INTRODUCTION AND CURRENT POSITION OF TOYOTA COMPANY:
Toyota Company has been an important and consistent performer in the global automobile market for the last 70 years. The success of Toyota Company in past and present is highly dependent on the strategy developed based on research of environmental factors such as political, economical, social and environmental factors Also deep understanding of cultural and social values. By the analysis of all these factors the Toyota Company is growing continuously with a crown of global leader in the automobile industry of the world (Isidore, 2013). Around 9.55 million vehicles are planned to be manufactured by Toyota Company in 2013 and employees around 300,000 people around the world (Callwood, 2012). While working in the automobile industry for so long around 75 years undoubtedly the Toyota Company has achieved a great success but also faced some failures at some stages. Those failures mostly belong to the side of mechanical or manufacturing.
The Toyota Company is famous for its quality brands and its production system (Bloomberg, 2011). The research is designed to evaluate the strategy of Toyota Corporation and to exploration of the effectiveness of implemented strategies in achieving operational, tactical and strategic goals.
TOYOTA STRATEGY FORMULATION
The Toyota’s Global vision as articulated in 2011 stated that Toyota requires itself to be company of customer’s choice as well as bringing smile on consumers’ face by exceeding expectation of those who chooses Toyota (Toyota, 2012).
- The strategy of Toyota revolves around three pillars of job context of continuous improvement by every employee, process of managing organization and functions improvement, entire people involved from bottom to top executive (Bloomberg, 2011). The commitment of Toyota Corporation to “respect for people” and the “continuous improvement” in every part of business. And people at every level are required to continuously strive for improvement. Further for improving lives of communities.
- The company works under constant support and guidance from senior management and also improvement suggestions from bottom line managers.
- The company arranges training and development programs to get new and innovative skills.
- The company has diversity in structure of management with the power and assurance to direct the company towards its setting objectives.
COMPANY’S STRATEGIC PLAN AND PERFORMANCE:
With the advancement and rapid changing global market Toyota Corporation still maintains its market position with increasing market share and market growth. The market is changing itself and consumer behavior is varying because of the availability of many alternative automobiles in the market. To meet these challenges of market variation and consumer behavior variation Toyota is competing with their formulated strategies and performing in a successful direction. By respect its people and collecting opinion from potential and actual customers and its employees, Toyota makes the innovation in the vehicles and processes according to need and wants of the people. Company has a transparent reflection of “continuous improvement” in their quality products. The company from its senior management’s experience and knowledge of Toyota’s brands development constantly drive for improvement. With all these integrations Toyota recently announced a new framework for developing vehicles that have greater appeal for customers and improves processes by sharing parts resulting in cost reduction by sharing parts around 30 percent (Callwood, 2012). This also contributes in improving lives of business. The company constantly conducts training and development programs to create the advance skills and approaches in the thinking process of employees and has all time code of conduct available for employees providing guideline for each and every activity conduct (Toyota, 2006). The diversity along with globalization is achieved with location of the manufacturing in different regions (Toyota, n.d). Hence, the strategy is successfully at work for gaining Toyota leading position in automobile sector for being customers’ choice.
COMPONENTS OF STRATEGY:
There are five components of strategies; scope, goals and objectives, resources, sustainable competitive advantages, and synergy (Mullins, Walker, Jr., Boyd, and Larreche, 2004) These five components of strategies are well addressed in strategy at work in Toyota Corporation. The brief components of Toyota strategy are presented in the image below:
(Toyota, 2012)
- The five components of test of Toyota strategy is conducted hereunder: SCOPE OF TOYOTA CORPORATION: The detailed segment of Toyota strategy determines the scope of around:
- Enhancing and enriching the transport system.
- Increasing vehicle functionality with greater safety and responsible way.
- GOALS AND OBJECTIVES:
- The customer should be provided with the highest quality vehicles with the lowest possible cost with in a shortest possible time period and other aspects to for making Toyota customer’s choice.
- Job satisfaction, fair treatment and job security should be provided to employees and hence preparing and engaging talented passionate people for success.
- RESOURCE DEPLOYMENTS:
The Strategy identifies Toyota’s distribution of resources among achieving the innovative, quality assurance for the safest and responsible to facilitate people’s movement.
- IDENTIFICATION OF SUSTAINABLE COMPETITIVE ADVANTAGE:
The proficiency in the part of adapting new and latest technology along with constant improvement with consistency is their main competitive advantage. Strategy clearly defined that constantly improving better way of doing thing to bring smile on customer face in responsible and safe way is their competitive advantage.
- SYNERGY:
The synergy in processes, people and management in dealing with challenges and achieving the leadership in mobility is well defined in the strategy of the Toyota.
STRATEGIC EVALUATION:
The strategy formulation and implementation of the Toyota Corporation is remarkable for the last 50 years and standing in the leading position in the global market. With this great achievement and success company also faces some challenges and declining phases in business cycle in different markets of the world. As explored from the above assessment the strategy development has been successful in meeting the set criteria. Despite fact that strategy development is in accordance to meet the goal of the company, however, implementation issues are still present in Toyota. s. Toyotas has been consistently affecting its business growth with regular recalls. In recent past, Toyota had to recall 2.77m cars for the matter of over steering or water pump in November 2012 (Telegraph, 2012). It is significant blow to reputation. In addition, 7.4 million vehicles from worldwide were recalled in October 2012 for the reason of a potential fire hazard (Dawson, 2012). Hence, constant recalls are posing big question marks on the strategy implementation for improving processes.
In contrast to the issues related to recalls, Toyota has developed competitive advantage among competitors based on its lean manufacturing. The guiding principles of Toyota operations are designed as follows:
(Toyota, 2012)
These factors have developed the strengthened the position of Toyota among competitors with an edge. The continuous improvement strategy of Japanese manufacturer had been distinguishing it from most of its competitors in the industry.
Constant improvement in performance and production processes is strongly aligned with external market environment factors. These constant improvements enable business to develop the more agile vehicles in alignment with changing market environment. For instance, recently Toyota had developed a new framework that would allow it to offer cars with greater appeal for customer yet more profitable for business.
COMPANY’S PRIMARY STRATEGIC POSITIONING:
In automobile innovation Toyota is one of the pioneers of bringing it in the industry with consistency. The expertise in the area of adapting new technology and process improvement constantly is Toyota’s prime competitive advantage that contains the company to compete effectively and efficiently in the global market. The Toyota is positioned as vehicle provider with much reliable and value addition for the people to give them a best and safe journey experience every time. The company is in the leaders with a strategy of continuous innovation and improvement in the automobiles. Customer of Toyota also value Toyota vehicles as one providing low cost product with higher value for its superior rated quality and features in contrast to other automobile manufacturers.
ALIGNMENT OF TOYOTA’S VISION, MISSION TO STRATEGIC POSITIONING:
The vision of Toyota had been achieving the position in the automobile sector where Toyota is customers’ choice due its innovation, safety, quality assurance, employee and community orientation etc.
The mission of Toyota Company is related to serving customers and society by gaining the position of forefront player in terms of mobility, quality and innovation. Mission of Toyota also refers it to be fruit of its value and philosophies.
As already noted the value given to Toyota motors by its customers as well as above reported strategy, vision and mission it can be clearly stated that all factors are strongly in alignment and bonded with each other in driving Toyota to its required position.
References
Bloomberg. (2011). What Toyota is still doing right. Retrieved June 9, 2013, from http://www.businessweek.com/managing/content/jun2011/ca20110624_657612.htm
Callwood, B. (2012). Toyota’s new strategy for success. Retrieved June 9, 2013, from http://www.benzinga.com/news/earnings/12/04/2481304/toyotas-new-strategy-for-success
Dawson, C. (2012). Toyota issues global recall. The Wall Street Journal. Retrieved June 9, 2013, from http://online.wsj.com/article/SB10000872396390444799904578047700401681438.html
Isidore, C. (2013). Toyota reclaims global auto sales crown. CNN. Retrieved June 9, 2013, from http://money.cnn.com/2013/01/28/news/companies/toyota-global-sales/index.html
Mullins, J., Walker, Jr., O., Boyd, H., and Larreche, J.C. (2004). Marketing Management: A Strategic Decision-Making Approach, New-York: McGraw-Hill/Irwin.
Telegraph. (2012). Toyota recalls 2.77m cars in latest blow to reputation. Retrieved June 9, 2013, from http://www.telegraph.co.uk/finance/newsbysector/industry/9676794/Toyota-recalls-2.77m-cars-in-latest-blow-to-reputation.html
Toyota. (2006). Toyota code of conduct. Retrieved June 9, 2013, from http://www.toyota-global.com/company/vision_philosophy/pdf/code_of_conduct.pdf
Toyota. (2012). Toyota global vision and strategy. Retrieved June 9, 2013, from http://epts2012.ktenet.hu/Toyota_European_Sustainability.pdf
Toyota. (n.d.). Globalizing and localizing manufacturing. Retrieved June 9, 2013, from http://www.toyota-global.com/company/vision_philosophy/globalizing_and_localizing_manufacturing/
