasonable and, above all, ethical.

The problem lies in the fact that Toyota seems to have failed to implement these principles, and the 2007 crisis proved it. The quality of the products was obviously deficient; the company kept denying its responsibility and, therefore, failed to analyze its actions and learn from its experience (Heller & Darling, 2012; Andrews et al., 2011). The way the company neglected the safety of its customers aggravated the damage dealt to Toyotas reputation.

In general, one may say that the company is still struggling with the crisis which is not over but instead is in its chronic stage. In order to create a sound strategy for the growth of the business, this fact must be taken into account.

Current Positioning in the Market

According to Andrews et al. (2011) the car manufacturing industry is an oligopoly, and Toyota is one of its most influential participants along with other giants like General Motors, Ford, and Honda. The survival on the market depends on the price, the quality of the products, and the brand loyalty. Apart from that, fuel pricing and local or worldwide economic situations also have their impact on the market (Andrews et al., 2011).

Since the beginning of the century, Toyotas cars had stayed competitive due to their quality combined with relative low costs; however, the crisis situation has severely damaged the image of the product. Apart from that, it appears that Toyota has had a significant impact on the market in general by setting off the trend of developing cheaper cars. As a result, other car manufacturers have also faced the problem of quality standards as they kept searching for inexpensive materials (Rankin, 2014).

SWOT Analysis for Toyota

The SWOT analysis is a tool of strategic planning that involves characterizing the strengths, weaknesses opportunities and threats of the company; apart from that, the trends existing in the market are described in order to define the possible directions of development.

Therefore, SWOT is devoted to a short summary of the external and internal factors that may determine the future growth of the business (Simerson, 2011). The previous sections include a detailed description of the internal and external factors influencing the company. An attempt at classifying the factors and integrating them in the process of strategic planning will be made in the following section.

Toyotas Strengths

Among the main Toyotas strength are its size, power, and impressive market share. Apart from that, the suppliers chain that was so extensively investigated in the previous sections is another significant advantage. The company has spent more than fifty years in the market, and it had time to create proper relationships with its partners including other car manufacturers. The experience its managers possess can also be considered an advantage, especially in case the company proves that it is able to learn from its mistakes.

Toyotas Weaknesses

It is apparent from the information given above that the main weaknesses of Toyota are the persisting quality problems, the difficulties connected with faulty crisis management, and the reputation issues. As it has been mentioned, Toyota is still struggling with the crisis and this point is proved by the fact that last year the company performed another massive recall due to the variety of problems detected in the models that were built before 2010 (Rankin, 2014). While attempts at rectifying the situation are apparently being made, the problem is far from solved.

Market Opportunities

Many of Toyotas opportunities stem from its advantages. For example, the size of the company results in a better access to all the necessary resources which in turn opens up the opportunities for further development. The relationships with other firms have been used by Toyota, for example, to conduct collaborative research (Agence France-Presse in Tokyo, 2015). Apart from that, a number of opportunities that Toyota may use could be better described as the modern market trends.

Market Trends

Technically, market trends or tendencies can be parts of both the opportunities and the threats existing in the market. It is obvious that adopting the technologies or strategies that have become a trend in the market may allow the company to develop, but any innovation is at least partially a risk. At the same time, a neglected trend very often ends up adopted by a competitor firm and provides it with an advantage.

Therefore, it is not surprising that trends are regarded as an opportunity that has to be taken. Apart from that, trends can also be trendy, popular, and adopting those means attracting customers. An example of such a trend is the green technology which has been extensively researched by Toyota on its own and in collaboration with other manufacturers, for instance, Mazda (Agence France-Presse in Tokyo, 2015).

This kind of technology is supposed to be both more efficient and less harmful to the environment. Given the growing public concern with the future of the planet and the environmental issues along with the economic crisis that makes cost-saving technologies particularly alluring, participating in this trend should be beneficial for Toyota.

At the same time, the trend of attempting to create cheaper cars that was described above can be less beneficial. This is a challenge that can hardly be turned down since it is already typical for the market; at the same time, with the quality is a priority for Toyota nowadays, which means that the company may follow this trend only to a limit. This particular market tendency can become a threat for Toyotas future.

Market Threats

The greatest threat existing in the oligopolistic market is the competition. While Toyotas size and power are an advantage, the fact that several other competitors have equally big market shares and similarly famous brands is much less helpful. At the same time, one should take into account that the competitors are also capable of making mistakes.

For example, General Motors faulty ignition switches may have caused 13 deaths and resulted in a massive recall in 2014 (Rankin, 2014). While the reputation of Toyota has been damaged by the 2007 crisis, it is still a competitive and powerful player in the market.

The Essential Areas of the Strategic Plan

It is hard to deny the fact that the companys weaknesses are crucial. The crisis of both quality and reputation demands consistent efforts aimed at eliminating them. At the same time, the companys strengths are providing it with enough resources that may assist in fighting the companys weaknesses. Finally, the trends existing in the market are extremely hard to ignore.

Being one of the major competitions, Toyota cannot help but respond to the challenges offered by other market players and create challenges of its own.

Toyotas Strategy Analysis: Method and Evaluation

The strategic plan of the future development of Toyota must be based on the fact that the current state of the company needs to be improved. This may be achieved by increasing the quality of the products (with the help of the Automotive Center of Quality Excellence) which will slowly lead to improving the companys reputation.

It is obvious that the company has all the resources needed to improve its production process. However, restoring the reputation of the business is going to be a more challenging task. It could be completed by a more extensive and aggressive promotion of the Toyota Way which it includes most ethical and reasonable suggestions (Andrews et al., 2011).

Unfortunately, it is impossible for the company to stabilize first and then proceed to grow the business. The competitiveness of the market would not allow it, which means that in addition to eliminating its flaws, the company should continue to develop new products and implement new technologies in order to keep expanding the business. The existing trends should be used to the companys advantage albeit carefully since the current issues Toyota has should not be aggravated.

It could be useful to point out that SWOT is a truly widespread but extremely criticized methodology. For example, throughout its existence the method has been characterized as vague, oversimplified, elusive, superficial, non-prioritized, and generalized (Helms & Nixon, 2010).

At the same time, all these drawbacks can be used for the benefit of the strategic planning. As such, the generalized and simplified character of the method allows concentrating on the big picture and general view on the positive and negative factors and their potential interaction. As a result, it cannot provide detailed information about the companys future but it may be useful for preliminary analysis and may give insights regarding the future of the business which was the aim of this paper.

Conclusion: Toyotas Future Strategic Plans

Toyotas SWOT analysis has allowed us a glimpse into the main factors that may affect its further development. Despite the fact that the methodology can only provide generalized results, we have found out that one of the main Toyotas concerns is its current weaknesses caused by the 2007 crisis.

Apart from that, Toyota seems to be using the current trends existing in the market in order to keep expanding and developing. The possible plan for the future growth of the business should be aimed at restoring the position of the company after the crisis along with responding to the markets challenges in order to keep up with the competitors. Despite the fact that Toyota is experiencing a crisis, it cannot afford any kind of respite.

References

Agence France-Presse in Tokyo. (2015, May 9). Toyota and Mazda reportedly cooperating on green car technology. The Guardian.

Andrews, A., Simon, J., Tian, F., & Zhao, J. (2011). The Toyota crisis: an economic, operational and strategic analysis of the massive recall. Management Research Review, 34(10), 1064-1077. doi:10.1108/01409171111171474

Heller, V., & Darling, J. (2012). Anatomy of crisis management: lessons from the infamous Toyota Case. European Business Review, 24(2), 151-168. doi:10.1108/09555341211204017

Helms, M., & Nixon, J. (2010). Exploring SWOT analysis  where are we now?. Journal Of Strategy And Mgt, 3(3), 215-251. doi:10.1108/17554251011064837

Rankin, J. (2014, April 9). Toyota recalls more than 6.5m cars over steering and seat problems. The Guardian.

Simerson, B. (2011). Strategic planning. Santa Barbara, Calif.: Praeger.

The management of an organization is what determines whether the organization will achieve its goals. Toyota is a multinational organization that was established in 1936.

Today, Toyota is the leading seller of automobiles in the whole world. This success is owed to its management commitment to achieving organizational goals. The management of Toyota has a clear vision of the future, and that is what has enabled the company to plan for future events.

At the moment, the company is already developing car models that are eco-friendly; the cars do not emit carbon at all and if they do, it is minimal such that it is less harmful to the environment.

The management of Toyota has been observing the environment for quite some time and has realized that in todays world everybody is looking for a way of preventing the pollution of the environment and that is why they have come up with hybrid vehicles, which is necessitated by proper delegation of functions.

This is because safeguarding the environment is a corporate responsibility of the company thats closely monitored by the management.

The management of Toyota is up to its task because plans are underway to venture into different products such as airplane manufacturing. This is commendable because for this company to remain ahead in business, it must identify what its competitors are not doing. It is the role of the company management to make the necessary arrangements for such ventures to actually take of, otherwise, just speaking about it is one thing and implementing the plans is another different task (Moon, 2010, p. 2).

One expects that the management of this company is engaging in research to find out what is required for the new projects to commence. So far the company is already manufacturing hybrid vehicles, but a keen observation of their goals is to start making electric vehicles by the end of 2012.

All these goals are derived from strategic planning which entails looking for possible future changes and identifying how the company will cope with the said changes (Bateman & Snell, 2009, p.137).

Failure to identify alternatives could drive Toyota out of the automobile market because the tastes of consumers are influenced by these same changes, and if an organization cannot integrate the changes in its products, it is on the losing end.

When it comes to achieving organization goals the managers are the ones who are expected to set the best examples. This means that the managers of Toyota should practice what they expect from others instead of leading from behind because a manager who exercises double standards creates an impression that what he/she said can be acceptable depending on circumstances.

For instance, Toyota has been advocating for the reduction in carbon emissions and this is reflected in its latest models and future models. This shows that the management of this company focused and it would contradict itself if they participated in the campaign against carbon emissions and continue to manufacture vehicles that emit carbon.

According to Moon (2010, p. 3) the management of Toyota exercises control over its employee by emphasizing on the need of respect among its employees and towards the clients. Respect for one another is essential in team work and since the workforce of Toyota is organized into teams, respect is crucial for them to be successful.

It is the role of Toyotas management to control how technology is introduced in its operations by analyzing the companys preparedness to roll out new advancements. The changes that have been implemented were initiated by the management which is logical because they are the ones who authorize the changes to take place.

Diversity is part and parcel of Toyota Company because it has many branches in different parts of the world. However, diversity is appreciated because people from a given location can only be themselves and would be unethical to make them behave like we all hail from the same background.

The diversity in skills enhances performance of Toyota because the employees have different skills and abilities; hence when challenges occur, the diversity in skills provides alternative solution because each employee will approach the problem based on his/her knowledge (Moon, 2010, p. 4).

Toyota is an equal opportunity employer, which means that the people who are hired are not brought on board because of anything else other than their skills. The workforce is comprised of employees from both sexes, that is, men and women and they are from different backgrounds.

Decisions at Toyota are made from the head office in Japan and are expected to roll over to various branches. Different branches have different organizational culture but then these differences cannot be seen from outside because regardless of their location, all Toyota branches have a consistent image.

References

Bateman, T.S & Snell, S.A. (2009). Management: Leading and Collaborating in the Competitive World (8^th ed.). New York: The McGraw-Hill Companies.

Moon, S. (2010, July 17). Toyota  Internal and External Factors Influencing Management. Web.

Introduction

Different companies in the world are associated with the production of various goods and services that have global components. In this context, the term globalization relates to the international integration brought about by the exchange of elements between different parts of the world. Such aspects include understanding, concepts, and components of different cultures.

The process has resulted in enhanced global interconnections. The development has been brought about by increased cultural and trade exchange. Some companies have taken advantage of the situation and established subsidiaries in countries away from their homeland (Kotabe and Murray 8). Such firms have transformed from national entities to multinationals. The operations of these organizations have various impacts on society. Some of the effects are positive, while others are negative.

In this paper, the author will analyze a multinational company with various global components. The impacts of the company on the modern society will be reviewed. The industry selected for this paper is the car manufacturing sector. Toyota is used as an example of a multinational firm in this industry. The cars produced by the company have a wide range of impacts on the environment. A net calculus of these products will be determined in this paper.

The Car Industry: An Example of a Sector with a Global Network

An example of a manufacturing sector where globalization is extensive is the car industry. Many companies have invested in the business to increase their market share and profit margins. Most consumers of these products are only aware of their positive impacts on their lives. The majority of them are ignorant of the negative effects (Mathieu, 460).

Toyota: An Example of a Major Operator in the Global Car Industry

One of the firms that have excelled in the globalization of the car manufacturing industry is Toyota. It is a Japanese manufacturer with several subsidiaries across the world (Mathieu 452). It has operations in countries like England, China, the United States of America, and France.

The Harm Caused by Toyotas Global Component

The main aim of any manufacturer is to make profits. Consequently, supply is constantly replenished to ensure the demands of customers are met. The same applies to the car industry. However, studies have shown that an increase in the number of cars in society is harmful. Statistics show that Toyota is one of the largest producers of cars in the world.

Every car produced by the company has negative impacts on the environment. Most of these machines emit dangerous gases into the surroundings. The gases are harmful to people, plants, and animals. It is not easy to stop the gases from reaching the environment and the atmosphere. Later, these compounds collate in the air and come down in the form of acid rain, which is very harmful (Mathieu 453). Furthermore, the oil and the grease used in cars are global components. They cause harm to the environment after use.

Beneficial Properties of Toyota Company

The existence of Toyota in the global arena is associated with a number of benefits. For example, the company has played an important role in building the economy of many nations. The firm engages many employees in different places of the world. The individuals could have been jobless if the company had not established its operations in their countries. The job opportunities have led to the growth of these economies (Mathieu 461).

Another benefit of Toyota operations entails foreign direct investment. The cars manufactured are a major aspect of international trade and foreign direct investment among countries. Western Europe, Asia, and North America are global leaders in this front. The regions have a large stake in car imports and exports.

At large, Eastern Europe and Asia are net exporters, whereas North America is a net importer. North America, Eastern Europe, the Middle East, and Africa are the main importers of cars and automotive products (Kotabe and Murray 10). The interactions have led to an increased exchange of cultures and ideas.

Trade is another benefit to the countries where Toyota has its branches. The existence of the entity has spurred growth in the car repair service industry. The repair of some parts requires specific products from the manufacturer. Such developments have led to increased demand for specialized parts. Many individuals are engaged in the service industry, leading to the growth of the economy (Mathieu, 454). The trade has allowed many families to raise their living standards.

It is also noted that the globalization of Toyota as a manufacturing company has enhanced the efficiencies and the opportunities generated by open markets. As a result, companies have been able to communicate easily and efficiently with customers, suppliers, and customers. The capability has enhanced the management of inventories and supplies from customers (Bhim et al. 160). Similarly, local companies have had the opportunity to sell their products to the manufacturer.

The interaction has created a cycle of a trade. Toyota, for instance, has been selling its cars and accessories with ease in New York (Kotabe and Murray 12). Likewise, Apple has been selling its high technology computers and other accessories to Toyota with similar ease. Consequently, the globalization of Toyota Company has eased business communication in the world.

Toyota Company operates on two major pillars. They are continuous improvement and respect for the people. The two have helped the company to achieve its goals and improve its operations by generating new ideas and working best on its abilities.

The organization acknowledges the important role played by various parties. The management realizes that the success of the entity depends on these stakeholders. In addition, the firm has realized that performance is enhanced through individual effort and functional teamwork (Mathieu 455).

Toyota prioritizes the benefits and welfare of its shareholders with regards to its management procedures. To this end, the organization works hard to improve its corporate structure and image. The aim is to achieve sustainable growth, which is expected to enhance the corporate value of the company. In the process, employees, the public, and other stakeholders have benefitted.

For example, on March 31, 2014, the management informed that it would continue paying dividends to its shareholders (Kotabe and Murray 14). Based on its projections, the company expects improvements in its profit margins. The reason is that the firm intends to expand its growth by exploiting the well-established customer base.

Comfort, safety, and convenience in transport are other benefits provided by Toyotas model cars. The firms innovativeness supports the automotive industry and helps it to meet the safety demands of the consumers. The companys products are unique. They meet the needs of the clients effectively. At the same time, they are produced and developed at low costs, making them affordable (Bhim et al. 159). The company has adopted a platform policy. The approach is beneficial to the globalization of companies in this sector.

Automakers invest money and time in development platforms. As a result, sharing in the sector has various benefits. They include reductions in expenditures associated with research and development. Toyota achieves this by spreading the cost of the final product over several production lines (Mathieu 470).

As a result, Toyota has helped automakers to provide low-cost items. In addition, economies of scale in the industry have increased as a result of Toyotas globalization components. The move has resulted in high returns on investment.

Harmful Aspects of the Toyota Company

Noise and air pollution are the major harmful properties associated with Toyota as a key player in the car industry. Pollution is caused by the release of combustion gases and other wastes to the environment. The wastes include particle pollution, ground-level ozone, and carbon monoxide. Others are sulfur oxides, nitrogen oxides, and lead (Bhim et al. 166).

The pollutants have negative impacts on the surroundings. The most harmful elements include particle pollution and ground-level ozone. The former includes soot, smoke, and chemically formed droplets. The particles are harmful to human health when they are inhaled (Bhim et al. 160). The chemicals mainly originate from burning fuel in cars. They are also released from Toyotas manufacturing factories.

Another harmful aspect of the motor vehicle industry is the occurrence of accidents. The mishaps are caused by natural factors, human-related errors, or faulty cars. People who have been involved in accidents with regards to Toyota cars have either died, left with permanent wounds, or escaped unhurt.

The nature of the impacts depends on the intensity of accidents or the cars capability to handle such situations (Mathieu 457). Approximately 1.2 million people die worldwide from car accidents. It is noted that 40 percent of these occurrences involve Toyota cars (Bhim et al. 165).

Another harmful aspect of Toyotas cars is the congestion of major roads around the world. The congestion increases levels of traffic noise, which has negative impacts on individuals and on the environment. The quality of urban life has reduced drastically as a result of these cars. The use of rubber tires is believed to be one of the major factors behind the rise in inner-city traffic (Bhim et al. 167).

Addressing the Problems Brought about by the Car Industry: A Case Study of Toyota Company

In an attempt to address the problem of air pollution, most companies have shifted to the production of hybrid and electric cars. Such innovations reduce the use of fossil fuel, which is the major source of pollution in the industry. Another move involves the production of biofuels. An example of a hybrid car is Toyota Prius. Others are BMW i8. The cars use fossil fuels on the high drive (Bhim et al. 160). However, on the low drive, they utilize saved electric energy.

Manufacturers have also considered installing catalytic converters to car exhausts. The aim is to convert carbon that would have been released as soot to carbon dioxide and water (Bhim et al. 165). The management at Toyota Company needs to speed up the development of the new technology to help reduce the number of pollutants released into the air.

On the issue of car accidents, Toyota aims at installing its vehicles with high-quality airbags and seatbelts. Such interventions hold the passenger to one place during the accident. The advancement can help curb the impacts of the collision, which mainly harm passengers during accidents. Another feature that the management should take into consideration is crush assistance. The systems and devices help the driver and the vehicle to detect obstacles and avoid collisions (Bhim et al. 160).

Another feature is a pedestrian protection system. To this end, most of the front parts of the car are made from plastic instead of metal. Such components reduce the impact received by a pedestrian in case of an accident (Bhim et al. 167). Some companies like Volvo have invented in passenger airbags that cushion a pedestrian from the cars impact. Toyota should consider innovating along these lines.

A number of these measures have been implemented in Toyota manufacturing processes. They include seat belts, airbags, and driver-assist controls. Improvements are still being made. The company has also collaborated with Google on research to produce self-driving vehicles. In addition, advisories are given to parents to ensure their cars are safe to handle in case their children are involved in accidents (Bhim et al. 167). The advisories include ensuring that the cars conform to the worlds safety measures.

Some of the new innovations expected to be launched by the company include the detection of drunk drivers. To this end, the automobile is designed to stop operating if the driver is drunk. The innovation will curb the menace caused by drunk drivers, who are the leading cause of accidents. In an attempt to curb noise pollution, Toyota installs silencers in its car engines. The procedure involves muffling the engine to reduce noise when in operation.

Net Calculus of Toyota Products

The benefits of the cars manufactured by Toyota are more compared to the disadvantages. The car industry is a major source of employment for many people. Many economies around the world depend on this sector. Cars from this company have eased the process of moving from one place to another (Mathieu 462). The ease is one of the benefits associated with the globalization of Toyota Company.

As a manager, to come up with a net calculus of Toyotas global operations, it is important to take into consideration how the company is attempting to reduce the negative impacts of its processes. The adoption of catalytic converters reduces air pollution. Muffling of engines, on its part, deals with noise pollution (Bhim et al. 168). The introduction of hybrid and electric cars has led to a reduction in pollution from fossil fuel. The innovation has made it possible to use cars and at the same time, make the world a safer place to live in.

Finally, most of the car parts can be recycled after the machines are decommissioned. For instance, they can be sold as scrap metal. Recycling will greatly reduce the amount of car litter lying unutilized. Finally, cars can be made safer and operated on clean fuel to save the planet. The objective can be achieved by reducing emissions, for example, through the adoption of electric cars (Mathieu 470). Based on this, one can argue that the net calculus shows the car industry can be beneficial if it is adjusted to reduce its negative impacts on the environment.

Works Cited

Bhim, Singh, Garg Santosh, S. Sharma and Grewal Chandandeep. Lean Implementation and its Benefits to Production Industry. International Journal of Lean Six Sigma 1.2 (2010): 157-168. Print.

Kotabe, Masaaki, and Janet Murray. Global Sourcing Strategy and Sustainable Competitive Advantage. Industrial Marketing Management 33.1 (2004): 7-14. Print.

Mathieu, Valerie. Service Strategies within the Manufacturing Sector: Benefits, Costs and Partnership. International Journal of Service Industry Management 12.5 (2001): 451-475. Print.

Introduction

The automobile industry is considered among the global industries where all firms regardless of their location must compete in the entire world market in order to break-even and survive. Most of the industrys products are spread around the entire world with only several firms in the industry competing for global recognition.

The failure or success of an individual firm in the industry therefore depends on how well it is able to define its niche and achieve a competitive advantage through effective business strategies. An effective international business strategy in this regard must therefore be one that enables the individual firm to attain some economies of scale both in terms of size and markets.

In recent front, market expansion and penetration into new markets has been termed a key factor for future success in the auto industry. This requires that automobile companies pursue global strategies to shape and define how their businesses compete in the global market.

The strategy employed by any of the individual firms in the industry determines to a very large extent the performance of that particular firm in the global market. There are various factors that need to be considered whenever a firm is devising and developing a global strategy.

These factors include an assessment of the existing interdependencies of the firms business competitive positions in the various world markets it operates in. First, the firm must identify a number of factors if any similarities of the operating environment exist in its various markets. Secondly, the firm also needs to identify the sources of these interdependencies.

Again here the firm would want to understand whether these similarities arise out of similar factors such as same tastes and preferences, similar economic conditions and so forth in the various markets or not. Thirdly, the firm needs to establish the critical factors that the adopted strategy would have to point at to configure and coordinate its world business activities.

Finally, the firm needs to focus on itself and its internal processes to ascertain whether they support and are well aligned with the derived global strategy. All of these areas need to be looked at carefully and interpreted correctly in devising whichever strategy that a firm devises for its international business.

Luckily for the automobile industry, it is considered the most global and geographical boundaries do not really alter to a large extent the competitive position of a particular firm in a given market provided that its product offerings are well focused on customer satisfaction.

This paper looks to study at the effectiveness in international business strategies of two auto companies from the ASEAN region, Toyota and Proton.

Toyota comes from Japan and is considered to be the worlds leading auto manufacturer while Proton is Malaysias leading manufacturer and national automobile company; both of these companies and with much regard to the ASEAN economy play vital roles and are very much important to their respective countries.

Industry Analysis

The global automotive industry has lately been facing a myriad of new and challenging factors. These pressing challenges ranging from increased globalization, digitalization, increasing competition not to forget the increasing requirements for safety and enhanced environmental consciousness by individual players in the industry are greatly reshaping the entire industry.

Unlike a while ago, size is proving to be no longer a guarantee to success but rather innovation. The current global automotive industry environment has it that, only those companies that find new ways to enhance value in all their processes and products as well do prosper in defining competitive frontiers for the future.

Strategic Analysis and Key Success Factors

Strategy

Strategy is defined by Campbell, Stonehouse, & Houston (2002) as the set of forecasts by business that can be adopted to guide and form the centers of decision making in supposition that an environmental situation of the future tends to be different from the past.

In this regard the firm must define conditions and means of responding and acting on any variables that intervene to affect the status quo and exercise some influence and control over these. This means that theres need of putting in place of a constant process of making and reviewing decisions inside any environmental situation.

In their turn, Mintzberg and Ghoshal (2003) conceptualize strategy within five dimensions christened the five Ps effectively defining strategy as a plan, pretext, perspective, poll and a position. However, Michael Porter made another decision and viewed strategy from a competitive point of view.

Allen et al. (2007) admit that this researcher figured out that a competitive strategy is one that enhances the company vision in a manner that its entire structure and processes are so designed as to enable the firm succeed and grow in a competitive environment.

He identified five forces namely supplier power, buyer power, barriers to entry, degree of rivalry and threat of substitute products as the main factors that guide the strategic direction of any firm. In the context of globalization, Porter redefines the concept of strategy to imply it as a process in which individual firms strive to differentiate themselves from rival competitors in a bid to attaining a competitive advantage.

In this context he portends that, strategy simply means choosing firm unique ways of competing by altering or modifying specific activities or processes in all areas of the business while at the same time putting into consideration the suitability and situation of the business.

In a more recent proposition, strategy is seen in the dimensions of product quality, customer satisfaction, and the integration effectiveness of other support activities and processes. The three fundamental considerations in a devising an effective strategy according to this new proposition are; operation effectiveness, customer targeting and innovation.

Key success factors

It is very important that players within the industry know and understand the key success factors that shape the industry they are in. These factors help individual firms to assess themselves in terms of where they are, know themselves in terms of their competitive strengths and weaknesses, and define where they want to be in the industry and devise effective strategies towards that course.

A number of factors in the industry are currently very crucial in determining the success of each individual firm in the global front. These include; customer orientation, innovation and cost position. Customer orientation is very critical not only for the automobile companies but also for any business. Any business needs to identify its customers in terms of their needs and the general direction of their tastes and preferences.

The modern consumer is increasingly becoming more complex and specific in terms of what he needs. Tastes and preferences as well are becoming more dynamic and hence the need for manufacturers to understand such diverse needs and move in to develop products that will build satisfaction for their customers.

For instance, in emerging markets basic mobility is of key concern to auto consumers in these markets. Manufacturers would therefore want to come up with products that enhance basic mobility in most emerging markets at the lowest possible price offering to also enhance affordability.

Toyota

There are a number of discussions and misunderstandings which are connected to the development of Toyota Motor Corporation. It was founded at the beginning of the 1900s; the year of 1937 was the year of Toyotas introduction to the automobile market in Japan.

In fact, this date played a very important role in the history of Toyotas development: the company had several years before the war to be promoted through the world and got a chance to contribute the war by means of providing special productions (e.g. trucks) for the Imperial Army (Japan  101: Information Resource 2005, para.3).

During the period of war, Japan had to rebuilt itself in order to achieve the necessary success, this is why Toyota as the main manufacture of the nation had to undergo certain changes as well and consider the innovations which were in demand.

Taking into consideration such rich past, the company remains to be successful and overcomes a number of economic challenges and losses; More (2009) admits that its high level of market focus that was demonstrated during the last 50 years become the main key of the companys success nowadays.

It is not always easier to succeed in manufacturing under the current conditions; still, the company under consideration proves that it is crucially important to focus on cost savings and neglect the possibility to improve employees morale in order to succeed and take the leading position in the existing competitions on the market (Hauser & Paper 2007, p. 687).

The managers of the company find it necessary to emphasis the experience of ownership of the company. The point is the chosen companys ownership experience is usually targeted in properly developed slogans which attract peoples attention and prove that the offered services are worth recognition.

For example, from 2004 and till now, the same slogan Moving Forward is known to the vast majority of people around the whole world (Toyota 2011).

Proton

Proton Holdings Berhad is another significant manufacturer that has been discussed in the paper. The point is that this company is considerably younger than Toyota, still, its popularity and recognition in the market is not less impressive. The success of the company is based on the licensing agreements offered by China (Song 2008, p. 18).

Of course, it is not that easy to introduce the company as an absolutely new idea for society regarding the presence of numerous competitors in the market, this is why the company makes a decision to reflect its quality in order to improve its brand and become a significant global player in the chosen market (About Proton 2011).

During the 1990s, Malaysian government made a decision to provide each citizen with the car as the new century should promote new improvements, and cars for every household became one of the main goals set by the government. Proton identified this need and wanted to present the best solution for the problem (Pope et al. 2002).

It turned out to be the period when the company was recognized by almost each citizen. The changes which take place in the company are usually based on the safety standards which are dictated by different nations that are ready to cooperate with the company.

In spite of the fact that Proton considers the requirements set by such countries like China or the USA, it is not always possible to meet all environmental points at the same time, this is why some challenges still bother the company.

However, it is not the time for the company to lose the game and promote other companies with a chance to succeed in automobile manufacturing, and Proton tries to find more financial aid due to ownership of such organization as the Lotus and Norwich City Football Club.

Comparison of the Competitive Positions between Toyota and Proton

As it has been identified in the previous sections, Toyota and Proton are the two leading automobile companies in different regions: Toyota leads the Japanese market, and Proton is noticeable on the Malaysia market. Both companies are powerful and innovating from a number of perspectives.

If Proton aims at increasing the productive capacity of the automobile sector (Sumormo 2005), then Toyota has to be recognized as the company which production system has been improved during the last decade as no other system in the world (Rooney 2005). Being charges with a number of economic and business issues, the companies under analysis have to make use of their best qualities to prove their worth on the market.

Many potential customers are afraid of the global economic slowdown, this is why the companies have to consider quality and price at the same time to meet the expectations of the customers. Operating environment is overcrowded, and it is not always possible for the companies to choose appropriate platforms for development.

Still, both companies are ready to address the issues and the problems in order to prove that their services and their production worth of customers attention even under current unstable economic conditions. For example, the representatives of Proton make a decision to phase out petrol production and focus on other ideas to help people save their money but still continue using the cars (Rahim 2005).

In the table offered below, it will be easier to compare the services offered by Toyota and Proton and to define those positions are stronger in order to take the leading position on the global automobile market.

Effects of the global turmoil on the strategic positions of the two automobile manufacturers

The current situation on the automobile market is not stable, and customers demands as well as customers opportunities and companies possibilities vary considerably. It is not easy to create certain strategies and plan actions as the conditions may require some improvements within a short period of time.

This is why even such strong and recognizable companies like Proton and Toyota may undergo some challenges and problems. This is why Proton is not able to carry considerably its brand equity, and customers admit that nowadays Proton can make cars still, the vast majority of them are short of excitement.

It becomes harder to satisfy the customer, and the company has to search for more reliable models. Poor sponsorships prevent using green engine technologies to their full extent (Investor Relations 2011).

This is why talking about Proton and the effects of the turmoil that is spreading through the world, it is necessary to admit that the company faces certain problems because of inabilities to forecast social needs and consider the companys possibilities.

Toyota does not undergo the same challenges due to the possibility to use governmental support from the Obama Administration and some environmental groups which have an impact on the technological development (Nurturing a Sustainable Society 2011), still, the global turmoil deprives the employers pay certain attention to the moral conditions of the employees who have to think about the improvement of the company and about the technological aspects that need evaluation.

This is why this automobile manufacture is under a threat to decrease the quality of work because of workers physical or emotional problems.

Future strategies to Make Toyota Competitive

Toyota is probably one of the most successful manufacturers on the automobile market. The company is ready to use its full potential and benefit from using the technological improvements within a short period of time. The only weak point of the organization under analysis is the attention to its workers emotional condition.

Any international strategy aims at promoting the best conditions under which the company may sell the products outside the chosen domestic market, and in case the companys workers are aware of the needs of the citizens from different countries, it will be easier for the company to sell its products.

This is why the offered improvement lies into the fact that managers should be attentive to all details, and emotional preparedness for work has to be also crucial.

Conclusion

In general, both Toyota and Proton demonstrate their readiness to compete on the automobile market. Though the companies have different approaches of how to win the customer and take the leading place, the achievements of Toyota remains to be more powerful due to its richer history and possibilities to cooperate with different countries at the same time.

Proton is good on the Malaysian market, still, it is not as strong as Toyota in regard to the economic challenges which appear frequently. This is why the competitive analysis of the companies shows that Toyota should become a good example of how activities have to be organize and what strategies must to be considered by managers.

List of References

About Proton 2011, Proton. Web.

Allen, RS, Helms, MM, Takeda, MB, & White, CS 2007, Porters generic strategies: An exploratory study of their use in Japan, Journal of Business Strategies, vol. 24, no. 1, pp. 69-90.

Campbell, D, Stonehouse, G, & Houston, B 2002, Business strategy, Butterworth-Heinemann, Woburn, MA.

Investor relations 2011, Proton. Web.

Hauser, K & Paper, D 2007, Simulation of business re-engineering processes: Case study of a United States motor manufacturing company, International Journal of Management, vol. 24, no. 4, pp. 676-687.

Mintzberg, H & Ghoshal, S 2003, The strategy process: Concepts, contexts, cases, Pearson Education, Harlow.

More, E 2009, How General Motors lost market focus, Ivey Business Journal Online, vol. 73, no. 2.

Nurturing a sustainable society, 2011, Toyota. Web.

Pope, M, Musa, M, Singagavelu, H, Bringaze, T, & Russell, M 2002, From colonialism to ultranationalism: History and development of career counseling in Malaysia, The Career Development Quarterly, vol. 50, no. 3, pp. 264  276.

Rahim, KA 2005, Market-based instruments for environmental protection: Piloting presumptive charge and emissions trading in Malaysian Smis, International Journal of Business and Society, vol. 6, no. 2, pp. 1- 36.

Rooney, MJ 2005, Toyota System Production meets large scale change: A synergy for sustainable improvements, Organization Development Journal, vol. 23, no. 2, pp. 21  28.

Song, TS 2008, Resources for China  ASEAN relations, China: An International Journal, vol. 6, no. 1, pp. 171  185.

Sumormo, S 2005, Transaction cost and organizational choice in the Malaysian automobile industry, International Journal of Business and Society, vol. 6, no. 2, pp. 97  112.

Toyota 2011, website.

Toyota Motor Corp: Automobile manufacturer in Japan 2005, Japan  101: Information Resource. Web.

Introduction

Toyota is among the most prominent brands in the automotive industry. Its recent take on hybrid vehicles, RAV4, is a best-selling SUV in the US (Cain, 2016). The following report explores the brands target market, positioning, and highlights key integrated marketing communications (IMC) strategies in an attempt to track the reasons behind the success of its marketing campaign.

Customer Profile/Target Market

The imagery located on the companys website allows us to identify the demographics of the intended audience as the customers roughly thirty to forty age groups. The marketing campaign is not restricted to a specific gender. The psychographic profile leans toward individuals interested in sports and outdoor activities since many images show a group of people in sportswear. In addition, nine out of ten images located on the page dedicated to RAV4 depict a car in a non-urban environment, which is appealing for the customers who prefer traveling and hiking

(Dynamic exterior, n.d.). This is a visible departure from the usual behaviouristic approach chosen by car companies, which commonly appeal to social status and luxurious characteristics. Nevertheless, this aspect of the market segmentation variable is not totally absent from the customer profile  the description of services and characteristics of RAV4 feature such passages as prestigious driving experience and luxurious feel (Toyota, 2016). It is important to note, however, that luxury is secondary to innovation and technological superiority such as performance, safety, fuel consumption, and automatized functions.

Companys Brand Positioning

The positioning of RAV4 is made via its attributes and benefits. The attributes of the product, e.g. performance, are product-related (Toyota, 2016). Besides, detailed reports of fuel consumption and net horsepower are featured prominently throughout the campaign. Of particular interest is the emphasis on the hybrid powertrain which is one of the products selling points and adds to the uniqueness of brand associations.

Importantly, hybrid vehicles are appealing to a specific audience which favors sustainability and cost-efficiency over performance. At the same time, until recent years hybrid cars were perceived by a wider audience as inferior to gas-powered vehicles in terms of performance, which necessitates the emphasis on positioning via product-related attributes. For the same reason, the brand benefits which are prioritized throughout the campaign are functional ones.

For instance, spacious cargo and interior capacity are emphasized in the textual and graphic ads of the car. One image notably shows RAV4s interior cluttered with additional objects  the move which undermines the luxurious vibe but adds to the feeling of comfort, familiarity, and utility

(Spacious interior, n.d.). However, the underlying message also suggests experiential benefits  for example, the description of performance specifications includes the mention of extra thrills, and most of the printed ads describe the driving experience as feeling young

(Toyota RAV4 print ad, n.d.). Thus, it can be argued that the chosen strategies emphasize functional benefits with experience as a secondary yet visible factor.

Integrated Marketing Communication Strategy

The RAV4 marketing strategies are built around print and broadcast media advertising with gradually heavier involvement of digital marketing communication.

The printed media include leaflets, brochures, and advertisements in various thematic magazines. Most of the printed ads stick to the formula described above with slight modifications depending on the volume of the piece. Smaller ads tend to prioritize the experiential benefits of the product while more voluminous examples offer in-depth descriptions of the functional benefits of the car.

The Challenge Hybrid Myths online ad campaign is a six-part video series that explores the advantages of RAV4 in a humorous manner (Toyota, 2016). While each part deals with a real advantage, such as cost-efficiency, visual design, and performance, no attempt is made to persuade the viewer  instead, the emphasis is made on memorability, so that the viewers can reflect on the message rather than believe in it.

The success of the campaign is confirmed by the fact that most entries are resulting from the search, which suggests initiative on the part of customers (SimilarWeb, 2016). Another prominent attempt at establishing digital marketing communication is a recent Facebook campaign that offers a video customized from 100 snippets based on their tracked preferences and behaviors (Tode, 2016). The mechanism takes advantage of Facebooks social component.

Such an approach not only assures the unique approach and caters to individual tastes but also opens up possibilities for gathering feedback. By tracking the popularity of customized videos and analyzing the related trends in individual consumer behavior, Toyota is able to adjust the strategies to a more specific audience and exclude unnecessary deviations.

Finally, the brand uses sponsorship marketing. Particularly, the RAV4s Lets Go Places campaign includes Nocturnal Wonderland music festival and Rock n Roll Marathon Series as a part of its sponsorship portfolio (Lets go places, 2015). The latter is popular among female athletes, which is consistent with the demographic and psychographic profiles of the audience.

Unapplicable Methods

The campaign notably excludes sales promotion, personal selling, and point-of-purchase marketing, none of which is suitable for the automotive industry as it undermines the respectable image of the brand. Direct marketing techniques are also in decline with the availability of social media substitutes such as customized videos. Finally, public relations, such as Toyota technical schools, are not mentioned because they are not directly tied to the RAV4 product.

Conclusion

The IMC campaign of RAV4 is a success for two important reasons. First, it distances itself from symbolic benefits that are irrelevant for the hybrid vehicles and prioritizes the functional ones. Second, it seeks to deliver the message on an individual basis and thus expands its intended audience. Currently, the chosen direction is promising, and there is no reason to change it and retract to traditional marketing strategies.

References

Cain, T. (2016). Want to beat the Honda CR-V? Sell a hybrid. Web.

Dynamic exterior. (n.d.). Web.

Lets go places: Toyota adds marathon series and music festivals to sponsorship portfolio. (2015). Web.

SimilarWeb. (2016). Traffic overview. Web.

Spacious Interior. (n.d.). Web.

Tode, C. (2016). Toyota sparks customized storytelling via 100,000 targeted video ads. Web.

Toyota. (2016). RAV4. Web.

Toyota RAV4 print ad. (n.d.). Web.

Introduction

In recent decades, the Toyota Production System has garnered significant popularity among managers from different business domains. While initially developed for the automotive industry, it was eventually adopted in other industries and applied to both products and services. The following paper evaluates the Toyota Production System by reviewing its core components and approaches and determining their relevance outside the manufacturing sector.

Background

Early in the course of its development, Toyota Motor Corporation experienced operational flaws in the manufacturing process and a series of drawbacks associated with the quality of its products. Its underperformance was especially apparent in comparison to Western leaders in the industry, such as Ford and General Motors. This discrepancy prompted the companys management to organize a visit to the United States to implement successful manufacturing practices. However, the visit found little to no improvement in its systems in several decades (Toyota n.d.). While the productivity of the employees was similar, the American system contained several inefficiencies. Based on these observations, a new production system was developed by management in collaboration with the engineering department. The system was primarily oriented toward the reduction of waste and elimination of inconsistencies, and it became the foundation for what is now known as the Toyota Way.

Corporate Approach

In its current form, the Toyota Production System is determined largely by the companys corporate approach. By extension, the latter is based on four core components. The first one is its philosophy  a compilation of ideas and values that are used to obtain a general sense of direction and understand the companys vision. In simple terms, the philosophy can be described as striving to add value to customers, partners, the community, and society in general (Kuhlang et al. 2013). The second component processes, which, once selected appropriately, inevitably lead to the right results. The third component is people, an umbrella term that includes company leaders, employees, and partners. According to the Toyota Way, organizing the interactions between stakeholders is essential for effective performance. Finally, the fourth component is problem-solving. This component is defined by the Genchi Genbutsu concept, often translated as go and see, and specifies the need for a first-hand approach as a necessary prerequisite for improvement. Also, the fourth component combines a thorough consideration of options and continuous improvement through reflection and learning (Trenkner 2016).

The Toyota philosophy was initially developed specifically for manufacturing processes in the automotive industry. However, its success was so striking that other organizations eventually sought to adopt it. Once it became apparent that its universality leads to wide applicability in industries that do not include manufacturing, its scope of applications expanded to other fields, including healthcare, governance, finance, and the administration of non-profit organizations, among others (Teich and Faddoul 2013). However, it is important to understand that the overarching approach that allows for such flexibility and diversity of uses also poses a considerable barrier to the consistency of implementation (Utureanu and Dragomir 2015). In many cases, the discrepancy results from a lack of understanding of the overall direction and piecemeal adoption of selected tools without utilizing the concepts of the Toyota Way.

Waste Elimination

One of the main objectives of the Toyota Production System is waste reduction. According to the Toyota Way, waste (defined as Muda, or futility) is among the most significant contributors to the inefficient allocation of resources in an organization (Modi and Thakkar 2014). It is important to understand that waste is defined as an activity that is not associated with value-added to the product or service (Sheth, Deshpande, and Kardani 2014). Since the willingness of the customers to pay for the products or services is viewed as a metric of value-added, it is tempting for the management to determine waste by its relevance for end-users. To further differentiate between different types of waste, the Toyota Production System introduces two distinct types of waste. The first type of waste is comprised of actions and processes that do not add value and are not necessary for the customers.

This is the most intuitive type of waste and is universally agreed to be a detriment. The majority of waste reduction practices are directed primarily at this type (Gao and Low 2014). The second type includes actions that do not add value but cannot be easily excluded due to their importance in the manufacturing process. One such example is quality control, which is an essential part of continuous improvement. From the customers standpoint, quality control does not necessarily increase their readiness to pay for the product. At the same time, it requires resources and time allocation (Mitra 2016). However, compliance with safety standards requires an inspection to take place. As a result, the procedure cannot be eliminated and should instead be optimized to provide the necessary benefits at a lower cost, which is a much more difficult task.

The original Toyota Production System identifies seven types of waste. The first is transportation that occurs during the production cycle. In addition to expenses associated with the process, transportation opens up the possibility for damage and deterioration (Banawi and Bilec 2014). The common approach to transportation waste reduction is product flow mapping, which allows for identifying inefficiencies and redundancies in the system. Once identified, waste can be reduced by eliminating unnecessary processes and bringing others closer to each other.

The second form is inventory, which is traditionally associated with raw materials in the manufacturing process. An excess inventory does not provide benefits for the organization while occupying valuable storage space. In many cases, it also requires the allocation of resources for storage to prevent deterioration (Rahman, Sharif, and Esa 2013). Despite the obvious connection to physical products, inventory is equally applicable to any unfinished product or other work in progress outside the manufacturing field. Since in this state the product does not generate revenue, it represents a setback to productivity and should be minimized.

The third form of waste is excess motion. Similarly to transportation, its adverse effects include damage to the product and additional time necessary for the delivery of the final product. However, unlike transportation, motion focuses specifically on actions that comprise the production process. The adverse effects of motion include the deterioration of equipment, injuries to employees, and downtime, all of which are applicable outside the manufacturing sector.

The fourth form is waiting, which is the total time when a product is not being processed or transported. The most common source of waiting is a queue before each subsequent operation. Waiting is often observed to be the result of poor material flow, excessive production runs, and large distances between facilities (Ko and Kuo 2015). These points are often referred to as bottlenecks and result in a slowdown of the entire organization.

The fifth form of waste is overproduction, which results from creating a component that cannot be utilized for production. The excess products need to be stored, which leads to the inventory issues described above and creates additional barriers to quality control (Wahab, Mukhtar, and Sulaiman 2013). Also, overproduction disrupts the optimal allocation of resources. It should be mentioned that overproduction is relatively difficult to detect and address due to the complexity of the phenomenon.

The sixth form of waste is overprocessing or performing actions that are irrelevant to customers. For instance, the organization may use equipment that can provide an excessive degree of quality or precision. In addition to the high costs of such equipment, it requires additional skills and maintenance efforts from the operators and may slow down the process. Interestingly, overprocessing may occur as a result of the misapplication of the Toyota Production System  for instance, in the form of installation of unnecessarily expensive monitoring equipment (Kundu 2015).

Finally, the seventh form defects, whose elimination creates additional expenses and time constraints. Usually addressing other forms of waste results in a significant reduction of defect occurrence.

As can be seen from the information above, TPS has tremendous potential for wide application. The majority of approaches to waste are oriented primarily around manufacturing processes. Nevertheless, with minor adjustments, they are equally applicable to other industries that provide products and services to customers.

Continuous Improvement

To address the occurrence of waste, the Toyota Production System uses the process of continuous improvement. To achieve the desired level of improvement, a company needs to adopt three fundamental principles. The first one requires formulating a long-term vision and incorporating in it a readiness to face challenges and demonstrate creativity to overcome them.

The second aspect, known as kaizen, is arguably one of the most recognizable components of the Toyota Way. Kaizen is a broad concept that requires the determination and engagement of the stakeholders in the pursuit of quality. It can be implemented through a variety of methods, with the PDCA cycle being one of the most popular ones. The cycle in question, also known as the Deming cycle, is a simple procedure that consists of four steps (plan, do check, act) (Lewis and Cooke 2013). The simplicity of the method allows for a wide range of applications in different industries and contributes to the sustainability of its effect. For PDCA to be successfully implemented, it should be supported by a root cause analysis, usually in the form of 5 Whys or similar interrogative techniques. It should be pointed out that PDCA and 5 Whys are not based on a rigid set of principles  rather, they can be used as broadly defined approaches.

Finally, the third component is Genichi Genbutsu, translated as go and see. This aspect of continuous improvement outlines the recommended approach to problem-solving through a hands-on approach. According to the Genichi Genbutsu principle, an effective solution needs to be based on primary data, preferably collected on site. As can be seen, all components of continuous improvement can be applied outside the manufacturing industry with minor adjustments.

Conclusion

After demonstrating excellent results in the automotive industry, the Toyota Production System garnered widespread recognition in many domains of organizational development. The simplicity and accessibility of the systems components allow for its use in multiple industries and about almost any product or service that can benefit from value-added. As was determined in the analysis above, its core components are not rigidly specified, which provides an opportunity for adjusting it to numerous applications. Thus it can be viewed as a valid generalized approach that allows for flexible and cost-efficient solutions.

Reference List

Banawi, A. and Bilec, M. M. (2014). A framework to improve construction processes: integrating Lean, Green and Six Sigma. International Journal of Construction Management, 14(1), 45-55.

Gao, S. and Low, S. P. (2014). The Toyota Way model: an alternative framework for lean construction. Total Quality Management and Business Excellence, 25(5), 664-682.

Ko, C. H. and Kuo, J. D. (2015). Making formwork construction lean. Journal of Civil Engineering and Management, 21(4), 444-458.

Kuhlang, P. et al. (2013). Systematic improvement of value streamsfundamentals of value stream oriented process management. International Journal of Productivity and Quality Management, 12(1), 1-17.

Kundu, G. K. (2015). Lean wastes: classifications from different industry perspectives. ICTACT Journal on Management Studies, 1(1), 39-42.

Lewis, P. and Cooke, G. (2013). Developing a lean measurement system to enhance process improvement. International Journal of Metrology and Quality Engineering, 4(3), 145-151.

Mitra, A. (2016). Fundamentals of quality control and improvement, 4th ed. New York: John Wiley and Sons.

Modi, D. B. and Thakkar, H. (2014). Lean thinking: reduction of waste, lead time, cost through lean manufacturing tools and technique. International Journal of Emerging Technology and Advanced Engineering, 4(3), 339-334.

Rahman, N. A. A., Sharif, S. M. and Esa, M. M. (2013). Lean manufacturing case study with Kanban system implementation. Procedia Economics and Finance, 7, 174-180.

Sheth, P. P., Deshpande, V. A. and Kardani, H. R. (2014). Value stream mapping: a case study of automotive industry. International Journal of Research in Engineering and Technology, 3(1), 310-314.

Teich, S. T. and Faddoul, F. F. (2013). Lean management: the journey from Toyota to healthcare. Rambam Maimonides Medical Journal, 4(2), 1-9.

Toyota. (n.d.). The origin of the Toyota Production System (online). Web.

Trenkner, M. (2016). Implementation of lean leadership. Management 20(2), 129-142.

Utureanu, S. and Dragomir, C. (2015). Review on lean tools used in manufacturing process improvement. Ovidius University Annals, 15(1), 642-647.

Wahab, A. N. A., Mukhtar, M. and Sulaiman, R. (2013). A conceptual model of lean manufacturing dimensions. Procedia Technology, 11, 1292-1298.

Introduction

The present report aims at analyzing the strategic position of Toyota in comparison with its competitors, such as General Motors, Volkswagen, and Ford Motor Company. The paper uses Porters Five Forces analysis, PESTLE framework, and benchmarking to evaluate Toyotas strategic strengths and weaknesses. After, the report identifies three strategic options to improve the current position and critically evaluates these options using the Suitability, Acceptability, and Feasibility framework.

Current Strategic Position of Toyota

Company and Industry Overview

Toyota Motor Corporation is a well-known automobile company established by Kiichiro Toyoda, a humble carpenter from Japan. The companys total market capitalization is ¥205.16 billion, with ¥29.9 billion in revenues in 2020 (Yahoo Finance, 2021). Currently, the company employs almost 360,000 people, which makes it one of the largest employers in the industry (Toyota, 2020). The company operates in a highly-competitive industry, which experiences a significant decline due to the COVID-19 pandemic. According to Automotive Industry Outlook, the sales in the industry were expected to fall by 14% in 2020 in comparison with 2019 (Report Linker, 2020). This will mean that the companies will focus on preserving internal capital short-term and explore robust online selling strategies (Report Linker, 2020a). Deloitte claimed that the automotive market experienced a considerable decline in 2020 due to the pandemic (Vitale, 2020). However, the projections for the future are optimistic, as the industry is expected to grow from $20,321 million in 2020 to $25,719 million in 2025 (Report Linker, 2020b). However, the success of the companies will depend entirely on how they will be able to adjust to the changes in the external environment.

Porters Five Forces

Competitive Rivalry: High

Porters Five Forces model suggests discussing competition in the industry as the first step (Scott, 2020). Toyota is a pioneer in the application of uniquely designed management techniques, which makes it resistant to competition (Fane et al., 2003, p. 54). The company actively encourages an atmosphere of reciprocal trust and respect, creating a higher level of competitiveness (Liker and Hoseus, 2010). Toyotas product range and distribution channels form an advantageous strategic position in the market, raising problems for its competitors to survive. Nevertheless, it has to face an extended number of competitors, many of which are large firms. Therefore,

Threat of New Entrants: Low

In Toyotas case, there is little possibility of the appearance of new competitors according to several factors. The great entry barriers are the high costs of growing, maintaining, and establishing a new automobile firm (Marksberry, 2011). Brand development and supply chain costs are expensive. Therefore, the threat of new entrants is one of Toyotas least concerns.

Bargaining Power of Suppliers: Moderate

One of the sources of superior performance is the companys attitude towards suppliers, whose force is one of Porters Five Forces. It is evident that Japan lacks natural resources, which puts Toyota in a vulnerable position. However, the corporation applies the make-or-buy decision technique, by which the cheapest way of production is utilized (Guiding principles at Toyota, 1997). Using this method, the company imports critical materials such as coking coal and iron ore from abroad, increasing the cost of manufacture. The outsourcing technique, which is the transfer of operations to an external party, is exploited by Toyota as a cost-minimization tactic (Mishra et al., 2018, p. 26). As there is a limited number of suppliers, it creates a moderate force that negatively impacts the company.

Bargaining Power of Buyers: High

In the automotive industry, the threat that its customers can change from this firm to any other is high because of low switching costs (Jothi and Kalaivani, 2015). What is more, the buyers are provided with an opportunity to find relevant information about the available options when purchasing a new car. Since the companies are expected to employ new strategies for developing online sales, the bargaining power of buyers is expected to increase. Thus, Toyota should make sure that it respects and addressed its target customers expectations and preferences.

The threat of Substitutes: Moderate

The threat of substitutes is moderate because of the combination of switching costs, availability of substitutes, and convenience of using the substitutes. As mentioned above, the switching cost is low, which makes it a strong force. However, the substitutes for Toyotas products, such as public transportation, bicycles, and motorbikes, have limited convenience. At the same time, the availability of the substitution is moderate, as public transportation may be unavailable in smaller cities. In summary, the threat of substitution is moderate.

PESTLE Analysis

Table 1: PESTLE Analysis. (Source: Created by Self).

Benchmarking

Benchmarking is crucial for comparing the performance of the company in comparison with its rivals. One of its major competitors of Toyota is Volkswagen AG, which is currently one of the leaders in the industry. Volkswagen actively exploits green marketing and aggressively trades in the EV market (Volkswagen AG, 2020). The comparison of financial performance is provided in Table 2 below.

Table 2: Financial Performance Analysis. (Source: Created by Self).

In summary, Toyotas performance is comparable to that of Volkswagen. However, Toyota has higher efficiency, and its profit margin increased in 2020 during the time of recession, which is a considerable advantage. At the same, Toyota uses less debt, which is crucial during the COVID-19 pandemic.

Organizational Culture

Toyotas organizational culture has been a matter of increased discussion among scholars and entrepreneurs around the world due to its distinctiveness. According to Sosnovskikh (2016), the company can be characterized as family-type, as there are close relationships between employees and high expectations. The core values of the organizational culture are continuous improvement, learning, respect for people, trust, and teamwork (Sosnovskikh, 2016). The companys corporate culture supports management effectiveness and decreases turnover (Sosnovskikh, 2016).

Strategic Position Summary

1. Toyota is actively exploiting its strategic advantage of green marketing, which is crucial based on the PESTLE analysis.
2. The company is exploiting its strategic advantage of investment in R&D.
3. The company has high efficiency of capital use and low dependence on debt in comparison with its competitors.
4. The company has high profitability due to cost control.
5. Toyota has no presence in the EV market, which is a weakness.
6. The organizational culture is the source of continuous improvement and low turnover of employees.

Available Strategic Options

Building strategic options include setting aims, determining specific policies to achieve them, and further evaluating their effects, benefits, and challenges. Factors such as the competition level, availability of funds, and political circumstances must be taken into consideration. Planning of strategies involves long-term results and, therefore, should be done from such a perspective (Steiner, 1979). Strategic options will depend upon the general strategic direction selected by the company.

Option 1: Differentiation through Entering the EV Market

One of the options for Toyota is aiming at the differentiation of the products to capture all the segments of buyers. According to Islami, Mustafa, and Latkovikj (2020), differentiation supposes the creation of a unique product that can help to achieve a competitive advantage over rivals. Differentiation assumes the dominance of quality over cost (Islami, Mustafa, and Latkovikj, 2020). This implies that customers develop high loyalty to the company, as customers start to value the distinct quality o the new product (Islami, Mustafa, and Latkovikj, 2020). Differentiation can be achieved by using the resources of the company effectively. Differentiation also highly depends on R&D, as it requires unique technologies to achieve distinctiveness from the competitors.

In Toyotas case, the strategic direction of differentiation can be achieved by entering the EV market. Currently, Toyota is only planning to make their first electric vehicle, which is a high-quality SUV (Baldwin, 2020). Toyota is one of the last entrants in the EV market, which makes it a very risky step. However, Toyota had significant success with hybrid cars, as Prius has gained worldwide acknowledgment due to its high quality. The company can utilize the experience of its competitors to learn from their mistakes and make a smart entry into the market. Toyota can afford to enter the market, as it invests much money in R&D and efficiency of production and distribution to make high-quality EVs with the lowest possible cost. This option is in line with growing environmental concerns and social pressures identified in the PESTLE analysis. In summary, the option is consistent with identified strategic advantages.

Option 2: Cooperative Expansion through Acquisition

Cooperative expansion can be achieved using various strategies, including mergers, acquisitions, joint ventures, and strategic alliances. Expansion is a corporate-level strategy, which aims at extending market presence using the resources of another company. The most appropriate strategy for corporate expansion for Toyota is the acquisition, as many companies in the automotive industry are experiencing a considerable decline in sales, which may potentially incline them to sell their businesses (Wagner, 2020). Toyota has a low D/A ratio in comparison with its rivals, which can allow them to use additional debt for purchases of smaller companies. Additionally, according to Russel Investments (2020), central banks in the US, Europe, and the UK are expected to implement unprecedented stimulus measures, which often include reducing interest rates. Toyota can use low-interest rates to pay for acquisitions.

Toyota should select the candidate for acquisition carefully, as they need to comply with certain criteria. First, the acquired company should have the potential to bring value (Salter & Weinhold, 1981). Second, the potential candidate should address the individual needs of the company (Salter & Weinhold, 1981). Finally, the acquired company should help to achieve strategic goals (Salter & Weinhold, 1981). One of the current strategic goals of the company is to enter the EV market, as was mentioned earlier. This can be achieved by purchasing an automotive company in China, such as BYD, Geely, BAIC, SAIC, or JAC Motors. These companies have been demonstrating steady performance in the EV market over the past five years (Bullard, 2019). The acquisition of one of these companies will also help to penetrate the Chinese market.

Option 3: Stability Strategy through Paying off Long-Term Debt

Stability strategy supposes that the company aims at the functional improvement of its current operations with considerable changes in the corporate strategy. There are three ways to implement the stability strategy: no change strategies, pause/proceed with caution strategy, and profit strategy (Avishitka, no date). In Toyotas case, the pause/proceed with caution scenario is preferable, as it allows one to understand the current situation and adapt to the quickly changing external environment.

At present, the global automotive market experiences a significant recession, as was mentioned in Section 1.1 of the present report. The recession is associated with the COVID-19 situation, which has a significant effect on the demand for automobiles. Even though the projections for the future are optimistic, the situation will depend upon how the pandemic develops. At present, the development of the new variants of COVID-19 is worrying, which may cause additional disturbances in the automotive industry. Thus, it may be considered appropriate to take a pause in corporate development and identify future strategies when the risks decrease.

The strategy can be implemented by decreasing the long-term debt to lower susceptibility to changes in the external environment. While Toyotas current D/A ratio is lower than that of its competitors, it is not balanced. The company can consider reducing the costs by eliminating long-term debt. This strategy is acceptable, as the company demonstrates stable financial performance, which is superior to its rivals. Toyota managed to have stable revenues and profits due to effective marketing strategies, improved efficiency, and stable market share (Yahoo Finance, 2021). This performance can continue to improve by paying off long-term debt.

Evaluation of Strategic Options and Final Suggestions

Sustainability, Acceptability, and Feasibility of the Available Options

One of the most effective methods for evaluating strategic options is an assessment of the sustainability, acceptability, and feasibility of every strategy. The analysis of the three options is provided in Table 3 below.

Table 3: Analysis of Options Available to Toyota. (Source: Created by Self).

Option Selection

According to the analysis provided in Table 3 above, the most appropriate option for Toyota is the expansion strategy based on direct acquisitions of smaller automotive companies. This option has the highest score, as the combination of suitability, acceptability, and feasibility is optimal. It allows to increase the companys market share, improve its presence in international markets, utilize the possibilities associated with the COVID-19 situation, and exploit low dependence on debt. Additionally, the option has lower uncertainty in comparison with Option 1, which is crucial in the rapidly changing outside environment.

The primary concern associated with this option is damage to corporate culture integrity. Acquisitions will require significant investments and close control over corporate culture in the acquired companies due to possible conflicts, which can make the corporate culture dysfunctional. According to Tedla (2016), a lack of corporate culture integration is associated with decreased financial performance and poor organizational performance.

Another concern that should be mentioned is the possibility of decreased quality of products produced in China if Toyota chooses to acquire a company in this country. According to Shih (2018), the myth that Chinese automakers produce low-quality vehicles no longer holds true. Chinese carmakers are developing rapidly, especially in the EV market. Thus, quality control will only be a moderate problem.

Possible Implementation Problems

There are several risks associated with the implementation of the selected option that should be considered. First, Toyota can miscalculate the acceptable price for the acquisition, which may result in long payback periods (Allahar, 2015). Second, the acquisition may cause legal problems due to poor protection in China. Third, Toyota will need to hire a strong post-sale team that has significant experience in resolving post-sale issues (Allahar, 2015). Finally, the company might miss the final targets, as the key employees may choose to abandon the acquired company (Deeb, 2016). It is crucial to address all the risks mentioned above to ensure the success of the implementation process.

Conclusion

Toyota is a large player in the automotive industry that has significant resources it can use for future growth. The assessment of these resources helped to identify three possible options for the development of the company. The analysis of these options revealed that the acquisition of a smaller Chinese EV manufacturer is the most appropriate strategic option, as it has the optimal combination of suitability, acceptability, and feasibility. However, this option is associated with implementation and cultural integrity concerns that should be addressed to ensure success.

References

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Introduction

Toyota has been known as one of the major global corporations producing cars. Originally founded in Japan, the company quickly grew into a global enterprise represented on multiple levels and targeting a wide variety of buyers. However, despite the attempts at incorporating the latest advances in HRM the company has still been succumbing to the traditional styles of managing its internal issues (Toma & Naruo, 2017). By combining an effective quality assurance technique with the focus on the improvement in the management of its resources and especially the introduction of talent management approaches, Toyota has made significant progress in cementing its position in the global market.

Main body

Toyotas overall strategy presently seems to appear to focus on the issues that are elated to the improvement of the companys supply chain, as well as the management of Toyotas production cycle, in general. Namely, the fact that the company has been using the JIT framework indicates that Toyota has been aiming at reducing the time taken for the production cycle to be completed. Indeed, the improvement of production speed along with the quality thereof allows increasing the competitive advantage of an organization significantly.

In addition to the overall competitive strategy of the organization, Toyota has updated its human resource management (HRM) framework, the described change appears to be in line with the overall trend within the company. Specifically, the organization has shown the tendency to reconsider the traditional approaches toward managing key processes within Toyota and introducing the strategies expected to reduce the amount of resources spent on its completion (Liker & Hoseus, 2010). Presently, Toyota strives to address a critical organizational concern. Therefore, the firm has been adopting a compound strategy based on a combination of several approaches, including the search for strategic partners, the inclusion of administrative experts, the focus on championing employees needs, and the introduction of change agents into the organizational setting.

Toyotas HRM strategies have been working quite well recently, allowing the organization to engage in effective talent management and contributing to the successful management of roles and responsibilities within the current team. Moreover, the focus on the professional development of the employees has allowed to enhance the current talent management practices and create the platform for building Toyotas future competitive advantage (Liker & Hoseus, 2010). Overall, the focus on the organizational development and the promotion of the internal TPS development within Toyota appears to have contributed to its progress to the greatest extent (Toma & Naruo, 2017). Indeed, looking at the performance delivered by the organization, one will notice a sharp rise in it with the adoption of the lean management techniques and the implementation of the said framework for TPS improvement, especially as far as the safety and quality assurance are concerned.

Conclusion

Overall, Toyotas readiness to combine the lean management practices with the TQM framework and the TPS strategies allows the organization to retain its competitive advantage and control the extent of the production quality to a considerable extent. As a result, the firm has been gaining increasingly more influence in the market of its choice, as well as in the global car manufacturing environment, in general. Although the company needs to continue working on the development of innovative methods and tools for keeping its products relevant and popular, it has provided the basis for improving its position in the global market. With the integration of the JIT principles, employee-centered talent management techniques, and reciprocity in the workplace, the company has gained essential footing in its target business setting.

References

Liker, J. K., & Hoseus, M. (2010). Human resource development in Toyota culture. International Journal of Human Resources Development and Management, 10(1), 34-50. Web.

Toma, S. G., & Naruo, S. (2017). Total quality management and business excellence: the best practices at Toyota Motor Corporation. Amfiteatru Economic Journal, 19(45), 566-580.