Toyota Motor Corporation is Japan’s number one carmaker. Toyota has international presence in over 170 countries worldwide. It manufactures cars, pickups, minivans, and SUVs include models such as Camry, Corolla, Qualls, Prado, Solara, the luxury Lexus line, and full-sized pickup trucks. It has huge financial strength, with large capitalizations, high technologies and high cost cutting strategies.
Strengths • Vast size/resources- Global brand and is one of the largest car manufacturers in the world along with General Motors. • 60% of products sold at U.S. are made in U.S. • Diverse brand- Brand portfolio, especially its well recognized brand “Lexus” • Japan’s largest car manufacturer- A highly recognized company within a profitable market. • Production engineering innovation- One of the most hi-tech product engineering divisions. (Global Body Line) could make different models on a single line
Weaknesses • Early attempts at the youth market, minivans and big pickup trucks all disappointed. • Remains dependent on the U.S. business for some 70% of earnings • Limited to Japanese designed cars
• Operational weakness- High level of capital expenditures in new product lines and opening of new production facilities.
Opportunities • Forecast future era of full-size trucks and luxury, environmental and youth cars • Cost reduction strategies- This will allow Toyota to become more competitive and more flexible for future shifts in the market.
• Toyota is very active in new technologies, proven with its hybrid vehicle, the Prius (eco-friendly gasoline-electric car)
Threats • Strong competition-These are the same as General Motors. Toyota faces a large number of competitors. • GM quality upswing, finishing $4.3 billion revamp of Cadillac
Toyota’s Top Sellers |Europe |America |Brazil |Argentina |Africa |India |China |Japan | | |Yaris |High European Look | | |Economic Troubles | | |Low |High Known as the Vitz | | |Solara | | | | | | | | | | |Corolla Sedan | | |High | |High | | | | | |Scion xB | | | | | | | | | | |Lexus |Low |High Luxury Leader | | | | | | | | |Avensis |High | | | | | | | | | |Prado SUV | | | | |High | | | | | |Qualls SUV | | | | | |High | | | | |Prius | |High
Eco-Friendly gasoline Electric Car | | | | | | | | |Camry | |High Top Selling | | | | | | | | | STATEMENT OF THE PROBLEM
1. Primary Problem
- Toyota poor decision-making due to cultural insularity.
2. Secondary Problem
- Poor styles of their product - led to miss Opportunities
AREAS OF CONSIDERATION
• Toyota’s History and Background which is dominated by Toyoda family
(Toyota is famously insular, being headquartered in southern Aiichi prefecture and still dominated by the Toyoda family. That insularity leads to missteps: In mid-June, Toyota had to delete part of a U.S. television commercial for its new Scion brand that showed a character consuming peyote and then hallucinating. And in China, the company used the Chinese lion, one of the Middle Kingdom's most cherished icons, in ads for the sport utility vehicle Prado. The Chinese, mindful of Japan's wartime occupation, were outraged. The ad was withdrawn.)
a.) Make Adjustments that would introduce to Japan management new insights regarding foreign consumers.
- The company can still centralize decision-making in Japan - It would open the minds of management not only to Japanese consumers. - It will make Toyota open for foreign opportunities
- Cultural Problems in different nation could be avoided
-Add up to expense - Long Term Process
b.) Hire foreign employees
- Could give a lot of insights to avoid cultural insularity - It would open the minds of the management not only to Japanese consumers. - It will make the management open for foreign opportunities - Decision-making balance between headquarters and local operating units
Disadvantages: - Allowing decision making to devolve to foreign managements like in U.S and Europe - New foreign employees need orientation and training about Toyota - Foreign and Japanese management need adjustment because of their different culture - Culture shock
- much expensive
Toyota Motor Corporation had been cutting expense from each step on their production. They had CCC21 that made them cut cost for being able to see glitches and having solutions in production. They also had employees that made time production faster by shifting one stage to the other for easy assembly of cars. They also had cut cost on their shipping by having counterparts of raw materials in the area where bulk of certain product are sold. They also had Global Body line in which it let them save 75% of the cost and also made it possible for them to produce multiple models in a single line.
Toyota does not only cut their cost but they also made Circle L in which they double and triple-check anything that customers complain about from small to big details. Beside these cutting of cost and evolving of technologies, Toyota missed some opportunities, such as when product planners at headquarters in Japan resisted calls from their U.S. colleagues to build an eight-cylinder pickup truck.
Toyota was able to cut cost and redesign process that chop out billions of expense that made margins strong and free up cash to develop new models and technologies. However, consumers in different areas have some level of styles like in Europe which luckily, they see Yaris of having a “European” Look and Toyota’s product planners. Many Toyotas were designed with Japanese consumers in mind and then exported. Thus, Toyota was unable to capture the taste of some consumers in different areas.
After comparing the possible courses of action in order to help in solving the problem of Toyota regarding decision-making affected by cultural insularity and considering the AOC we recommend that they should apply the 1st course of action which is making Adjustments that would introduce to Japan management new insights regarding foreign consumers.