Professional Documents
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TOYOTA
KELOMPOK 7 MM EKSEKUTIF B 27C
DIAN ATIKA
RAFIKA
RERY INDRA KUSUMA
Content
Case Summary
Main Issue
Problem Statement
Analysis
Recommendation
Case summary
On August 28, 2009, driver and four passengers
of Lexus ES350 were killed because the car
couldnt stop horrified audiences in the United
States and around the world.
For Japan-based Toyota Motor Corporation, a
company once revered for its commitment to
quality and reliability, this incident touched off a
series of recall announcements.
Toyota have to lived up to the high standards and
improving reputation after incident.
Year
History
1937
1938
Production began
1947
1950
1951
Culture
Year
1957
1958
1961
1965
1967
1968
Built Corolla
Year
1972
1974
1978
1980
1983
1989
Name
History
Strategy
Hiroshi Okuda
Replaced Toyoda in
1995. Okuda step
down as Chairman in
June 2006.
Katsuaki
Watanabe
Become president in
2005.
Akio Toyoda
Become president
(youngest CEO) in
June 2009
Main Issue
Before incident:
Since Toyota was founded, profitability, global presence
and production in the U.S. increased dramatically until an
incident happened on August 28, 2009 around San Diego
highway.
After incident:
Toyota President Akio Toyoda apologize to the public.
First recall :
Recall was met with disbelief but continuing support for
the brand, subsequent revelations and recalls tested the
brands resilience in the U.S.
Recalls Begin
Starting September 2009 January 2010, news of Toyota recalls flooded American media. These
recalls fell into three distinct categories:
1. Pedal entrapment
recall
3. Prius recall
Recall 437,000 Prius and other Toyota hybrid vehicles for brake
failure. Vehicles were susceptible to a momentary loss in braking
capability while travelling on uneven surfaces.
Recall
Problem Statement
How to return Toyota to producing highquality products on a zero-defect basis.
How to convince Congress and the public of
Toyotas sincere commitment to this cause.
Most consumers choose the Toyota brand
because of its reputation, but where does this
prolonged and misunderstood problem leave
the companys reputation?
Floor Mat
Entrapment
2004-2009
Prius
2005-2010
Avalon,
Tacoma
Sticky Pedals
Braking
Lexus
Avalon, Prius,
Highlander
2006-2010
IS 250, IS 350
2007-2010
Tundra
Tundra
2008-2010
Highlander
Sequoia
2009-2010
Corolla, Venza,
Matrix
Matrix, RAV4,
Corolla
Camry
ES 350
Effect of Recall
Year
Sales in the US
Shares
Januari 2010
Fell 16%
Lost 11.6%
Februari 2010
Fell 8.7%
Lost 11.6%
Analysis
Slow response
In a global corporation with thousands of suppliers,
identifying the problem and getting all the players
alligned took more time.
Saving face
Toyota issued a public apology, explanation about
repairing vehicles, recalls information and interview in
public relations and social media.
Japanese views
Japans media argued that the recalld and critism
of Toyota were a consequence of Toyotas poor
management.
Business Impact
Competitor jumped on the opportunity, offering deals and steal
away Toyotas customers.
Toyota estimates that it was losing approximately 20,000 sales
per week.
Some dealers reported year-on-year sales declines of 25%.
The Camry, Highlander and RAV4 experienced immediate and
massive price drops on dealer lots right after the January recalls.
Out of pocket costs of fixing the recalled cars, lost sales, market
share, pricing power and residual values figured in the
companys valuation and recalls affected them all.
Japanese media argue that Toyotas poor crisis management
might damage the credibility of Japanese manufacturing in
general.
Recommendation
Toyota have to learn that its initial slow response was
the reason why the recall issue had become an
increasing problem, Akio Toyoda should have
announced that he would attend the hearing much
earlier.
Toyoda focused on protecting its brand and image with
accepted a formal invitation to testify before cooperate
with the U.S. Congress.
While Toyodas February 24 testimony would aim to
show that the company sincerely wished to make
things right and renew its commitment to quality.
Recommendation
Toyota organize a clear message around its commitment to
return to quality.
A comprehensive response included taking care of
vehicles on the road today and making them even safer in
the future and being more open and transparent about
safety issues that might arise.
Toyota would set a new standard for transparency and
speed of response on safety issues and would continue to
advance safety and environmental technologies.
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