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8/18/2019 Strategic Management for Toyota
1/95
MANILA BUSINESS COLLEGE MBC Bldg., 1671 Alvarez St., Sta. Cruz, Manila, Philippines 741-348!7434"38
A Strategic Management Paper of Toyota Manufacturing
Corporation, Phiippine!
In Partia fu"ment #ith the re$uirement! in Strategic Management
Su%mitte& %y'
Bel#$, %eah $ P.
'ela Cruz, Mar$ $ M.
(sidr#, Ma. %e#)il$ '.
*#driguez, &ud$ Ann +.
Su%mitte& to'
Mr. erard B#z +ung#l
&anuar$ 8, 16
8/18/2019 Strategic Management for Toyota
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E(ecuti)e Summary
+his strategi/ )anage)ent paper pr#vides a detailed #utline #0 the
/urrent strategies #0 +#$#ta M#t#r Philippines ith the pr#p#sed strategies
2ased #n the S+ anal$sis.
+#$#ta M#t#r Philippines C#rp#rati#n 5+MP is an aut#)#tive
)anu0a/turing /#)pan$ in/#rp#rated #n August 3, 188. +MP is a #int
venture #0 + Capital #ldings, (n/., +#$#ta M#t#r C#rp#rati#n and Mitsui 9
C#. %td. +MP is the 2iggest aut#)#tive /#)pan$ and the )ar:et leader in the
/#untr$.
aving the visi#n state)ent, ;+# 2e the ? CMPA
8/18/2019 Strategic Management for Toyota
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d#)inan/e is prevalent. C#ntinu#usl$ in/reasing /#)petiti#n is 0ueled 2$ the
higher /#nsu)er eDpe/tati#ns and anti/ipati#n 0#r the l#er pri/es.
Alth#ugh +#$#ta has rather str#ng /#st /utting strateg$, the re/ent
natural disaster has put an additi#nal pressure #n +#$#tas /#sts. *e/entl$,
the 'etr#it +hree have 2een #ering higher sales dis/#unts t# /#unter pri/e
/#)petiti#n, hi/h puts +#$#ta under a heavier 2urden #0 eE/ient
pr#du/ti#n and /#st /utting strategies. @et, +#$#ta re)ains a leader in the
l# /#st )anu0a/turing, hile its pr#du/ti#n s$ste) /aused #ther /ar-
)anu0a/turers t# /hange the a$ the$ #perate.
+he threat #0 su2stitutes is ea: 2e/ause as the industr$ trends
indi/ate, the /ust#)ers still have a s#lid relian/e #n the used-/ar )ar:et.
C#nsidering the 0a/t that the e/#n#)$ has n#t 0ull$ re/#vered, a signiF/ant
part #0 the /ar de)and is ta:en 2$ the used-/ar industr$. ith the a2ilit$ t#
/ut /#sts )#re eE/ientl$ than its /#)petit#rs, +#$#ta has narr#ed the pri/e
gap 2eteen the used-/ars and its #n aut#)#2iles. +here0#re, /#)pared t#
its peers, the su2stituti#n ith the used /ars is less #0 a danger 0#r +#$#ta.
+he 2argaining p#er #0 2u$ers is nearl$ )#derate 2e/ause the re/ent
trends indi/ate that the /#nsu)ers are pr#ne t# see: #ut )#re 0uel-eE/ient
/ars due t# the rising #il pri/es. +his als# results in the in/reasing de)and 0#rthe h$2rid /ars that #er /heaper alternatives 0#r #perating the vehi/le
/#upled ith higher eDpe/tati#ns #0 pr#du/t Gualit$. M#re#ver, sin/e the
/h#i/es in the /ar )ar:et are a2undant, the 2u$er has a Guite str#ng
2argaining p#er and l# sit/hing /#sts. +he /#st /utting pra/ti/es that
+#$#ta i)ple)ents in its #perati#ns l#ers the 2u$er p#er and puts its /ars
int# a )#re advantage#us p#siti#n /#)pared t# its /#)petit#rs.
+he 2argaining p#er #0 suppliers is nearl$ )#derate 2e/ause the
suppliers in the aut#-)anu0a/turing industr$ are li:el$ t# 2e s)aller than
)anu0a/turers and thus tend t# sell t# )ultiple aut#)a:ers. hile e see
that suppliers net#r: ith aut#)a:ers is prett$ diversiFed, the$ pr#vide
/ru/ial ele)ents 0#r /ar )a:ing and )#st #0 the aut#-)anu0a/turers rel$ #n
the suppliers ti)el$ #perati#ns and stellar Gualit$. H#r this reas#n, the l#ng-
8/18/2019 Strategic Management for Toyota
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ter) /#ntra/ts a//#)panied 2$ stri/t standards #r Gualit$ #n 0#r the
suppliers are ver$ /#))#n. =suall$ i0 a supplier d#es n#t /#)pl$ ith the
standards set 2$ the /ar)a:ers and /harge t## )u/h it is 0airl$ eas$ 0#r the
/ar )anu0a/turer t# Fnd an#ther supplier and even )#ve the suppl$ /hain
t#ards the /heaper suppl$ )ar:ets in a dierent /#untr$. ne #0 the
/#)petitive advantages #0 +#$#ta C#. is its str#ng relati#nship ith the
suppliers. (ts eE/ient )anner #0 )#nit#ring suppl$ /hain pla/es l#
2argaining p#er #n the suppliers.
+he anal$sis #0 p#tential /hanges in the )a/r#-envir#n)ent /#nne/ted
ith P#rters Hive H#r/es M#del, this paper studied the general e/#n#)i/
/#nditi#ns, p#pulati#n de)#graphi/s, s#/ietal values and li0est$les,
te/hn#l#g$, e/#l#gi/al, in0rastru/tural, p#liti/al envir#n)ent, and legislati#ns
and regulati#ns ae/ting +MPs eDternal envir#n)ent. +he threats and
#pp#rtunities #0 +MP are then 2ased #n the eDternal anal$sis.
+he strengths and ea:nesses #0 +MP are 2ased #n the internal
anal$sis hi/h inv#lves the Fnan/ial and value /hain anal$sis.
verall, +MP has #utper0#r)ed the industr$ #ver the past $ears. +he
Fnan/ial rati#s ill 2e eDplained, as ell as, the value /hain anal$sis, ith
the /#rresp#nding eDplanati#ns in this paper.
n the strategi/ plan, the paper ill eDplain the s#/ial, Fnan/ial, and
strategi/ #2e/tives. +his ill als# eDplain the present /#rp#rate strategies #0
+MP and the pr#p#sed /#rp#rate strategies, ith the strateg$
i)ple)entati#n using the 7S 0ra)e#r: and the pr#e/ti#ns.
A2#ve all, this paper ill 2e a guide in de/isi#n-)a:ing pr#/esses #0
+MP ith regarding ne strategies t# sta$ #n t#p #0 its /#)petit#rs.
8/18/2019 Strategic Management for Toyota
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TABLE O* CONTENTS
?De/utive Su))ar$ +a2le #0 C#ntentsA/:n#ledge)ents
(. (ntr#du/ti#na. C#)pan$ Pr#Fle
i+ Ba/:gr#undii+ >isi#n
1. Anal$sis. Suggested *evisi#n, i0 an$
iii+ Missi#n1. Anal$sis. Suggested *evisi#n, i0 an$
i)+ Pr#du/ts2. Pr#du/ts #0 the C#)pan$
((. ?Dternal ?nvir#n)ent Anal$sisa. (ndustr$2. Mar:et
i+ Mar:et 'eFniti#nii+ Mar:et Size
/. Anal$sis #0 Present +as: ?nvir#n)enti+ +hreat #0 alues and %i0est$le
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8/18/2019 Strategic Management for Toyota
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Acno#e&gement
e have i))ense pleasure in su//ess0ul /#)pleti#n #0 this #r: entitledL
; Strategi/ Manage)ent Paper 0#r +#$#ta M#t#rs.Hirst and 0#re)#st e #uld li:e t# eDpress #ur gratitude t# #d Al)ight$
0#r giving us strength and isd#) in riting this stra)a paper.
e #uld li:e t# eDpress #ur deepest appre/iati#n t# #ur pr#0ess#r Mr.
erard B#z +ung#l 0#r sh#ing his supp#rt and en/#urage)ent t# a//#)plish
this stud$. ith#ut his guidan/e and persistent help, this paper #uld n#t
have 2een p#ssi2le.
e a/:n#ledge ith gratitude all the re0eren/es that e use 0#r #ur
strategi/ )anage)ent paper.
And lastl$, e ant t# ta:e this #pp#rtunit$ t# than: #ur gr#up )e)2ers
h# have /#ntri2ute t# this pr#e/t ith their invalua2le #pini#ns and
suggesti#ns hi/h has d#ne a l#ng a$ in s##thing #ur r#ugh edge as a
tea).
8/18/2019 Strategic Management for Toyota
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I+ Intro&uction
a+ Company Pro"e
i+ Bacgroun&
+@+A M+* P(%(PP(
8/18/2019 Strategic Management for Toyota
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+he /#)pan$ has a g##d visi#n state)ent eD/ept 0#r the
g#al t# 2e ;the n#.1 aut#)#tive /#)pan$. ( thin: this is a
little a)2iti#us sin/e there are a l#t #0 /#)pan$ in the
industr$ h# are n# pr#du/ing ele/tr#ni/ /arsand +#$#ta
0#/uses the)selves #n h$2rid /ars. +he$ /an a/hieve their
visi#n i0 the inn#vati#n #0 the *esear/h and 'evel#p)ent
are a/tive n#t li)iting the)selves in )anu0a/turing #nl$
h$2rid /ars #ever, the h#le visi#n state)ent ere
/learl$ stated.
SUGGESTE. /E-ISION
+# 2e the one of the leading automotive /#)pan$
here *?A+ P?P%? #r: as a +?AM t# pr#vide the B?S+
pr#du/ts and servi/e t# #ur C=S+M?*S.
iii+ Mi!!ion
+# d#)inate #ur )ar:ets thr#ugh d$na)i/ selling and
ti)el$ deliver$ #0 attra/tive pr#du/ts, ith eD/ellent
/ust#)er servi/e and /#ntinu#us pr#du/t i)pr#ve)ent. +# pr#du/e vehi/les and /#)p#nents #0 #utstanding
Gualit$, using advan/e te/hn#l#g$, /#ntinu#usl$ i)pr#ving
)eth#ds and envir#n)ent-0riendl$ pr#/esses hile
)aintaining sa0e #r:ing /#nditi#ns. +# sustain C#)pan$ pr#Fta2ilit$, sta2ilit$, pr#du/tivit$ and
gr#th 2$ engaging in ee/tive Fnan/ial and res#ur/e
)anage)ent 0#r the /#lle/tive gain #0 the +#$#ta Ha)il$
and the s#/iet$ e serve. +# sustain +ea) Me)2erNs )#rale and pr#du/tivit$ 2$
devel#ping their 0ull p#tential and t#tal ell-2eing, and 2$
esta2lishing )utual trust, )utual resp#nsi2ilit$, and
har)#n$ thr#ugh #pen /#))uni/ati#n.E)auation of the Nine 012 Component! of a Goo&
Mi!!ion Statement
STATE. IN T3E MISSION
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COMPONENTS' STATEMENT'
Cust#)ers
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C#n/ern 0#r ?)pl#$ees
devel#ping their 0ull
p#tential and t#tal ell-
2eing, and 2$ esta2lishing
)utual trust, )utual
resp#nsi2ilit$, and har)#n$
thr#ugh #pen
/#))uni/ati#n.
SUGGESTE. /E-ISION +# d#)inate aut#)#tive industr$ thr#ugh d$na)i/
selling and ti)el$ deliver$ #0 attra/tive pr#du/ts, eD/ellent
/ust#)er servi/e and /#ntinu#us i)pr#ve)ent.
+# pr#du/e vehi/les and /#)p#nents #0 #utstanding
Gualit$, using advan/e te/hn#l#g$ that #uld Ft the taste #0
the /ust#)er /#ntinu#usl$ i)pr#ving )eth#ds and
envir#n)ent 0riendl$ pr#/esses hile )aintaining sa0e
#r:ing /#nditi#ns.
S# sustain /#)pan$ pr#Fta2ilit$, sta2ilit$, pr#du/tivit$
and gr#th 2$ engaging in ee/tive Fnan/ial and res#ur/e
)anage)ent 0#r the /#lle/tive gain #0 the +#$#ta 0a)il$ #0 the
s#/iet$ e serve.
+# sustain tea) )e)2ers )#rale and pr#du/tivit$ 2$
devel#ping their 0ull p#tential and t#tal ell-2eing and 2$
esta2lishing )utual trust, )utual resp#nsi2ilit$ /#n/ern 0#r
pu2li/ i)age and har)ing thr#ugh #pen /#))uni/ati#n.
i)+ Pro&uct!
Aut#)#tive Cars
Aut#)#tive Servi/es
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• il Changes
• +ire *#tati#n and Align)ent
• +rans)issi#n *epair and Servi/e
• Car ashes and 'etail
• Hluid +#p ! Hlushes
• +iring Belt *epair!*epla/e)ent
• Parts and A//ess#r$ (nstallati#n
• Hree >A State (nspe/ti#ns
• +ire Pressure ?valuati#n
%+ Pro&uct! of the Company
TO4OTA
PASS??(C%?86 AlvanzaCa)r$ AlphardC#r#lla Altis C#aster%C Prad# H& CruiserPrius H#rtunerPrius C a/e>i#s iluDig# SP=
@aris (nn#va%CPrevia*av
LE5USPASS??(C%?C+ O 46?S 3" %O "7
S 3" *O 3"S 4" *O 4"(S 3"(S- C%S-%S 46
8/18/2019 Strategic Management for Toyota
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II+ E(terna En)ironment Anay!i!
a+ In&u!try
+#$#ta C#)pan$ 2el#ngs t# an aut#)#tive industr$. +his industr$
addresses the needs 0#r th#se land vehi/les su/h as the tru/:s,
vans, private /ars, and passenger /ars. +here are several /#)pan$
in/luded in this parti/ular industr$ su/h as the BM, Mitsu2ishi and
#ther /#)pan$ h# #ers the sa)e pr#du/t addressing the sa)e
need t# the pe#ple.
%+ Maret
i+ Maret .e"nition
+#$#ta )#t#r targets pe#ple h# are illing and /apa2le #0
pur/hasing the aut#)#tive vehi/les su/h as private
vehi/les, passenger /ars, tru/:, vans and deliver$ vehi/les.
+he$ /reate dierent t$pes #0 vehi/les 0#r h#useh#ld and
2usiness /#nsu)er.
ii+ Maret Si6e
+#$#ta M#t#r Philippines 5+MP has 0urther idened its
)ar:et share t# 44.7 per/ent as #0 He2ruar$ this $ear hile
se/#nd 2iggest /ar /#)pan$ Mitsu2ishi M#t#r PhilippinesC#rp. 5MMPC, hi/h p#sted a negative gr#th in the Frst
t# )#nths, had t# /#ntend ith a /#ntra/ti#n in its
)ar:et share t# 18.6 per/ent.
+MP s#ld a t#tal #0 17,"7 units in the &anuar$-He2ruar$
peri#d versus 13,88 units in the sa)e peri#d in 14.
+MPs per0#r)an/e idened its )ar:et share t# 44.7
per/ent 0r#) #nl$ 43.3 per/ent in the sa)e peri#d last
$ear.
n the #ther hand, MMPCs 4.6 per/ent )ar:et share in
&anuar$-He2ruar$ 14 /#ntra/ted t# #nl$ 18.6 per/ent in
the Frst t# )#nths this $ear. MMPCs redu/ed )ar:et
share as due t# its negative 6." per/ent sales gr#th t#
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#nl$ 7,313 units 0r#) 7,8 units in the sa)e peri#d in
14.
(n a state)ent, +MP s#ld 8,87 units in He2ruar$ 0#r
an#ther re/#rd )#nthl$ sales gr#th #0 8 per/ent 2ringing
its t#tal sales in the Frst t# )#nths this $ear t# 17,"7
units #r " per/ent higher than its /#)parative peri#d in
14.
+he str#ng sales #0 +#$#ta last )#nth as )ade p#ssi2le
thr#ugh the /#ntinu#us high de)and #0 its 2est-selling
vehi/le in the /#untr$, the >i#s, ith sales #0 ,1 units.
He2ruar$s sales ere 0urther rein0#r/ed 2$ #ther str#ng
)#dels in +#$#tas line-up su/h as the H#rtuner, (nn#va,
ig#, iluD, Avanza and C#r#lla Altis.
n the #ther hand, +#$#tas luDur$ 2rand, %eDus, re/#rded
6 units last )#nth. %eading the pa/: are its nel$
laun/hed luDur$ /#)pa/t /r#ss-#ver, the
8/18/2019 Strategic Management for Toyota
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and pr#Fta2ilit$, and
annual sales have
rea/hed prere/essi#n
levels in s#)e
regi#ns. (strategyand.pw
c.com)
#0 s/ale 0#r s)all
/#)panies and ne
entrants. 5
8/18/2019 Strategic Management for Toyota
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t# pr#vide g##d Gualit$
pr#du/ts at reas#na2le
pri/es. And 2e/ause #0
that, ne entrants ill
have t# ta:e )#re ti)e
t# have their #n
identit$ in the industr$.
Brand identit$ #0
/#)panies is 2ased #n
Gualit$, sa0et$,
per0#r)an/e, value, 0uel
e/#n#)$, design!st$le
and
te/hn#l#g$!inn#vati#n.
(Toyota Annual Report
20)
easil$ 2uild up their
2rand identit$ 2e/ause
#0 the large eDisting
/#)panies in the
industr$.
S#itching co!t S#)e /lients )a$
/#)plain a2#ut the
pr#du/ts #r servi/es 0#r
n#t 2eing /#nsistent and
the$ )a$ tend t# 2u$ in
#ther /#)panies,
in/luding the ne
entrants, hi/h ill #er
2u$ers their eDpe/tati#ns
in a pr#du/t.
+here isnt )u/h 2rand
l#$alt$ in the aut#)#tive
industr$.
(termpaperwarehouse.co
m)
3 M#derate threat #0
ne entrants
igh sit/hing /#sts
)a:e it diE/ult 0#r
/ust#)ers t# /hange
hi/h pr#du/ts the$
n#r)all$ pur/hase.
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Capita re$uirement! Aut#)#2ile industr$
in/urs high /apital /#st.
+here is an eDtre)el$
high a)#unt #0 /apital
that is reGuired t#
pur/hase ph$si/al
)anu0a/turing plants,
ra )aterials, as ell as,
t# hire and train
e)pl#$ees. (t ta:es a
great a)#unt #0 /apital,
n#t #nl$ 0#r the
)anu0a/turing pr#/ess,
2ut als# t# :eep up ith
the latest inn#vati#ns in
#rder t# /#)pete ith
the industr$ leaders.
(psu.edu)
1 ea: threat #0 ne
entrants
8/18/2019 Strategic Management for Toyota
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2e/ause spa/e ithin a
dealership l#t is li)ited.
(psu.edu)A%!oute co!t
a&)antage!
+#da$s su//ess0ul
aut#)#2ile /#)panies
p#ssess at least s#)e #0
the 0#ll#ing attri2utesL
pr#du/ti#n eE/ien/$,
ell-planned /#st
stru/tures, )anagea2le
size, distri2uted
)anage)ent #0 2rands,attenti#n t# underserved
)ar:ets, 0#/used
strateg$, and ell-
respe/ted 2rands and
pr#du/ts. (Team A 200!)
3 M#derate threat #0
ne entrants
Hir)s are /#)peting 0#r
inn#vati#n and ne
pr#du/ts that dier
0r#) #ther /#)petit#rs
that a ne entrant /an
als# pr#vide.
Go)ernment poicy H#r the ne Fr) t# enter
in the industr$, the$
)ust /#)pl$ ith the
reGuire)ents that are
needed 2$ the
g#vern)ent.
+he #rldide
aut#)#tive industr$ is
su2e/t t# vari#us las
and g#vern)ent
regulati#ns in/luding
th#se related t# vehi/le
sa0et$, envir#n)ental
)atters, and nu)2er #0
1 ea: threat #0 ne
entrants
+he /#)panies that are
planning t# enter the
industr$ ill have t#
0#ll# g#vern)ent
regulati#ns and t#
/#)pl$ ith )an$
g#vern)ent
reGuire)ents.
8/18/2019 Strategic Management for Toyota
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vehi/les. +he
g#vern)ent )a$ als#
i)p#se taris and #ther
trade 2arriers, taDes and
levies, #r ena/t pri/e #r
eD/hange /#ntr#ls.
(Toyota Annual Report
20)
E(pecte& retaiation Sin/e 2ig /#)panies are
in the industr$ it /ann#t
2e av#ided that the$ are
pr#viding high pri/es t#their pr#du/ts hi/h )a$
/ause ne entrants t#
#er l# pri/es, pr#)#s
and dis/#unts t# 2u$ers.
igh retaliati#n is
p#ssi2le 0r#) eDisting
/#)panies i0 ne
entrants #uld 2ring
inn#vative pr#du/ts and
)#re a#rda2le pri/es t#
the industr$. (Nkomo)
3 M#derate threat #0
ne entrants
'ue t# the /#)panies
2ig na)e in theindustr$, there are
p#ssi2le retaliati#ns
that ill 2e thr#n t#
the).
TOTAL A-E/AGE .33 +here is a nearl$
)#derate threat #0 ne
entrants.
ii+ .eterminant! of /i)ary among E(i!ting Competitor!
Anay!i! Criteria .e!cription /ating!
8/18/2019 Strategic Management for Toyota
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In&u!try Gro#th Aut#)#tive industr$ is a
0ast gr#ing )ar:et.
+he #rldide
aut#)#tive industr$ has
2een en#$ing a peri#d
#0 relativel$ str#ng
gr#th and pr#Fta2ilit$,
and annual sales have
rea/hed prere/essi#n
levels in s#)e regi#ns.
(strategyand.pwc.com)
1 %# intensit$ #0
rivalr$
C#)panies /an gr#
ith#ut /apturing
)ar:et share 0r#) ea/h
#ther, hi/h leads t#
de/reased /#)petiti#n.
Pro&uct .i8erence! Aut#)#tive industr$ hasundierentiated
pr#du/ts ith regards t#
their /ars and #ther
vehi/les. But ith
regards t#
advan/e)ents in the
use #0 te/hn#l#g$, there
is a 2ig dieren/e.
(n0#r)ati#n +e/hn#l#g$
5(+ is the ne driving
0#r/e 2ehind pr#du/t
dierentiati#n in the
aut# industr$.("d
Richardson)
3 igh intensit$ #0 rivalr$
Cust#)ers /an /h##se
an$ 2rand 2e/ause the
pr#du/ts are al)#st the
sa)e. But n#t that
)u/h i0 tal:ing a2#ut
te/hn#l#gi/al
advan/e)ent.
Bran& I&entity Al)#st all #0 the Fr)s in
the industr$ have their
#n 2rand identit$ ith
regards t# pri/e and
Gualit$.
" igh intensit$ #0
rivalr$
Cust#)ers are idel$
dispersed ith regards
t# /h##sing a 2rand.
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Aut#)a:ers that
pr#)#te str#ng 2randing
in /a)paigns )a:e the
)#st i)pa/t hen it
/#)es t# 2eing t#p-#0-
)ind a)#ng p#tential
2u$ers.
(lu#urydaily.com)
S#itching Co!t +he sit/hing /#st is l#
2e/ause #0 the
undierentiated
pr#du/ts. +here isnt )u/h 2rand
l#$alt$ in the aut#)#tive
industr$.
(termpaperwarehouse.c
om)
1 %# intensit$ #0
rivalr$
'ue t# undierentiated
pr#du/ts, /ust#)ersd#nt need t# sa/riF/e a
l#t #0 /#sts t# sit/h
ith an#ther 2rand.
Concentration an&
Baance
+here are a l#t #0
/#)petit#rs in the
aut#)#tive )ar:et.
(n pursuit #0 gr#th and
devel#p)ent,
/#)panies have tried t#
stri:e a 2alan/e 2eteen
/#)petiti#n and a/r#ss
ti)e.
(http$%%papers.ssrn.com%)
" igh intensit$ #0
rivalr$
ther /#)petit#rsare
n#t happ$ ith their
p#siti#n in the )ar:et.
E(it Barrier! (0 a Fr) ill de/ide t#
leave the industr$, the
/apital that as
rendered ill n#t gain
an$)#re.
" igh intensit$ #0
rivalr$
+here are high eDit
2arriers that prevent
Fr)s t# leave, li:e
8/18/2019 Strategic Management for Toyota
22/95
C#)panies have alread$
)ade the invest)ent in
)a/hiner$ and 0a/ilities
and s# it )a:es )#re
sense 0#r the) t#
re)ain in the industr$
and /#ntinu#usl$
de/rease pri/es than t#
eDit alt#gether.
5u:essa$s./#)
2an:rupt/$.
Tota A)erage 3.33 +here is a
)#derate intensit$ #0 rivalr$
iii+ Threat of Su%!titute!
Anay!i! Criteria .e!cription /ating!The reati)e price
performance of
!u%!titute!
(n/reasing 0uel pri/es
have 2een pushing
s#)e ur2an drivers t#
use pu2li/
transp#rtati#n. M#st
vehi/le #ners still
agree that the
/#nvenien/e #0 using a
pers#nal vehi/le #sets
in/reases in 0uel pri/es,
h#ever i0 this trend/#ntinues and
aut#)#2ile
)anu0a/turers are n#t
a2le t# pr#vide a )#re
/#st-eE/ient s#luti#n,
3 M#derate threat #0
su2stituti#n
(0 the in/rease in 0uel
pri/es /#ntinu#usl$
gr#s, )#st /ust#)ers
ill tend t# /h##se the
use #0 pu2li/
transp#rtati#n. But i0
n#t, the$ #uld rather
/h##se t# 2u$ their #n
private /ars that t# usepu2li/ vehi/les.
8/18/2019 Strategic Management for Toyota
23/95
this threat ill in/rease.
(ukessays.com)
S#itching co!t (t is /heaper 0#r the
/ust#)ers t# use pu2li/
)#de #0 transp#rtati#n
#r 2$ al:ing.
+he sit/hing /#sts
ass#/iated ith using a
dierent )#de #0
transp#rtati#n, su/h as
train, )a$ 2e high in
ter)s #0 pers#nal ti)e5i.e., independen/e,
/#nvenien/e, and utilit$
5e.g., luggage /apa/it$
(Team A 200!)
3 M#derate threat #0
su2stituti#n
S#)e pe#ple )a$
/h##se su2stitute t#
pr#du/t #r servi/e that
ill 0ulFll their sa)e
need ith l# /#st
Buyer propen!ity to
!u%!titute!
Bu$ers use su2stitute
pr#du/ts 2e/ause #0
envir#n)ental aspe/ts
and 0#r the) t# save
/#st.
+here is n# realisti/
su2stitute t# )#t#r
vehi/les ith the
eD/epti#n #0 large s/ale
transp#rtati#n that
raila$s pr#vide. +he
ev#luti#n #0 /#nsu)er
relian/e #n )#t#r
vehi/les 2egan ith the
)ass pr#du/ing #0
3 M#derate threat #0
su2stituti#n
Su2stitute pr#du/ts are
#0ten ust te)p#rar$ 0#r
s#)e 2u$ers )a$ tend
t# 2u$ their #n /ar 0#r
/#nvenien/e, utilit$ and
sa0et$.
8/18/2019 Strategic Management for Toyota
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aut#)#2iles. (&rant'
200' p. )
TOTAL A-E/AGE 3 +he industr$ has a
)#derate threat #0
su2stituti#n
i)+ Bargaining Po#er of Buyer!
Anay!i! Criteria .e!cription /ating!Buyer concentration
)!+ *irm
concentration
%arge nu)2ers #0
)anu0a/turers, either
2ig #r s)all, are
/#)peting t# a s)all
v#lu)e #0 /ust#)ers.
Ba2$ 2##)ers, 2#rn
2eteen 146 and
164, :ept their sp#t as
the largest /#nsu)er
gr#up, 2u$ing 38
per/ent #0 ne vehi/les
s#ld in the sa)e ti)e
0ra)e.(autonews.com)
3 M#derate
2argaining p#er #0
2u$ers
ith a large nu)2er #0
p#tential 2u$ers, Fr)s
in the industr$ )a$ als#
tend t# in/rease their
/#)petiti#n ith #ther
/#)panies.
Buyer )oume S#)e 2u$ers are
individuals that 2u$ #nl$
#ne #r t# vehi/les and
s#)e are /#rp#rati#ns
#r g#vern)ent agen/ies
that 2u$ large Guantities
that the$ ill give in
reas#na2le pri/es and
reGuest 0#r dis/#unts.
(Nkomo)
" Str#ng 2argaining
p#er #0 2u$ers
+he )#re 0reGuent $#ur
/ust#)er pur/hases and
the )#re the$ are li:el$
t# neg#tiate #n pri/e,
Gualit$ and servi/e
S#itching co!t Hir)s in the industr$ 3 M#derate
8/18/2019 Strategic Management for Toyota
25/95
have 2een thr#ugh in
dierent issues
regarding t# their
pr#du/ts that )ight
tend t# sit/h t#
an#ther /#)pan$.
He sit/hing /#sts
eDist 5little /#st 0#r
)#ving t# an#ther
2rand. (marsdd.com)
2argaining p#er #0
2u$ers
(t d#esnt /#st )u/h 0#r
2u$ers t# sit/h t#
an#ther 2rand #0
vehi/le.
Buyer information Meanhile, /#nsu)ers
are aash in easil$a//essi2le in0#r)ati#n
a2#ut aut#)#2ile
spe/iF/ati#ns, pri/es,
dis/#unts, Gualit$, and
per0#r)an/e, giving
2u$ers greater
2argaining p#er.
(*trategy+.pwc.com)
+he 2u$er sh#uld have
0ull in0#r)ati#n
5:n#ledge #0 de)and,
)ar:et pri/es and
supplier /#sts pr#vides
the) ith leverage.
(marsdd.com)
3 M#derate
2argaining p#er #0 2u$ers.
Bu$ers are 2eing ise
these da$s the$ are
2eing t## stri/t ith
dierent aspe/t.
A%iity to %ac#ar&
integrate
Bu$ers /ann#t easil$
2a/:ard integrate in
the industr$.
+he #rldide
1 ea: 2argaining
p#er #0 2u$ers
Bu$ers /ant /#)pete t#
large Fr)s in the
8/18/2019 Strategic Management for Toyota
26/95
aut#)#tive in the
)ar:et is highl$
/#)petitive, /#)panies
0a/es intense
/#)petiti#n. (Toyota
Annual Report 20)
industr$ .
Su%!titute pro&uct! Bu$ers )a$ tend t# use
su2stitutes li:e 2uses,
trains, 2i/$/le #r
al:ing rather than t#
2u$ a private vehi/le t#
save )#ne$ in ter)s #0 0uel.
Current te/hn#l#gi/al
devel#p)ents suggest
that /ars, as used
t#da$, ill 2e repla/ed.
?sta2lished alternatives
t# /ar use in/lude pu2li/
transit 52uses,
tr#lle$2uses, trains,
su2a$s, )#n#rails,
tra)a$s, /$/ling,
al:ing, r#ller2lading
and s:ate2#arding.
(wikipedia.org)
" Str#ng 2argaining
p#er #0 2u$ers
Pe#ple n#ada$s )a$
tend t# use su2stitute
pr#du/ts t# save.
Pro&uct &i8erence! +he 0a/t#rs that ae/t
/#nsu)er t# )a:e
2u$ing de/isi#n are the
appearan/e, Gualit$
pri/e and envir#n)ental
3 M#derate
2argaining p#er #0
2u$ers
?a/h Fr)s #er
pr#du/ts that are dier
8/18/2019 Strategic Management for Toyota
27/95
ee/t that a #ne
/#)pan$ is #ering that
diers 0r#) an$ #ther
2rand. (*un.200)
0r#) #ther /#)panies
that a 2u$ers has
dierent varieties t#
/h##se 0r#).Bran& i&entity Al)#st all #0 the
/#)panies in this
industr$ are ell :n#n
that pr#vide g##d
Gualit$ pr#du/ts and
reas#na2le pri/es that
are ne t# entrants )a$
ta:e )#re ti)e t# haveits #n identit$.
Brand identit$ #0
/#)panies is 2ased #n
Gualit$, sa0et$,
per0#r)an/e, value, 0uel
e/#n#)$, design!st$le
and
te/hn#l#g$!inn#vati#n.
(Toyota Annual Report
20)
3 M#derate
2argaining p#er #0
2u$ers
Brand identit$ #0 a #ne
Fr) has an i)pa/t t#
2u$ers 2u$ing de/isi#n.
Buyer! Pro"t! S#)e /lients are illing
t# 2u$ ith a higher
pri/e ust t# )eet their
needs, ants, and
eDpe/tati#ns.
+he )ass )ar:et is
/at/hing up ith luDur$.
C#nsu)ers are als#
de)anding )#re
3 M#derate
2argaining p#er #0
2u$ers
+he 2u$ers are less
/#n/ern t# the pri/e i0
the$ are pr#Fta2le and
the pr#du/t the$ are
2u$ing )eets their
eDpe/tati#n. Bu$ers are
8/18/2019 Strategic Management for Toyota
28/95
s#phisti/ated
in0#tain)ent s$ste)s
and are eDpe/ting )#re
high-end 0eatures t# 2e
standard.
(*trategy+.pwc.com)
2asing their 2u$ing
de/isi#n #n variet$ #0
li0est$les.
TOTAL A-E/AGE 3. +here is
)#derate 2argaining
p#er #0 2u$ers
)+ Bargaining Po#er of Suppier!
Anay!i! criteria .e!cription /ating!.i8erentiation of
input!
+here are inn#vated
pr#du/ts that attra/t
/ust#)ers t# help the)
t# save )#re.
Aut# )anu0a/turers
reGuire inputs-la2#r,
parts, ra )aterials and
servi/es. +he /#st #0
these inputs /an have a
signiF/ant ee/t #n
pr#Fta2ilit$.
(ukessays.com)
3 M#derate
2argaining #0 suppliers
Suppliers #0 the industr$
)a$ als# #er ne
)aterials and at the
sa)e ti)e, the
suppliers /an in/rease
their pri/es due t# the
inn#vati#ns.
S#itching co!t of
!uppier! an& "rm! in
the in&u!try
+here are )ultiple
/h#i/es #0 suppliers t#
lessen /#st s# that it ill
n#t ae/t the pri/e #0 a
pr#du/t.
?sta2lishing part designs
and spe/iF/ati#n
reGuires a 0air initial
3 M#derate
2argaining p#er #0
suppliers
S#)e pri/e #0 ra
)aterials /ann#t 2e
av#ided t# rise.
8/18/2019 Strategic Management for Toyota
29/95
invest)ent.
(ukessays.com)
Pre!ence of
!u%!titute input!
+here are alternative
t$pes #0 su2stitutes #n
ra )aterials.
+he pr#2le) ith the
Gualit$ #0 eGuip)ent
and /#)pati2ilit$ #0
parts )ade 2$ dierent
)anu0a/turers 2e/a)e
t## eDpensive as it as
/#sting )#re /#)paring
t# 2u$ing 0r#) suppliers.
(ukessays.com)
3 M#derate
2argaining p#er #0
suppliers
(n the industr$, a
/#)pan$ /an /h##se t#
sit/h 0r#) #ne ra
)aterial t# an#ther in
#rder t# save /#st, 2ut
still, it is n#t #0 the sa)e
Gualit$.
Suppier
concentration
+here is a large
p#pulati#n #0 suppliers
in the industr$. Suppliers
in this )ar:et, either 2ig
#r s)all, )a$ have a
)ild /#)petiti#n
2e/ause #0 high
a//essi2ilit$ #0 )aterials
#r suppl$.
(0 a )anu0a/turer is
reliant #n #ne supplier
al)#st eD/lusivel$, this
/reates a )#n#p#listi/
situati#n that reGuires
that the )anu0a/turer
:eep the supplier
satisFed, espe/iall$ i0
3 M#derate
2argaining #0 suppliers
+here are large nu)2ers
#0 suppliers are
/#)peting.
8/18/2019 Strategic Management for Toyota
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the$ are eDpl#ring #ther
)anu0a/turing
#pp#rtunities ith rivals.Importance of )oume
to !uppier
+he pur/hasing p#er #0
/lients puts eight #n
#rganizati#ns 2$
reGuesting less /#st 2ut
#0 high Gualit$.
+he t#p aut#)#2ile
/#)p#nent suppliers
have the a2ilit$ t#
leverage their 2u$ers t#a//ept engineering
/hanges that ae/ts
their pr#du/ti#n, di/tate
suppl$ availa2ilit$ and
dates, and set pri/es in
line ith their #n
pr#Fta2ilit$
reGuire)ents.
(ukessays.com)
3 M#derate
2argaining p#er #0
suppliers
+here )ust 2e an
assuran/e that the
/#n/ern 0#r /lients and
the Gualit$ #0 )aterials
delivered are )et.
Impact of input! on
co!t or &i8erentiation
Bu$ers are pri/e
sensitive and their
de/isi#n is #0ten 2ased
#n h# )u/h d# a
vehi/le /#st and its
0eatures #r 2u$ers ill
sit/h t# an#ther 2rand.
+he /#st #0 the inputs
/an have a signiF/ant
ee/t #n pr#Fta2ilit$.
3 M#derate
2argaining p#er #0
suppliers
Suppliers /an pr#du/e
)aterials that are
needed 2$ the Fr)s t#
)eet the needs and
ants #0 the /ust#)ers.
8/18/2019 Strategic Management for Toyota
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(ukessays.com)
TOTAL A-E/AGE 3 M#derate
2argaining p#er #0
suppliers
&+ Anay!i! of Potentia Change! in the Macro9en)ironment
i+ Genera Economic Con&ition!
Aut#)#tive sales in the Philippines )#ved up 0r#) 16","6
units in 11 t# #ver 18, in 1 (wikipedia.org). A
13 Canadian )ar:et resear/h rep#rt predi/ted that
0urther invest)ents in the aut#)#tive se/t#r ere
eDpe/ted t# gr# in the 0#ll#ing $ears. +#$#ta sells the
)#st vehi/les in the /#untr$ (,slowski' -ustins
/Automotive roduction in the hilippines1). +he 2##)ing
Philippine aut# )ar:et ill 2e an additi#nal s#ur/e #0
gr#th 0#r parts suppliers (m.com).
E8ect on Barrier! or .eterminant!' +hreat #0 ne
entrants is l# 2e/ause pr#Fta2ilit$ reGuires e/#n#)ies #0
s/ale. +he intensit$ #0 rivalr$ is )#derate 2e/ause industr$
gr#th is high and /#n/entrati#n and 2alan/e #0 the
/#)panies in the industr$ is l# 2e/ause #ther Fr)s are
n#t /#ntented ith their /urrent p#siti#n in the )ar:et.
ii+ Popuation .emographic!
+here are 37Q #0 age stru/tures ranging 0r#) "-"4 $ears
#ld. Pe#ple ithin this age 2ra/:et are )#stl$ th#se h#
have the /apa2ilit$ t# 2u$ #r pur/hase private /ars. A)#ng
#ther age stru/tures, the$ have the highest per/entage
(inde#mundi.com).
E8ect on Barrier! or .eterminant!' Bargaining p#er
#0 2u$ers is )#deratel$ high 2e/ause 2u$er /#n/entrati#n
8/18/2019 Strategic Management for Toyota
32/95
and Fr) /#n/entrati#n is the sa)e and 2u$er v#lu)e is
large en#ugh t# 2e/#)e p#tential /ust#)ers.
iii+ Societa -aue! an& Life!tye
Cust#)ers n#ada$s pre0er t# /h##se a 2rand ith high
Gualit$ 2ut l# /#st. +hat is h$ &apanese /#)panies,
in/luding +#$#ta, i)pr#vised t##ls t# i)pr#ve Gualit$,
parti/ularl$ the SiD Sig)a. Als#, there are dierent health
#rganizati#ns t#da$ that are )#tivating pe#ple t# al: as a
per0e/t 0#r) #0 eDer/ise that ae/ts the aut#)#tive
industr$s pr#Fta2ilit$. n the #ther hand, pe#ple are
2e/#)ing )#re aare #0 the negative i)pa/t #0 energ$
/#nsu)pti#n in #ur envir#n)ent that )a:es /ust#)ers
Fnd pr#du/ts that has l# i)pa/t in the envir#n)ent,
e)erging p#pularizati#n #0 h$2rid /ars
(ivythesis.typepad.com).
E8ect on Barrier! or .eterminant!' +hreat #0 ne
entrants is nearl$ )#derate 2e/ause pr#prietar$ pr#du/t
dieren/es is high ith regards t# Gualit$ and
i)pr#ve)ent #0 pr#du/ts, 2rand identit$ is l# 2e/ause)an$ /#)panies in the industr$ are ell-:n#n in
pr#viding high Gualit$ pr#du/ts, a2s#lute /#st advantage is
s#)ehat high ith regards t# the /#)panies
inn#vati#ns, and g#vern)ent p#li/$ is ae/ting the ne
entrants /apa/it$ t# esta2lish a Fr). +hreat #0 su2stitutes
is )#derate 2e/ause the relative pri/e per0#r)an/e #0
su2stitutes is s#)ehat high due t# Ku/tuating 0uel pri/es
and 2u$er pr#pensit$ t# su2stitutes is als# s#)ehat high
due t# the private vehi/les envir#n)ental aspe/ts,
/#nvenien/e, and sa0et$. Bargaining p#er #0 2u$ers is
)#derate 2e/ause there are su2stitute pr#du/ts that are
0uel-saving, pr#du/t dieren/es are s#)ehat high ith
8/18/2019 Strategic Management for Toyota
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regards t# envir#n)ental aspe/ts, /#)panies have their
#n 2rand identit$ regarding the relati#n #0 pri/e and
Gualit$, and 2u$er pr#Fts are high that sh#uld )eet the
reGuire)ents #0 their needs.
i)+ Technoogy
Advan/e)ents in te/hn#l#g$ in/lude sa0et$ standardizati#n
a)#ng dierent aut#)#tive vehi/les that +#$#ta ai)ed t#
)a:e a ;sa0e /ar hi/h /an pr#te/t #//upants in the
event #0 /ar a//idents #r prevent a//idents 0r#) #//urring.
ith the advent #0 ne te/hn#l#g$, r#2#ts are designed
and invented that )ade +#$#ta use industrial r#2#ts in
their pr#du/ti#n line t# )ini)ize err#rs (toyota.co.3p).
E8ect on Barrier! or .eterminant!' +hreat #0 ne
entrants is )#derate 2e/ause #0 the ne te/hn#l#gies
2eing dis/#vered ae/ting pr#prietar$ pr#du/t dieren/es,
sa0et$ and per0#r)an/e due t# te/hn#l#g$ and inn#vati#n
that ae/ts 2rand identit$, the latest inn#vati#ns are
reGuiring ne Fr)s t# have a huge /apital reGuire)ents,
and inn#vati#ns, als#, is #ne #0 the a2s#lute /#stadvantages. (ntensit$ #0 rivalr$ is )#derate 2e/ause
in0#r)ati#n te/hn#l#g$ is )a:ing pr#du/t dieren/es.
Bargaining p#er #0 2u$ers is s#)ehat str#ng 2e/ause
te/hn#l#gi/al advan/e)ents #n sa0et$ and per0#r)an/e
ae/t 2#th su2stitute pr#du/ts and 2rand identit$.
)+ Ecoogica
?nvir#n)entalists sa$ that 0#ssil 0uels greatl$ har) the
envir#n)ent as it /auses /li)ate /hange. +#$#ta and #ther
8/18/2019 Strategic Management for Toyota
34/95
/ar )anu0a/turers resp#nd t# this 2$ )a:ing vehi/les that
use ethan#l instead #0 gas#line #n their h$2rid vehi/les
(enotes.com).
E8ect on Barrier! or .eterminant!' +hreat #0 ne
entrants is ea: 2e/ause 0uel e/#n#)$ is ae/ting 2rand
identit$ and envir#n)ental )atter is #ne #0 the
g#vern)ent p#li/ies. +hreat #0 su2stituti#n is )#derate
2e/ause 0uel pri/es ae/t the relative pri/e per0#r)an/e #0
su2stitutes and 2u$er pr#pensit$ t# su2stitutes is ae/ted
2$ the envir#n)ental aspe/ts. Bargaining p#er #0 2u$ers
is )#derate 2e/ause 0uel saving is a 0a/t#r h$ /ust#)ers
use su2stitute pr#du/ts, envir#n)ental ee/t #0 /ars are
/reating pr#du/t dieren/es, and 0uel e/#n#)$ is )a:ing a
2rand identit$ 0#r aut#)#tive industr$.
)i+ Infra!tructura
C#ngesti#n has g#tten ver$ 2ad as the e/#n#)$ gre
a//#rding t# a taDi driver na)ed *anil#Banez. %##:ing at a
2u)per-t# 2u)per traE/ a)s al#ng an$ streets and r#ad,
n# #ne ill 2e en/#uraged t# 2u$ ne /ars t# add up t# thetraE/, even the g#vern)ent ill tr$ t# lessen #r li)it the
users #0 private /ars (philstar.com). ()pr#ve)ents are n#
2eing d#ne 2$ the g#vern)ent in/luding s:$a$s,
higha$s, and eDpressa$s herein s#)e are alread$
appr#ved and s#)e are alread$ 2eing /#nstru/ted,
2elieving that additi#nal r#ads ill help lessen the traE/
(wikipedia.org).
E8ect on Barrier! or .eterminant!' +he threat #0 ne
entrants is ea: 2e/ause the g#vern)ent p#li/ies
regarding the nu)2er #0 vehi/les are li)iting the
pr#du/ti#n #0 ne vehi/les.
)ii+ Poitica En)ironment
8/18/2019 Strategic Management for Toyota
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Anti-g#vern)ent pr#tests t##: pla/e in +hailand 2eteen
the latter part #0 13 until 14, resulting in re)#val #0
their pri)e )inister and the na)ing #0 +hai ar)$ /hie0 as
the ne pri)e )inister. +he pr#tests ae/ted +hai aut#
pr#du/ti#n hi/h #rders aut# parts 0r#) the Philippines
(philstar.com).
E8ect on Barrier! or .eterminant!' +hreat #0 ne
entrants is l# 2e/ause the /hanging #0 p#liti/s ill in/ur
ne Fr)s a l#t #0 /#sts ith regards t# g#vern)ent
regulati#ns. Bargaining p#er #0 suppliers is l# 2e/ause
ith the /hange #0 leaders, /#ntra/ts ill als# /hange.
)iii+ Legi!ation! an& /eguation!
+#$#ta, al#ng ith #ther aut#)#tive )anu0a/turers, is a
)e)2er #0 Cha)2er #0 Aut#)#tive Manu0a/turers
Ass#/iati#n #0 the Philippines, (n/#rp#rated 5CAMP(. Being
a )e)2er, the$ have t# 0#ll# rules, las, and regulati#ns
CAMP( is reGuiring the). (t in/ludes *epu2li/ A/t n#. 87"
5Seat2elt %a, *epu2li/ A/t n#. 874 5Philippine Clean Air
A/t, and *epu2li/ A/t n#. 4 5*ati#nalizati#n #0 ?D/ise +aD 0#r M#t#r >ehi/les (pressroom.ph). +he *epu2li/ A/t
n#. 164 #r the Philippine %e)#n %a hi/h is an a/t
strengthening /#nsu)er pr#te/ti#n in the pur/hase #0
2rand ne )#t#r vehi/les that 2egun and held in Metr#
Manila #n tent$-se/#nd da$ #0 &ul$, $ear t# th#usand
thirteen (gov.ph).
E8ect on Barrier! or .eterminant!' +hreat #0 ne
entrants is l# 2e/ause there are )an$ regulati#ns t#
0#ll# regarding taDes and taris. Bargaining p#er #0
2u$ers is high due t# the g#vern)ents regulati#n a2#ut
the /ust#)ers rights and sa0et$. Bargaining p#er #0
8/18/2019 Strategic Management for Toyota
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suppliers is high 2e/ause /#ntra/ts are #0 high value 0#r
the )anu0a/turers.
e+ Threat! an& Opportunitie!
i+ Threat!
Inten!ity of /i)aryBran& I&entity 7 al)#st all /#)panies in the
industr$ have /reated their #n na)es and identities
hi/h is a threat t# +#$#ta in attra/ting /ust#)ers.Concentration an& Baance 7 there are a l#t #0
/#)petit#rs in the aut#)#tive )ar:et that are n#t
satisFed ith their /urrent p#siti#n, /reating a threat
t# +#$#tas p#siti#n in the )ar:et.E(it Barrier! 7 th#se ne Fr)s that entered the
industr$ /ann#t eDit an$)#re due t# a huge /#st and
this is a threat t# +#$#ta 2e/ause there ill 2e )#re
/#)petit#rs that ill tr$ t# re)#ve the) 0r#) their
/urrent p#siti#n. Bargaining Po#er of Buyer!
Buyer -oume 7 there are a l#t #0 2u$ers in the
)ar:et 2ut there are als# a l#t #0 /#)petit#rs that
ill tr$ t# target +#$#tas pr#spe/tive /ust#)ers.Su%!titute Pro&uct! 7#ther than private vehi/les,
/ust#)ers )a$ /h##se t# transp#rt using pu2li/
vehi/les t# save 0uel and the /#st #0 )aintenan/e.
ii+ Opportunitie!
Ne# Entrant!Economie! of Scae 7 2ig /#)panies in the industr$
prevents ne entrants t# esta2lish their #n Fr)s,
/ausing +#$#ta t# still 2e the nu)2er #ne in sales.Bran& I&entity 7 ne entrants /ann#t )a:e their
#n na)es in the industr$ hile +#$#ta is still
)a:ing it t# the t#p.
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Capita /e$uirement! 7 ne esta2lishing Fr)s
/ann#t /#)pete ith +#$#tas /apital, )a:ing it the
nu)2er #ne aut#)#tive 2rand in the Philippines.Go)ernment Poicy 7 the g#vern)ent has a huge
ee/t #n the ne entrants /apa/it$ t# esta2lish #r
2uild their #n /#)panies, hile +#$#ta still
)anages #n the g#vern)ent p#li/ies that eas$.
III+ Anay!i! of Interna En)ironment
a+ *inancia Anay!i!
verall, +#$#ta has #utper0#r)ed the industr$ #ver the past
$ears. +#tal assets in/reased "86.8 2illi#n 0r#) the end #0 the
previ#us Fs/al $ear t# 3,43.7 2illi#n due )ainl$ t# an in/rease
in )ar:et value #0 invest)ent se/urities. %ia2ilities a)#unted t#
1,718.8 2illi#n, an in/rease #0 ".7 2illi#n 0r#) the end #0 the
previ#us Fs/al $ear due )ainl$ t# an in/rease in de0erred taD
lia2ilities.
8/18/2019 Strategic Management for Toyota
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2illi#n . A0ter adding translati#n adust)ents and /ash and /ash
eGuivalents at 2eginning #0 peri#d, /ash and /ash eGuivalents as
#0 Mar/h 31, 13 st##d at 17.3 2illi#n , a de/rease #0 117."
2illi#n , #r 4Q, #ver Fs/al 1.
%+ *inancia /atio! in Compari!on to In&u!try:Competitor
Performance
Li$ui&ity /atio
+#$#ta M#t#r
C#rp., liGuidit$
rati#s
Mar 31, 1" Mar 31, 14 Mar 31, 13
Current rati# 1. 1.7 1.7Rui/: rati# .8" .84 .84
*ati# 'es/ripti#n +he /#)pan$Current rati# A liGuidit$ rati#
/al/ulated as /urrent
assets divided 2$
/urrent lia2ilities.
+#$#ta M#t#r C#rp.Ns
/urrent rati# i)pr#ved
0r#) 13 t# 14 and
0r#) 14 t# 1".Rui/: rati# A liGuidit$ rati#
/al/ulated as 5/ash plus
sh#rt-ter) )ar:eta2le
invest)ents plus
re/eiva2les divided 2$
/urrent lia2ilities.
+#$#ta M#t#r C#rp.Ns
Gui/: rati# i)pr#ved
0r#) 13 t# 14 and
0r#) 14 t# 1".
Le)erage /atio!
+#$#ta M#t#r
C#rp., leverage
rati#s
Mar 31, 1" Mar 31, 14 Mar 31, 13
'e2t-t#-?Guit$
*ati#
1.13 1.13 1.16
+i)es-(nterest-
?arned *ati#
14.8 141."7 7.
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*ati# 'es/ripti#n +he /#)pan$'e2t-t#-+#tal Assets
*ati#'e2t-t#-?Guit$ *ati# A s#lven/$ rati#
/al/ulated as t#tal de2t
divided 2$ t#tal
shareh#ldersN eGuit$.
+#$#ta M#t#r C#rp.Ns
de2t-t#-eGuit$ rati#
i)pr#ved 0r#) 13 t#
14 2ut then slightl$
deteri#rated 0r#) 14
t# 1". +i)es-(nterest-?arned
*ati#
A s#lven/$ rati#
/al/ulated as ?B(+
divided 2$ interest
pa$)ents.
+#$#ta M#t#r C#rp.Ns
interest /#verage rati#
i)pr#ved 0r#) 13 t#
14 2ut then slightl$
deteri#rated 0r#) 14
t# 1".
Acti)ity /atio!
+#$#ta M#t#r
C#rp., sh#rt-ter)
a/tivit$ rati#s
Mar 31, 1" Mar 31, 14 Mar 31, 13
(nvent#r$
+urn#ver
.78 1."" 1."
*ati# 'es/ripti#n +he /#)pan$(nvent#r$ +urn#ver An a/tivit$ rati#
/al/ulated as /#st #0 g##ds s#ld divided 2$
invent#r$.
+#$#ta M#t#r C#rp.Ns
invent#r$ turn#veri)pr#ved 0r#) 13 t#
14 2ut then
deteri#rated
signiF/antl$ 0r#) 14
8/18/2019 Strategic Management for Toyota
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t# 1".
Pro"ta%iity /atio!
+#$#ta M#t#r
C#rp., pr#Fta2ilit$
rati#s
Mar 31, 1" Mar 31, 14 Mar 31, 13
r#ss Pr#Ft
Margin
1.8Q 1.4Q 1"."1Q
perating Pr#Ft
Margin
1.1Q 8.Q ".Q
8/18/2019 Strategic Management for Toyota
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5*A /al/ulated as net
in/#)e divided 2$ t#tal
assets.
*A i)pr#ved 0r#)
13 t# 14 and 0r#)
14 t# 1".*eturn #n St#/:h#lders
?Guit$ 5*?
A pr#Fta2ilit$ rati#
/al/ulated as net
in/#)e divided 2$
shareh#ldersN eGuit$.
+#$#ta M#t#r C#rp.Ns
*? i)pr#ved 0r#)
13 t# 14 and 0r#)
14 t# 1".
Gro#th /atio
+#$#ta M#t#r
C#rp., gr#th
rati#
Mar 31, 1" Mar 31, 14 Mar 31, 13
?arnings Per
Share
11."1 11.17 6.4"
c+ -aue Chain Anay!i!
i+ Primary Acti)itie! +he pri)ar$ a/tivities in +#$#taNs value /hain anal$sis
in/lude (n2#und %#gisti/s, perati#ns, ut2#und %#gisti/s,
Mar:eting and Sales,and Servi/e.
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• In%oun& Logi!tic!(n2#und l#gisti/s use &(+ 5&ust-in-+i)e s$ste) #0
pr#du/ti#n as it de/reases the invent#r$ /#st. &(+
helps +#$#ta t# #pti)ize their asse)2ling and
pr#du/ti#n pr#/ess as ell as t# )ini)ize parts g#ing
t# aste #r getting unused as invent#r$. (n2#und
l#gisti/s are the g##ds that the /#)pan$ re/eives
0r#) its suppliers and st#re 0#r s#)e peri#d #0 ti)e
until the )#)ent hen the$ ill 2e used in the
pr#du/ti#nand pr#/ess. +#$#ta /#)pan$ d#es n#t
have and is n#t a2le t# /reate #n ra )aterials that
are needed 0#r asse)2ling #0 /ars, thus it has t#/#lla2#rate ith a third part$. +#$#ta #rders the ra
)aterials 0r#) all #ver the #rld and in the interest
#0 )aDi)izing their availa2ilit$ #0 ra )aterials the$
)aintain g##d relati#nships ith their suppliers.
+#$#ta uses &ust-in-+i)e s$ste) t# )anage the
suppl$ #0 ra )aterials as ell as #pti)izing the
suppl$ and pr#du/ti#n pr#/esses
• Operation! +hese a/tivities /#)prise )ainl$ #0 the
)anu0a/turing and asse)2ling pr#/ess #0 the )#t#r
vehi/les. ther a/tivities in the #perati#ns )a$
in/lude )#t#r tuning, /#nFgurati#n #0 )#t#r parts
and Fnal engine tuning. +#$#ta M#t#rs have
esta2lished and )aintained the i)age #0 pr#du/ing
relia2le and l#ng lasting vehi/les largel$ due t# their
ell-designed and )#derated #perati#n pr#/ess. ne
#0 the )ain 0a/t#rs #0 +#$#tas su//ess0ul sales
re/#rd is /redited t# their /#)prehensive
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i)ple)entati#n #0 an eDGuisitel$ planned #perati#n
s$ste). +#$#ta Pr#du/ti#n S$ste) 5+PS is an #perati#n
stru/ture 0#ll#ed, hi/h /#nsists #0 the integrati#n
#0 the lean pr#du/ti#n /#n/ept and &ust-(n-+i)e 5&(+
)anage)ent, /#ntr#ls the pr#du/ti#n pr#/ess in
a//#rdan/e ith the /ust#)er reGuire)ents. ther
#perati#n a/tivities als# in/lude the ;&id#:a s$ste),
hi/h st#ps the pr#du/ti#n pr#/ess i0 an$ de0e/ts #r
#ther #perati#nal pr#2le)s #//ur. perati#nal
/#nstan/$ is als# a part #0 +PS and /#nsists #0
;eiun:a /#n/ept hi/h 0#/uses #n the uni0#r)distri2uti#n #0 #r: at an$ p#siti#n #0 the pr#du/ti#n
pr#/ess, #r: rganizati#n 0#/using #n the a//urate
distri2uti#n #0 tas:s in the /#rre/t #rder and
des/ripti#n, and +#tal Pr#du/tive Maintenan/e 5+PM
hi/h e)phasizes #n #verall /he/:-up #0 all
eGuip)ent and t##ls used in the pr#du/ti#n pr#/ess.• Out%oun& Logi!tic!
n /#)pleti#n #0 the #perati#n pr#/ess, Fnal
pr#du/ts are trans0erred t# the retailers, h#lesalers
and, ulti)atel$, t# the Fnal /ust#)ers. +#$#ta
/#ntr#ls the h#le pr#/ess #0 vehi/les distri2uti#n,
0r#) the 0a/t#r$ t# their 2ran/hes #rldide, t#
ensure that the Fnal pr#du/ts are delivered in the
right pla/e and at the right ti)e. ?a/h +#$#ta dealer
is dire/tl$ lin:ed and /#ntr#lled 2$ +#$#ta, ith 0e #rn# su2sidiaries inv#lved in the distri2uti#n pr#/ess.
ut2#und l#gisti/s #0 Fnished vehi/les are the
resp#nsi2ilit$ #0 +#$#ta M#t#r Sales. Parts 'istri2uti#n
)anages the suppl$ #0 servi/e parts 0r#) the plant
t# the servi/e /enter. (t supp#rts servi/e parts
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pr#du/ti#n and shipping preparati#n hi/h in/ludes
/#ntainerizati#n and #verseas shipping. +his gr#up is
als# resp#nsi2le 0#r Gualit$, te/hni/al supp#rt and
#verseas l#gisti/s and /ust#)s.• Mareting an& Sae!
(n these a/tivities, +#$#tas )ar:eting depart)ent
assigns ne pr#du/ts t# the pre/ise gr#up #0
targeted /ust#)ers. Mar:eting and Sales a/tivities #0
+#$#ta als# in/lude e)phasis #n their planned
pr#)#ti#n )iD and )ar:eting /#))uni/ati#n
appr#a/hes, li:e advertising and sales pr#)#ti#ns, as
ell as 2uilding gr#und#r: 0#r #ers that #uld 2e
suita2le 0#r )eeting the eDpe/tati#ns #0 the
/ust#)ers and the /#)pan$, as ell.• Ser)ice
Servi/e is the Fnal aspe/t #0 the pri)ar$ a/tivities
that )ainl$ adds value t# the pr#du/ts and ensures
su//ess0ul distri2uti#n, as ell as, #2taining 0eed2a/:
and resp#nse 0r#) the /ust#)ers. +his in/ludes all
areas #0 servi/e su/h as Fnal /he/:ing, a0ter-salesservi/e, )aintenan/e, handling /#)plaints, training,
repair servi/es and additi#nal /ust#)er servi/es.
+#$#ta 2elieves that /ust#)ers are the ;driver #0
the /#)pan$s su//ess, thus it pr#vides and i)pr#ve
several t$pes #0 their #ered servi/es. As +#$#ta
pr#du/ts )ain 0a/t#r is relia2ilit$, there0#re servi/es
are delivered 2$ GualiFed pers#nnel ensuring all
servi/es pr#vided are #0 high Gualit$. +he i)p#rtan/e
#0 per0e/ti#n ensures servi/e eD/ellen/e and )#re
satisFed /ust#)ers, as ell as, sustaining a greater
/#)petitive advantage.ii. Support Acti)itie!
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Supp#rt a/tivities in/lude Pr#/ure)ent, +e/hn#l#g$, u)an
*es#ur/e Manage)ent, and Hir) (n0rastru/ture.• Procurement
+hese a/tivities are ass#/iated ith the pur/hase #0
g##ds, )aterials, eGuip)ent and servi/es, and 0#/us#n redu/ing the /#st #n pur/hases and re/eiving
the) #n the assigned ti)e. +#$#ta uses e-2u$ing and
#uts#ur/ing )eth#ds t# )anage pr#/ure)ent
a/tivities. Hurther)#re, in /#lla2#rati#n ith its
suppliers, +#$#ta supp#rts the redu/ti#n #0
envir#n)ental p#lluti#n that #//urs during the
deliver$ #0 supplies.• Technoogy
+hese a/tivities are the integrati#n #0 /#nstantl$
devel#ping te/hn#l#gies in the pr#/esses used and
help t# /reate and )aintain their /#)petitive
advantage. ?ver$ depart)ent #0 +#$#ta is 2uild up #n
te/hn#l#gies. +he )ain 0#/us #n te/hn#l#g$
devel#p)ent is t# guarantee the /ust#)ers #0 the
sa0et$ #0 the vehi/les. +#$#ta /#)2ines 0#r/es ithC#lla2#rative Sa0et$ *esear/h Centre l#/ated in the
=nited States #0 A)eri/a t# re0#r) sa0et$ /he/:s #0
the vehi/les and i)pr#vise test-drives, as ell as,
i)pr#ve their #verall pr#du/t per0#r)an/e. +#$#ta
has integrated sa0et$ te/hn#l#gi/al s$ste)s that are
ai)ed t# pr#vide sa0et$ 0#r the drivers and the
vehi/les. +he Frst te/hn#l#g$ is PCS 5Pre-Crash
Sa0et$ s$ste) that helps t# predi/t p#ssi2le /rash
and there2$ )ini)izes the ris: #0 da)age and
inuries. +he se/#nd is P#p-=p B#nnet te/hn#l#g$
hi/h is a deFnite design #0 the /ar 0ra)e stru/tures
that as /reated 2$ +#$#ta t# av#id the da)age
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/aused t# #ther vehi/les and the pedestrians. +he
third #ne is Adaptive 'riving Bea) s$ste) hi/h is
assi)ilated in s#)e )#dels #0 +#$#ta /ars that helps
t# regulate high 2ea) in aut#)ati/ a$.• 3uman /e!ource Management
(t is the i)p#rtant part #0 the h#le #rganizati#nal
2usiness and +#$#ta uses dierent ta/ti/s t# sustain
its e)pl#$ees. ther /ar )anu0a/turing /#)panies
are /#nsidered as pr#du/ers #0 high Gualit$ /ars,
h#ever the$ /ann#t /#)pete ith +#$#ta in u)an
*es#ur/e Manage)ent, as ell as its suppliers and
)eth#ds #0 distri2uti#n. +#$#ta has a highl$
integrated %ean Pr#du/ti#n S$ste) in #rder t# use
the #r:0#r/e in )#re pr#du/tive and eE/ient a$.
+he )ain /#n/ept #0 )anaging hu)an res#ur/e is t#
eDpand the /apa/it$ and /apa2ilit$ #0 the e)pl#$ees
2$ pr#viding the) a )aterial en/#urage)ent 0#r the
eDtra #r:, training the) t# devel#p their #r:ing
s:ills, and giving the) vari#us reards. +hese
)eth#ds lead t# 0riendl$ and /#)0#rta2le #r:ing
at)#sphere in the /#)pan$ that in turn in/rease in
pr#du/tivit$ and Gualit$ #0 the pr#du/t and results in
/reating #0 the /#)petitive advantage.• *irm Infra!tructure
+hese a/tivities are /#nne/ted ith devel#ping the
strategi/ plans #0 the #rganizati#n. M(S 5Manage)ent
(n0#r)ati#n S$ste) pla$s a vital r#le in designing
the strategi/ plan, #rganizing, and /#ntr#lling the
vari#us depart)ents #0 +#$#ta su/h as Fnan/e,
a//#unting, and /#rp#rate strateg$. M#re#ver, +#$#ta
uses r#2#ti/s s$ste) here pe#ple a/t as #perat#rs
that )a:e the pr#du/ti#n pr#/ess 0ast and eE/ient.
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&+ Strength! an& ;eane!!e!
i+ Strength!
Lo#er Pro&uction Co!t through the u!e of
alue Chain Supp#rt A/tivities 5u)an
*es#ur/e Manage)ent'(SC=SSL +#$#ta d#es a 2ig invest)ent hen it
/#)es t# the trainings and se)inars t# i)pr#ve the
pr#du/tivit$ #0 their pe#ple. Als# t# insure the
l#$alt$, the$ give reas#na2le 2eneFts 0#r their
pe#ple. ther )anu0a/turing /#)panies in the
industr$ /an pr#du/e higher Gualit$ /ars h#ever
the$ /ann#t :eep their pe#ple ust li:e hat +#$#ta
did.
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ii+ ;eane!!e!
Large9!cae reca!S=*C?L Hinan/ial State)ent'(SC=SSL +#$#ta had Guite a 0e large-s/ale vehi/le
re/alls #ver the past 0e $ears. +he 2usiness re/alled
)illi#n vehi/les 2eteen and 1 and 7.43
)illi#n /ars in 1. Su/h re/alls d#es n#t #nl$ hurt
the Fr) Fnan/iall$ 2ut signiF/antl$ da)ages Fr)s
2rand. ;ea pre!ence in the emerging maret!
S=*C?L >alue Chain ut2#und %#gisti/s'(SC=SSL +#$#tas )ain )ar:ets are &apan, =nited
States, and ?ur#pe, hile su/h e)erging e/#n#)ies
su/h as China #r (ndia )a:e #nl$ a s)all per/entage
#0 all +#$#tas sales. 'ue t# p##r presen/e in the
largest aut#)#2ile )ar:et hi/h happens t# 2e
China. +#$#ta ill Fnd it hard t# /#)pete ith M
that has huge )ar:et share there.I-+ Strategic Pan
a+2 O%=ecti)e!i+2 Socia
• +# resp#nd t# the needs #0 the /ust#)ers )aDi)izing
the res#ur/es availa2le in the s#/iet$.• +# devel#p pr#du/ts that ill help 2#th /#)pan$ and
the /ust#)ers. C#)pan$ in ter)s #0 gaining higher
pr#Ft and /ust#)ers in ter)s #0 2eneFts 0r#) the
pr#du/ts and servi/e.ii+2 *inancia
A/hieves /ertain /#st redu/ti#n in pur/hase #0 the
needed )aterial
%#ering level #0 astage
*aise the revenue up t# "Q using dierent strategies
8/18/2019 Strategic Management for Toyota
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+# esta2lish ne strategi/ allian/e $earl$iii+2 Strategic
+# have all the pr#du/ts )eets the guidelines #0 the
/#)pan$ and )eet the satis0a/ti#n #0 the /ust#)ers.
?)pl#$ pr#0essi#nals that /an /reate su//ess t# the/#)pan$
C#ntinu#us inn#vate pr#du/ts t# intr#du/e
s#)ething ne in the )ar:et%+2 E)auation of Pre!ent Corporate Strategie! 0Actua
Company Strategie!2i+2 Generic Competiti)e Strategy
Co!t ea&er!hip
;+#$#ta is the l# /#st pr#du/er in the industr$.
+#$#ta a/hieves its /#st leadership strateg$ 2$
ad#pting lean pr#du/ti#n, /are0ul /h#i/e and /#ntr#l
#0 suppliers, eE/ient distri2uti#n, and l# servi/ing
/#sts 0r#) a Gualit$ pr#du/t.5Mi/hael ?. P#rter +his
Gu#te 0r#) Mi/hael P#rter su)s up h# +#$#ta
a/hieves this l# /#st strateg$. +hr#ugh resear/h, it
is evident that +#$#ta is still the l# /#st leader in
the aut#)#tive industr$.
*e/ent events have suggested that +#$#ta has
0#/used t## )u/h #n l# /#st, l#sing )ar:et share
and their )ar:et p#siti#ning #0 superi#r design and
Gualit$, hi/h hist#ri/all$ the$ have used a
dierentiati#n strateg$. H#r +#$#ta, the 2iggest thing
the$ need t# d# is )a:e sure that their l# /#st
strateg$ d#es n#t /#)pr#)ise their superi#r designand Gualit$. 5.#u.edu T U2neish6
.I**E/ENTIATION +#$#tas uses 2#th dierentiati#n and l# /#st as
generi/ strategies t# tr$ and gain a /#)petitive
advantage #ver their /#)petit#rs in the aut#)#tive
8/18/2019 Strategic Management for Toyota
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industr$. +he )ar:et s/#pe that +#$#ta uses is a
2r#ad #ne that en/#)passes nearl$ ever$ t$pe #0
/ust#)er that is in the )ar:et t# pur/hase an
aut#)#2ile. +#$#ta is a2le t# target su/h a large
)ar:et 2e/ause the$ have s#)ething 0#r ever$#ne.
+#$#ta has 0#ur heel drive tru/:s and S=>s 0#r the
#utd##r t$pes #r th#se h# live in areas that 0a/e
severe eather /#nditi#ns, h$2rid )#dels li:e the
Prius 0#r the e/#-0riendl$ /ust#)ers that are
interested in saving the envir#n)ent, al#ng ith the
standard /ars 0#r general, ever$da$ use.
Additi#nall$, +#$#ta pr#vides vehi/les 0#r all pri/e
ranges. Hr#) the l# pri/e +#$#ta C#r#lla line #0 /ars
t# the high pri/ed luDur$ line #0 /ars and S=>s ith
%eDus, +#$#ta has s#)ething 0#r ever$#ne. +#$#ta dierentiates #n several levels 0#r)
their /#)petit#rs. Hirst #0 all, +#$#ta has 2een ver$
su//ess0ul in dierentiating #n the 2asis #0 superi#r
design and Gualit$. +his has led t# +#$#ta 2eing a2le
t# /reate a 2rand i)age that is ver$ str#ng and #ne
that 2rings t# )ind Gualit$, l#ng lasting /ars hen a
p#tential /ust#)er sees it. +he strength #0 +#$#tas
2rand i)age has 2een seen in re/ent $ears ith the
re/alls and pr#2le)s +#$#ta 0a/ed in dealing ith
these re/alls. +#$#ta as a2le t# survive these
pr#2le)s 2e/ause the$ had su/h a l#ng and pr#ven
tra/: re/#rd #0 Gualit$ and superi#r. An#ther, area
that +#$#ta dierentiates is in te/hn#l#g$. +#$#ta
as the Frst su//ess0ul )ass pr#du/e the h$2rid /ar
#n the )ar:et hen it released the Prius in 3.
Being the Frst t# get their h$2rid #n the )ar:et
8/18/2019 Strategic Management for Toyota
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all#ed +#$#ta t# gain a large p#rti#n #0 the )ar:et
share in the area #0 h$2rid /ars.
ii+2 .imen!ion! of Competiti)e Strategy
Technoogica Lea&er!hip
+#$#ta is n#t the te/hn#l#gi/al leader in the
industr$. +he /#)pan$ /h##ses t# 2e a 0#ll#er in
#rder t# )aintain the i)age 2rand that the$ started.
+he$ are :n#n t# 2e the )anu0a/turer #0 h$2rid
/ars. S#)e /#)panies in the industr$ alread$laun/hed an aut#)#tive /ars p#ered 2$ ele/tri/it$.
Cust#)ers taste are ala$s 2ased #n the trend.
+#$#taNs re/ent strateg$ is t# 2e/#)e the
#rldNs nu)2er #ne aut#)a:er has 2een
underpinned 2$ using ne :n#-h#, ne
te/hn#l#g$ and ne )aterials t# i)pr#ve, per0e/t
and 2rea: thr#ugh aut# design and )anu0a/turing.
#ever, the strateg$ als# reGuired that +#$#ta
shi0ted its 0#/us 0r#) )anu0a/turing engineering and
2uilt-in-Gualit$ t#ard resear/h and devel#p)ent
pr#du/t design.
+@+A M
H%%?* %?A'?*
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hen a /#)pan$ shi0ts its 0#/us 0#r) lean
pr#du/ti#n t# te/hn#l#g$ - inn#vati#n, there is an
e)2edded #2sta/le - /ulture /hange. n #ne hand,
the essen/e #0 lean pr#du/ti#n di/tates the
eli)inati#n #0 aste. n the #ther hand, the
un/ertainties in ne pr#du/t devel#p)ent reGuire
that the )anu0a/turer 2uild in redundan/$ t#
)anage the ris:s #0 the un:n#n and unsure a high
level #0 sa0et$. +r$ing t# 2alan/e lean pr#du/ti#n ith
the need 0#r redundan/$ is a diE/ult a/t that
reGuires the leadership t# 2e instru)ental in )a:ing
:e$ de/isi#ns as ell as leading and )anaging the
/hange
5httpL!!.u:essa$s./#)!essa$s!)ar:eting!strategi
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essa$.php
• Geographic Scope
e#graphi/all$, +#$#ta started its /#)pan$ in
&apan and eDpanded gl#2all$ that rea/h up t# the
Philippines and #ther /#unt$. ?ver$ /#untr$ have
)#re than 1 #utlets #0 the /#)pan$. Si)ilar ith
#nda the$ are 2#th gl#2al /#)pan$. +#$#ta
penetrated the e)erging )ar:et )#re rapidl$ than
#nda did.+#$#ta alread$ /#nGuered A)eri/a,
?ur#pe, A0ri/a, Asian and /eania. +here ere 33
t#tal nu)2er #0 /#untries.
+@+A
8/18/2019 Strategic Management for Toyota
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8/18/2019 Strategic Management for Toyota
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Bran& I&enti"cation
B$ the $ear 14, +MP is the t#p seller #0 /ars
ith 16, 11 units s#ld. 5)#ti#n/ars.inGuirer.net
(t si)pl$ eDplains that the /#)pan$ is ell-:n#n
and its 2rand identiF/ati#n is str#ng en#ugh t#
attra/t )#re 2u$ers.
Pu!h an& Pu Channe Seection
+MP is using the pull )eth#d herein all#ing a
single-pie/e K# s$ste) that /#uld eli)inate 2ul:
pr#du/ti#n and 2at/h sizes sin/e #nl$ #ne pr#du/t
at a ti)e is 2eing #r:ed #n. H#r /ar)anu0a/turers, this /an 2e a ti)e-saving
pr#/edure and /an 2e Guite pr#Fta2le. (t
)ini)izes the eDpense #0 the need 0#r spa/e due
t# #verpr#du/ti#n and it all#s a /#)pan$ t#
redu/e the /#st #0 la2#r ass#/iated ith st#/:
handling. 5sh)ula./#)
c+2Propo!e& Corporate Strategyi+ .etai! of the Strategy
+#$#ta
Str#ng
2rand
identiF/ati#
ea: 2rand
identiF/ati#
n
+#$#ta
Pull strateg$Push
strateg$
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*ocu!e! on the #ea pre!ence in the emerging
maret!
Sin/e +#$#tas )ain )ar:et are &apan, =nited States,
and ?ur#pe the e/#n#)$ #0 th#se /#untr$ are higher than
#ther /#untries li:e China , (ndia and Brazil here +#$#ta
has la/: #0 presen/e herein the &eneral 4otors has the
largest national market in 5hina and followed y the
6nited *tates. The company has een the sales leader
among gloal automakers in 5hina for si# consecutive
years. (chinausinessreview.com).
China is 0a/ing /hallenges in 0#ur )ain areasL energ$,
envir#n)ent, sa0et$, and /#ngesti#n. (n ter)s #0 energ$W
)#re than " per/ent #0 Chinas #il is i)p#rted, and in the
last Fve $ears the /#untr$s greatest in/rease in #il use
as 0r#) transp#rtati#n. +he huge /#n/ern is h# China
ill sustain an aut# industr$ hen r#ughl$ 6 per/ent #0 its
/ars )a$ run #n gas#lineWand )an$ #ther industries
/#nsu)e energ$ as ell. (n ter)s #0 the envir#n)ent,
alth#ugh China has )ade )a#r a//#)plish)ents redu/ingaut# e)issi#ns in the past 1- $ears, it still has )an$
2uses and tru/:s ith #ld te/hn#l#gies. (n )an$ )a#r
/ities, #ne-third #0 air p#llutants are aut# related.
C#n/erning sa0et$, alth#ugh China has 0ar 0eer /ars #n
the streetWpr#2a2l$ #ne-F0th t# #ne-siDth #0 hats in the
=SWand 0ar 0eer aut#-related a//idents than in the =S,
China has 1 #r 1 ti)es )#re aut#-related 0atalities than
in A)eri/a. +his is 2e/ause )#st pe#ple that are hurt in /ar
a//idents in China are pedestrians. Hinall$, )an$ /ities are
suering 0r#) /#ngesti#n.
B$ pr#viding vehi/les that ill give s#luti#ns t# China and
#ther /#untriesN )ain issues regarding energ$,
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envir#n)ent, sa0et$ and /#ngesti#n, +#$#ta /an i)pr#ve
their presen/e #n t#se )ar:ets. C#)e up strategies #uld
2e pr#)#ting their h$2rids /ars #r /#)e up ith a ne
inn#vate vehi/les that targeting energ$ eE/ien/$ and
envir#n)ent /#n/ern aspe/ts.
?Dpands #n )ar:et in #ther /#untries in pr#p#sing l# /#st
/ars that are dierentiated 0r#) the #ther 2rand 2$ design
and engineering Gualit$.
+he e)erging )ar:ets in Asia have the )#st p#tential 0#r
gr#th and the transp#rtati#n #0 /h#i/e is either high-
end luDur$ vehi/les #r l#-/#st, 2asi/ transp#rt 0#r the
)asses. Reuters rep#rts 5via &apanNs 5hunichi
*himunnespaper that +#$#ta is planning t# intr#du/e
s#)ething #n the l#-end #0 the spe/tru) (autolog.com)
Advan/e)ent #0 vehi/leNs 0eatures /an strengthens the
ea: presen/e #0 +#$#ta in e)erging )ar:ets.
Cust#)ersN de)ands are /hanging s# vehi/les sh#uld
upgrade a//#rdingl$ t# the pre0eren/es #0 p#tential 2u$ers.
+e/hn#l#g$ advan/e)ent is a a$ #ut t# pr#videinn#vative 0eatures in a pr#du/t (n/rease in ele/tr#ni/s and
s#0tare /#ntent that targeting the Gualit$, de)ands and
sa0et$.
ii+ Co!t of the StrategyIncrea!e !eing of )ehice! in emerging maret!
from the aim of !eing haf of it! )ehice! a!t year+ +#$#ta )a$ give )#re e#rt in strengthening their
presen/e in #ther e)erging )ar:ets 2$ pr#)#ting itspr#du/ts that /an pr#vide s#luti#n in s#)e issues and )eet
the needs #0 a p#tential 2u$ers.As e all :n# +#$#ta is a /#st leader /#)pan$, 2$ ise
pi/: #n suppliers and ee/ient t##ls and pr#/ess ithan
ensure Gualit$ s# the$ /an attain l# /#st.
http://www.autoblog.com/car-finder/luxury/http://autoblog.com/make/toyota/http://www.autoblog.com/car-finder/luxury/http://autoblog.com/make/toyota/
8/18/2019 Strategic Management for Toyota
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B$ intr#du/ing /ars that )eet internati#nal needs in
rapidl$ gr#ing e)erging )ar:ets, see:ing 0#r an in/rease
in the share gl#2al sales )ade up 2$ e)erging )ar:ets,
0r#) 4Q t# "Q.
Ai)ing t# sell )#re than a hal0 pr#du/e #0 its
pr#du/t 0#r 2##sting presen/e in e)erging )ar:ets.
+he /#st #0 ele/tr#ni/s and s#0tare /#ntent in aut#s
as less than per/ent #0 the t#tal /#st a de/ade ag#.
+#da$ it is as )u/h as 3" per/ent, a//#rding t# studies 2$
Man0red Br#$, a pr#0ess#r #0 in0#r)ati/s at +e/hni/al
=niversit$, Muni/h. M#re i)p#rtantl$, ele/tr#ni/s s$ste)s/#ntinue t# /#ntri2ute )#re than per/ent #0 inn#vati#ns
and ne 0eatures.iii+ Potentia Bene"t of the Strategy
• +#$#ta M#t#r ill 2e the #ne #0 the 2eneFted #n the
pr#p#sed strateg$ in in/rease their e/#n#)i/ due t# the
high sales #0 the pr#du/ts.• P#tential 2u$ers in e)erging )ar:ets ill 2e 2eneFted in
ter)s #0 the 2u$ing /ars 2$ getting their satis0a/ti#n 2$
having a sa0et$, energ$ eE/ient, and e/#-0riendl$ vehi/le
in l# /#st.• r#th in the )ar:et #0 +#$#ta ill 2e in a g##d s/ale 2$
in/reasing the nu)2ers #0 2u$ers 2e/ause #0 this
inn#vati#n• (n/rease 2argaining #0 p#er in +#$#ta in ter)s #0 2u$erNs
pr#Fta2ilit$. (t is ae/ting h# )u/h pe#ple are illing t#
pa$ 0#r aut#)#2iles. +hat illingness is als# ae/ted 2$the aning #0 pr#du/t dierentiati#n, due partl$ t# a
general in/rease in vehi/le Gualit$ thr#ugh#ut the
industr$.i)+ Ba!i! of Strategy
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+#$#ta ea:ness #n value /hain #ut2#und l#gisti/ is
having a la/: #r ea: presen/e in s#)e e)rging )ar:etsChina /urrentl$ registered the highest rate #0 e/#n#)i/
gr#th and s# the #ther sele/ted /#untries and the
aut#)#tive seg)ent is a ver$ large eDpansi#n, hi/h
)a:es +#$#ta t# hurr$ t# ta:e #ver the /#ntr#l #0 this
)ar:et.A re/ent C#nsu)er *ep#rts surve$ 0#und that
in0#tain)ent eGuip)ent as the )#st tr#u2les#)e 0eature
in 14 vehi/les, suggesting a p#er0ul upside 0#r
/#)panies that /an devise superi#r s$ste)s. +ele)ati/s 0eatures, in/luding se)i aut#n#)#us
driving aids su/h as aut#)ati/ parallel par:ing and lane-
:eeping assistan/e as ell as sens#r-2ased rep#rting #n
/ar )aintenan/e and usage, als# present the /han/e t#
0#rge a /l#ser relati#nship ith /ust#)ers and in/rease
)argins. H#r eDa)ple, riginal ?Guip)ent Manu0a/turers
5?Ms and dealers /an #er )#re /#nvenient pr#a/tive
servi/e, alerting a /ar #ner t# up/#)ing )aintenan/e #r
repairs. (n additi#n, tele)ati/s 0eatures a#rd #pp#rtunities0#r tie-ins ith insurers, su/h as #ering dis/#unts 0#r
/ust#)ers h# drive sa0el$. +he in/reasing i)p#rtan/e #0 in0#tain)ent and
tele)ati/s s$ste)s is disruptive 0#r ?Ms and traditi#nal
suppliers, putting a pre)iu) #n inn#vati#n and /hanging
the a$s that industr$ pla$ers design and devel#p ne
pr#du/ts and servi/es. S#0tare 2rea:thr#ughs are
2e/#)ing as /riti/al as hardare inn#vati#n, and
/#)petiti#n is in/reasingl$ /#)ing 0r#) n#ntraditi#nal
pla$ers. ?ver )#re vital s#0tare /#ntent has als#
a//elerated the pa/e #0 /hange in pr#du/ts and 0eatures.
hereas the ti)e 0ra)e 0#r ne vehi/le laun/hes is
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t$pi/all$ three t# 0#ur $ears, the /$/le 0#r ne s#0tare
iterati#ns, #0ten driven 2$ intera/tivit$ ith )#2ile devi/es,
is )easured in )#nths 5Strageg$9.p/./#).)+ Strength to %e &e)eope& or #eane!! to %e
o)ercome• eneral M#t#rs are a /#)pan$ #0 )an$ Frsts in China. (n
17, e set up the Frst te/hni/al /enter &> in ChinaWthe
Pan Asia +e/hni/al Aut#)#tive Center 5PA+ACW2eteen
M and SA(C. (t is n# #ne #0 their /#re advantages. (t
)eans #ther /#)pan$ ill have diE/ulties #n patr#nizing
2$ Chinese pe#ple.• +#$#ta /an /#)pete ith #ther /#)pan$ in pr#viding the
/ust#)er needs and ants sin/e the$ /an )a:e pr#du/ts
ith high Gualit$, ala$s per0e/ting and inn#vating
aut#)#tive te/hn#l#gies, /reating ne )#dels, sh#ing
/#n/ern 0#r /#nsu)pti#n, 2ut als# 0#r the envir#n)ent
surr#undings, 0#/using #n the /#nsu)er.• +#$#taNs strategies in advan/e)ent inn#vati#n is an edge
t# their /#ntin#us gr#th.• +e/hn#l#g$ advan/e)ent sustains the Gualit$ #0 a
pr#du/t s# that +#$#ta /an eD/eed the /ust#)ersN
eDpe/tati#n.)i+ 3o# can the !trategy hep the country
B$ )eeting the need and pr#viding s#luti#ns t# a
/ust#)ers, +#$#ta ill attain itNs s#/ial #2e/tives and
2##sting the revenue #0 the /#)pan$.2rand identit$ and als# their p#siti#n in the )ar:et. +he
/#ntin#us inn#vati#n is an advantage #0 the /#)pan$ in
intr#du/ing a pr#du/t.
Another Propo!e& Corporate Strategyi+ .etai! of the !trategy
Onine Car Shopping
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Be/ause #0 the nu)er#us advantages and 2eneFts,
)#re and )#re pe#ple sa$ the$ pre0er #nline sh#pping
#ver /#nventi#nal sh#pping these da$s. Cust#)er ants
easier li0e, in /reating #nline /ar sh#pping eD/lusivel$ 0#r
+#$#ta Pr#du/ts here $#u /an see all the pr#du/ts ith its
0eatures, the ne intr#du/e pr#du/t. @#u /an als# give
0eed2a/:s and suggesti#ns.+he$ /an a//ess +#$#tas #nline
sh#p an$ti)e and an$here als# thr#ugh s)art ph#nes.
+he nu)2er #0 s)artph#ne users #rldide ill
surpass 2illi#n in 16, this $ear, there ill 2e #ver 1.1
2illi#n s)artph#ne users a/r#ss the gl#2e, a Fgure that illin/rease an#ther 1.6Q t# near .16 2illi#n in 16. H#r the
Frst ti)e, )#re than #ne-Guarter #0 the gl#2al p#pulati#n
ill use s)artph#nes in 1", and 2$ 18, eMar:eter
esti)ates, #ver #ne-third #0 /#nsu)ers #rldide, #r )#re
than ."6 2illi#n pe#ple, ill d# s#. +hat 18 Fgure als#
represents #ver hal0W"1.7QW#0 all )#2ile ph#ne users,
)eaning that 0eature ph#nes ill have Fnall$ 2e/#)e a
)in#rit$ in the tele/#))uni/ati#ns #rld 5e)ar:eter./#)
ii+ Co!t of the !trategy
(ts hard t# sa$ pre/isel$ h# )u/h pr#0essi#nal e-
/#))er/e devel#p)ent /#sts. S)all pr#e/ts /an 2e a 0e
th#usand d#llars. C#)pleD pr#e/ts /an 2e hundred
th#usand d#llars #r )#re and theres a variet$ in 2eteen.
(t )a$ s#und eDpensive 2ut the earning #nline /an g# 0#ra2#ut )illi#ns #0 d#llars. +hese dierent relevant 0a/t#rs
/#)es d#n ith pr#e/t s/#pe 0#r an e-/#))er/e 2udget
Cu!tomer %a!e' +he size #0 the /ust#)er 2ase
deter)ines the te/hn#l#g$ reGuire)ents, hardare and
s#0tare. (0 $#u have a large /ust#)er 2ase, $#u ill
8/18/2019 Strategic Management for Toyota
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reGuire a e2site and supp#rting appli/ati#ns that /an
handle a l#t #0 /#n/urrent traE/. +his di/tates the
te/hn#l#g$ $#u use and the t$pe #0 net#r:, servers and
#ther hardare reGuired. +his in turn di/tates the size and
eDpertise #0 $#ur devel#p)ent tea). aving a /#st 0#rhiring s:illed pe#ple 0#r a2#ut th#usands #0 d#llars #r
depends #n /#)pan$s l#/ati#n.
Supporting appication!' +he industr$ uses the ter)
?*P 5?nterprise *es#ur/e Planning t# des/ri2e a h#st #0
s#0tare that )anages $#ur invent#r$, shipping 5;3P%,
inv#i/ing and #ther 2a/:-#E/e servi/es. A large /#)pan$
)a$ have )ultiple ?*P s#luti#ns. S#)e ?*P s#luti#ns /an
/#st #ver X1, 0#r a single annual li/ense. (ntegrating
th#se ith a e2site /an als# ta:e hundreds #0 h#urs #0
pr#gra))ingMar:etingL nline and #Yine )ar:eting is an i)p#rtant
eDpense that needs t# 2e 0a/t#red int# ever$ 2usiness
e2site. As #pp#rtunities 0#r )ar:eting in/rease, su/h as
s#/ial )edia, vide#, )#2ile )ar:eting and '*M 5dire/t
resp#nse, et/., /#)pan$s 2udgets have t# in/rease t#)aintain )ar:et share and drive traE/. A larger 2usiness
li:e +#$#ta )ight spend #ver X1, a )#nth in
)ar:eting.Heatures and Hun/ti#nalit$L A large /#)pan$ )ust pr#vide
the latest, /##lest, intera/tive 0eatures t# pr#)#te their
pr#du/ts and sta$ /#)petitive and this als# in/ludes in
)ar:eting aspe/ts.
e2site C#ntentL +his in/ludes pr#du/t i)ages, pr#du/tdes/ripti#ns, pri/ing and teDt /#ntent a2#ut the /#)pan$,
et/.iii+ Potentia %ene"t! of the !trategy
• /e&uce& o)erhea&!' in general, an #nline sh#p /#sts
less t# set up and run than a ph$si/al st#re, alth#ugh its
8/18/2019 Strategic Management for Toyota
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i)p#rtant t# re/#gnize that )a:ing e-/#))er/e #r:
reGuires /#ntinuing invest)ent.
• Lo#er mareting co!t!' ith 2etter targeting, #nline
pr#)#ti#n /an 2e )#re pre/isel$ ai)ed at p#tential
/ust#)ers than using /#nventi#nal )edia. (ts als# )u/h
/heaper.
• E(pan&e& geographica reach' (t /an idens the
/#)pan$s #rldide )ar:et ust thr#ugh having an
ee/tive e-/#))er/e strateg$.
• Being open for %u!ine!! >?:@' ith aut#)ated #rder
and pa$)ent pr#/essing, sales /an 2e )ade at an$ ti)e,
and /ust#)ers /an 2u$ hen it suits the).
• Greater e(i%iity' an #nline st#re /an 2e updated
instantl$ and as #0ten as $#u li:e I 0#r eDa)ple, t#
pr#)#te a Zdeal #0 the da$ #n $#ur 0r#nt page, ith#ut
the need 0#r eDpensive printed displa$ )aterial.
• Broa&er potentia cu!tomer %a!e' an e-/#))er/e
2usiness is an additi#nal 2u$ing /hannel, /apa2le #0
attra/ting /ust#)ers h# have n#t 2#ught 2e0#re.
• Impro)e& cu!tomer pro"ing' ith the #pp#rtunit$ t#
target pr#du/ts and servi/es at spe/iF/ gr#ups 2ased #n
2u$ing data.
• Increa!e& )i!i%iity for your %u!ine!!' ith an
invest)ent in sear/h engine #pti)izati#n and #nline
pr#)#ti#n, an #nline sh#p 2e/#)es )#re a//essi2le t#
/ust#)ers sear/hing 0#r $#ur pr#du/ts.
• The a%iity to te peope a%out your %u!ine!!L this is
parti/ularl$ valua2le hen an #nline st#re #perates
al#ngside a /#nventi#nal high-street #utlet, pr#viding
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in0#r)ati#n a2#ut #pening h#urs, /#nta/t details and
ansers /#n/erns.
• Another mareting channe' #nline st#re /an supp#rt
#nline )ar:eting e#rts 2$ in/luding /ust#)er revies
and testi)#nials. (*ource$ usinessyell.com)
i)+ Ba!i! of Strategy
An #nline /ar-2u$ing pr#gra) that targets S/i#nNs
$#ung /ust#)er 2ase is 2arel$ # the gr#und. But
eDe/utives are alread$ preparing t# r#ll #ut a si)ilar
s$ste) [as s##n as p#ssi2le[ 0#r the +#$#ta 2rand. +hatNs
a//#rding t# Bill Ha$, general )anager #0 +#$#ta 'ivisi#n,hi/h en/#)passes 2#th 2rands. Ha$ t#ld Automotive
News this )#nth at a press laun/h here 0#r the 16
+a/#)a that +#$#ta 2rand ai)s t# r#ll #ut its #n versi#n
#0 S/i#nNs v#luntar$ Pure Pr#/ess Plus #nline transa/ti#n
pr#gra) in siD t# 1 )#nths. Bla)e the shi0t #n the :ids.
[Millennials are starting t# eDpress the 0a/t that
the$Nd li:e t# d# )#re sh#pping #nline,[ Ha$ said.
[+he$Nd li:e t# /#nne/t that sh#pping t# a 2u$ing
eDperien/e ... that needs t# 2e Gui/:er and )#re
transparent.[ +he S/i#n and +#$#ta initiatives are part #0
a 2r#ader )#ve 2$ aut#)a:ers, dealers and third parties
t# si)pli0$ /ar 2u$ing thr#ugh #nline and )#2ile t##ls.
%arge dealership gr#ups su/h as Aut#
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has 2uilt its 2usiness ar#und /#nne/ting its net#r: #0
dealers ith leads generated thr#ugh its e2sites and
)#2ile apps t# )ini)ize pri/e haggling. Ha$ said the
+#$#ta and S/i#n pr#gra)s arenNt an e#rt t# /#)pete
ith hat the 2ig dealership gr#ups and +rueCar are
d#ing. *ather, he said, the$ are a resp#nse t# /hanging
/#nsu)er 2u$ing ha2its and a a$ t# #r: ith dealers
t# pr#vide a )#re integrated eDperien/e. +#$#ta dealers
h# #pt in t# the $et-unna)ed pr#gra) ill have
KeDi2ilit$ in h# the$ i)ple)ent it in their st#res, the
/#)pan$ said. Ha$ said +#$#ta ill use hat itNs learning
0r#) Pure Pr#/ess Plus t# shape the +#$#ta pr#gra),
in/luding the in0#r)ati#n te/hn#l#g$ and Fnan/e and
insuran/e sides #0 the #perati#n. +he g#al, he said, is t#
redu/e the ti)e a /ust#)er spends in the ph$si/al
dealership t# a2#ut an h#ur. S/i#nNs setup all#s a user
t# g# #nline, pi/: and spe/ #ut a S/i#n vehi/le sear/h
l#/al dealerships 0#r the eDa/t vehi/le get pri/e in0#,
in/luding taDes and 0ees /al/ulate )#nthl$ pa$)entsget an esti)ate #n a trade-in, and appl$ 0#r and get
appr#ved 0#r /redit ith a /ertiF/ate t# ta:e t# the
dealership.
S/i#nNs pil#t pr#gra) has a2#ut 6 parti/ipating
=.S. dealers, ith 3 )#re eDpe/ted t# #in 2$ $ear end.
+he /#)pan$ sa$s 1" are eDpe/ted 2$ the end #0 16,
#ut #0 a2#ut 1, S/i#n dealers t#tal. +#$#ta dealers
ill get a previe #0 the #nline servi/e at a nati#nal
dealer )eeting neDt )#nth. 5aut#nes./#) 16
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)+ Strength! to %e &e)eope& or #eane!! to %e
o)ercomeenerating a strateg$ t# 2e/#)e a /ust#)er
#riented ill help t# have a g##d relati#nship ith the
/lients and having a advan/e use #0 in0#r)ati#n
te/hn#l#g$.)i+ 3o# can the !trategy hep the company attain it!
o%=ecti)e!
B$ this strateg$, +#$#ta /an easil$ rea/h /ust#)ers
and sustain their g##d /ust#)er relati#nship. +he
p#tential higher v#lu)e #0 2u$ers )a$ prevail 2$
in/reasing the visi2ilit$ #0 the /#)pan$ that /an help
2##sting their sales.
&+2 Competiti)e A&)antagei+ Pre!ent Competiti)e A&)antage!
C#)petitive advantage #//urs hen an #rganizati#n
a/Guires #r devel#ps an attri2ute #r /#)2inati#n #0
attri2utes that all#s it t# #utper0#r) its /#)petit#rs, it /an
2e /#n/luded that +#$#taNs phil#s#ph$, its uniGue /#ntinu#usi)pr#ve)ent pr#/ess as ell as its highl$ ee/tive and
eE/ient * )anage)ent s$ste) and the deepl$-r##ted
pr#2le) s#lving /ulture are trul$ sustained /#)petitive
advantages and 0#r that reas#n essentiall$ /#ntri2ute t#
+#$#taNs leading p#siti#n in the gl#2al aut#)#tive industr$
Phio!ophy
+he /#rp#rate phil#s#ph$ #0 a /#)pan$ /an 2e deFned as
the set #0 rules and attitudes that g#vern the use #0 the
/#)panies res#ur/es
At +#$#ta M#t#r C#rp#rati#n, this 2asi/all$ )eans that
)anage)ent de/isi#ns are 2ased #n a l#ng-ter) phil#s#ph$,
even at the eDpense #0 sh#rt-ter) Fnan/ial g#als. +# 2e
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)#re spe/iF/, the )ain ideas #0 +#$#taNs phil#s#ph$ are t#
2ase )anage)ent de/isi#ns #n a [phil#s#phi/al sense #0
purp#se[, t# thin: l#ng ter), t# have a pr#/ess 0#r s#lving
pr#2le)s, t# add value t# the #rganizati#n 2$ devel#ping its
pe#ple, and t# re/#gnize that /#ntinu#usl$ s#lving r##t
pr#2le)s drives #rganizati#nal learning.
Pr#/esses
+he s# /alled +#$#ta Pr#du/ti#n S$ste) 5+PS. B#th
ele)ents, +#$#taNs /#rp#rate phil#s#ph$ and its spe/ial
)anu0a/turing )eth#d, are the d#u2le heliD #0 +#$#taNs '
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ne #0 the greatest advantages #0 +PS is its
str#ng 0#/us #n lean pr#du/ti#n. %ean pr#du/ti#n is
ai)ed at the eli)inati#n #0 aste in an$ area #0
pr#du/ti#n in/luding /ust#)er relati#ns, pr#du/t
design, supplier net#r:s and 0a/t#r$ )anage)ent.
(ts g#al is t# in/#rp#rate less hu)an e#rt, less
invent#r$, less ti)e t# devel#p pr#du/ts, and less
spa/e t# 2e/#)e highl$ resp#nsive t# /ust#)er
de)and hile pr#du/ing t#p Gualit$ pr#du/ts in the
)#st eE/ient and e/#n#)i/al )anner p#ssi2le
+#$#ta invented &ust-in-+i)e 5&(+, an invent#r$
strateg$ that strives t# i)pr#ve a 2usinesses return
#n invest)ent 2$ redu/ing in-pr#/ess invent#r$ and
ass#/iated /arr$ing /#sts, 0#ll#ing the si)ple
phil#s#ph$ that invent#r$ is aste. +# )eet its
#2e/tives, #ne #0 the pri)ar$ t##ls #0 a &(+ s$ste)
are signals 2eteen dierent p#ints in the pr#/ess,
hi/h tell pr#du/ti#n hen t# )a:e the neDt part.
Su/h signals )aintain an #rderl$ and eE/ient K# #0 )aterials thr#ugh#ut the entire )anu0a/turing
pr#/ess, i)pr#ving a )anu0a/turing #rganizati#nNs
return #n invest)ent, as ell as Gualit$ and
eE/ien/$.
+#$#taNs &(+ prin/iple is the /#)pan$Ns
#utstanding suppl$ /hain )anage)ent, as the high
eE/ien/$ and ee/tiveness #0 a &(+ invent#r$ s$ste)
is heavil$ dependent up#n the s)##th /#-#rdinati#n
#0 a /#)pan$Ns supplier net#r:. +#$#ta as ell as
#ther &apanese /ar )anu0a/turers are a2le t# ensure
su/h a s)##th /#-#rdinati#n and /l#se and trust0ul
/##perati#n ith their suppliers thr#ugh the s# /alled
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\eiretsu. A :eiretsu is a traditi#nal &apanese
instituti#n and /an 2e deFned as a set #0 /#)panies
ith inter l##:ing 2usiness relati#nships and
shareh#ldings. (n general, there are three dierent
t$pes #0 :eiretsuL
igyo !hu&an 9 #riz#ntall$ diversiFed 2usiness
gr#ups
Sei!an eiret!u 9 >erti/al )anu0a/turing net#r:s
/yut!u eiret!u 9 >erti/al distri2uti#n net#r:s
+#da$, +#$#ta is idel$ /#nsidered the 2iggest
#0 the verti/all$-integrated :eiretsu gr#ups, ith
/#)panies li:e the 'ens# C#rp#rati#n - the #rldNs
se/#nd largest aut#)#tive /#)p#nents )anu0a/turer
- as ell as 3 #ther /#)p#nent suppliers 2eing
)#re #r less dire/tl$ lin:ed t# the /#)pan$.
+he high eE/ien/$ #0 +#$#taNs )anu0a/turing
plants is als# due t# a high level #0 standardizati#n.
H#r +#$#ta, standardized tas:s and pr#/esses are the
0#undati#n 0#r /#ntinu#us i)pr#ve)ent ande)pl#$ee e)p#er)ent. (n this /#nteDt, #ne #0 the
)#st i)p#rtant prin/iples 0#r +#$#ta is t# visualize
standards t# ensure that n# pr#2le)s are hidden.
(n/luded in this prin/iple is the s# /alled "S Pr#gra)
/#)prising Fve steps that are used t# )a:e all #r:
spa/es eE/ient and pr#du/tive, help pe#ple share
#r: stati#ns, redu/e ti)e l##:ing 0#r needed t##ls
and i)pr#ve the #r: envir#n)ent.
A)oi&ing error!
ne #0 the )#st i)p#rtant aspe/ts hen
#r:ing ith a )ini)u) st#/: #0 )aterials and &(+
invent#r$ s$ste)s is t# ensure that ea/h part
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entering the neDt step #0 the pr#du/ti#n pr#/ess
)eets the highest p#ssi2le Gualit$ standards. +#
)eet this reGuire)ent, it is n#t en#ugh t# ta:e
sa)ples. (n 0a/t, all e)pl#$ees #r:ing in pr#du/ti#n
and l#gisti/s )ust 2e trained and sensi2ilized 0#r this
set #0 pr#2le)s.
At +#$#ta, this is ensured 2$ the s# /alled +#tal
Rualit$ Manage)ent 5+RM appr#a/h.
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