Download - Toyota case study
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Strategic management
Instructor : PhD. Eldi MetushiStudent : Zakariya Albaroudi
Toyota automobile manufacturer
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• Introduction
• Mission
• Vision
• Goal
• SWOT Analysis
• Porter's five forces analysis for Toyota
• Operation Strategies
• Conclusion
Contents
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• Toyota is a Japanese multinational automobile makers headquarters in Aichi Japan.
• It produces an estimated eight million vehicles per year, about a million fewer than the number produced by GM.
• Japanese market share : 40% of all new cars registered in 2004 being Toyotas
• founders:
• Sakichi Toyoda
• Kiichiro Toyoda
• Eiji Toyoda
• Current CEO :
• Akio Toyoda
Introduction
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• History :
• Began as a textile company 1926
• In 1933 an automobile department was established with Toyoda automatic loom works
• In 1937 Toyota motor co. was established as an independent company
• The Golden Period :
• Becomes a major supplier of trucks to the imperial Army during WWII
• Plants were scheduled to be destroyed by allies, but the war ended first
• Launching first car :
• launched first car in 1947
• Toyota production system formed in 1950 based on JIT principle
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• Mission:
• “To attract and attain customers with high-valued products and services and the most satisfying ownership experience”
• Vision:
• “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.”
• Goal:
• "Always better Cars." We continually reinvent ourselves , introduce new technologies and stay ahead of our competition.
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• International Position in 170 countries worldwide
• Second largest manufacturer automobile
• It is best know for durability, reliability and value for money and convenient.
• its brand image in market is based on quality and environmental friendly
• Presently maintains 16% of US market share
Strengths
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• It is criticized as foreign importer by Japanese cars producers
• It may 2009 they reported a record yearly net loss of 4.2 billion $
• It was badly hit by 2008 financial crises and declared its first annual loss in 70 years history
• In 2005 faced criticism because of large scale recall and quality issues
• Production capacity which produces most of its cars in US and Japan where with that competitors might take advantage of global efficiency gains
Weaknesses
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• Toyota produces Fuel efficient , higher quality and smaller automobile that can attract consumers
• With fuel price increasing every time they can produce hybrid gas electric vehicles which are both fuel and environmental effective
• Toyota keeps on producing the new models of vehicles so attract all the segment in population
• They continued global expansion especially in emergin markets that is china india and russia where population and demand are accelerating
Opportunities
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• Increased competition , force full marketing campaigns and raising competitive pressures
• Increasing maintenance cost of vehicles , rising fuel price and changing customer preferences are challenging threats
• Adverse impact of fluctuations in foreign currency conversion rates
• Economic slow down
Threats
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• the threat of new entrants is low.
• Toyota has established brand image and reputation
Threat of new entrants :
bargaining power of buyers:
• the bargaining power of buyers is moderately high in automotive industry
• the buyers have low switching cost
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• bargaining power of supplier is low.
• the suppliers do not own the power to change the price
Bargaining power of supplier :
Threats of substitutes :
• threat from two wheelers
• alternative types of transportation almost cost less and sometimes are more environment friendly
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• competition between existing players is likely high
• there is not much differentiation between players and their products
Degree of rivalry :
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Toyota’s Way
Toyota’s Way
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• 1. Toyota Production System (TPS)
• 2. Re-engineering
• 3. Superior Technology & Quality
Operation strategies
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• Lean Manufacturing
• Just-In-Time (JIT)
• Kaizen
• Jikoda
• Kanban
• Andan
• Pull System
Toyota Production System (TPS)
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• aimed at the elimination of waste in every area of production including customer relations, product design, supplier networks and factory management.
• incorporate less human effort, less inventory, less time to develop products, and less space
• become highly responsive to customer demand while producing top quality products in the most efficient and economical manner possible.
• Some principles:
• Zero waiting time
• Zero inventory
• Cut actual process times
• Saves turnover expenses
• Reduces set-up times
Lean Manufacturing
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• philosophy pioneered by Toyota in 1970s
• It's a method of waste elimination by which the inventory levels are minimized.
• The heart of JIT is Kanban, Japanese word for signal.
• JIT implementations include:
• Inventory reduction
• Smaller production lots and batch sizes
• Quality control
• Complexity reduction and transparency
• Waste minimization
Just-in-Time
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• lean manufacturing term for continuous improvement
• Kaizen describes an environment where companies and individuals proactively work to improve the manufacturing process
• Employing Kaizen means the following:
• Proactively improve production
• Reduce manufacturing waste
• Increase employee involvement
• Increase customer satisfaction
Kaizen
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• meaning "automation with a human touch“
• It is a quality control process
• applies the following four principles:
• Detect the abnormality
• Stop
• Fix or correct the immediate condition
• Investigate the root cause and install a countermeasure
Jikoda
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• Meaning "signal“
• It signals a cycle of replenishment for production and materials.
• It maintains an orderly and efficient flow of materials throughout the entire manufacturing process
• It is usually a printed card that contains:
• Instruction for production and conveyance
• Visual control tool to check for over production and to detect irregular processing speeds
• Tool to perform kaizen
Kanban
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• production line is stopped if there is a problem somewhere in the line.
• Every employee is empowered to stop the production on finding a defect.
• This is done to prevent the defective items from passing to the next stage
• Andan electric boards will highlight the location where the defective part is located, and hence, can be attended.
Andan
Pull System
• 'pull' system asks the worker to use his or her head to come up with a manufacturing process
• where he or she alone must decide what needs to be made and how quickly it needs to be made.
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Re-engineering• Major factor for the success of Toyota.
• Consider a Toyota model, which is newly introduced in the market, failed to impress the market.
• The next Toyota strategy will be to re-engineer the model.
• This method is not practiced at General Motors and Ford.
• the whole manufacturing facility for manufacturing the model is scrapped and the employees are often pushed out of the company.
• This results in loosing the knowledge gained at great cost.
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• Toyota production facilities are flexible , could easily add / switch new models or ramp-up production of existing models within a short period
• Robots are used widely in mass production. By allowing the choice of either people or robots depending upon profitability, the production line offers the flexibility to handle everything from low-volume to mass production
• Toyota's quality control during production ensures that the correct materials and parts are used and fitted with precision and accuracy.
• GM takes 34 hours for producing a vehicle while Toyota does it in 27 hours, shows the technical superiority of Toyota.
• Awards & Recognitions
Superior Technology & Quality
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• with superior technology and best industry practices, Japanese auto major is giving a run for the auto industry.
• All credits to the production prowess and the technical innovation, which made the Japanese sail through the rough waters, a journey that started in 1933 and is still continuing.
Conclusion
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•Thank you