Cost and Value Drivers – Toyota

Value drivers:Quality:Total quality control is carried out using two basic principles: quality is built in at every stage and quality is continually improved. [2] Toyota has launched, unannounced, several low-profile initiatives, including a global computer data base to track vehicle repairs and cut reporting times about customer complaints from months to days [1] No matter where Toyota vehicles are made, they must have the same high level of quality. Toyota doesn’t put a label on vehicles which says “Made in The USA” or “Made in Japan”, but instead opts for one label for all: “Made by TOYOTA.” [5]

DELIVERY:Toyota Philippines promises dynamic selling and the timely delivery of their automotive products. [3]

BRAND/ REPUTATION:The Toyota Motor Philippines Foundation, Inc. (TMPF), we carry on our mission to help improve the lives of less privileged Filipinos through programs in the areas of technical education, healthcare, the environment, and community service. [4]

RISK ASSUMPTION:Air Conditioning System, Corrosion Perforation,Paint and Surface Rust Warranty Toyota warrants that it will either repair or replace any part that Toyota supplies that is defective in material or workmanship under normal use except those items listed under “What is Not Covered” for a period of 36 months or 100,000 kilometers, whichever comes first. [4]

BREADTH OF LINE:Toyota has a variety of car models. Aside from cars, they sell genuine Toyota car parts and Toyota Oils and Chemicals.

COMPLEMENTARY PRODUCTS:Whichever Toyota model you drive, fitting genuine Toyota accessories will add

an extra dimension of individuality to the experience. Each item in the accessory range has been developed by Toyota uniquely for Toyota cars, and made with the same care and attention to detail as your car itself. [4]

GEOGRAPHY:Toyota and its suppliers located in one location.Toyota established regional GPCs in the United States, the United Kingdom and Thailand to carry out corresponding activities in the North American, European, and Asia-Pacific regions. [5]

ENVIRONMENT POLICIES:TMP engages in Clean & Green Project activities with schools as partners. Students are taught the importance of tree-planting, waste segregation, and recycling. [4] Toyota uses technology that minimizes environmental impact through engines that are fuel-efficient and produce lower emissions. [4] TMP is proud to be the first automotive company in the Philippines to be awarded ISO14001 certification for environment [4]

NETWORK EXTERNALITIES:A lot of people buy Toyota. They are the world’s largest automaker in the world. [2]

COST DRIVERSSCALE ECONOMIES:Toyota achieves cost savings through increasing the quantity of products it produces. [6]

SCOPE ECONOMIES:Toyota’s merger allows them synergies of production between their previous automobile line and the new trucks and minivans. In addition, existing capital assets like machinery and factories will produce the new products, reducing the fixed investment ordinarily required to launch a new product line. [6]


Toyota has a bottom-up not top-down system [2]

VERTICAL INTEGRATION:Toyota procured vital lithium resources for its hybrid battery packs by striking a deal with Orocobre. Toyota Motors now commands both the raw materials and the manufacturing infrastructure it needs to hit the ground running when its plug-in model is released [7]

LOW INPUT COSTS:Toyota requires parts and materials that offer distinctively superior cost performance. [8] Cost performance of individual partsReductions in total costs:Integration of multiple part functions into composite assemblies and systems Improvements to promote ease of installationImprovements to logistics [8]

ORGANIZATIONAL PRACTICES:Toyota’s operations are enormously flexible and responsive to customer demand. [9]