Toyota Organizational Assessment Company Overview

Toyota Organizational Assessment

Company Overview

As a Japanese-based company Toyota is a major international car retailer and automotive specialist. The company offers a wide variety of vehicles, from small sedans to trucks. It also has a line of luxury vehicles under the Land Rover and Lexus brand names. For generations the company has been competing well against American-based companies within the same industry, and as the consumer interest moves to cleaner vehicles with more sustainable attributes, the company only continues to grow and offer more eco-friendly vehicles for consumers all over the world.

Toyota was formed in Japan by Kiichiro Toyoda who had the spirit of invention and innovation within his blood. Son of another famous inventor, Sakichi Toyoda, Kiichrio worked laboriously for years until "he finally successfully completed the AI prototype vehicle in 1935," (Toyota "History of Toyota" 2009). With the success of this prototype, the global corporation Toyota was born.

From this initial success, Toyoda jumped on the opportunity to expand and develop his small business and set the foundations for what it is pictured as today. He understood the importance of keeping up with the latest technologies and so established the Toyoda Physical and Chemical Research Institute in 1940. This along with his developing plants all over Japan helped establish Toyoda as a major force in the early Asian automotive industry. A few years later in 1950, Toyoda re-established his corporation as the Toyota Auto Body Corporation, which was later re-established as the Toyota Motor Sales Co. which is still in place today.

That same year Toyota came out with several models which still make up much of their sales gross today. In 1950 Toyota launched its version of the jeep, now known as the Land Cruiser. The 1950's saw a growth in both product diversity and capability within the corporation. Along with introducing several new products which later would help establish them as a popular global company, they also continued a strong strategy of growth and establishing and acquiring new plants all over Japan.

The company was not limited to Japan for very long. By 1957, Toyota had begun exporting the first passenger cars to the United States, a move which would later increase their profits immensely. The company continued it international growth throughout the 1960's with the opening of new sister corporations in nations such as Thailand, Toyota Motor Thailand Co. officially opened its doors in 1962. By 1969, Toyota reached a monumental number of exports with one million cars sold to external nations.

The future generations also held great growth and development of the corporation. By the 1970's Toyota was a major powerhouse within the automotive industry. It continued its trends of moving into other nations and reached a grand total of five million vehicles exported in 1975. The first American branch of the company, the Toyota Technical Center U.S.A., INC was established in 1977. The company reached ten million vehicles exported by 1979, a number which doubled the five million exports reported only four years earlier. The modern Camry saw its birth in the year 1980 and the number of exports continued to rapidly climb, with twenty million exports reached in 1985. In 1988, the company opened a plant in the United States, the Toyota Motor Manufacturing Kentucky, INC in the Midwest. Further development continued with the arrival of Lexus model dealerships in the United States around 1989. This was followed by a plant opening in the United Kingdom in 1992.

The company's modern day history has solidified it as a major international power in terms of the automotive industry. By 1994, Toyota had reached over one million exported vehicles and was still growing. In 1998, Toyota opened up several more manufacturing plants within the borders of the United States including locations in Indiana and West Virginia. Domestic production soared along with importing Toyota and Lexus cars into the United States. By 1999 100 million Toyota vehicles had been domestically manufactured within the United States and annual overseas sales topped over three million cars a year. The new millennium saw a much more environmentally friendly production practices with more sales of hybrid Prius models within the U.S., reaching over 100,000 unites by 2002. These hybrid models which consume much less gas became more and more popular as the world's citizens became increasingly aware of the environmental damage car emissions were causing. By 2006, Toyota had sold over 600,000 Pius worldwide, solidifying their role as a major rounder of more sustainable vehicles. Today, Toyota still proves to dominate the global market, especially as they move towards more green branding of their company image. Only the future can tell what else the company has in store for the world.

Industry Analysis

Toyota is witnessing a strange new marketplace in today's world. As a leader of hybrid and more sustainable vehicles, they're sales have continued to dominate over heavier and more environmentally harmful American alternatives. Toyota's Corolla came to dominate sedan sales. In the midst of the automotive crisis within American industries, there are great opportunities and also looming threats for the Japan-based Toyota. The company already has a strong line of eco-friendly products in place, which gives them the green advantage. Also the weak position of American car companies gives Toyota a strong advantage over the industry; "Imported vehicles -- coming now especially from Japan, Germany, and South Korea -- accounted for 23.4% of the vehicles sold in the United States," in 2007 (Uchitelle 2007). This is an 11% jump from just a decade before. However, the company must tread lightly as to not suffer the same fate as major American competitors such as General Motors and Ford.

Current Organizational Mission

Toyota's organizational mission is to bring affordable quality cars and premier customer service to the general public. Its' mission statement reads "To attract and attain customers with high-valued products and services and the most satisfying ownership experience," (Toyota "What are Toyota's Mission and Vision Statements 2009). The company aims to keep reasonably priced vehicles efficient, clean, and luxurious. Toyota communicates this mission to the public based around advertising campaigns centered on the sustainability and affordability. One of its major current organizational goals is to dominate the automotive industry in the United States and remain strong while its competitors crumble under the weight of the domestic financial crisis.

SWOT Analysis

Strengths

Weaknesses

O

p p o r t u n I t e s

1. Ability to capitilize on the "Big Three's" financial trouble to dominate the American Market.

2. Global presence and market knowledge. 3. Capibility to produce large numbers of affordable and eco-friendly vehicles. 4. Capitilizing on the already strong Toyota brand name.

5. Compeitive pricing allows for Toyota to compete in all markets which it targets. 6. Toyota's products boost fuel-effiency, allowing for consumers to save money both in upfront vehicle sales costs and long-term gas costs. 7. Diversification allows Toyota to dominate a multitude of markets including the automotive, aerospace, and financial industries. 8. Toyota is known for liability, therefore strengthening its reputation. 9. Multifaceted product list allows for complete functionality. Along with providing transportation the company also provides functional products like fork lift models and aerospace development.

10. Toyota's philanthropic reputation reinforces the strength and reputation of the brand.

11. Price reliability ensure Toyota's customers that they will not pay a one high rate one day and see the car on sale for much cheaper the next. They provide a stability which is comforting within an unstable financial environment.

12. "Toyota Teen Driver Program" effectively identified and appeals to parents wanting their children to gain a proper education regarding driving and motor-vehicle safety.

13. Reputation built on brand name rather than sole individual product.

14. High level of customer satisfaction leads to a large percentage of return clientele. Keeping touch wit previous clients with service reminders, birth day cards, and etc. helps keep the brand image fresh within the customer's mind.

1. Ability to capitilize on the "Big Three's" financial trouble to dominate the American Market. 2. Global presence and market knowledge.

3. Capibility to produce large numbers of affordable and eco-friendly vehicles. 4. Capitilizing on the already strong Toyota brand name.

5. Compeitive pricing allows for Toyota to compete in all markets which it targets. 6. Toyota's products boost fuel-effiency, allowing for consumers to save money both in upfront vehicle sales costs and long-term gas costs. 7. Diversification allows Toyota to dominate a multitude of markets including the automotive, aerospace, and financial industries. 8. Toyota is known for liability, therefore strengthening its reputation. 9. Multifaceted product list allows for complete functionality. Along with providing transportation the company also provides functional products like fork lift models and aerospace development.

10. As a Japanese brand, it will always have to go over and above to be fully domestically respected. Yet the current philanthropic nature of Toyota helps build its reputation.

11. Potential changes in import tariffs might force prices up despite the company's commitment to affordability. Therefore, the company must prepare in case it would have to readjust pricing strategies.

12. It has not been implemented in a wide enough spectrum to really gain the attention of parents on a national level.

13. Marketing towards one single brand image sometimes limits a company's capability to market its diversified product line.

14. Targeting previous customers through follow up ay waster valuable resources.

T

h r e a t s

1. Utilize the global Toyota presence to keep financial budgets and cash flows under control. 2. If one market collapses, it might threaten others, thus Toyota must balance all its market locations equally.

3. Upcoming competition with other major names threatens Toyota's dominance in sustainable technologies. The company needs to continue investing in new innovative technologies to maintain dominance.

4. Domestic brands smearing Toyota with the idea that buying foreign takes away from American jobs, the company should continue to open plants in different nations as to provide jobs in the countries which they sell in.

5. Cutting prices too low may create a price war with major competitors of both foreign and domestic vehicle producers.

6. Ever changing technologies threaten to outdate costly investments in technology development at a more rapid rate. Therefore, Toyota must keep up an innovative and up-to-date research department.

7. Competitors will always play out strategies of diversification as well, forcing Toyota to stay innovative in what it invests and lends its name to.

8. Other companies may target Toyota to attempt to ruin the reputation of reliability through advertising campaigns and other promotional efforts.

9. By keeping with true functionality which leads to scientific breakthroughs, Toyota can avoid the threat of having to compete in other markets such as the motorcycle or water entertainment units.

10. American complaints about a foreign company stealing American jobs loose the weight of their argument if philanthropic efforts are conducted domestically. Rather than conducting charity abroad, Toyota should domestically show its charitable nature

11. Static price points also leave the company to the mercy of extreme marketing campaigns on behalf of competitors such as the current Saturn run payment for three months on new vehicles is the borrower looses his or her job.

12. The teen driving program has only been implemented in one area, thus there may not be the capability to deal with it on a national demand level.

13. Companies may react by attacking the larger brand name, rather than a specific competing product. This then places the entire image of Toyota in danger.

14. Maintaining customer contact can help fend off other competing car companies from stealing previous clients from the Toyota brand.

1. Keep operation costs as low as possible and minimize spending in such rough times. 2. Capitalize on such a large reach rather than drown in it. Toyota needs to keep expanding to take over new markets as they emerge. 3. Launch strong advertising campaigns speaking to different demographics directly regarding the importance of each person taking individual steps to help the environment.

4. Along with providing jobs, Toyota can also give back to local communities in charity for to help boost the domestic reputation of the brand. 5. Dealing with importing in mass numbers would also help reduce the import costs and keep them to a minimum.

6. Work with companies promoting alternative sources of energy as to help fund development of greener technologies and loosen the hold gas companies have on the car industry.

7. Staying innovative forces Toyota to invest largely in research and development, potentially limiting the budge of other areas. However proper handling of research and development will potential prove to have enormous success.

8. If something were to happen to threaten that liability, such as a financial scare seen in the American competitors, this fractures the reputation built on liability. Therefore, keeping the liability low on the customer end will prove risky at times but beneficial to the brand in the end.

9. Other competitors may overlap Toyota in the domination of other functional markets, such as Honda within the motorcycle market.

10. Yet, Toyota holds dominance over a wide range of markets, forcing the company to spread out the funds and resources allocated to philanthropic purposes.

11. Working with domestic agencies to help encourage the importation of more eco-friendly vehicles may prove an efficient strategy in the event of a tariff being raised on importing vehicles into the United States.

12. Expanding the teen driving program will help boost trust of the Toyota brand within the demographic of parents, who not only buy for themselves but also for their children.

13. By diversifying marketing strategies under an umbrella strategy, Toyota can keep such a diverse target consumer base.

14. Returning customers are some of the moat reliable sources of income if they remain loyal. Therefore allocating extra resources to maintain customer contact is not a waste.

Marketing Mix

Overview

The marketing mix of any company proves an essential element to full scale success. It helps formulate effective plans for attractive new customers and maintaining previous ones. Within the context of any given marketing mix is what the industry calls the four P's (International Center for Management a Business Administration Inc. 2007). These include price, place, promotion and public relation. The ultimate goal of an effective marketing mix "is to make decisions that center the four P's on the customer in target market to order to create perceived value and generate a positive response," (International Center for Management a Business Administration Inc. 2007). The efficiency of implementing the different aspects of the marketing mix could have serious consequences on the future of Toyota.

Product

The major product Toyota deals with is automobiles. The company also delves in other types of servicing and additional products to supplement their vehicles, but these activities take back seat to the top profit maker -- automobile production. Toyota specializes in providing a variety of vehicle choices to consumers, from SUVs to Prius. Along with normal consumer cars, the company also controls luxury brands such as Land Rover and Lexus, which also bring in enormous profits. However, the major products highlighted recently in the midst of both a financial and environmental crisis have been sustainable and affordable sedans and coops. The effort goes to save the consumer money upfront with the initial purchase, along with in the log run in the savings produced by Toyota model's gas efficiency. In comparison to domestic made cars, Toyota's models provide consumers with a fuel efficient and affordable mode of transportation. Models like the Prius and Yaris provide consumers environmentally friendly transportation at a reasonable price, thus satisfying the Toyota company mission.

Price

The company strives to maintain affordable prices while also maintaining the reputation of their luxury brands in order to appeal to a larger consumer base. The cost effective Yaris, Camry, and Prius are affordable in comparison to American competing models. However, import costs do raise the price more than what the company might like. For example, the Prius, a "fuel-efficient, ecologically friendly," is made strictly in Japan (Uchitelle 2007). The cist for brand new off the lot Toyotas proves affordable to many Anericans. For example, a 2010 Camry ranges around $26,000. For a brand new vehicle that promises later savings thanks to stellar gas mileage, that price is not terrible. Older and used Toyota's go even lower with the same dealership promise and functionality. In the state of the economy as bad as it is, Toyota needs to keep its promise of affordability in order to dominate the market.

Place

Thanks to the early move to go global, Toyota model vehicles can be purchased just about any where. As the world's largest car maker, the company has locations in more than 140 countries. The company also has plants located in Japan, Australia, India, South Africa, Turkey, Colombia, the United Kingdom, Indonesia, Poland, France, Portugal, Argentina, Mexico, and several more including here in the United States. Toyota dealerships offer both brand new models as well as used vehicles to local consumers. Such availability of Toyota products is key to maintaining its dominance as a major name in the automotive industry world wide.

Promotion

Promotion is key to allocating future health and growth. Without promotional activity, Toyota would loose much of its methods for gaining new customer business. As with any company, "In the context of the marketing mix, promotion represents the various aspects of marketing communication, that is, the communication of information about the product with the goal of generating a positive customer response," (International Center for Management a Business Administration Inc. 2007). In the midst of a changing world, both literally and from a marketing perspective, there is a large push towards green branding. Green branding is the idea that there is a large open market which demands an eco-friendly product, "As consumers rally to the climate change challenge, companies have rapidly learned that being green -- and being seen to be green-makes good business sense," (Bowman 2008). Toyota can and has capitalized on their eco-friendly products within their promotional campaigns. Billboard and print ads focus on the beauty of nature. Television ads represent a connectedness between the modern individual on the go and the mutual respect for the external world that surrounds all of us. Green Branding is an intelligent strategy in that it allows the manufacturer to reasonably bump up costs in order to provide the client what is truly needed and desired, "They want to live a greener life, and their spending patterns reflect their desire to see the brands they use go green as well," (Bowman 2008). It's crucial that Toyota continues towards this green brand trend and present the consumer market with more fuel-efficient and sustainable method of transportation.

Public Relations

A major element of promotions which Toyota will have to utilize efficiently in a change of marketing strategy is the power of public relations. The field of public relations is much different than that of paid advertising. Rather, costs are allocated indirectly to other events and charities as a method to drive attention towards Toyota as a brand. Efficient public relations can solidify the messages first presented in other promotional advertising as well as create a charitable and reliable reputation within the industry and larger public knowledge. It presents of the Toyota image as a reputable and responsible company. One act currently under way is a program in Los Angeles, CA is the development of an after-school teen driving program which provides essential lessons in vehicle operation and safety. This program not only provides driver safety but it also "identified a relevant, authentic need for an important audience segment (parents) and provided a real solution that doesn't scream 'and buy a Toyota too,'" (Peal 2009). This is an example of an effective Public Relations strategy that can help bring awareness to the brand without throwing an advertisement blatantly in the targeted audience's face. The events in local Los Angeles schools also helped highlight the capabilities of the cars, "Everyone sees how great the cars perform in challenging situations, reinforcing the positioning of the company as a safety-first organization," (Pearl 2009). Toyota does benefit from the publicity of its charitable events. These events bring customer attention while helping a good cause in the process. According to Ryan Pearl's article "Toyota Driving School for Teens," this type of public attention "is a great example to consider when you are in need for a brand building vs. product) campaign that simply strives to help someone out in some way, give them something they really need or make someone's life a bit better," (Pearl 2009). This is the type of marketing that will establish Toyota not just as a car company, but a brand, both domestically and internationally.