Toyota's Strategic Opportunities And Threats
Toyota Corporation (NYSE:TM) is a $226B global manufacturer of automotive vehicles including passenger cars, light and heavy-duty trucks and transportation equipment. Automotive sales globally generated $206B in their latest full fiscal year, Financial Services contributed $13.3B, delivering a Fiscal Year (FY) 2012 Net Income of $4.3B (Toyota Investor Relations, 2013). The most profitable business unit is Financial Services, which is the financing division of automotive sales globally (Toyota Investor Relations, 2013). As of January, 2013 Toyota had their best month ever of hybrid vehicle sales, attaining a 45% increase, delivering 21,000 units globally (Toyota Investor Relations, 2013). Prius sales alone were up 36% over the previous month in January, 2013 as well (Toyota Investor Relations, 2013). Toyota has several promising potential opportunities for growth that are described in the next section.
Analysis of Toyota's Opportunities Today and in the Future
One of the most innate strengths Toyota has developed and continues to refine is the ability to define, execute and enrich alliances and partnerships with highly vertically-integrated auto manufacturers who often produce their own engines and drivetrains (Takahashi, 2004). The alliance and patent licensing programs that Toyota has put into place with BMW to compliment their existing diesel engine production and support the next generation of truck and heavy equipment engines based on the Toyota hybrid patents. Toyota senior management estimates that the complete intellectual property portfolio of the company in hybrid technologies could one day surpass the highly profitable Financial Services...
In addition ot the BMW strategic alliance, Toyota also has a series of strategic initiatives in place with Ford Motor Company to license them hybrid technology across an entire series of vehicles by 2016 (Takahashi, 2004). With BMW and Ford now active licensers of their patents, Toyota can turn their attention to getting more automotive manufacturers to also partner and license portions or the entire intellectual property portfolio. This is one of the leading priorities for the company according ot their latest annual report, in addition to leading the auto industry in investments in hybrid technologies (Toyota Investor Relations, 2013).
Toyota's globally recognized and respected Toyota Production System, a world class manufacturing system that spans over 4,000 suppliers and over 100 production locations (Towill, 2007) can also be used for selling into new, high growth markets. The high-growth nations of Brazil, Russia, India and China (BRIC) show the greatest potential for Toyota. Based on their history of achievement in shifting production into new markets as shown in the graphic below from their annual report, the company has significant opportunity for growth supported by extensive expertise in the processes and systems to bring the Toyota Production System online efficiently and economically in other nations of the world. The following figure shows the production ramp across foreign nations that Toyota has been able to attain…
