Toyoda Sakichi came up with idea behind founding of the Toyota Motor Company
First vehicles were produced in 1935
Embraced the tenets of total quality management
Increased quality, productivity, efficiency and effectiveness of company
Known for its quality vehicles until recalls tarnished its reputation
Caught off guard by recession of 2008/2009
Is now starting to recover
Toyota Racing very successful
Industry Analysis:
Threat of potential competition – Low threat; cost barriers, existing companies have a lot off brand recognition and loyalty.
Existing rivalry – High, All the car companies that you can think of are rivals
Bargaining power of suppliers – Low to moderate depending on the item. Most of the raw materials are available from different suppliers.
Bargaining power of buyers – High power; there are business buyers like dealers, car rental companies, and corporations that keep a fleet of cars
Threat of substitute products – Moderate; Most people would rather have a car than walk, ride a bus, etc.
Corporate-level strategy –
Toyota is an automobile manufacturer
Has vertical integration (makes some of its own parts)
Joint venture with GM (NUMMI)
Outsources
Business-level strategy:
Differentiation
High quality and efficiency (TQM, lean manufacturing, JIT, manages its supply chain well)
Innovator (Prius)
Customer responsive
Global expansion
Structure and controls:
Structure:
Decentralized authority – Kanban system
Culture – companywide obsession with continuing to improve efficiency and effectiveness of the manufacturing process
By 2012 had 14 vehicle assembly plants in North America
Emergency Profit Improvement Committee
Changed senior management ranks in 2009
Supplier associations
Quality circles
More flexible workforce
Controls:
Small batches
Organized into teams
Quality circles for control
Lifetime employment for employees
Pay tied to seniority and profitability
Fix errors that occur during assembly
Workers could stop the assembly line
Workers trace defect back to its source
Produced about 25% of major components in-house
Kanban system – increased inventory turnover
Kanban does away with need for extensive centralized management
Suppliers – long-term relationships, brings them into the design process
Supplier tiers
Statistical process control
Uses TQM
Computer aided design
Contract for a component was for 4-5 years
Additional profit shared between Toyota and supplier
Subsidiary – Toyota Motor Sales – formed to handle distribution and sales
Wide range of sales training and services for dealers
Brought customers into design process
Database of customers created
Toyota Supplier Support Center
Global Body Line (GBL)
Internal Environment:
Strengths –
Leader in TQM (quality)
Kanban – Quality circles
Supply chain management
Lean production
Reduced setup times
Small batch manufacturing
Organization of workplace (teams)
Lifetime employment
Profit sharing
Outsourcing used
Organized suppliers – improvements in quality and productivity
Increased labor productivity at Toyota
Decline in defects
Toyota Motor Sales
Customer database
Toyota Supplier Support Center
Partners with NASCAR
2004 became second largest car company in the world
Very profitable
Culture of company
Global Body Line
Prius
Tundra
Weaknesses –
Caught flat-footed by recession in 2008
Lifetime employment (can hurt motivation)
Losing younger customers
1950s – cars performed poorly in road tests on U.S. highways
Defects in North America (recalls)
External Environment:
Opportunities –
More global expansion
Electric cars
Autonomous driving vehicles
New models for younger drivers
Green movement focus
Threats –
Competition
Treat of tariffs
Safety regulations in U.S.
Import quotas in 1981
Electric car market dominated by Tesla
Quality gap closing
Aging of customer base
Threat of another economic recession
Uber and related services
Recommendations/evaluations
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ToyotaKey.docx
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