Executive Summary: This report provides a detailed company description of the giant automaker Toyota Motor Corporation (TMC), along with an in depth analysis and evaluation of their logistics, marketing, human resource management and international strategy. What is currently being questioned is the allowance of TMC to cross our borders and begin operations within our country.
After reviewing all evidence found for and against allowing TMC to enter our nation, it was made clear that TMC provides many opportunities for economic growth and ultimately a higher standard of living. It is strongly recommended that Toyota Motor Company and all their business and operation activities be permitted and granted access to our country.
Company Description: Toyota Motor Corporation (TMC) is a multinational automaker based out of Japan. Founded in 1937 by Kiichiro Toyoda, TMC has become the world largest automobile company reclaiming its title at the end of 2012, surpassing once again General Motors. Selling 9.75 million vehicles worldwide and obtaining revenues of $178.4 billion in the company experienced an net revenue increase of 26% in 2012 compared to the previous fiscal year. It is expected that in 2013, revenues will continue to increase to an impressive $226.5 billion (Mississippi Business Journal 2013).
TMC headquarters are located at 1 Toyota-Cho, Toyota City, Aichi Prefecture 471-8571, Japan and employs over 325,000 (consolidated) worldwide (Toyota Motor Corporation Global). The companies main ventures are the production and sales of motor vehicles with its main brands including Toyota, Lexus and recently added, Scion. Spanning every continent, Toyota undergo operations worldwide totaling 170 countries.
At the turn of the 21st century TMC obtained the title as the largest automaker in the world. In years following, including the 2008 financial crisis, it continued to battle for this top spot with its North American based rivals GM but in recent years was able to stay strong and take a big leap ahead (The Wall Street Journal) 2013. It has also sparked global attention for being the first to mass produce hybrid (gas-electric) vehicles such as their “Prius” model, selling over 1.7 million (Auto123 2009), and truly pushing change in the automotive industry to become a moreenvironmentally friendly and eco-friendly industry worldwide.
Company International Strategy: Toyota’s success in both the Japanese and international auto market is mainly due to its core values and constant desire to make a higher quality product. The company base their attitude on a single word: “kaizen”, which means “continuous improvement”. This attitude relates and is based from Japanese ideologies that no product is so good that there is no room for improvement. ”Kaizen” is an integrative strategy, which means a cross-functional strategy that appoints the gradual improvement, management and continuous business activities and the parameters of quality, productivity and competitiveness, with direct involvement of all staff.
The need to compete with international competitors like GM and Ford forced Toyota to look for greater cost economies. The desired cost economics was achieved at the end of the 20th century when TMC strategically chose to reduce its 20 vehicle platforms down to 10. Building a wide range of models from few platforms allowed the company to dramatically allow increase the supply and availability along with the consistently of parts, supplies and finished products(Hara 2004).
Regarding the global problem of pollutant emissions, Toyota spends over $8 billion annually in research and development (USA Today 2009). Exploring simultaneously a variety of solutions for designing less polluting vehicles, Toyota has committed to develop hybrid systems as a basic factor in manufacturing clean technology cars, combining different sources of power.
It has made significant progress in designing engines that use alternative energy sources. One of the most promising approach is combining two different sources of energy in a single system with the potential to use both. This solution is known as hybrid technology and is the most promising way to achieve Toyota’s green machine.
Company Marketing Strategy: Japanese companies tend to have a different strategy when it comes to marketing, selling, and achieving. From the beginning to the near finished products consisting of many common parts, Toyota add local product features that will meet the locals desires and needs. This was made possible by the implementation of over 65 factories located in all global regions allowing easy and simple distribution to the surrounding areas.
This allows TMC to realize the many benefits of global manufacturing while reacting well to pressures for local responsiveness by being able to differentiate its product among regional markets. It is difficult to say who exactly are TMC’s most important markets considering the company fully commits to each region. As mentioned previously their small platform strategy causes an interconnection of international markets making one just as important and connected to the other.
Japanese companies waste less time, money, and space on marketing. People will not see many advertisements for Toyota on the television among the many vehicle advertisements marketed daily. The people in Toyota seem to worry more about the product then the marketing of that product. They believe that quality speaks for itself.
This also in turn allows Toyota save a lot of money that would have been spent on advertising and utilizes that very money to improve the quality of their products. Having a marketing department that heavily promotes a product is not a bad strategy either but it seems like Toyota is more confident than many out there because of which it does not feel the need to promote. In addition, confidence is always attractive. It always draws attention and usually proves to be worth while.
Toyota considers the buyer as the master while the company itself plays the role of the slave. It seems like they yearn to provide the client, customer, or buyer with the best possible service and products. In addition, everybody likes being the master. Therefore, it is natural for people to get attracted by this company and have a rather enjoyable experience purchasing one of their products.
Company’s Logistics Approach: Toyota’s approach to logistics has been a model that underwent many years of development to become what it is today. Taking a humble approach to manufacturing methods and learning from industries other than the auto industry, Toyota’s logistic model, known as the Toyota Production System (TMS), has become a homework assignment for all other automakers around the globe.
To properly implement the TMS factories and plants for all operations have been implemented worldwide, consisting of over 65 factories spanning every continent. Some examples of nations with Toyota factories and plants are United States, Canada, Brazil, China, Japan, Indonesia, Thailand, India, Turkey, South Africa and the United Kingdom (Toyota Motor Corporation 2013).
Toyota assembly plants get just-in-time (JIT) delivery of parts multiple times per day to plants within the nearby region or country (Toyota Motor Corporation 2013). One part of the solution was to use cross-docking (sometimes called “break-bulk” facilities). In this case, the cross-dock takes in deliveries of supplier parts a few times a day and reconfigure them into different mixes of products so they are shipped as mixed truckloads of the right number of parts for one to two hours of production.
The cross-dock allows for efficient pickup of parts from suppliers and for JIT delivery to the assembly plant. Cross-docks are quite common in many industries, for example, in the food industry, and normally cross-docking is subcontracted out as a commodity. What is distinct about Toyota’s cross-dock is the care with which Toyota’s partner, Transfreight, manages it and the care with which Toyota took much time and effort to teach that partner to use the TPS (Inbound Logistics 2008). From Toyota’s perspective, the cross-dock is an extension of the assembly line, an evolution of the assembly-line created by Henry Ford.
Company Human Resource Management Approach: Toyota’s HRM model, which is considered to have been mastered by 1994, strongly believes that human resource practices of this company can serve as a model, particularly for all manufacturing and production oriented companies worldwide. Toyota’s HRM framework broadly comprises of four goals which is described below (in no particular order) (Human Resource Executive Online 2008).
Their first goal is the goal of integration throughout the corporation. The integration of employees at individual and collective level with the entire corporation is seen as the primary goal of Toyota HRM strategy. This goal has been achieved through extensive use of teams that are subordinate to organizational goals. Welfare of employees also received wide attention as a part of this goal.
Secondly they focus on the goal of flexibility and adaptability. Team authority in place of single individual holding all the powers had paved way for realizing flexibility in the organization. These teams are task-based and can be dismantled or restructured, depending upon the situation. The adaptability trait is institutionalized through the approach of multi-skilling and job rotations, allowing all employs to become more productive at more than one task.
The third goal they focus on is The goal of commitment. In order to achieve this goal, a two-pronged strategy was followed. Firstly, Toyota preferred to implement their plants and factories in less urban and more rural areas. They believe that people who are not contaminated by industrial culture and influences tend to retain with them a kind of feudal value of loyalty, which can be converted into organizational commitment.
Secondly, measures such as suggestion schemes, quality circles and employee involvement methods are used to gain commitment. Lastly, the goal of quality. Self, peer and teams surveillance techniques are used to ensure quality of products. Toyota also believes that the combination of all 3 goals previously stated will reinforce the realization of this last goal.
Summary: Toyota contains many strengths and few weaknesses when considering the allowance of TMC to begin operations within our country. Weaknesses such as a net loss in 2009 and a recall of 8 million vehicles globally that took place in 2008 through 2009 can be strongly shadowed by the strengths such as an increase in revenues of over 26% from the last fiscal year and reclaiming its position as the largest automaker in the world.
Toyota’s international strategy and logistics approach based on the Toyota Production System offer the possibility that the company would invest many regions of our country at a large scale which could offer employment opportunities in a large scale, improve infrastructure and technology. As a subsequent effect, this could help improve our nations standard of living and economics.
Since they do not entirely focus on marketing, like many other automakers do, it should not pose any future problems with our nations current implementation of laws and guidelines within the broadcasting/telecommunication industry. Finally, after analyzing the company’s human resource management model, it seems that Toyota would offer a healthy, safe and structured workplace for future employees. Their model would also improve the productivity and knowledge of our citizens which as mentioned before could help this nation economically.
Conclusion: After extensively analyzing the Toyota Motor Corporation, along with their strengths, weaknesses and what they could offer our nation, I would strongly recommend that they are granted access to cross our borders and begin operations. This decision would offer many short-term and long-term benefits such as employment opportunities and an improved standard of living.