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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…
References
Baker, B. (2003). Toyota Production System. Quality Progress, 36(1), 98-98.
Krutilla, K., & Graham, J.D. (2012). Are green vehicles worth the extra cost? The case of diesel-electric hybrid technology for urban delivery vehicles. Journal of Policy Analysis and Management, 31(3), 501-532.
Matsuura, M., Shiroyama, H., & Suzuki, T. (2010). Sustainable energy and environmental policymaking in japan. IEEE Technology and Society Magazine, 29(3), 45-54.
Pegels, C.C. (1984). The Toyota Production System - lessons for American management. International Journal of Operations & Production Management, 4(1), 3-3.
Toyota Investor Relations (2013). Investor Relations. Retrieved February 3, 2013 from Toshiba Investor Relations and Filings with the SEC Web site: http://www.toyota-global.com/investors/
Toyota Analysis: Part II As detailed in Part one of the Toyota Motor Corporation case study the company faced exogenous threats to its continuing longstanding profitability: rigorous and growing competition in the automotive industry amidst a weak global economic recovery, and the hangover in trust and customer loyalty to the brand due to 10 million auto recalls since 2009 (CNNMoney.com. N.D.). Despite these threats the company has pushed forward in its
Toyota has a few strengths on which to build competitive advantage and exploit opportunities in the marketplace. The company has two strong brands in Toyota and Lexus that are internationally recognized, allowing Toyota significant leverage when entering new markets or even negotiating with suppliers. Another strength that Toyota has is a strong global distribution network. Takahashi (2010) notes that even as Japan and the U.S. saw weakness in 2010, the
Toyota Strategic Management For decades, Toyota has been one of the most admired companies in the world. They were able to turn their image in the 1960's and 70's from cheap Japanese import to the car of choice for millions of consumers worldwide. Toyota's strategy has varied significantly over the years. The company began by primarily imitating many of its competitor's designs and even used some of its components. Much of
Therefore, they use strict evaluation criteria to make choice among different alternatives. Keeping in view the strength of customers' bargaining power, Toyota and other automakers are expending huge amounts on advertisements and promotional campaigns to create awareness about their brands and convince these customers to prefer them over all other brands (Jenny & Scammon, 2010). 5. Internal Environmental Analysis for Toyota Motor Corporation 5.1. The Resources Types: Like other types of business
Toyota is one of the world's leading automakers. For most of its existence, the company has been unassailable, but this past year has presented the company with a number of challenges. These include plant shutdowns caused by parts shortages as a result of the Japanese tsunami, Japanese consumer spending falling again because of the tsunami, competitive challenges and product quality issues that lead to recalls. As one of the world's leading
Analysis of Toyota Opportunities and Threats Toyota is the world's leading patent holder in hybrid vehicle technologies, having over 85% of all patents registered in the U.S. Patent Office, in addition to holding over forty different patents in other registries throughout Europe and Asia. This is a formidable platform for growth in this high-growth emerging line of business. Hybrid technologies can reduce carbon emissions by over 60% in the latest engine