Toyota Motor Corporation
The company developed in 1937. In 1938, it launched Just in Time (JIT) system. In 1991 Prius was introduced. In 2000s, products like Passo, Porte, Rush, and LS 600h were announced and with the focus on sustainability in relation to Toyota’s Way, energy efficient cars like SAI, Prius Plug-in Hybird were introduced (Toyota’s History). The company designs, manufactures, assembles, and sells passenger vehicles, minivans, and commercial vehicles along with related parts and accessories. The products that are offered by the company include hybrid cars under Prius, Corolla, Harrier; fuel cell passenger cars under the MIRAI; and conventional engine vehicles like subcompact and compact cars under Corolla sedan, Yaris, Porte and Spade, etc. The operations are expanded to Japan, North America, Europe, Asia, Central and South America, Oceania, Africa, and the Middle East (Bloomberg).
Environmental Analysis
Internal Analysis/Marketing Mix: The internal factors are linked to the marketing mix of the company as well as the capabilities to overcome external challenges. It can be ascertained by the fact that the company offers innovative products and services to the customers as part of their strengths. The company is strived to develop environmental friendly cars by diversification of fuels and powertrains (refers to fig 1).
Fig1. Diversification of Automotive Fuels from Toyota Motor Corporation. Annual Report. 2014. Web. Jan 18. 2017. < http://www.toyota-global.com/investors/ir_library/annual/pdf/2014/>
The key strengths that distinguish the company from competitors include The Toyota Production System (TPS). TPS promotes the thorough elimination of the waste, irregularities and overburdening from production process (Toyota Motor Corporation 18) (refers to fig 2).
Fig2. Toyota Production System from Toyota Motor Corporation. Annual Report. 2014. Web. Jan 18. 2017. < http://www.toyota-global.com/investors/ir_library/annual/pdf/2014/>
In addition, genchi genbutsu approach used by the company enables it to take into consideration the opinions of on-site individuals as part of the improvement process. Kaizen refers to continuous improvement and it is linked to taking ownership of work and focus on what should be done instead of what can be done (Toyota Motor Corporation 18). Others features of the company include investment in the innovative technologies like Integrative Safety Management concept (refers to fig 3); automotive driving technology i.e. Automated Highway Driving Assist (AHDA) and Smart Mobility Society. One example of Smart Mobility Society is T-Connect service. The service features software agents that not only control car electronics, but also search for information and indicate knowledge for safety and comfortable driving experience (Toyota Motor Corporation 21) (refers to fig. 4).
Fig3. Integrative Safety Management concept from Toyota Motor Corporation. Annual Report. 2014. Web. Jan 18. 2017. < http://www.toyota-global.com/investors/ir_library/annual/pdf/2014/>
Fig4. T-Connect Service from Toyota Motor Corporation. Annual Report. 2014. Web. Jan 18. 2017. < http://www.toyota-global.com/investors/ir_library/annual/pdf/2014/>
Furthermore, the company offers affordable cars to the consumers by optimizing the energy-efficient technologies as part of pricing factor of marketing mix. In other words, the company targets both luxuries and price-conscious customers by providing range of products and services. Moreover, the company’s promotional activities are based on the sustainability and corporate social responsibility (CSR) efforts. It indicates that the company used its sustainability approach to promote its products and services to achieve ultimate success.
In relation to the weakness, the key issue faced by the company is related to quality of its products. It can be understood by the fact that in 2016 the company recalled 3.37 million cars due to the issues like air bags and emissions control units. The evaporative fuel emissions control units were installed in models developed from 2006 to 2015, including Prius and Corolla. In turn, 1.55 million cars were recalled in Japan, 713,000 in Europe, 35,000 in China, and 568,000 in other areas. In addition, 1.4 million cars were recalled over the issue of air bag inflators (Shepardson and Tajitsu).
External Analysis: In relation to external factors, political aspects affect the automobile industry. For example, in 2009 restrictions from government with respect to carbon emissions and Corporate Average Fuel Economy (CAFÉ) standard created opportunities for the automobile companies to produce energy efficient cars (Access). In addition, automobile industry significantly contributes to economy. For instance, the industry employs more than 1.5 million people and is responsible for providing jobs to7.25 million people at national level. Moreover, approximately 205 billion dollars tax revenues on annual basis facilitate the economy (Auto Alliance). Furthermore, changing behaviors of consumers to car purchasing is a key external factor as people demand more energy efficient, quality and luxurious cars. Technological advancements like hybrid technology also contribute to high quality automobiles. Last but not the least; environmental aspects like reduction in carbon emissions, waste management and recycling are the key factors that shape the sustainable environment of the organization.
Strategy Implemented by Toyota
Fig5. Smart Mobility Society from Toyota Sustainable Management. Sustainable Management Report. 2016. Web. Jan 18. 2017. < http://www.toyota-global.com/sustainability/report/ar-smr/pdf/sustainable_management_report16_fe.pdf>
For example, refers to fig 5 feature 1 is related to providing everyone with the freedom of movement. In relation to this strategy, the company utilized Artificial Intelligence (AI) Technology and Big Data to enable cars to get instant knowledge and to connect people, cars and communities. The company aims to offer ever-better cars with the focus on creating new value in sustainable mobility societies with the use of Big Data (Toyota Sustainable Management 9) (refers to fig 6).
Fig6. Artificial Intelligence (AI) Technology and Big Data from Toyota Sustainable Management. Sustainable Management Report. 2016. Web. Jan 18. 2017. < http://www.toyota-global.com/sustainability/report/ar-smr/pdf/sustainable_management_report16_fe.pdf>
Second feature of the strategy used by the company is linked to TNGA i.e. Toyota New Global Architecture. It refers to the new approaches in car production design concept. The success of the strategy is the production of New Prius. The cycle of TNGA increases the rate of making ever-better cars (Toyota Sustainable Management 10) (refers to fig 7).
Fig7. The Cycle of TNGA from Toyota Sustainable Management. Sustainable Management Report. 2016. Web. Jan 18. 2017. < http://www.toyota-global.com/sustainability/report/ar-smr/pdf/sustainable_management_report16_fe.pdf>
Third feature is associated with the development of future society in harmony with nature. In relation to this strategy, the company strives to meet challenges related to environmental issues. Fig. 8 provides a notion of the challenges and actions taken by the company.
Fig8. Six Challenges and Actions from Toyota Sustainable Management. Sustainable Management Report. 2016. Web. Jan 18. 2017. < http://www.toyota-global.com/sustainability/report/ar-smr/pdf/sustainable_management_report16_fe.pdf>
The earlier described strategy contributes to overall mission of the company as the company employs innovative technologies like AI and Big Data, Intelligent Transport System, and Automated Driving Technology to produce high quality products and services with the aim to provide reliable cars to consumers and for the sustainable development of society. Toyota’s National Park Project is an example of sustainable development and its positive impact on economy, environment and society. For instance, linkage of Toyota Camry batteries to solar panels changed a remote site in Yellowstone National Park from noisy and polluting diesel to renewable energy. On one hand, the company offered a great car i.e. Prius to consumers and on the other hand used its batteries to contribute to environmental sustainability and economy through renewable energy resources (Palkovsky). The success of the company can be ascertained by the fig 9. Fig 9 indicates the financial success of the company achieved through sustainable development strategy.
Fig9. Financials from Toyota Sustainable Management. Sustainable Management Report. 2016. Web. Jan 18. 2017. < http://www.toyota-global.com/sustainability/report/ar-smr/pdf/sustainable_management_report16_fe.pdf>
Conclusion and Recommendations
It can be concluded from the above discussion that it is necessary to focus on quality and sustainable development in today’s technological business environment. It is due to the fact that quality products and services and sustainable activities influence consumers to make purchases and enhances the reputation of the company. Hence, the company i.e. Toyota is required to overcome quality issues by utilizing integrative approach to improve quality of products and services. It means the company should use different quality tools like TQM, Six Sigma and quality standards to overcome quality issues. In addition, the company should focus on the sustainable efforts by adopting new innovations by partnering with technological firms and suppliers to make energy-efficient cars and sustainable supply chain.
Work Cited
Access. New Automobile Regulations: Double the Fuel Economy, Half the CO2 Emissions, and Even Automakers Like It. 2015. Web. Jan 18. 2017. < http://www.accessmagazine.org/articles/fall-2012/new-automobile-regulations/>
Auto Alliance. Quick Facts. 2017. Web. Jan 18. 2017. < http://www.autoalliance.org/auto-jobs-and-economics/quick-facts>
Bloomberg. Toyota Motor Corp. 2017. Web. Jan. 01. 2017. < http://www.bloomberg.com/research/stocks/snapshot/snapshot.asp?capId=319676>
Palkovsky, Nicole. What Underlies the Success of the World's First Billion-Dollar Sustainable Brands. Jun 08, 2016. Web. Jan 18. 2017. < http://www.sustainablebrands.com/news_and_views/brand_innovation/nicole_palkovsky/what_underlies_success_worlds_first_billion-dollar_>
Shepardson, David and Tajitsu, Naomi. Toyota recalls 3.37 million cars over air bags, emissions control. Jun.29. 2016. Web. Jan 18. 2017. < http://www.reuters.com/article/us-autos-toyota-recall-idUSKCN0ZF0CX>
Toyota Motor Corporation. Annual Report. 2014. Web. Jan 18. 2017. < http://www.toyota-global.com/investors/ir_library/annual/pdf/2014/>
Toyota Sustainable Management. Sustainable Management Report. 2016. Web. Jan 18. 2017. < http://www.toyota-global.com/sustainability/report/ar-smr/pdf/sustainable_management_report16_fe.pdf>
Toyota’s History. 75 Years of History. 2017. Web Jan 18. 2017. < http://www.toyota-global.com/company/history_of_toyota/75years/>
