1. “Strategic management can be defined as the art and science of formulating, implementing and evaluating cross-functional decisions that enable an organization to achieve its objectives.” David, F.R. (2009). 2. “An integrative management field that combines analysis, formulation, and implementation in the quest for competitive advantage.” Rothaermel, F. T. (2012) 3. “Strategic management includes understanding the strategic position of an organisation, making strategic choices for the future and managing strategy in action.” Johnson, G, Scholes, K. Whittington, R. (2008)
4. “Strategic management is defined as the process by which managers of the firm analyze the internal and external environments for the purpose of formulating strategies and allocating resources to develop a competitive advantage in an industry that allows for the successful achievement of organizational goals.” Cox, M. Z., Daspit, J., McLaughlin, E. and Jones III, R.J. (2012)
Various definitions are used to describe the subject, but the combination of all 4 definitions used previously gives us a much clearer view of what the subject is: Strategic management is a continuous process of strategic analysis, strategy creation, implementation and monitoring, used by organizations with the purpose to achieve and maintain a competitive advantage.
The difference between strategic management and strategic Planning: Both strategic management and strategic planning terms mean the same! The difference is that the latter one is more used in the business world while the former is used in the academic environment. (http://www.strategicmanagementinsight.com/)
A visual depiction of the strategic management processThe strategic management process never ends; the process restarts after a plan ends. The company takes the results and re-evaluates its position. Assessment involves performing a situation analysis, self-evaluation, and competitor analysis—both internal and external, and both micro-environmental and macro-environmental. Short- and long-term objectives and completion dates are set. Implementation plans detail how the objectives are to be achieved. (www.boundless.com) TOYOTA Overview
Company Name| Toyota Motor Corporation|President and RepresentativeDirector| Akio Toyoda|Head Office| 1 Toyota-Cho, Toyota City, Aichi Prefecture 471-8571, Japan Phone: (0565) 28-2121|Tokyo Head Office| 1-4-18 Koraku, Bunkyo-ku, Tokyo 112-8701, Japan Phone: (03) 3817-7111|Nagoya Office| 4-7-1 Meieki, Nakamura-ku, Nagoya City, Aichi Prefecture 450-8711, Japan Phone: (052) 552-2111|Date founded| August 28, 1937| Capital| 397.05 billion yen (as of March 31, 2012)|Fiscal Year| From April 1 to March 31 of the following year| Main Business Activities| Motor Vehicle Production and Sales| Number of employees (consolidated)| 325,905 (as of March 31, 2012)| Number of employees
(non-consolidated)| 69,148 (as of March 31, 2012)|Note: Information current as of June 2012.
TOYOTA MISSION”Toyota will lead the way to the future of mobility, enriching lives around the world with the safest and most responsible ways of moving people.Through our commitment to quality, constant innovation and respect for the planet, we aim to exceed expectations and be rewarded with a smile. We will meet our challenging goals by engaging the talent and passion of people, who believe there is always a better way.”
Toyota VisionToyota aims to achieve long-term, stable growth in harmony with the environment, the global economy, the local communities it serve, and its stakeholders.
Toyota Visionary ManagementThe image of a tree has been chosen to symbolize the Toyota Global Vision -its “roots to fruits”.The roots of the tree are the shared values that have steered Toyota from the beginning and that have underlain our monozukuri1. They are expressed in the Toyoda Precepts, in the Guiding Principles at Toyota and in the Toyota Way, which form the foundation of our business.
The “fruit” that Toyota provides for customers, is creating “always better cars” and enriching lives in communities. Through these efforts, we aim to become an admired and trusted company in the various regions where we conduct businesses. The “trunk” of the tree, the underlying support for creating Toyota’s products that earn smiles from our customers, is the stable base of business. Toyota’s business activities are based on the concept: “ensuring sustainable growth by fostering the virtuous circle”
Always better cars ➞ Enriching lives of communities ➞ Stable base of business.
Toyota Core values are based on five pillars* Respect for People.* Safe and friendly environment for all.* Best work practices based on Ethics and Integrity.* Teamwork.* Honesty is the best policy
Corporate Social Responsibility AssessmentAs Toyota strives for continuous improvement, Toyota Motor Europe (TME) has developed an internal assessment process to ensure Toyota behavior towards stakeholders is consistent with the Corporate Social Responsibility (CSR) Policy. TMEs annual CSR assessment is conducted with subsidiary companies including National Marketing and Sales Companies (NMSCs) and European Manufacturing Companies (EMCs). The results of the CSR assessment enable us to: * Identify key TME mid-term issues
* Prioritise improvement opportunities* Act upon these opportunities and show progress over time
SWOT analysis of ToyotaSWOT analysis “is a framework that allows managers to synthesize insights obtained from an internal analysis of the company’s strengths and weaknesses with those from an analysis of external opportunities and threats.” Rothaermel, F. T. (2012)
Name| Toyota Motor Corporation|Industries served| Automotive|Geographic areas served| Worldwide|Headquarters| Japan|Revenue| ¥18.583 trillion (2012)|Profit| ¥283.55 billion (2012)|Main Competitors| Bayerische Motoren Werke AG, Chrysler Group LLC, Daimler AG, Ford Motor Co., General Motors Company, Honda Motor Company, Nissan Motor, Tata Motors, Ltd., Volkswagen AG and many other automotive companies.|
This is a Toyota Motor Corporation SWOT analysis for 2013.Strengths| Weaknesses|1. Innovative culture2. Brand reputation valued at $30 billion3. Industry leader in manufacturing and production4. Strong brand portfolio5. The leader in “green” cars development| 1. Large recalls2. Weak presence in the emerging markets| Opportunities| Threats|
1. Positive attitude towards “green” vehicles2. Increasing fuel prices3. Changing customer needs4. Growth through acquisitions| 1. Fluctuating fuel prices2. New emission standards3. Rising raw material prices4. Intense competition5. Natural disasters6. Appreciating yen exchange rate|
Strengths1. Innovative culture. Toyota is one of the most innovative auto companies and has a strong culture that is focused on constant innovation. The company was the first to introduce Kaizen, Kanban and Total quality Management systems widely in their organization. The company was the first to mass-produce and sell hybrid vehicles too. 2. Brand reputation valued at $30 billion. Toyota’s brand is the most valued automotive brand in the world. The company is known for its environmentally friendly, safe and durable cars that are sold in more than 170 countries.
3. Industry leader in manufacturing and production. Toyota was the first company to introduce lean manufacturing and total quality management practices in manufacturing process. For some time, the company was the only practitioner of these practices and had the lowest manufacturing and production costs worldwide. Although many manufacturers were able to replicate Toyota’s lean manufacturing system, the company is still one of the most profitable manufacturers in the world.
4. Strong brand portfolio. Toyota currently sells about 70 different models of cars under its namesake brand. This does not only increase brands awareness but also satisfies nearly every consumer group needs. Toyota’s flagship models are Corolla and Prius. 5. The leader in “green” cars development. Toyota understands that environmental friendly cars are the necessity nowadays. Consumers are more selective in terms of CO2 emissions and fuel-efficiency of the cars they buy and Toyota’s early move towards selling hybrid and efficient cars is the strength few competitors can match.
Weaknesses1. Large-scale recalls. Toyota had quite a few large-scale vehicle recalls over the past few years. The company recalled 9 million vehicles in 2009-2010 and 7.43 million cars in 2012. Such recalls does not only hurt the firm financially but significantly damages firm’s brand. 2. Weak presence in the emerging markets. Toyota’s main markets are Japan, US and Europe, while such emerging economies as China or India make only a small percentage of all Toyota’s sales. Due to poor presence in the largest automobile market (China), Toyota will find it hard to compete with GM that has huge market share there.
Opportunities1. Positive attitude towards “green” vehicles. Today consumers are more aware of the negative effects (air pollution) caused by cars. Large quantities of CO2 emissions intensify greenhouse effect and negatively impact the life on earth. Thus, consumers are more likely to buy new hybrid and electric cars that emit less CO2. 2. Increasing fuel prices. Increasing fuel prices open up large markets for Toyota’s hybrid cars as consumers shift towards efficient cars.
3. Changing customer needs. By introducing new car models, Toyota could satisfy varying consumers’ tastes and needs and access wider customer group. 4. Growth through acquisitions. Toyota has successfully acquired other car companies in the past and should continue doing so to grow, gain new skills, assets and access to new markets.
Threats1. Decreasing fuel prices. There is high possibility that future fuel prices will drop, as more shale gas will be extracted. For this reason, fuel-efficient hybrid and electric cars will become less attractive to cost conscious consumers that are the main customer group for Toyota’s Prius model. 2. New emission standards. New emission standards introduced by the government would require more investments into producing cleaner engines. More investments mean less profit for Toyota. 3. Rising raw material prices. Rising raw material prices are especially important to automobiles manufacturers. Higher prices mean higher costs and less profits for Toyota as the raw metals are the main components in car manufacturing. 4. Intense competition.
Toyota faces more intense competition from other auto manufacturers more than ever. Volkswagen group is strongly growing and GM steps up after its reorganization to become more competitive than ever. 5. Natural disasters. Toyota’s has manufacturing facilities in Japan, Thailand, China and Indonesia. These countries, including others, are often subject to natural disasters that disrupt manufacturing in the facilities and decrease Toyota’s production volumes. 5. Appreciating yen exchange rate. Most of Toyota’s revenue comes from foreign countries.
The profits earned abroad must be sent back to Japan and converted to yen. Appreciating yen exchange rate against other currencies means lower profits for Toyota. Toyota Corporate Strategy
Toyota’s corporate strategy is to enhance its corporate value by maintaining its position as a market leader in the automotive industry, continuing its growth through global operations and through products reflecting Toyota’s advanced technology that target the local demand in each market. Toyota strives to further enhance its technology, supply capability and marketing. Corporate level strategies
I. DiversificationII. IntegrationIII. Joint Venture and Divestment. Rohan Negi 2013
Toyota Environmental StrategyVISION & ACTIONRespect for the Planet. Simply stated, this is Toyota’s commitment to the environment. We challenge ourselves to minimize environmental impacts at all stages of the vehicle life cycle: in research and development, manufacturing, logistics and sales. We look at our own operations as well as those of key business partners—suppliers and dealerships. And, we partner with our communities to support environmental programs and initiatives.
Our success comes only by engaging the talent and passion of our employees, who believe there is always a better way. This conviction is rooted in the two pillars of the Toyota Way: Continuous Improvement: kaizen (change for the better) with standardized work, an evolutionary process that eliminates inefficiencies; and Respect for People: valuing and empowering the individual and the team, essential to making kaizen possible.