Professional Documents
Culture Documents
2013
Resource ................................................................................................................................................. 15
Capabilities .............................................................................................................................................. 15
Toyota is a multinational motor company. It ranks among the best automobile companies in the
world. Kiichiro Toyoda is responsible for the formation of the company in 1937. Toyota
Automobile was a division of the Toyoda Automatic Loom Works. The government supported
the production of domestic vehicles because there was money scarcity throughout the world
and also because of the war with China. The first Type A Engine was produced by the company
in 1934. This was used to build the first A1 car. Model AA car started to be produced from 1936.
1950 Company faces a financial crisis; Toyota Motor Sales Co., Ltd. is established.
1955 The Toyopet Crown, Toyopet Master and Crown Deluxe are launched.
1957 The first prototypes of the Crown are exported to the United States; Toyota Motor Sales U.S.A., Inc. is established.
1965 Toyota wins the Deming Application Prize for quality control.
1966 The Corolla is launched; business partnership with Hino Motors Ltd. begins.
1982 Toyota Motor Co., Ltd. and Toyota Motor Sales Co., Ltd. are merged into Toyota Motor Corporation.
1984 Joint venture with General Motors (New United Motor Manufacturing, Inc.) begins production in the USA.
1988 Toyota Motor Manufacturing, USA, Inc. (present TMMK) begins production.
1997 The Prius is launched as the world's first mass-produced hybrid car.
2002 Toyota enters Formula One World Championship; Tianjin Toyota Motor Co., Ltd. begins production in China.
2010 Worldwide Prius sales top 2 million mark; Toyota and Tesla Motors agree on joint EV development.
Worldwide Hybrid Vehicle sales top 3 Million mark; Toyota Motor Manufacturing, Mississippi, Inc. begins production in the
2011
USA.
Toyotas factory for producing or assembling is spread all over the world. It factories are present
in countries like Japan, Canada, South Africa, Poland, turkey, India, Australia, Indonesia, United
Kingdom, France, Brazil, Portugal, Argentina, Pakistan, Mexico, Thailand, Czech Republic,
Malaysia, China, Venezuela, Russia and the Philippines. Toyotas main passion is producing
vehicles with the latest technology. Names of few of the popular Toyota vehicles are Toyota
Prius, Camry, Lexus, Toyota Tundra, Toyota Tundra Double Cab and Corolla.
Aerospace- It is the share holder of Mitsubishi Aircraft Corporation and invested money for its
latest venture.
Education- The company in1981 established the Toyota Technological Institute.
Finance- It provides financial help to Toyota customers through Toyota Financial Services
Corporation.
Agricultural biotechnology- It invests in many partnerships and small businesses in
biotechnology.
Robotics- The company is developing robots for older people and entertainment.
Today, Toyota is one of the best known car companies In terms of revenues, profits and net
worth Toyota is the worlds largest automobile maker.
Thailand Floods
Thailand has had severe flooding since late July, the monsoon season had three times
the typical rain fall.
The flood waters destroyed many auto part production facilities and as a consequence
Japanese automakers are struggling to find enough parts to produce vehicles.
Toyota and Honda withdrew earnings projections as part availability is too large of an
unknown to accurately predict future prospects.
The three Toyota plants in Thailand were not damaged but have nonoperational since
October 10th, total production loss since the closure is approximately 150,000 units.
Recalls
November 2009 Toyota recalled several models for floor mats that trapped accelerator
pedals.
January 2010, more models were recalled for sticking accelerator pedals.
February 2010, the ABS software in the Pruis was found to have defects and recalled.
Approximately 200 class actions have been filed under damages caused by unintended
acceleration in Scion, Lexus, and Toyota vehicles. The allegation is that the software is
flawed and the actual cause of the problem. 20 class actions have been filed for failure
of the ABS to perform correctly.
Tests have shown that the vehicle can be stopped with the emergency brake and foot
brake or be shifted into neutral and coast to stop. Some fatalities could have been
prevented with these measures, yet the diver did not choose to therefore the collisions
could be a combination of software and diver error.
There is no definitive evidence as to the cause.
Industry Overview
The evolution of the automotive industry has been influenced by various innovations in fuels,
vehicle components, societal infrastructure, and manufacturing practices, as well as changes in
markets, suppliers and business structures. Some historians cite examples as early as the year
1600 of sail-mounted carriages as the first vehicles to be propelled by something other than
animals or humans. However, it is believed by most historians that the key starting point for the
automobile was the development of the engine. The engine was developed as a result of
discovering new energy carrying mediums, such as steam in the 1700s, and new fuels, such as
gas and gasoline in the 1800s. Shortly after the invention of the 4-stroke internal combustion
gasoline-fueled engine in 1876, the development of the first motor vehicles and establishment of
first automotive firms in Europe and America occurred.
Pestle Analysis
Political Factors
In the background of the financial crisis, each countrys government carried out the
relating remedy policy to protect or stimulate each important industry, including the
annotative industry. For example, in end of 2008, U.S. government gave $17.4 billion
short-term loans to General Motors and Chrysler to help them. In March, 2009, Toyota
has asked for $2 billion loan from the Japanese Government. These loan policies may
help the vehicles corporation survive in the difficult position caused by the financial
crisis.
In addition, the U.S. Federal Reserve Board took the quantitative easing policy, which
leads the global asset price inflation to protect U.S. trade. Therefore, these policies
would help each country to spur its own automotives industry and protect others
country automotives corporation to occupy the market share.
Economic Factors
The automotive industry shows the recovery evidence. The General Motors paid back
$8.1 billion in emergency government loans and Chrysler demonstrated that it started
to produce an operating profit. In the United States, the passenger vehicle sales rose
Social Factors
Due to the increasing price of the oil, more and more people choose the small
displacement engines due to its high efficiency. For example, 140,000 Chevrolet Cruze
with small displacement engines were purchased in the first six months of 2010. This
tendency will lead the manufacturer to produce the small displacement engines. For
instance, GM and SAIC develop small displacement engines, and Toyota plans to launch
more such types of cars in China. In addition, with the rising power of the middle class in
China, they became the main purchasing power of automotive, which help China to
become the largest growing car market in the world. It is demonstrated that Chinas
middle class occupies 23% of its total population.And the luxury cars also are preferred
in China. For example, Beijing includes 8,800 billionaires and 143,000 millionaires. Most
of wealthy own between a minimum of two to five luxury cars millionaires. This may
lead the changing of the production direction about the vehicles types.
Technology Factors
Regarding to the precious energy resource, the demand for vehicle drove by other types
of energy caused the interest of vehicle interest, so such types of vehicles were invented
by the vehicles manufactures. For example, Hybrid electric vehicle is such type vehicle
which comprises of a conventional engine propulsion system with an electric propulsion
system. The features of these cars are to achieve both the better fuel economy and a
1. Environmental Factors
The waste gas emitted by the vehicles became the hot point in the recent years. The
stringent emission standards for the passenger and light vehicles were adopted by the
European Union (EU) Commission and the EU Parliament since 2005. In the standards,
the automotive corporation must be responsible for the emission performance of these
vehicles. And another severe emission standard was adopted by EU in 2009. And the EU
Commission plans to carry on more severe standards. And different countries have the
different emission standard. For example, the national emission standard of Australia is
more stringent than several Asian countries. Thus, with the more stringent emission
standard, the additional costs should be spent by the automotive manufacturers to
meet it in the factors of product development, testing and manufacturing operations.
2. Legal Factors
Each country operated the legal policy to protect its own automobile corporation
benefit. The Asian countries changed their import duty for the automobiles. For
example, it is demonstrated by China government, the preferential taxes will be ended
on the small displacement cars, in order to reduce the pollution in the large cities. India
also reduced the import duty and excise duty on hybrid cars, and reduced the tax on the
auto component aimed at helping the Indian auto component manufacturers. In 2009,
U.S. government would restrict imports of Chinese commercial low cost tires, and
increased the additional tariffs. This caused that the U.S. automotive corporation cannot
chose the expensive European tires instead of Chinese tires, which increased the cost of
Capabilities
The recession that started in the late 2007 had a profound impact on the automobile industry. By
early 2009, the global automobile industry was in a deep slump and sales were dropping
substantially. Retail gasoline prices of more than $4.00 per gallon combined with a powerful
recession put the brakes on new car sales. One result of the high gasoline costs has been the
strong demand for Toyota's Prius gasoline-electric hybrid car over recent years. Other carmakers
were greatly encouraged in their own efforts to bring more hybrids to the market, but however
consumers generally aren't as impressed with U.S. hybrid technology as they are with that of
Toyota models. (Plunkett Research Ltd., 2009)
The Toyota Motor Corporation is a multinational corporation and now the world's largest
automaker in terms of sales, net worth, revenue, and profit according to Fortune Global 500. It
was founded in 1926 as Toyoda Automatic Loom Works, Ltd. and has consistently been more
productive than its competitors. The company has been widely recognized for the quality of its
products and production systems. The company is already onto its third generation hybrid engine
- which is incredible given that many manufacturers have not even begun to develop their first.
(AUTOeBID)
Toyota vision :
Toyotas business activities are based on the concept, ensure sustainable growth by fostering
the virtuous circle, Always better cars Enriching lives of communities Stable base of business.
Primary activities
Inbound logistics
Receiving, storing, and disseminating inputs. E.g., warehousing, inventory
toyota in obtaining raw materials, they do not process their own, or create your own,
they use a third party, they handed the small parts, such as leather seats, steering
wheel, tire, to local companies, but to the nature of strategic importance, like a
machine, they import from Japan (center), it's all to maintain the quality standard that
was created toyota,
Toyota put on the assembly system in the process, it has led to toyota raw material
supply for its assembly need a place to store supplies, or warehouse, to avoid piling up
too many assets, Toyota to forecast demand,
Jidoka, in the production context means not allowing defective parts to go from one
work station to the next. It specifically refers to machines or the production line itself
being able to stop automatically in abnormal conditions (for example, when a machine
breaks down or when defective parts are produced). This Automation allows machines
to run autonomously, as they will stop when a problem occurs.
Jidoka is also used when individual people encounter a problem at their work station.
They are responsible for correcting the problem - if they cannot, they should stop the
line rather than let the defective part do.
- The base is the Operational Stability. Section on it will not function properly if the
bottom is not working. The base consists of:
Heijunka: smoothing. Meaning: wherever possible evenly distributed workload made at
any time. Without this, Just in time can not be applied, because it will happen stacking
and queuing at peak load.
Standard work: At each stage of the work there is a clear indication of the order and
how to do the job.
Total Productive Maintenance (TPM): a comprehensive equipment maintenance process
so that the tools are always in good condition to wear to work.
Value Chain: It is a series of value-added processes. There are continuous efforts to
reduce "non-value added waste" so that what remains is just something that has
added value in the production process. Discussion of "non-value added waste"
includes the activities of 5S
Service
Providing service to enhance or maintain the value of the product
Toyota managed to outperform its competitors from the automotive industry in
customer satisfaction. This is demonstrated by the results of a survey conducted by JD
Power Asia Pacific to its customers in Indonesia
The Best Total Ownership Experience 'is a principle that is always carried by Toyota at
each line, starting from the central office to the Toyota dealership. Their concept is the
customer number one, so that makes them always trying to meet customer needs and
continuously improve services.
Toyota recorded occupies the top position with 764 points, 757 points, followed by
Nissan, Honda and Hyundai as well as 755 points. Overall average score is 758, making
the Toyota as the only company that is above average.
Support Activities
Firm infrastructure
infrastructure owned by Toyota factory is very modern and sophisticated, is a robotic
system with humans as the operator,, all the production support until the sale is
available with either situation, the factory to the dealer,,
Build safer cars into the center of Toyota's global vision. Learning from data in the real
world, Toyota continues to improve testing, products and services, by establishing a
Collaborative Safety Research Center in the USA.
Collaborative Safety Research Center in collaboration with a number of North American
universities, hospitals, and research organizations.
Procurement
At Toyota Industries Corporation our procurement activities are based on fair business
practices in order to realize amicable relationships and mutual benefit.
Toyota Industries Corporation is involved in a wide range of business fields and procures
the parts, materials, and equipment for these many different businesses from suppliers
all over the world. Along with requiring our suppliers to provide quality items at a low
price and in a timely manner, we cooperate with them to promote environmental
preservation and meet the other demands of society. In addition we take a long term
view toward our relationships with suppliers with an aim to realize an amicable
relationship of mutual benefit based on fair business practices.
Taylors Fortune Magazine article describes the story of a man named Akio Toyoda and his
vision for Toyotas future. Akio has had a very difficult past few years: US market share fell from
18.3 percent from 2009 to 12.9 percent in 2011. Akio formally apologized before congress for
his companys deathtraps that accelerated out of control. And, tsunamis ravaged Japan, which
killed over 15,000 and halted production at a number of factories while disrupting the supply of
500 parts.
Focus on designing brands that excite US buyers: To give Lexus a sportier image, he
championed the development of the $375,000 LFA, a carbon fiber super-car.
Be Fast and Move Quickly: Akio shrank the board of directors by half and took out layers of
management. Akio also meets with five top advisors ever week and makes decisions on the
spot without written agendas.
No more Executive Rotation: Previously, executives rotated positions. A product engineer, for
example, could work on manufacturing. No longerexecutives stay at the position that they
are best at.
Always make better cars mentality: This Spring, Toyota will launch the plug-in Prius. It's a
$32,000 car that has a battery that can run for 15 miles without gasoline.
In this message he continuing to foster Toyotas competitive advantage with its lean
production system, while, at the same time, demanding that the company innovate and
produce more exciting cars. Akios strategy to keep executives in one place should help improve
Toyotas quality while avoiding another recall disaster. And finally, his always make better
cars mentality is not lip service. As the grandson of the companys founder, Akio cares more
than anyone about continuing his familys success. His ultimate goal is to restore honor to
Toyotas name.
Since its foundation, Toyota has strived to contribute to the sustainable development of society
through leadership in the manufacturing and provision of innovative and quality products and
services.
In FY11 the CSR assessment showed a high score on Compliance, Health & Safety, Quality,
Corporate Value and Customer First. The Employee satisfaction score decreased slightly in
comparison to the previous year, primarily due to an increase in employee turnover.
1. Human resources
2. Product
The Toyota Way can be briefly summarized through two pillars that support it: Continuous
Improvement and Respect for People.
Managements critical role is to motivate and engage large numbers of people to work
together toward a common goal.
Defining and explaining what the goal is, sharing a path to achieving it, motivating the people
to take the journey with you, and assisting them by removing obstacles --- those are
managements reason for being.
Its success is derived from balancing the role of people in an organizational culture that expects
and values their continuous improvements, with a technical system focused on high-value-
added flow.
Continuous Improvement :
The 14 Principles of the Toyota Way is a management philosophy used by the Toyota
Corporation That includes the Toyota Production System. The main ideas are to base
management decisions on a "Philosophical sense of purpose", to think long term, to have a
process for solving problems, to add value to the organization by developing its people, and to
Recognize That continuously solving root problems drives organizational learning.
Toyota continues to prove its commitment in providing the Best Total Ownership
Experience to customers. Reflection of customer satisfaction to service Toyota this year
can be seen from the results of the survey JD Power category CSI (Customer Satisfaction
Index) and SSI (Sales Satisfaction Index), where Toyota was ranked first. In terms of
products, superior quality products back Toyota proved by JD Power Asia Pacific 2007
Indonesia Initial Quality Study (IQS), where the Toyota Yaris, Vios, and Rush was ranked
top in each segment.
3 products outperform Toyota 5 segments were taken into account in this survey.
Vehicles that are in the first position is recorded at least get a report on problems per
100 vehicles in the survey in their respective segments. Toyota Yaris is ranked top in the
segment of premium compact vehicles. Ranked second in this segment is followed by a
Suzuki SX4 and Honda Jazz. Meanwhile, Toyota Vios in the top position in the entry
midsize car segment / midsize, which won second place Honda Civic and Honda City in
the third position. Both the Toyota Yaris and the Vios was also in the same position the
previous year.
While Toyota's new product, the new Toyota Rush marketed since early 2009, managed
to outperform the Daihatsu and Isuzu Panther in the entry SUV segment.
J. D. Power Asia Pacific 2009 Indonesia Initial Quality Study (IQS), which this year enters
its fifth year, a survey conducted on the new car owners who make purchases in the
month of October 2006 - June 2007, on matters of quality vehicles. Results J.D. Power
Asia Pacific 2009 Indonesia Initial Quality Study (IQS) is obtained from a survey
conducted over 2796 new-vehicle owners, including 50 passenger and commercial
vehicles from 14 brands. Field survey itself is conducted in April - August 2009
Responding to
Threats to Sustainability
Responses to Imitation Responses to
Building Barriers Substitution
Economies of scale and scope Fighting
Learning/private information Switching-Hybrid
Contracts and relationships
Time lags
Fit
Upgrading Added Value
Appropriated
Value
Responses to
Holdup
Contracting
Responses to Slack Integrating
Gathering information Building bargaining
Monitoring behavior power
Shaping norms Bargaining hard
Bonding resources-Restructuring Reducing asset-
Changing governance specificity
Mobilizing for change Building relationships
Developing trust