strategic management for toyota

8/18/2019 Strategic Management for Toyota

1/95

MANILA BUSINESS COLLEGE MBC Bldg., 1671 Alvarez St., Sta. Cruz, Manila, Philippines 741-348!7434"38

A Strategic Management Paper of Toyota Manufacturing

Corporation, Phiippine!

In Partia fu"ment #ith the re$uirement! in Strategic Management

Su%mitte& %y'

Bel#$, %eah $ P.

'ela Cruz, Mar$ $ M.

(sidr#, Ma. %e#)il$ '.

*#driguez, &ud$ Ann +.

Su%mitte& to'

Mr. erard B#z +ung#l

&anuar$ 8, 16


2/95

E(ecuti)e Summary

+his strategi/ )anage)ent paper pr#vides a detailed #utline #0 the

/urrent strategies #0 +#$#ta M#t#r Philippines ith the pr#p#sed strategies

2ased #n the S+ anal$sis.

+#$#ta M#t#r Philippines C#rp#rati#n 5+MP is an aut#)#tive

)anu0a/turing /#)pan$ in/#rp#rated #n August 3, 188. +MP is a #int

venture #0 + Capital #ldings, (n/., +#$#ta M#t#r C#rp#rati#n and Mitsui 9

C#. %td. +MP is the 2iggest aut#)#tive /#)pan$ and the )ar:et leader in the

/#untr$.

aving the visi#n state)ent, ;+# 2e the ? CMPA


3/95

d#)inan/e is prevalent. C#ntinu#usl$ in/reasing /#)petiti#n is 0ueled 2$ the

higher /#nsu)er eDpe/tati#ns and anti/ipati#n 0#r the l#er pri/es.

Alth#ugh +#$#ta has rather str#ng /#st /utting strateg$, the re/ent

natural disaster has put an additi#nal pressure #n +#$#tas /#sts. *e/entl$,

the 'etr#it +hree have 2een #ering higher sales dis/#unts t# /#unter pri/e

/#)petiti#n, hi/h puts +#$#ta under a heavier 2urden #0 eE/ient

pr#du/ti#n and /#st /utting strategies. @et, +#$#ta re)ains a leader in the

l# /#st )anu0a/turing, hile its pr#du/ti#n s$ste) /aused #ther /ar-

)anu0a/turers t# /hange the a$ the$ #perate.

+he threat #0 su2stitutes is ea: 2e/ause as the industr$ trends

indi/ate, the /ust#)ers still have a s#lid relian/e #n the used-/ar )ar:et.

C#nsidering the 0a/t that the e/#n#)$ has n#t 0ull$ re/#vered, a signiF/ant

part #0 the /ar de)and is ta:en 2$ the used-/ar industr$. ith the a2ilit$ t#

/ut /#sts )#re eE/ientl$ than its /#)petit#rs, +#$#ta has narr#ed the pri/e

gap 2eteen the used-/ars and its #n aut#)#2iles. +here0#re, /#)pared t#

its peers, the su2stituti#n ith the used /ars is less #0 a danger 0#r +#$#ta.

+he 2argaining p#er #0 2u$ers is nearl$ )#derate 2e/ause the re/ent

trends indi/ate that the /#nsu)ers are pr#ne t# see: #ut )#re 0uel-eE/ient

/ars due t# the rising #il pri/es. +his als# results in the in/reasing de)and 0#rthe h$2rid /ars that #er /heaper alternatives 0#r #perating the vehi/le

/#upled ith higher eDpe/tati#ns #0 pr#du/t Gualit$. M#re#ver, sin/e the

/h#i/es in the /ar )ar:et are a2undant, the 2u$er has a Guite str#ng

2argaining p#er and l# sit/hing /#sts. +he /#st /utting pra/ti/es that

+#$#ta i)ple)ents in its #perati#ns l#ers the 2u$er p#er and puts its /ars

int# a )#re advantage#us p#siti#n /#)pared t# its /#)petit#rs.

+he 2argaining p#er #0 suppliers is nearl$ )#derate 2e/ause the

suppliers in the aut#-)anu0a/turing industr$ are li:el$ t# 2e s)aller than

)anu0a/turers and thus tend t# sell t# )ultiple aut#)a:ers. hile e see

that suppliers net#r: ith aut#)a:ers is prett$ diversiFed, the$ pr#vide

/ru/ial ele)ents 0#r /ar )a:ing and )#st #0 the aut#-)anu0a/turers rel$ #n

the suppliers ti)el$ #perati#ns and stellar Gualit$. H#r this reas#n, the l#ng-


4/95

ter) /#ntra/ts a//#)panied 2$ stri/t standards #r Gualit$ #n 0#r the

suppliers are ver$ /#))#n. =suall$ i0 a supplier d#es n#t /#)pl$ ith the

standards set 2$ the /ar)a:ers and /harge t## )u/h it is 0airl$ eas$ 0#r the

/ar )anu0a/turer t# Fnd an#ther supplier and even )#ve the suppl$ /hain

t#ards the /heaper suppl$ )ar:ets in a dierent /#untr$. ne #0 the

/#)petitive advantages #0 +#$#ta C#. is its str#ng relati#nship ith the

suppliers. (ts eE/ient )anner #0 )#nit#ring suppl$ /hain pla/es l#

2argaining p#er #n the suppliers.

+he anal$sis #0 p#tential /hanges in the )a/r#-envir#n)ent /#nne/ted

ith P#rters Hive H#r/es M#del, this paper studied the general e/#n#)i/

/#nditi#ns, p#pulati#n de)#graphi/s, s#/ietal values and li0est$les,

te/hn#l#g$, e/#l#gi/al, in0rastru/tural, p#liti/al envir#n)ent, and legislati#ns

and regulati#ns ae/ting +MPs eDternal envir#n)ent. +he threats and

#pp#rtunities #0 +MP are then 2ased #n the eDternal anal$sis.

+he strengths and ea:nesses #0 +MP are 2ased #n the internal

anal$sis hi/h inv#lves the Fnan/ial and value /hain anal$sis.

verall, +MP has #utper0#r)ed the industr$ #ver the past $ears. +he

Fnan/ial rati#s ill 2e eDplained, as ell as, the value /hain anal$sis, ith

the /#rresp#nding eDplanati#ns in this paper.

n the strategi/ plan, the paper ill eDplain the s#/ial, Fnan/ial, and

strategi/ #2e/tives. +his ill als# eDplain the present /#rp#rate strategies #0

+MP and the pr#p#sed /#rp#rate strategies, ith the strateg$

i)ple)entati#n using the 7S 0ra)e#r: and the pr#e/ti#ns.

A2#ve all, this paper ill 2e a guide in de/isi#n-)a:ing pr#/esses #0

+MP ith regarding ne strategies t# sta$ #n t#p #0 its /#)petit#rs.


5/95

TABLE O* CONTENTS

?De/utive Su))ar$ +a2le #0 C#ntentsA/:n#ledge)ents

(. (ntr#du/ti#na. C#)pan$ Pr#Fle

i+ Ba/:gr#undii+ >isi#n

1. Anal$sis. Suggested *evisi#n, i0 an$

iii+ Missi#n1. Anal$sis. Suggested *evisi#n, i0 an$

i)+ Pr#du/ts2. Pr#du/ts #0 the C#)pan$

((. ?Dternal ?nvir#n)ent Anal$sisa. (ndustr$2. Mar:et

i+ Mar:et 'eFniti#nii+ Mar:et Size

/. Anal$sis #0 Present +as: ?nvir#n)enti+ +hreat #0 alues and %i0est$le


6/95


7/95

Acno#e&gement

e have i))ense pleasure in su//ess0ul /#)pleti#n #0 this #r: entitledL

; Strategi/ Manage)ent Paper 0#r +#$#ta M#t#rs.Hirst and 0#re)#st e #uld li:e t# eDpress #ur gratitude t# #d Al)ight$

0#r giving us strength and isd#) in riting this stra)a paper.

e #uld li:e t# eDpress #ur deepest appre/iati#n t# #ur pr#0ess#r Mr.

erard B#z +ung#l 0#r sh#ing his supp#rt and en/#urage)ent t# a//#)plish

this stud$. ith#ut his guidan/e and persistent help, this paper #uld n#t

have 2een p#ssi2le.

e a/:n#ledge ith gratitude all the re0eren/es that e use 0#r #ur

strategi/ )anage)ent paper.

And lastl$, e ant t# ta:e this #pp#rtunit$ t# than: #ur gr#up )e)2ers

h# have /#ntri2ute t# this pr#e/t ith their invalua2le #pini#ns and

suggesti#ns hi/h has d#ne a l#ng a$ in s##thing #ur r#ugh edge as a

tea).


8/95

I+ Intro&uction

a+ Company Pro"e

i+ Bacgroun&

+@+A M+* P(%(PP(


9/95

+he /#)pan$ has a g##d visi#n state)ent eD/ept 0#r the

g#al t# 2e ;the n#.1 aut#)#tive /#)pan$. ( thin: this is a

little a)2iti#us sin/e there are a l#t #0 /#)pan$ in the

industr$ h# are n# pr#du/ing ele/tr#ni/ /arsand +#$#ta

0#/uses the)selves #n h$2rid /ars. +he$ /an a/hieve their

visi#n i0 the inn#vati#n #0 the *esear/h and 'evel#p)ent

are a/tive n#t li)iting the)selves in )anu0a/turing #nl$

h$2rid /ars #ever, the h#le visi#n state)ent ere

/learl$ stated.

SUGGESTE. /E-ISION

+# 2e the one of the leading automotive /#)pan$

here *?A+ P?P%? #r: as a +?AM t# pr#vide the B?S+

pr#du/ts and servi/e t# #ur C=S+M?*S.

iii+ Mi!!ion

+# d#)inate #ur )ar:ets thr#ugh d$na)i/ selling and

ti)el$ deliver$ #0 attra/tive pr#du/ts, ith eD/ellent

/ust#)er servi/e and /#ntinu#us pr#du/t i)pr#ve)ent. +# pr#du/e vehi/les and /#)p#nents #0 #utstanding

Gualit$, using advan/e te/hn#l#g$, /#ntinu#usl$ i)pr#ving

)eth#ds and envir#n)ent-0riendl$ pr#/esses hile

)aintaining sa0e #r:ing /#nditi#ns. +# sustain C#)pan$ pr#Fta2ilit$, sta2ilit$, pr#du/tivit$ and

gr#th 2$ engaging in ee/tive Fnan/ial and res#ur/e

)anage)ent 0#r the /#lle/tive gain #0 the +#$#ta Ha)il$

and the s#/iet$ e serve. +# sustain +ea) Me)2erNs )#rale and pr#du/tivit$ 2$

devel#ping their 0ull p#tential and t#tal ell-2eing, and 2$

esta2lishing )utual trust, )utual resp#nsi2ilit$, and

har)#n$ thr#ugh #pen /#))uni/ati#n.E)auation of the Nine 012 Component! of a Goo&

Mi!!ion Statement

STATE. IN T3E MISSION


10/95

COMPONENTS' STATEMENT'

Cust#)ers


11/95

C#n/ern 0#r ?)pl#$ees

devel#ping their 0ull

p#tential and t#tal ell-

2eing, and 2$ esta2lishing

)utual trust, )utual

resp#nsi2ilit$, and har)#n$

thr#ugh #pen

/#))uni/ati#n.

SUGGESTE. /E-ISION +# d#)inate aut#)#tive industr$ thr#ugh d$na)i/

selling and ti)el$ deliver$ #0 attra/tive pr#du/ts, eD/ellent

/ust#)er servi/e and /#ntinu#us i)pr#ve)ent.

+# pr#du/e vehi/les and /#)p#nents #0 #utstanding

Gualit$, using advan/e te/hn#l#g$ that #uld Ft the taste #0

the /ust#)er /#ntinu#usl$ i)pr#ving )eth#ds and

envir#n)ent 0riendl$ pr#/esses hile )aintaining sa0e

#r:ing /#nditi#ns.

S# sustain /#)pan$ pr#Fta2ilit$, sta2ilit$, pr#du/tivit$

and gr#th 2$ engaging in ee/tive Fnan/ial and res#ur/e

)anage)ent 0#r the /#lle/tive gain #0 the +#$#ta 0a)il$ #0 the

s#/iet$ e serve.

+# sustain tea) )e)2ers )#rale and pr#du/tivit$ 2$

devel#ping their 0ull p#tential and t#tal ell-2eing and 2$

esta2lishing )utual trust, )utual resp#nsi2ilit$ /#n/ern 0#r

pu2li/ i)age and har)ing thr#ugh #pen /#))uni/ati#n.

i)+ Pro&uct!

Aut#)#tive Cars

Aut#)#tive Servi/es


12/95

• il Changes

• +ire *#tati#n and Align)ent

• +rans)issi#n *epair and Servi/e

• Car ashes and 'etail

• Hluid +#p ! Hlushes

• +iring Belt *epair!*epla/e)ent

• Parts and A//ess#r$ (nstallati#n

• Hree >A State (nspe/ti#ns

• +ire Pressure ?valuati#n

%+ Pro&uct! of the Company

TO4OTA

PASS??(C%?86 AlvanzaCa)r$ AlphardC#r#lla Altis C#aster%C Prad# H& CruiserPrius H#rtunerPrius C a/e>i#s iluDig# SP=

@aris (nn#va%CPrevia*av

LE5USPASS??(C%?C+ O 46?S 3" %O "7

S 3" *O 3"S 4" *O 4"(S 3"(S- C%S-%S 46


13/95

II+ E(terna En)ironment Anay!i!

a+ In&u!try

+#$#ta C#)pan$ 2el#ngs t# an aut#)#tive industr$. +his industr$

addresses the needs 0#r th#se land vehi/les su/h as the tru/:s,

vans, private /ars, and passenger /ars. +here are several /#)pan$

in/luded in this parti/ular industr$ su/h as the BM, Mitsu2ishi and

#ther /#)pan$ h# #ers the sa)e pr#du/t addressing the sa)e

need t# the pe#ple.

%+ Maret

i+ Maret .e"nition

+#$#ta )#t#r targets pe#ple h# are illing and /apa2le #0

pur/hasing the aut#)#tive vehi/les su/h as private

vehi/les, passenger /ars, tru/:, vans and deliver$ vehi/les.

+he$ /reate dierent t$pes #0 vehi/les 0#r h#useh#ld and

2usiness /#nsu)er.

ii+ Maret Si6e

+#$#ta M#t#r Philippines 5+MP has 0urther idened its

)ar:et share t# 44.7 per/ent as #0 He2ruar$ this $ear hile

se/#nd 2iggest /ar /#)pan$ Mitsu2ishi M#t#r PhilippinesC#rp. 5MMPC, hi/h p#sted a negative gr#th in the Frst

t# )#nths, had t# /#ntend ith a /#ntra/ti#n in its

)ar:et share t# 18.6 per/ent.

+MP s#ld a t#tal #0 17,"7 units in the &anuar$-He2ruar$

peri#d versus 13,88 units in the sa)e peri#d in 14.

+MPs per0#r)an/e idened its )ar:et share t# 44.7

per/ent 0r#) #nl$ 43.3 per/ent in the sa)e peri#d last

$ear.

n the #ther hand, MMPCs 4.6 per/ent )ar:et share in

&anuar$-He2ruar$ 14 /#ntra/ted t# #nl$ 18.6 per/ent in

the Frst t# )#nths this $ear. MMPCs redu/ed )ar:et

share as due t# its negative 6." per/ent sales gr#th t#


14/95

#nl$ 7,313 units 0r#) 7,8 units in the sa)e peri#d in

14.

(n a state)ent, +MP s#ld 8,87 units in He2ruar$ 0#r

an#ther re/#rd )#nthl$ sales gr#th #0 8 per/ent 2ringing

its t#tal sales in the Frst t# )#nths this $ear t# 17,"7

units #r " per/ent higher than its /#)parative peri#d in

14.

+he str#ng sales #0 +#$#ta last )#nth as )ade p#ssi2le

thr#ugh the /#ntinu#us high de)and #0 its 2est-selling

vehi/le in the /#untr$, the >i#s, ith sales #0 ,1 units.

He2ruar$s sales ere 0urther rein0#r/ed 2$ #ther str#ng

)#dels in +#$#tas line-up su/h as the H#rtuner, (nn#va,

ig#, iluD, Avanza and C#r#lla Altis.

n the #ther hand, +#$#tas luDur$ 2rand, %eDus, re/#rded

6 units last )#nth. %eading the pa/: are its nel$

laun/hed luDur$ /#)pa/t /r#ss-#ver, the


15/95

and pr#Fta2ilit$, and

annual sales have

rea/hed prere/essi#n

levels in s#)e

regi#ns. (strategyand.pw

c.com)

#0 s/ale 0#r s)all

/#)panies and ne

entrants. 5


16/95

t# pr#vide g##d Gualit$

pr#du/ts at reas#na2le

pri/es. And 2e/ause #0

that, ne entrants ill

have t# ta:e )#re ti)e

t# have their #n

identit$ in the industr$.

Brand identit$ #0

/#)panies is 2ased #n

Gualit$, sa0et$,

per0#r)an/e, value, 0uel

e/#n#)$, design!st$le

and

te/hn#l#g$!inn#vati#n.

(Toyota Annual Report

20)

easil$ 2uild up their

2rand identit$ 2e/ause

#0 the large eDisting

/#)panies in the

industr$.

S#itching co!t S#)e /lients )a$

/#)plain a2#ut the

pr#du/ts #r servi/es 0#r

n#t 2eing /#nsistent and

the$ )a$ tend t# 2u$ in

#ther /#)panies,

in/luding the ne

entrants, hi/h ill #er

2u$ers their eDpe/tati#ns

in a pr#du/t.

+here isnt )u/h 2rand

l#$alt$ in the aut#)#tive

industr$.

(termpaperwarehouse.co

m)

3 M#derate threat #0

ne entrants

igh sit/hing /#sts

)a:e it diE/ult 0#r

/ust#)ers t# /hange

hi/h pr#du/ts the$

n#r)all$ pur/hase.


17/95

Capita re$uirement! Aut#)#2ile industr$

in/urs high /apital /#st.

+here is an eDtre)el$

high a)#unt #0 /apital

that is reGuired t#

pur/hase ph$si/al

)anu0a/turing plants,

ra )aterials, as ell as,

t# hire and train

e)pl#$ees. (t ta:es a

great a)#unt #0 /apital,

n#t #nl$ 0#r the

)anu0a/turing pr#/ess,

2ut als# t# :eep up ith

the latest inn#vati#ns in

#rder t# /#)pete ith

the industr$ leaders.

(psu.edu)

1 ea: threat #0 ne

entrants


18/95

2e/ause spa/e ithin a

dealership l#t is li)ited.

(psu.edu)A%!oute co!t

a&)antage!

+#da$s su//ess0ul

aut#)#2ile /#)panies

p#ssess at least s#)e #0

the 0#ll#ing attri2utesL

pr#du/ti#n eE/ien/$,

ell-planned /#st

stru/tures, )anagea2le

size, distri2uted

)anage)ent #0 2rands,attenti#n t# underserved

)ar:ets, 0#/used

strateg$, and ell-

respe/ted 2rands and

pr#du/ts. (Team A 200!)


ne entrants

Hir)s are /#)peting 0#r

inn#vati#n and ne

pr#du/ts that dier

0r#) #ther /#)petit#rs

that a ne entrant /an

als# pr#vide.

Go)ernment poicy H#r the ne Fr) t# enter

in the industr$, the$

)ust /#)pl$ ith the

reGuire)ents that are

needed 2$ the

g#vern)ent.

+he #rldide

aut#)#tive industr$ is

su2e/t t# vari#us las

and g#vern)ent

regulati#ns in/luding

th#se related t# vehi/le

sa0et$, envir#n)ental

)atters, and nu)2er #0

1 ea: threat #0 ne

entrants

+he /#)panies that are

planning t# enter the

industr$ ill have t#

0#ll# g#vern)ent

regulati#ns and t#

/#)pl$ ith )an$

g#vern)ent

reGuire)ents.


19/95

vehi/les. +he

g#vern)ent )a$ als#

i)p#se taris and #ther

trade 2arriers, taDes and

levies, #r ena/t pri/e #r

eD/hange /#ntr#ls.


20)

E(pecte& retaiation Sin/e 2ig /#)panies are

in the industr$ it /ann#t

2e av#ided that the$ are

pr#viding high pri/es t#their pr#du/ts hi/h )a$

/ause ne entrants t#

#er l# pri/es, pr#)#s

and dis/#unts t# 2u$ers.

igh retaliati#n is

p#ssi2le 0r#) eDisting

/#)panies i0 ne

entrants #uld 2ring

inn#vative pr#du/ts and

)#re a#rda2le pri/es t#

the industr$. (Nkomo)


ne entrants

'ue t# the /#)panies

2ig na)e in theindustr$, there are

p#ssi2le retaliati#ns

that ill 2e thr#n t#

the).

TOTAL A-E/AGE .33 +here is a nearl$

)#derate threat #0 ne

entrants.

ii+ .eterminant! of /i)ary among E(i!ting Competitor!

Anay!i! Criteria .e!cription /ating!


20/95

In&u!try Gro#th Aut#)#tive industr$ is a

0ast gr#ing )ar:et.

+he #rldide

aut#)#tive industr$ has

2een en#$ing a peri#d

#0 relativel$ str#ng

gr#th and pr#Fta2ilit$,

and annual sales have

rea/hed prere/essi#n

levels in s#)e regi#ns.

(strategyand.pwc.com)

1 %# intensit$ #0

rivalr$

C#)panies /an gr#

ith#ut /apturing

)ar:et share 0r#) ea/h

#ther, hi/h leads t#

de/reased /#)petiti#n.

Pro&uct .i8erence! Aut#)#tive industr$ hasundierentiated

pr#du/ts ith regards t#

their /ars and #ther

vehi/les. But ith

regards t#

advan/e)ents in the

use #0 te/hn#l#g$, there

is a 2ig dieren/e.

(n0#r)ati#n +e/hn#l#g$

5(+ is the ne driving

0#r/e 2ehind pr#du/t

dierentiati#n in the

aut# industr$.("d

Richardson)

3 igh intensit$ #0 rivalr$

Cust#)ers /an /h##se

an$ 2rand 2e/ause the

pr#du/ts are al)#st the

sa)e. But n#t that

)u/h i0 tal:ing a2#ut

te/hn#l#gi/al

advan/e)ent.

Bran& I&entity Al)#st all #0 the Fr)s in

the industr$ have their

#n 2rand identit$ ith

regards t# pri/e and

Gualit$.

" igh intensit$ #0

rivalr$

Cust#)ers are idel$

dispersed ith regards

t# /h##sing a 2rand.


21/95

Aut#)a:ers that

pr#)#te str#ng 2randing

in /a)paigns )a:e the

)#st i)pa/t hen it

/#)es t# 2eing t#p-#0-

)ind a)#ng p#tential

2u$ers.

(lu#urydaily.com)

S#itching Co!t +he sit/hing /#st is l#

2e/ause #0 the

undierentiated

pr#du/ts. +here isnt )u/h 2rand

l#$alt$ in the aut#)#tive

industr$.

(termpaperwarehouse.c

om)

1 %# intensit$ #0

rivalr$

'ue t# undierentiated

pr#du/ts, /ust#)ersd#nt need t# sa/riF/e a

l#t #0 /#sts t# sit/h

ith an#ther 2rand.

Concentration an&

Baance

+here are a l#t #0

/#)petit#rs in the

aut#)#tive )ar:et.

(n pursuit #0 gr#th and

devel#p)ent,

/#)panies have tried t#

stri:e a 2alan/e 2eteen

/#)petiti#n and a/r#ss

ti)e.

(http$%%papers.ssrn.com%)

" igh intensit$ #0

rivalr$

ther /#)petit#rsare

n#t happ$ ith their

p#siti#n in the )ar:et.

E(it Barrier! (0 a Fr) ill de/ide t#

leave the industr$, the

/apital that as

rendered ill n#t gain

an$)#re.

" igh intensit$ #0

rivalr$

+here are high eDit

2arriers that prevent

Fr)s t# leave, li:e


22/95

C#)panies have alread$

)ade the invest)ent in

)a/hiner$ and 0a/ilities

and s# it )a:es )#re

sense 0#r the) t#

re)ain in the industr$

and /#ntinu#usl$

de/rease pri/es than t#

eDit alt#gether.

5u:essa$s./#)

2an:rupt/$.

Tota A)erage 3.33 +here is a

)#derate intensit$ #0 rivalr$

iii+ Threat of Su%!titute!

Anay!i! Criteria .e!cription /ating!The reati)e price

performance of

!u%!titute!

(n/reasing 0uel pri/es

have 2een pushing

s#)e ur2an drivers t#

use pu2li/

transp#rtati#n. M#st

vehi/le #ners still

agree that the

/#nvenien/e #0 using a

pers#nal vehi/le #sets

in/reases in 0uel pri/es,

h#ever i0 this trend/#ntinues and

aut#)#2ile

)anu0a/turers are n#t

a2le t# pr#vide a )#re

/#st-eE/ient s#luti#n,


su2stituti#n

(0 the in/rease in 0uel

pri/es /#ntinu#usl$

gr#s, )#st /ust#)ers

ill tend t# /h##se the

use #0 pu2li/

transp#rtati#n. But i0

n#t, the$ #uld rather

/h##se t# 2u$ their #n

private /ars that t# usepu2li/ vehi/les.


23/95

this threat ill in/rease.

(ukessays.com)

S#itching co!t (t is /heaper 0#r the

/ust#)ers t# use pu2li/

)#de #0 transp#rtati#n

#r 2$ al:ing.

+he sit/hing /#sts

ass#/iated ith using a

dierent )#de #0

transp#rtati#n, su/h as

train, )a$ 2e high in

ter)s #0 pers#nal ti)e5i.e., independen/e,

/#nvenien/e, and utilit$

5e.g., luggage /apa/it$

(Team A 200!)


su2stituti#n

S#)e pe#ple )a$

/h##se su2stitute t#

pr#du/t #r servi/e that

ill 0ulFll their sa)e

need ith l# /#st

Buyer propen!ity to

!u%!titute!

Bu$ers use su2stitute

pr#du/ts 2e/ause #0

envir#n)ental aspe/ts

and 0#r the) t# save

/#st.

+here is n# realisti/

su2stitute t# )#t#r

vehi/les ith the

eD/epti#n #0 large s/ale

transp#rtati#n that

raila$s pr#vide. +he

ev#luti#n #0 /#nsu)er

relian/e #n )#t#r

vehi/les 2egan ith the

)ass pr#du/ing #0


su2stituti#n

Su2stitute pr#du/ts are

#0ten ust te)p#rar$ 0#r

s#)e 2u$ers )a$ tend

t# 2u$ their #n /ar 0#r

/#nvenien/e, utilit$ and

sa0et$.


24/95

aut#)#2iles. (&rant'

200' p. )

TOTAL A-E/AGE 3 +he industr$ has a

)#derate threat #0

su2stituti#n

i)+ Bargaining Po#er of Buyer!

Anay!i! Criteria .e!cription /ating!Buyer concentration

)!+ *irm

concentration

%arge nu)2ers #0

)anu0a/turers, either

2ig #r s)all, are

/#)peting t# a s)all

v#lu)e #0 /ust#)ers.

Ba2$ 2##)ers, 2#rn

2eteen 146 and

164, :ept their sp#t as

the largest /#nsu)er

gr#up, 2u$ing 38

per/ent #0 ne vehi/les

s#ld in the sa)e ti)e

0ra)e.(autonews.com)

3 M#derate

2argaining p#er #0

2u$ers

ith a large nu)2er #0

p#tential 2u$ers, Fr)s

in the industr$ )a$ als#

tend t# in/rease their

/#)petiti#n ith #ther

/#)panies.

Buyer )oume S#)e 2u$ers are

individuals that 2u$ #nl$

#ne #r t# vehi/les and

s#)e are /#rp#rati#ns

#r g#vern)ent agen/ies

that 2u$ large Guantities

that the$ ill give in

reas#na2le pri/es and

reGuest 0#r dis/#unts.

(Nkomo)

" Str#ng 2argaining

p#er #0 2u$ers

+he )#re 0reGuent $#ur

/ust#)er pur/hases and

the )#re the$ are li:el$

t# neg#tiate #n pri/e,

Gualit$ and servi/e

S#itching co!t Hir)s in the industr$ 3 M#derate


25/95

have 2een thr#ugh in

dierent issues

regarding t# their

pr#du/ts that )ight

tend t# sit/h t#

an#ther /#)pan$.

He sit/hing /#sts

eDist 5little /#st 0#r

)#ving t# an#ther

2rand. (marsdd.com)

2argaining p#er #0

2u$ers

(t d#esnt /#st )u/h 0#r

2u$ers t# sit/h t#

an#ther 2rand #0

vehi/le.

Buyer information Meanhile, /#nsu)ers

are aash in easil$a//essi2le in0#r)ati#n

a2#ut aut#)#2ile

spe/iF/ati#ns, pri/es,

dis/#unts, Gualit$, and

per0#r)an/e, giving

2u$ers greater

2argaining p#er.

(*trategy+.pwc.com)

+he 2u$er sh#uld have

0ull in0#r)ati#n

5:n#ledge #0 de)and,

)ar:et pri/es and

supplier /#sts pr#vides

the) ith leverage.

(marsdd.com)

3 M#derate

2argaining p#er #0 2u$ers.

Bu$ers are 2eing ise

these da$s the$ are

2eing t## stri/t ith

dierent aspe/t.

A%iity to %ac#ar&

integrate

Bu$ers /ann#t easil$

2a/:ard integrate in

the industr$.

+he #rldide

1 ea: 2argaining

p#er #0 2u$ers

Bu$ers /ant /#)pete t#

large Fr)s in the


26/95

aut#)#tive in the

)ar:et is highl$

/#)petitive, /#)panies

0a/es intense

/#)petiti#n. (Toyota

Annual Report 20)

industr$ .

Su%!titute pro&uct! Bu$ers )a$ tend t# use

su2stitutes li:e 2uses,

trains, 2i/$/le #r

al:ing rather than t#

2u$ a private vehi/le t#

save )#ne$ in ter)s #0 0uel.

Current te/hn#l#gi/al

devel#p)ents suggest

that /ars, as used

t#da$, ill 2e repla/ed.

?sta2lished alternatives

t# /ar use in/lude pu2li/

transit 52uses,

tr#lle$2uses, trains,

su2a$s, )#n#rails,

tra)a$s, /$/ling,

al:ing, r#ller2lading

and s:ate2#arding.

(wikipedia.org)

" Str#ng 2argaining

p#er #0 2u$ers

Pe#ple n#ada$s )a$

tend t# use su2stitute

pr#du/ts t# save.

Pro&uct &i8erence! +he 0a/t#rs that ae/t

/#nsu)er t# )a:e

2u$ing de/isi#n are the

appearan/e, Gualit$

pri/e and envir#n)ental

3 M#derate

2argaining p#er #0

2u$ers

?a/h Fr)s #er

pr#du/ts that are dier


27/95

ee/t that a #ne

/#)pan$ is #ering that

diers 0r#) an$ #ther

2rand. (*un.200)

0r#) #ther /#)panies

that a 2u$ers has

dierent varieties t#

/h##se 0r#).Bran& i&entity Al)#st all #0 the

/#)panies in this

industr$ are ell :n#n

that pr#vide g##d

Gualit$ pr#du/ts and

reas#na2le pri/es that

are ne t# entrants )a$

ta:e )#re ti)e t# haveits #n identit$.

Brand identit$ #0

/#)panies is 2ased #n

Gualit$, sa0et$,

per0#r)an/e, value, 0uel

e/#n#)$, design!st$le

and

te/hn#l#g$!inn#vati#n.


20)

3 M#derate

2argaining p#er #0

2u$ers

Brand identit$ #0 a #ne

Fr) has an i)pa/t t#

2u$ers 2u$ing de/isi#n.

Buyer! Pro"t! S#)e /lients are illing

t# 2u$ ith a higher

pri/e ust t# )eet their

needs, ants, and

eDpe/tati#ns.

+he )ass )ar:et is

/at/hing up ith luDur$.

C#nsu)ers are als#

de)anding )#re

3 M#derate

2argaining p#er #0

2u$ers

+he 2u$ers are less

/#n/ern t# the pri/e i0

the$ are pr#Fta2le and

the pr#du/t the$ are

2u$ing )eets their

eDpe/tati#n. Bu$ers are


28/95

s#phisti/ated

in0#tain)ent s$ste)s

and are eDpe/ting )#re

high-end 0eatures t# 2e

standard.

(*trategy+.pwc.com)

2asing their 2u$ing

de/isi#n #n variet$ #0

li0est$les.

TOTAL A-E/AGE 3. +here is

)#derate 2argaining

p#er #0 2u$ers

)+ Bargaining Po#er of Suppier!

Anay!i! criteria .e!cription /ating!.i8erentiation of

input!

+here are inn#vated

pr#du/ts that attra/t

/ust#)ers t# help the)

t# save )#re.

Aut# )anu0a/turers

reGuire inputs-la2#r,

parts, ra )aterials and

servi/es. +he /#st #0

these inputs /an have a

signiF/ant ee/t #n

pr#Fta2ilit$.

(ukessays.com)

3 M#derate

2argaining #0 suppliers

Suppliers #0 the industr$

)a$ als# #er ne

)aterials and at the

sa)e ti)e, the

suppliers /an in/rease

their pri/es due t# the

inn#vati#ns.

S#itching co!t of

!uppier! an& "rm! in

the in&u!try

+here are )ultiple

/h#i/es #0 suppliers t#

lessen /#st s# that it ill

n#t ae/t the pri/e #0 a

pr#du/t.

?sta2lishing part designs

and spe/iF/ati#n

reGuires a 0air initial

3 M#derate

2argaining p#er #0

suppliers

S#)e pri/e #0 ra

)aterials /ann#t 2e

av#ided t# rise.


29/95

invest)ent.

(ukessays.com)

Pre!ence of

!u%!titute input!

+here are alternative

t$pes #0 su2stitutes #n

ra )aterials.

+he pr#2le) ith the

Gualit$ #0 eGuip)ent

and /#)pati2ilit$ #0

parts )ade 2$ dierent

)anu0a/turers 2e/a)e

t## eDpensive as it as

/#sting )#re /#)paring

t# 2u$ing 0r#) suppliers.

(ukessays.com)

3 M#derate

2argaining p#er #0

suppliers

(n the industr$, a

/#)pan$ /an /h##se t#

sit/h 0r#) #ne ra

)aterial t# an#ther in

#rder t# save /#st, 2ut

still, it is n#t #0 the sa)e

Gualit$.

Suppier

concentration

+here is a large

p#pulati#n #0 suppliers

in the industr$. Suppliers

in this )ar:et, either 2ig

#r s)all, )a$ have a

)ild /#)petiti#n

2e/ause #0 high

a//essi2ilit$ #0 )aterials

#r suppl$.

(0 a )anu0a/turer is

reliant #n #ne supplier

al)#st eD/lusivel$, this

/reates a )#n#p#listi/

situati#n that reGuires

that the )anu0a/turer

:eep the supplier

satisFed, espe/iall$ i0

3 M#derate

2argaining #0 suppliers

+here are large nu)2ers

#0 suppliers are

/#)peting.


30/95

the$ are eDpl#ring #ther

)anu0a/turing

#pp#rtunities ith rivals.Importance of )oume

to !uppier

+he pur/hasing p#er #0

/lients puts eight #n

#rganizati#ns 2$

reGuesting less /#st 2ut

#0 high Gualit$.

+he t#p aut#)#2ile

/#)p#nent suppliers

have the a2ilit$ t#

leverage their 2u$ers t#a//ept engineering

/hanges that ae/ts

their pr#du/ti#n, di/tate

suppl$ availa2ilit$ and

dates, and set pri/es in

line ith their #n

pr#Fta2ilit$

reGuire)ents.

(ukessays.com)

3 M#derate

2argaining p#er #0

suppliers

+here )ust 2e an

assuran/e that the

/#n/ern 0#r /lients and

the Gualit$ #0 )aterials

delivered are )et.

Impact of input! on

co!t or &i8erentiation

Bu$ers are pri/e

sensitive and their

de/isi#n is #0ten 2ased

#n h# )u/h d# a

vehi/le /#st and its

0eatures #r 2u$ers ill

sit/h t# an#ther 2rand.

+he /#st #0 the inputs

/an have a signiF/ant

ee/t #n pr#Fta2ilit$.

3 M#derate

2argaining p#er #0

suppliers

Suppliers /an pr#du/e

)aterials that are

needed 2$ the Fr)s t#

)eet the needs and

ants #0 the /ust#)ers.


31/95

(ukessays.com)

TOTAL A-E/AGE 3 M#derate

2argaining p#er #0

suppliers

&+ Anay!i! of Potentia Change! in the Macro9en)ironment

i+ Genera Economic Con&ition!

Aut#)#tive sales in the Philippines )#ved up 0r#) 16","6

units in 11 t# #ver 18, in 1 (wikipedia.org). A

13 Canadian )ar:et resear/h rep#rt predi/ted that

0urther invest)ents in the aut#)#tive se/t#r ere

eDpe/ted t# gr# in the 0#ll#ing $ears. +#$#ta sells the

)#st vehi/les in the /#untr$ (,slowski' -ustins

/Automotive roduction in the hilippines1). +he 2##)ing

Philippine aut# )ar:et ill 2e an additi#nal s#ur/e #0

gr#th 0#r parts suppliers (m.com).

E8ect on Barrier! or .eterminant!' +hreat #0 ne

entrants is l# 2e/ause pr#Fta2ilit$ reGuires e/#n#)ies #0

s/ale. +he intensit$ #0 rivalr$ is )#derate 2e/ause industr$

gr#th is high and /#n/entrati#n and 2alan/e #0 the

/#)panies in the industr$ is l# 2e/ause #ther Fr)s are

n#t /#ntented ith their /urrent p#siti#n in the )ar:et.

ii+ Popuation .emographic!

+here are 37Q #0 age stru/tures ranging 0r#) "-"4 $ears

#ld. Pe#ple ithin this age 2ra/:et are )#stl$ th#se h#

have the /apa2ilit$ t# 2u$ #r pur/hase private /ars. A)#ng

#ther age stru/tures, the$ have the highest per/entage

(inde#mundi.com).

E8ect on Barrier! or .eterminant!' Bargaining p#er

#0 2u$ers is )#deratel$ high 2e/ause 2u$er /#n/entrati#n


32/95

and Fr) /#n/entrati#n is the sa)e and 2u$er v#lu)e is

large en#ugh t# 2e/#)e p#tential /ust#)ers.

iii+ Societa -aue! an& Life!tye

Cust#)ers n#ada$s pre0er t# /h##se a 2rand ith high

Gualit$ 2ut l# /#st. +hat is h$ &apanese /#)panies,

in/luding +#$#ta, i)pr#vised t##ls t# i)pr#ve Gualit$,

parti/ularl$ the SiD Sig)a. Als#, there are dierent health

#rganizati#ns t#da$ that are )#tivating pe#ple t# al: as a

per0e/t 0#r) #0 eDer/ise that ae/ts the aut#)#tive

industr$s pr#Fta2ilit$. n the #ther hand, pe#ple are

2e/#)ing )#re aare #0 the negative i)pa/t #0 energ$

/#nsu)pti#n in #ur envir#n)ent that )a:es /ust#)ers

Fnd pr#du/ts that has l# i)pa/t in the envir#n)ent,

e)erging p#pularizati#n #0 h$2rid /ars

(ivythesis.typepad.com).


entrants is nearl$ )#derate 2e/ause pr#prietar$ pr#du/t

dieren/es is high ith regards t# Gualit$ and

i)pr#ve)ent #0 pr#du/ts, 2rand identit$ is l# 2e/ause)an$ /#)panies in the industr$ are ell-:n#n in

pr#viding high Gualit$ pr#du/ts, a2s#lute /#st advantage is

s#)ehat high ith regards t# the /#)panies

inn#vati#ns, and g#vern)ent p#li/$ is ae/ting the ne

entrants /apa/it$ t# esta2lish a Fr). +hreat #0 su2stitutes

is )#derate 2e/ause the relative pri/e per0#r)an/e #0

su2stitutes is s#)ehat high due t# Ku/tuating 0uel pri/es

and 2u$er pr#pensit$ t# su2stitutes is als# s#)ehat high

due t# the private vehi/les envir#n)ental aspe/ts,

/#nvenien/e, and sa0et$. Bargaining p#er #0 2u$ers is

)#derate 2e/ause there are su2stitute pr#du/ts that are

0uel-saving, pr#du/t dieren/es are s#)ehat high ith


33/95

regards t# envir#n)ental aspe/ts, /#)panies have their

#n 2rand identit$ regarding the relati#n #0 pri/e and

Gualit$, and 2u$er pr#Fts are high that sh#uld )eet the

reGuire)ents #0 their needs.

i)+ Technoogy

Advan/e)ents in te/hn#l#g$ in/lude sa0et$ standardizati#n

a)#ng dierent aut#)#tive vehi/les that +#$#ta ai)ed t#

)a:e a ;sa0e /ar hi/h /an pr#te/t #//upants in the

event #0 /ar a//idents #r prevent a//idents 0r#) #//urring.

ith the advent #0 ne te/hn#l#g$, r#2#ts are designed

and invented that )ade +#$#ta use industrial r#2#ts in

their pr#du/ti#n line t# )ini)ize err#rs (toyota.co.3p).


entrants is )#derate 2e/ause #0 the ne te/hn#l#gies

2eing dis/#vered ae/ting pr#prietar$ pr#du/t dieren/es,

sa0et$ and per0#r)an/e due t# te/hn#l#g$ and inn#vati#n

that ae/ts 2rand identit$, the latest inn#vati#ns are

reGuiring ne Fr)s t# have a huge /apital reGuire)ents,

and inn#vati#ns, als#, is #ne #0 the a2s#lute /#stadvantages. (ntensit$ #0 rivalr$ is )#derate 2e/ause

in0#r)ati#n te/hn#l#g$ is )a:ing pr#du/t dieren/es.

Bargaining p#er #0 2u$ers is s#)ehat str#ng 2e/ause

te/hn#l#gi/al advan/e)ents #n sa0et$ and per0#r)an/e

ae/t 2#th su2stitute pr#du/ts and 2rand identit$.

)+ Ecoogica

?nvir#n)entalists sa$ that 0#ssil 0uels greatl$ har) the

envir#n)ent as it /auses /li)ate /hange. +#$#ta and #ther


34/95

/ar )anu0a/turers resp#nd t# this 2$ )a:ing vehi/les that

use ethan#l instead #0 gas#line #n their h$2rid vehi/les

(enotes.com).


entrants is ea: 2e/ause 0uel e/#n#)$ is ae/ting 2rand

identit$ and envir#n)ental )atter is #ne #0 the

g#vern)ent p#li/ies. +hreat #0 su2stituti#n is )#derate

2e/ause 0uel pri/es ae/t the relative pri/e per0#r)an/e #0

su2stitutes and 2u$er pr#pensit$ t# su2stitutes is ae/ted

2$ the envir#n)ental aspe/ts. Bargaining p#er #0 2u$ers

is )#derate 2e/ause 0uel saving is a 0a/t#r h$ /ust#)ers

use su2stitute pr#du/ts, envir#n)ental ee/t #0 /ars are

/reating pr#du/t dieren/es, and 0uel e/#n#)$ is )a:ing a

2rand identit$ 0#r aut#)#tive industr$.

)i+ Infra!tructura

C#ngesti#n has g#tten ver$ 2ad as the e/#n#)$ gre

a//#rding t# a taDi driver na)ed *anil#Banez. %##:ing at a

2u)per-t# 2u)per traE/ a)s al#ng an$ streets and r#ad,

n# #ne ill 2e en/#uraged t# 2u$ ne /ars t# add up t# thetraE/, even the g#vern)ent ill tr$ t# lessen #r li)it the

users #0 private /ars (philstar.com). ()pr#ve)ents are n#

2eing d#ne 2$ the g#vern)ent in/luding s:$a$s,

higha$s, and eDpressa$s herein s#)e are alread$

appr#ved and s#)e are alread$ 2eing /#nstru/ted,

2elieving that additi#nal r#ads ill help lessen the traE/

(wikipedia.org).

E8ect on Barrier! or .eterminant!' +he threat #0 ne

entrants is ea: 2e/ause the g#vern)ent p#li/ies

regarding the nu)2er #0 vehi/les are li)iting the

pr#du/ti#n #0 ne vehi/les.

)ii+ Poitica En)ironment


35/95

Anti-g#vern)ent pr#tests t##: pla/e in +hailand 2eteen

the latter part #0 13 until 14, resulting in re)#val #0

their pri)e )inister and the na)ing #0 +hai ar)$ /hie0 as

the ne pri)e )inister. +he pr#tests ae/ted +hai aut#

pr#du/ti#n hi/h #rders aut# parts 0r#) the Philippines

(philstar.com).


entrants is l# 2e/ause the /hanging #0 p#liti/s ill in/ur

ne Fr)s a l#t #0 /#sts ith regards t# g#vern)ent

regulati#ns. Bargaining p#er #0 suppliers is l# 2e/ause

ith the /hange #0 leaders, /#ntra/ts ill als# /hange.

)iii+ Legi!ation! an& /eguation!

+#$#ta, al#ng ith #ther aut#)#tive )anu0a/turers, is a

)e)2er #0 Cha)2er #0 Aut#)#tive Manu0a/turers

Ass#/iati#n #0 the Philippines, (n/#rp#rated 5CAMP(. Being

a )e)2er, the$ have t# 0#ll# rules, las, and regulati#ns

CAMP( is reGuiring the). (t in/ludes *epu2li/ A/t n#. 87"

5Seat2elt %a, *epu2li/ A/t n#. 874 5Philippine Clean Air

A/t, and *epu2li/ A/t n#. 4 5*ati#nalizati#n #0 ?D/ise +aD 0#r M#t#r >ehi/les (pressroom.ph). +he *epu2li/ A/t

n#. 164 #r the Philippine %e)#n %a hi/h is an a/t

strengthening /#nsu)er pr#te/ti#n in the pur/hase #0

2rand ne )#t#r vehi/les that 2egun and held in Metr#

Manila #n tent$-se/#nd da$ #0 &ul$, $ear t# th#usand

thirteen (gov.ph).


entrants is l# 2e/ause there are )an$ regulati#ns t#

0#ll# regarding taDes and taris. Bargaining p#er #0

2u$ers is high due t# the g#vern)ents regulati#n a2#ut

the /ust#)ers rights and sa0et$. Bargaining p#er #0


36/95

suppliers is high 2e/ause /#ntra/ts are #0 high value 0#r

the )anu0a/turers.

e+ Threat! an& Opportunitie!

i+ Threat!

Inten!ity of /i)aryBran& I&entity 7 al)#st all /#)panies in the

industr$ have /reated their #n na)es and identities

hi/h is a threat t# +#$#ta in attra/ting /ust#)ers.Concentration an& Baance 7 there are a l#t #0

/#)petit#rs in the aut#)#tive )ar:et that are n#t

satisFed ith their /urrent p#siti#n, /reating a threat

t# +#$#tas p#siti#n in the )ar:et.E(it Barrier! 7 th#se ne Fr)s that entered the

industr$ /ann#t eDit an$)#re due t# a huge /#st and

this is a threat t# +#$#ta 2e/ause there ill 2e )#re

/#)petit#rs that ill tr$ t# re)#ve the) 0r#) their

/urrent p#siti#n. Bargaining Po#er of Buyer!

Buyer -oume 7 there are a l#t #0 2u$ers in the

)ar:et 2ut there are als# a l#t #0 /#)petit#rs that

ill tr$ t# target +#$#tas pr#spe/tive /ust#)ers.Su%!titute Pro&uct! 7#ther than private vehi/les,

/ust#)ers )a$ /h##se t# transp#rt using pu2li/

vehi/les t# save 0uel and the /#st #0 )aintenan/e.

ii+ Opportunitie!

Ne# Entrant!Economie! of Scae 7 2ig /#)panies in the industr$

prevents ne entrants t# esta2lish their #n Fr)s,

/ausing +#$#ta t# still 2e the nu)2er #ne in sales.Bran& I&entity 7 ne entrants /ann#t )a:e their

#n na)es in the industr$ hile +#$#ta is still

)a:ing it t# the t#p.


37/95

Capita /e$uirement! 7 ne esta2lishing Fr)s

/ann#t /#)pete ith +#$#tas /apital, )a:ing it the

nu)2er #ne aut#)#tive 2rand in the Philippines.Go)ernment Poicy 7 the g#vern)ent has a huge

ee/t #n the ne entrants /apa/it$ t# esta2lish #r

2uild their #n /#)panies, hile +#$#ta still

)anages #n the g#vern)ent p#li/ies that eas$.

III+ Anay!i! of Interna En)ironment

a+ *inancia Anay!i!

verall, +#$#ta has #utper0#r)ed the industr$ #ver the past

$ears. +#tal assets in/reased "86.8 2illi#n 0r#) the end #0 the

previ#us Fs/al $ear t# 3,43.7 2illi#n due )ainl$ t# an in/rease

in )ar:et value #0 invest)ent se/urities. %ia2ilities a)#unted t#

1,718.8 2illi#n, an in/rease #0 ".7 2illi#n 0r#) the end #0 the

previ#us Fs/al $ear due )ainl$ t# an in/rease in de0erred taD

lia2ilities.


38/95

2illi#n . A0ter adding translati#n adust)ents and /ash and /ash

eGuivalents at 2eginning #0 peri#d, /ash and /ash eGuivalents as

#0 Mar/h 31, 13 st##d at 17.3 2illi#n , a de/rease #0 117."

2illi#n , #r 4Q, #ver Fs/al 1.

%+ *inancia /atio! in Compari!on to In&u!try:Competitor

Performance

Li$ui&ity /atio

+#$#ta M#t#r

C#rp., liGuidit$

rati#s

Mar 31, 1" Mar 31, 14 Mar 31, 13

Current rati# 1. 1.7 1.7Rui/: rati# .8" .84 .84

*ati# 'es/ripti#n +he /#)pan$Current rati# A liGuidit$ rati#

/al/ulated as /urrent

assets divided 2$

/urrent lia2ilities.

+#$#ta M#t#r C#rp.Ns

/urrent rati# i)pr#ved

0r#) 13 t# 14 and

0r#) 14 t# 1".Rui/: rati# A liGuidit$ rati#

/al/ulated as 5/ash plus

sh#rt-ter) )ar:eta2le

invest)ents plus

re/eiva2les divided 2$

/urrent lia2ilities.


Gui/: rati# i)pr#ved

0r#) 13 t# 14 and

0r#) 14 t# 1".

Le)erage /atio!

+#$#ta M#t#r

C#rp., leverage

rati#s

Mar 31, 1" Mar 31, 14 Mar 31, 13

'e2t-t#-?Guit$

*ati#

1.13 1.13 1.16

+i)es-(nterest-

?arned *ati#

14.8 141."7 7.


39/95

*ati# 'es/ripti#n +he /#)pan$'e2t-t#-+#tal Assets

*ati#'e2t-t#-?Guit$ *ati# A s#lven/$ rati#

/al/ulated as t#tal de2t

divided 2$ t#tal

shareh#ldersN eGuit$.


de2t-t#-eGuit$ rati#

i)pr#ved 0r#) 13 t#

14 2ut then slightl$

deteri#rated 0r#) 14

t# 1". +i)es-(nterest-?arned

*ati#

A s#lven/$ rati#

/al/ulated as ?B(+

divided 2$ interest

pa$)ents.


interest /#verage rati#

i)pr#ved 0r#) 13 t#

14 2ut then slightl$

deteri#rated 0r#) 14

t# 1".

Acti)ity /atio!

+#$#ta M#t#r

C#rp., sh#rt-ter)

a/tivit$ rati#s

Mar 31, 1" Mar 31, 14 Mar 31, 13

(nvent#r$

+urn#ver

.78 1."" 1."

*ati# 'es/ripti#n +he /#)pan$(nvent#r$ +urn#ver An a/tivit$ rati#

/al/ulated as /#st #0 g##ds s#ld divided 2$

invent#r$.


invent#r$ turn#veri)pr#ved 0r#) 13 t#

14 2ut then

deteri#rated

signiF/antl$ 0r#) 14


40/95

t# 1".

Pro"ta%iity /atio!

+#$#ta M#t#r

C#rp., pr#Fta2ilit$

rati#s

Mar 31, 1" Mar 31, 14 Mar 31, 13

r#ss Pr#Ft

Margin

1.8Q 1.4Q 1"."1Q

perating Pr#Ft

Margin

1.1Q 8.Q ".Q


41/95

5*A /al/ulated as net

in/#)e divided 2$ t#tal

assets.

*A i)pr#ved 0r#)

13 t# 14 and 0r#)

14 t# 1".*eturn #n St#/:h#lders

?Guit$ 5*?

A pr#Fta2ilit$ rati#

/al/ulated as net

in/#)e divided 2$

shareh#ldersN eGuit$.


*? i)pr#ved 0r#)

13 t# 14 and 0r#)

14 t# 1".

Gro#th /atio

+#$#ta M#t#r

C#rp., gr#th

rati#

Mar 31, 1" Mar 31, 14 Mar 31, 13

?arnings Per

Share

11."1 11.17 6.4"

c+ -aue Chain Anay!i!

i+ Primary Acti)itie! +he pri)ar$ a/tivities in +#$#taNs value /hain anal$sis

in/lude (n2#und %#gisti/s, perati#ns, ut2#und %#gisti/s,

Mar:eting and Sales,and Servi/e.


42/95

• In%oun& Logi!tic!(n2#und l#gisti/s use &(+ 5&ust-in-+i)e s$ste) #0

pr#du/ti#n as it de/reases the invent#r$ /#st. &(+

helps +#$#ta t# #pti)ize their asse)2ling and

pr#du/ti#n pr#/ess as ell as t# )ini)ize parts g#ing

t# aste #r getting unused as invent#r$. (n2#und

l#gisti/s are the g##ds that the /#)pan$ re/eives

0r#) its suppliers and st#re 0#r s#)e peri#d #0 ti)e

until the )#)ent hen the$ ill 2e used in the

pr#du/ti#nand pr#/ess. +#$#ta /#)pan$ d#es n#t

have and is n#t a2le t# /reate #n ra )aterials that

are needed 0#r asse)2ling #0 /ars, thus it has t#/#lla2#rate ith a third part$. +#$#ta #rders the ra

)aterials 0r#) all #ver the #rld and in the interest

#0 )aDi)izing their availa2ilit$ #0 ra )aterials the$

)aintain g##d relati#nships ith their suppliers.

+#$#ta uses &ust-in-+i)e s$ste) t# )anage the

suppl$ #0 ra )aterials as ell as #pti)izing the

suppl$ and pr#du/ti#n pr#/esses

• Operation! +hese a/tivities /#)prise )ainl$ #0 the

)anu0a/turing and asse)2ling pr#/ess #0 the )#t#r

vehi/les. ther a/tivities in the #perati#ns )a$

in/lude )#t#r tuning, /#nFgurati#n #0 )#t#r parts

and Fnal engine tuning. +#$#ta M#t#rs have

esta2lished and )aintained the i)age #0 pr#du/ing

relia2le and l#ng lasting vehi/les largel$ due t# their

ell-designed and )#derated #perati#n pr#/ess. ne

#0 the )ain 0a/t#rs #0 +#$#tas su//ess0ul sales

re/#rd is /redited t# their /#)prehensive


43/95

i)ple)entati#n #0 an eDGuisitel$ planned #perati#n

s$ste). +#$#ta Pr#du/ti#n S$ste) 5+PS is an #perati#n

stru/ture 0#ll#ed, hi/h /#nsists #0 the integrati#n

#0 the lean pr#du/ti#n /#n/ept and &ust-(n-+i)e 5&(+

)anage)ent, /#ntr#ls the pr#du/ti#n pr#/ess in

a//#rdan/e ith the /ust#)er reGuire)ents. ther

#perati#n a/tivities als# in/lude the ;&id#:a s$ste),

hi/h st#ps the pr#du/ti#n pr#/ess i0 an$ de0e/ts #r

#ther #perati#nal pr#2le)s #//ur. perati#nal

/#nstan/$ is als# a part #0 +PS and /#nsists #0

;eiun:a /#n/ept hi/h 0#/uses #n the uni0#r)distri2uti#n #0 #r: at an$ p#siti#n #0 the pr#du/ti#n

pr#/ess, #r: rganizati#n 0#/using #n the a//urate

distri2uti#n #0 tas:s in the /#rre/t #rder and

des/ripti#n, and +#tal Pr#du/tive Maintenan/e 5+PM

hi/h e)phasizes #n #verall /he/:-up #0 all

eGuip)ent and t##ls used in the pr#du/ti#n pr#/ess.• Out%oun& Logi!tic!

n /#)pleti#n #0 the #perati#n pr#/ess, Fnal

pr#du/ts are trans0erred t# the retailers, h#lesalers

and, ulti)atel$, t# the Fnal /ust#)ers. +#$#ta

/#ntr#ls the h#le pr#/ess #0 vehi/les distri2uti#n,

0r#) the 0a/t#r$ t# their 2ran/hes #rldide, t#

ensure that the Fnal pr#du/ts are delivered in the

right pla/e and at the right ti)e. ?a/h +#$#ta dealer

is dire/tl$ lin:ed and /#ntr#lled 2$ +#$#ta, ith 0e #rn# su2sidiaries inv#lved in the distri2uti#n pr#/ess.

ut2#und l#gisti/s #0 Fnished vehi/les are the

resp#nsi2ilit$ #0 +#$#ta M#t#r Sales. Parts 'istri2uti#n

)anages the suppl$ #0 servi/e parts 0r#) the plant

t# the servi/e /enter. (t supp#rts servi/e parts


44/95

pr#du/ti#n and shipping preparati#n hi/h in/ludes

/#ntainerizati#n and #verseas shipping. +his gr#up is

als# resp#nsi2le 0#r Gualit$, te/hni/al supp#rt and

#verseas l#gisti/s and /ust#)s.• Mareting an& Sae!

(n these a/tivities, +#$#tas )ar:eting depart)ent

assigns ne pr#du/ts t# the pre/ise gr#up #0

targeted /ust#)ers. Mar:eting and Sales a/tivities #0

+#$#ta als# in/lude e)phasis #n their planned

pr#)#ti#n )iD and )ar:eting /#))uni/ati#n

appr#a/hes, li:e advertising and sales pr#)#ti#ns, as

ell as 2uilding gr#und#r: 0#r #ers that #uld 2e

suita2le 0#r )eeting the eDpe/tati#ns #0 the

/ust#)ers and the /#)pan$, as ell.• Ser)ice

Servi/e is the Fnal aspe/t #0 the pri)ar$ a/tivities

that )ainl$ adds value t# the pr#du/ts and ensures

su//ess0ul distri2uti#n, as ell as, #2taining 0eed2a/:

and resp#nse 0r#) the /ust#)ers. +his in/ludes all

areas #0 servi/e su/h as Fnal /he/:ing, a0ter-salesservi/e, )aintenan/e, handling /#)plaints, training,

repair servi/es and additi#nal /ust#)er servi/es.

+#$#ta 2elieves that /ust#)ers are the ;driver #0

the /#)pan$s su//ess, thus it pr#vides and i)pr#ve

several t$pes #0 their #ered servi/es. As +#$#ta

pr#du/ts )ain 0a/t#r is relia2ilit$, there0#re servi/es

are delivered 2$ GualiFed pers#nnel ensuring all

servi/es pr#vided are #0 high Gualit$. +he i)p#rtan/e

#0 per0e/ti#n ensures servi/e eD/ellen/e and )#re

satisFed /ust#)ers, as ell as, sustaining a greater

/#)petitive advantage.ii. Support Acti)itie!


45/95

Supp#rt a/tivities in/lude Pr#/ure)ent, +e/hn#l#g$, u)an

*es#ur/e Manage)ent, and Hir) (n0rastru/ture.• Procurement

+hese a/tivities are ass#/iated ith the pur/hase #0

g##ds, )aterials, eGuip)ent and servi/es, and 0#/us#n redu/ing the /#st #n pur/hases and re/eiving

the) #n the assigned ti)e. +#$#ta uses e-2u$ing and

#uts#ur/ing )eth#ds t# )anage pr#/ure)ent

a/tivities. Hurther)#re, in /#lla2#rati#n ith its

suppliers, +#$#ta supp#rts the redu/ti#n #0

envir#n)ental p#lluti#n that #//urs during the

deliver$ #0 supplies.• Technoogy

+hese a/tivities are the integrati#n #0 /#nstantl$

devel#ping te/hn#l#gies in the pr#/esses used and

help t# /reate and )aintain their /#)petitive

advantage. ?ver$ depart)ent #0 +#$#ta is 2uild up #n

te/hn#l#gies. +he )ain 0#/us #n te/hn#l#g$

devel#p)ent is t# guarantee the /ust#)ers #0 the

sa0et$ #0 the vehi/les. +#$#ta /#)2ines 0#r/es ithC#lla2#rative Sa0et$ *esear/h Centre l#/ated in the

=nited States #0 A)eri/a t# re0#r) sa0et$ /he/:s #0

the vehi/les and i)pr#vise test-drives, as ell as,

i)pr#ve their #verall pr#du/t per0#r)an/e. +#$#ta

has integrated sa0et$ te/hn#l#gi/al s$ste)s that are

ai)ed t# pr#vide sa0et$ 0#r the drivers and the

vehi/les. +he Frst te/hn#l#g$ is PCS 5Pre-Crash

Sa0et$ s$ste) that helps t# predi/t p#ssi2le /rash

and there2$ )ini)izes the ris: #0 da)age and

inuries. +he se/#nd is P#p-=p B#nnet te/hn#l#g$

hi/h is a deFnite design #0 the /ar 0ra)e stru/tures

that as /reated 2$ +#$#ta t# av#id the da)age


46/95

/aused t# #ther vehi/les and the pedestrians. +he

third #ne is Adaptive 'riving Bea) s$ste) hi/h is

assi)ilated in s#)e )#dels #0 +#$#ta /ars that helps

t# regulate high 2ea) in aut#)ati/ a$.• 3uman /e!ource Management

(t is the i)p#rtant part #0 the h#le #rganizati#nal

2usiness and +#$#ta uses dierent ta/ti/s t# sustain

its e)pl#$ees. ther /ar )anu0a/turing /#)panies

are /#nsidered as pr#du/ers #0 high Gualit$ /ars,

h#ever the$ /ann#t /#)pete ith +#$#ta in u)an

*es#ur/e Manage)ent, as ell as its suppliers and

)eth#ds #0 distri2uti#n. +#$#ta has a highl$

integrated %ean Pr#du/ti#n S$ste) in #rder t# use

the #r:0#r/e in )#re pr#du/tive and eE/ient a$.

+he )ain /#n/ept #0 )anaging hu)an res#ur/e is t#

eDpand the /apa/it$ and /apa2ilit$ #0 the e)pl#$ees

2$ pr#viding the) a )aterial en/#urage)ent 0#r the

eDtra #r:, training the) t# devel#p their #r:ing

s:ills, and giving the) vari#us reards. +hese

)eth#ds lead t# 0riendl$ and /#)0#rta2le #r:ing

at)#sphere in the /#)pan$ that in turn in/rease in

pr#du/tivit$ and Gualit$ #0 the pr#du/t and results in

/reating #0 the /#)petitive advantage.• *irm Infra!tructure

+hese a/tivities are /#nne/ted ith devel#ping the

strategi/ plans #0 the #rganizati#n. M(S 5Manage)ent

(n0#r)ati#n S$ste) pla$s a vital r#le in designing

the strategi/ plan, #rganizing, and /#ntr#lling the

vari#us depart)ents #0 +#$#ta su/h as Fnan/e,

a//#unting, and /#rp#rate strateg$. M#re#ver, +#$#ta

uses r#2#ti/s s$ste) here pe#ple a/t as #perat#rs

that )a:e the pr#du/ti#n pr#/ess 0ast and eE/ient.


47/95

&+ Strength! an& ;eane!!e!

i+ Strength!

Lo#er Pro&uction Co!t through the u!e of

alue Chain Supp#rt A/tivities 5u)an

*es#ur/e Manage)ent'(SC=SSL +#$#ta d#es a 2ig invest)ent hen it

/#)es t# the trainings and se)inars t# i)pr#ve the

pr#du/tivit$ #0 their pe#ple. Als# t# insure the

l#$alt$, the$ give reas#na2le 2eneFts 0#r their

pe#ple. ther )anu0a/turing /#)panies in the

industr$ /an pr#du/e higher Gualit$ /ars h#ever

the$ /ann#t :eep their pe#ple ust li:e hat +#$#ta

did.


48/95

ii+ ;eane!!e!

Large9!cae reca!S=*C?L Hinan/ial State)ent'(SC=SSL +#$#ta had Guite a 0e large-s/ale vehi/le

re/alls #ver the past 0e $ears. +he 2usiness re/alled

)illi#n vehi/les 2eteen and 1 and 7.43

)illi#n /ars in 1. Su/h re/alls d#es n#t #nl$ hurt

the Fr) Fnan/iall$ 2ut signiF/antl$ da)ages Fr)s

2rand. ;ea pre!ence in the emerging maret!

S=*C?L >alue Chain ut2#und %#gisti/s'(SC=SSL +#$#tas )ain )ar:ets are &apan, =nited

States, and ?ur#pe, hile su/h e)erging e/#n#)ies

su/h as China #r (ndia )a:e #nl$ a s)all per/entage

#0 all +#$#tas sales. 'ue t# p##r presen/e in the

largest aut#)#2ile )ar:et hi/h happens t# 2e

China. +#$#ta ill Fnd it hard t# /#)pete ith M

that has huge )ar:et share there.I-+ Strategic Pan

a+2 O%=ecti)e!i+2 Socia

• +# resp#nd t# the needs #0 the /ust#)ers )aDi)izing

the res#ur/es availa2le in the s#/iet$.• +# devel#p pr#du/ts that ill help 2#th /#)pan$ and

the /ust#)ers. C#)pan$ in ter)s #0 gaining higher

pr#Ft and /ust#)ers in ter)s #0 2eneFts 0r#) the

pr#du/ts and servi/e.ii+2 *inancia

A/hieves /ertain /#st redu/ti#n in pur/hase #0 the

needed )aterial

%#ering level #0 astage

*aise the revenue up t# "Q using dierent strategies


49/95

+# esta2lish ne strategi/ allian/e $earl$iii+2 Strategic

+# have all the pr#du/ts )eets the guidelines #0 the

/#)pan$ and )eet the satis0a/ti#n #0 the /ust#)ers.

?)pl#$ pr#0essi#nals that /an /reate su//ess t# the/#)pan$

C#ntinu#us inn#vate pr#du/ts t# intr#du/e

s#)ething ne in the )ar:et%+2 E)auation of Pre!ent Corporate Strategie! 0Actua

Company Strategie!2i+2 Generic Competiti)e Strategy

Co!t ea&er!hip

;+#$#ta is the l# /#st pr#du/er in the industr$.

+#$#ta a/hieves its /#st leadership strateg$ 2$

ad#pting lean pr#du/ti#n, /are0ul /h#i/e and /#ntr#l

#0 suppliers, eE/ient distri2uti#n, and l# servi/ing

/#sts 0r#) a Gualit$ pr#du/t.5Mi/hael ?. P#rter +his

Gu#te 0r#) Mi/hael P#rter su)s up h# +#$#ta

a/hieves this l# /#st strateg$. +hr#ugh resear/h, it

is evident that +#$#ta is still the l# /#st leader in

the aut#)#tive industr$.

*e/ent events have suggested that +#$#ta has

0#/used t## )u/h #n l# /#st, l#sing )ar:et share

and their )ar:et p#siti#ning #0 superi#r design and

Gualit$, hi/h hist#ri/all$ the$ have used a

dierentiati#n strateg$. H#r +#$#ta, the 2iggest thing

the$ need t# d# is )a:e sure that their l# /#st

strateg$ d#es n#t /#)pr#)ise their superi#r designand Gualit$. 5.#u.edu T U2neish6

.I**E/ENTIATION +#$#tas uses 2#th dierentiati#n and l# /#st as

generi/ strategies t# tr$ and gain a /#)petitive

advantage #ver their /#)petit#rs in the aut#)#tive


50/95

industr$. +he )ar:et s/#pe that +#$#ta uses is a

2r#ad #ne that en/#)passes nearl$ ever$ t$pe #0

/ust#)er that is in the )ar:et t# pur/hase an

aut#)#2ile. +#$#ta is a2le t# target su/h a large

)ar:et 2e/ause the$ have s#)ething 0#r ever$#ne.

+#$#ta has 0#ur heel drive tru/:s and S=>s 0#r the

#utd##r t$pes #r th#se h# live in areas that 0a/e

severe eather /#nditi#ns, h$2rid )#dels li:e the

Prius 0#r the e/#-0riendl$ /ust#)ers that are

interested in saving the envir#n)ent, al#ng ith the

standard /ars 0#r general, ever$da$ use.

Additi#nall$, +#$#ta pr#vides vehi/les 0#r all pri/e

ranges. Hr#) the l# pri/e +#$#ta C#r#lla line #0 /ars

t# the high pri/ed luDur$ line #0 /ars and S=>s ith

%eDus, +#$#ta has s#)ething 0#r ever$#ne. +#$#ta dierentiates #n several levels 0#r)

their /#)petit#rs. Hirst #0 all, +#$#ta has 2een ver$

su//ess0ul in dierentiating #n the 2asis #0 superi#r

design and Gualit$. +his has led t# +#$#ta 2eing a2le

t# /reate a 2rand i)age that is ver$ str#ng and #ne

that 2rings t# )ind Gualit$, l#ng lasting /ars hen a

p#tential /ust#)er sees it. +he strength #0 +#$#tas

2rand i)age has 2een seen in re/ent $ears ith the

re/alls and pr#2le)s +#$#ta 0a/ed in dealing ith

these re/alls. +#$#ta as a2le t# survive these

pr#2le)s 2e/ause the$ had su/h a l#ng and pr#ven

tra/: re/#rd #0 Gualit$ and superi#r. An#ther, area

that +#$#ta dierentiates is in te/hn#l#g$. +#$#ta

as the Frst su//ess0ul )ass pr#du/e the h$2rid /ar

#n the )ar:et hen it released the Prius in 3.

Being the Frst t# get their h$2rid #n the )ar:et


51/95

all#ed +#$#ta t# gain a large p#rti#n #0 the )ar:et

share in the area #0 h$2rid /ars.

ii+2 .imen!ion! of Competiti)e Strategy

Technoogica Lea&er!hip

+#$#ta is n#t the te/hn#l#gi/al leader in the

industr$. +he /#)pan$ /h##ses t# 2e a 0#ll#er in

#rder t# )aintain the i)age 2rand that the$ started.

+he$ are :n#n t# 2e the )anu0a/turer #0 h$2rid

/ars. S#)e /#)panies in the industr$ alread$laun/hed an aut#)#tive /ars p#ered 2$ ele/tri/it$.

Cust#)ers taste are ala$s 2ased #n the trend.

+#$#taNs re/ent strateg$ is t# 2e/#)e the

#rldNs nu)2er #ne aut#)a:er has 2een

underpinned 2$ using ne :n#-h#, ne

te/hn#l#g$ and ne )aterials t# i)pr#ve, per0e/t

and 2rea: thr#ugh aut# design and )anu0a/turing.

#ever, the strateg$ als# reGuired that +#$#ta

shi0ted its 0#/us 0r#) )anu0a/turing engineering and

2uilt-in-Gualit$ t#ard resear/h and devel#p)ent

pr#du/t design.

+@+A M

H%%?* %?A'?*


52/95

hen a /#)pan$ shi0ts its 0#/us 0#r) lean

pr#du/ti#n t# te/hn#l#g$ - inn#vati#n, there is an

e)2edded #2sta/le - /ulture /hange. n #ne hand,

the essen/e #0 lean pr#du/ti#n di/tates the

eli)inati#n #0 aste. n the #ther hand, the

un/ertainties in ne pr#du/t devel#p)ent reGuire

that the )anu0a/turer 2uild in redundan/$ t#

)anage the ris:s #0 the un:n#n and unsure a high

level #0 sa0et$. +r$ing t# 2alan/e lean pr#du/ti#n ith

the need 0#r redundan/$ is a diE/ult a/t that

reGuires the leadership t# 2e instru)ental in )a:ing

:e$ de/isi#ns as ell as leading and )anaging the

/hange

5httpL!!.u:essa$s./#)!essa$s!)ar:eting!strategi

/-)anage)ent-rep#rt-#n-t#$#ta-)ar:eting-

essa$.php

• Geographic Scope

e#graphi/all$, +#$#ta started its /#)pan$ in

&apan and eDpanded gl#2all$ that rea/h up t# the

Philippines and #ther /#unt$. ?ver$ /#untr$ have

)#re than 1 #utlets #0 the /#)pan$. Si)ilar ith

#nda the$ are 2#th gl#2al /#)pan$. +#$#ta

penetrated the e)erging )ar:et )#re rapidl$ than

#nda did.+#$#ta alread$ /#nGuered A)eri/a,

?ur#pe, A0ri/a, Asian and /eania. +here ere 33

t#tal nu)2er #0 /#untries.

+@+A


53/95

5httpsL!!.g##gle./#).ph!sear/hJs/lientps$-

a292i113792ih719G2ran/hesQ#0

Qt#$#taQinQ#rld9#G2ran/hesQ#0

Qt#$#ta9gsVlhp.1.3.l3ii3.4"768".4"846

6..4"873..13..7.7..33"."7.31.13......

..1/.1.64.ps$-

a2...1.36.)@(vSs4d:9p2D19dpr.9i#n1

9/ad/2v9seiMta>>pip


54/95

Bran& I&enti"cation

B$ the $ear 14, +MP is the t#p seller #0 /ars

ith 16, 11 units s#ld. 5)#ti#n/ars.inGuirer.net

(t si)pl$ eDplains that the /#)pan$ is ell-:n#n

and its 2rand identiF/ati#n is str#ng en#ugh t#

attra/t )#re 2u$ers.

Pu!h an& Pu Channe Seection

+MP is using the pull )eth#d herein all#ing a

single-pie/e K# s$ste) that /#uld eli)inate 2ul:

pr#du/ti#n and 2at/h sizes sin/e #nl$ #ne pr#du/t

at a ti)e is 2eing #r:ed #n. H#r /ar)anu0a/turers, this /an 2e a ti)e-saving

pr#/edure and /an 2e Guite pr#Fta2le. (t

)ini)izes the eDpense #0 the need 0#r spa/e due

t# #verpr#du/ti#n and it all#s a /#)pan$ t#

redu/e the /#st #0 la2#r ass#/iated ith st#/:

handling. 5sh)ula./#)

c+2Propo!e& Corporate Strategyi+ .etai! of the Strategy

+#$#ta

Str#ng

2rand

identiF/ati#

ea: 2rand

identiF/ati#

n

+#$#ta

Pull strateg$Push

strateg$


55/95

*ocu!e! on the #ea pre!ence in the emerging

maret!

Sin/e +#$#tas )ain )ar:et are &apan, =nited States,

and ?ur#pe the e/#n#)$ #0 th#se /#untr$ are higher than

#ther /#untries li:e China , (ndia and Brazil here +#$#ta

has la/: #0 presen/e herein the &eneral 4otors has the

largest national market in 5hina and followed y the

6nited *tates. The company has een the sales leader

among gloal automakers in 5hina for si# consecutive

years. (chinausinessreview.com).

China is 0a/ing /hallenges in 0#ur )ain areasL energ$,

envir#n)ent, sa0et$, and /#ngesti#n. (n ter)s #0 energ$W

)#re than " per/ent #0 Chinas #il is i)p#rted, and in the

last Fve $ears the /#untr$s greatest in/rease in #il use

as 0r#) transp#rtati#n. +he huge /#n/ern is h# China

ill sustain an aut# industr$ hen r#ughl$ 6 per/ent #0 its

/ars )a$ run #n gas#lineWand )an$ #ther industries

/#nsu)e energ$ as ell. (n ter)s #0 the envir#n)ent,

alth#ugh China has )ade )a#r a//#)plish)ents redu/ingaut# e)issi#ns in the past 1- $ears, it still has )an$

2uses and tru/:s ith #ld te/hn#l#gies. (n )an$ )a#r

/ities, #ne-third #0 air p#llutants are aut# related.

C#n/erning sa0et$, alth#ugh China has 0ar 0eer /ars #n

the streetWpr#2a2l$ #ne-F0th t# #ne-siDth #0 hats in the

=SWand 0ar 0eer aut#-related a//idents than in the =S,

China has 1 #r 1 ti)es )#re aut#-related 0atalities than

in A)eri/a. +his is 2e/ause )#st pe#ple that are hurt in /ar

a//idents in China are pedestrians. Hinall$, )an$ /ities are

suering 0r#) /#ngesti#n.

B$ pr#viding vehi/les that ill give s#luti#ns t# China and

#ther /#untriesN )ain issues regarding energ$,


56/95

envir#n)ent, sa0et$ and /#ngesti#n, +#$#ta /an i)pr#ve

their presen/e #n t#se )ar:ets. C#)e up strategies #uld

2e pr#)#ting their h$2rids /ars #r /#)e up ith a ne

inn#vate vehi/les that targeting energ$ eE/ien/$ and

envir#n)ent /#n/ern aspe/ts.

?Dpands #n )ar:et in #ther /#untries in pr#p#sing l# /#st

/ars that are dierentiated 0r#) the #ther 2rand 2$ design

and engineering Gualit$.

+he e)erging )ar:ets in Asia have the )#st p#tential 0#r

gr#th and the transp#rtati#n #0 /h#i/e is either high-

end luDur$ vehi/les #r l#-/#st, 2asi/ transp#rt 0#r the

)asses. Reuters rep#rts 5via &apanNs 5hunichi

*himunnespaper that +#$#ta is planning t# intr#du/e

s#)ething #n the l#-end #0 the spe/tru) (autolog.com)

Advan/e)ent #0 vehi/leNs 0eatures /an strengthens the

ea: presen/e #0 +#$#ta in e)erging )ar:ets.

Cust#)ersN de)ands are /hanging s# vehi/les sh#uld

upgrade a//#rdingl$ t# the pre0eren/es #0 p#tential 2u$ers.

+e/hn#l#g$ advan/e)ent is a a$ #ut t# pr#videinn#vative 0eatures in a pr#du/t (n/rease in ele/tr#ni/s and

s#0tare /#ntent that targeting the Gualit$, de)ands and

sa0et$.

ii+ Co!t of the StrategyIncrea!e !eing of )ehice! in emerging maret!

from the aim of !eing haf of it! )ehice! a!t year+ +#$#ta )a$ give )#re e#rt in strengthening their

presen/e in #ther e)erging )ar:ets 2$ pr#)#ting itspr#du/ts that /an pr#vide s#luti#n in s#)e issues and )eet

the needs #0 a p#tential 2u$ers.As e all :n# +#$#ta is a /#st leader /#)pan$, 2$ ise

pi/: #n suppliers and ee/ient t##ls and pr#/ess ithan

ensure Gualit$ s# the$ /an attain l# /#st.

http://www.autoblog.com/car-finder/luxury/http://autoblog.com/make/toyota/http://www.autoblog.com/car-finder/luxury/http://autoblog.com/make/toyota/


57/95

B$ intr#du/ing /ars that )eet internati#nal needs in

rapidl$ gr#ing e)erging )ar:ets, see:ing 0#r an in/rease

in the share gl#2al sales )ade up 2$ e)erging )ar:ets,

0r#) 4Q t# "Q.

Ai)ing t# sell )#re than a hal0 pr#du/e #0 its

pr#du/t 0#r 2##sting presen/e in e)erging )ar:ets.

+he /#st #0 ele/tr#ni/s and s#0tare /#ntent in aut#s

as less than per/ent #0 the t#tal /#st a de/ade ag#.

+#da$ it is as )u/h as 3" per/ent, a//#rding t# studies 2$

Man0red Br#$, a pr#0ess#r #0 in0#r)ati/s at +e/hni/al

=niversit$, Muni/h. M#re i)p#rtantl$, ele/tr#ni/s s$ste)s/#ntinue t# /#ntri2ute )#re than per/ent #0 inn#vati#ns

and ne 0eatures.iii+ Potentia Bene"t of the Strategy

• +#$#ta M#t#r ill 2e the #ne #0 the 2eneFted #n the

pr#p#sed strateg$ in in/rease their e/#n#)i/ due t# the

high sales #0 the pr#du/ts.• P#tential 2u$ers in e)erging )ar:ets ill 2e 2eneFted in

ter)s #0 the 2u$ing /ars 2$ getting their satis0a/ti#n 2$

having a sa0et$, energ$ eE/ient, and e/#-0riendl$ vehi/le

in l# /#st.• r#th in the )ar:et #0 +#$#ta ill 2e in a g##d s/ale 2$

in/reasing the nu)2ers #0 2u$ers 2e/ause #0 this

inn#vati#n• (n/rease 2argaining #0 p#er in +#$#ta in ter)s #0 2u$erNs

pr#Fta2ilit$. (t is ae/ting h# )u/h pe#ple are illing t#

pa$ 0#r aut#)#2iles. +hat illingness is als# ae/ted 2$the aning #0 pr#du/t dierentiati#n, due partl$ t# a

general in/rease in vehi/le Gualit$ thr#ugh#ut the

industr$.i)+ Ba!i! of Strategy


58/95

+#$#ta ea:ness #n value /hain #ut2#und l#gisti/ is

having a la/: #r ea: presen/e in s#)e e)rging )ar:etsChina /urrentl$ registered the highest rate #0 e/#n#)i/

gr#th and s# the #ther sele/ted /#untries and the

aut#)#tive seg)ent is a ver$ large eDpansi#n, hi/h

)a:es +#$#ta t# hurr$ t# ta:e #ver the /#ntr#l #0 this

)ar:et.A re/ent C#nsu)er *ep#rts surve$ 0#und that

in0#tain)ent eGuip)ent as the )#st tr#u2les#)e 0eature

in 14 vehi/les, suggesting a p#er0ul upside 0#r

/#)panies that /an devise superi#r s$ste)s. +ele)ati/s 0eatures, in/luding se)i aut#n#)#us

driving aids su/h as aut#)ati/ parallel par:ing and lane-

:eeping assistan/e as ell as sens#r-2ased rep#rting #n

/ar )aintenan/e and usage, als# present the /han/e t#

0#rge a /l#ser relati#nship ith /ust#)ers and in/rease

)argins. H#r eDa)ple, riginal ?Guip)ent Manu0a/turers

5?Ms and dealers /an #er )#re /#nvenient pr#a/tive

servi/e, alerting a /ar #ner t# up/#)ing )aintenan/e #r

repairs. (n additi#n, tele)ati/s 0eatures a#rd #pp#rtunities0#r tie-ins ith insurers, su/h as #ering dis/#unts 0#r

/ust#)ers h# drive sa0el$. +he in/reasing i)p#rtan/e #0 in0#tain)ent and

tele)ati/s s$ste)s is disruptive 0#r ?Ms and traditi#nal

suppliers, putting a pre)iu) #n inn#vati#n and /hanging

the a$s that industr$ pla$ers design and devel#p ne

pr#du/ts and servi/es. S#0tare 2rea:thr#ughs are

2e/#)ing as /riti/al as hardare inn#vati#n, and

/#)petiti#n is in/reasingl$ /#)ing 0r#) n#ntraditi#nal

pla$ers. ?ver )#re vital s#0tare /#ntent has als#

a//elerated the pa/e #0 /hange in pr#du/ts and 0eatures.

hereas the ti)e 0ra)e 0#r ne vehi/le laun/hes is


59/95

t$pi/all$ three t# 0#ur $ears, the /$/le 0#r ne s#0tare

iterati#ns, #0ten driven 2$ intera/tivit$ ith )#2ile devi/es,

is )easured in )#nths 5Strageg$9.p/./#).)+ Strength to %e &e)eope& or #eane!! to %e

o)ercome• eneral M#t#rs are a /#)pan$ #0 )an$ Frsts in China. (n

17, e set up the Frst te/hni/al /enter &> in ChinaWthe

Pan Asia +e/hni/al Aut#)#tive Center 5PA+ACW2eteen

M and SA(C. (t is n# #ne #0 their /#re advantages. (t

)eans #ther /#)pan$ ill have diE/ulties #n patr#nizing

2$ Chinese pe#ple.• +#$#ta /an /#)pete ith #ther /#)pan$ in pr#viding the

/ust#)er needs and ants sin/e the$ /an )a:e pr#du/ts

ith high Gualit$, ala$s per0e/ting and inn#vating

aut#)#tive te/hn#l#gies, /reating ne )#dels, sh#ing

/#n/ern 0#r /#nsu)pti#n, 2ut als# 0#r the envir#n)ent

surr#undings, 0#/using #n the /#nsu)er.• +#$#taNs strategies in advan/e)ent inn#vati#n is an edge

t# their /#ntin#us gr#th.• +e/hn#l#g$ advan/e)ent sustains the Gualit$ #0 a

pr#du/t s# that +#$#ta /an eD/eed the /ust#)ersN

eDpe/tati#n.)i+ 3o# can the !trategy hep the country

B$ )eeting the need and pr#viding s#luti#ns t# a

/ust#)ers, +#$#ta ill attain itNs s#/ial #2e/tives and

2##sting the revenue #0 the /#)pan$.2rand identit$ and als# their p#siti#n in the )ar:et. +he

/#ntin#us inn#vati#n is an advantage #0 the /#)pan$ in

intr#du/ing a pr#du/t.

Another Propo!e& Corporate Strategyi+ .etai! of the !trategy

Onine Car Shopping


60/95

Be/ause #0 the nu)er#us advantages and 2eneFts,

)#re and )#re pe#ple sa$ the$ pre0er #nline sh#pping

#ver /#nventi#nal sh#pping these da$s. Cust#)er ants

easier li0e, in /reating #nline /ar sh#pping eD/lusivel$ 0#r

+#$#ta Pr#du/ts here $#u /an see all the pr#du/ts ith its

0eatures, the ne intr#du/e pr#du/t. @#u /an als# give

0eed2a/:s and suggesti#ns.+he$ /an a//ess +#$#tas #nline

sh#p an$ti)e and an$here als# thr#ugh s)art ph#nes.

+he nu)2er #0 s)artph#ne users #rldide ill

surpass 2illi#n in 16, this $ear, there ill 2e #ver 1.1

2illi#n s)artph#ne users a/r#ss the gl#2e, a Fgure that illin/rease an#ther 1.6Q t# near .16 2illi#n in 16. H#r the

Frst ti)e, )#re than #ne-Guarter #0 the gl#2al p#pulati#n

ill use s)artph#nes in 1", and 2$ 18, eMar:eter

esti)ates, #ver #ne-third #0 /#nsu)ers #rldide, #r )#re

than ."6 2illi#n pe#ple, ill d# s#. +hat 18 Fgure als#

represents #ver hal0W"1.7QW#0 all )#2ile ph#ne users,

)eaning that 0eature ph#nes ill have Fnall$ 2e/#)e a

)in#rit$ in the tele/#))uni/ati#ns #rld 5e)ar:eter./#)

ii+ Co!t of the !trategy

(ts hard t# sa$ pre/isel$ h# )u/h pr#0essi#nal e-

/#))er/e devel#p)ent /#sts. S)all pr#e/ts /an 2e a 0e

th#usand d#llars. C#)pleD pr#e/ts /an 2e hundred

th#usand d#llars #r )#re and theres a variet$ in 2eteen.

(t )a$ s#und eDpensive 2ut the earning #nline /an g# 0#ra2#ut )illi#ns #0 d#llars. +hese dierent relevant 0a/t#rs

/#)es d#n ith pr#e/t s/#pe 0#r an e-/#))er/e 2udget

Cu!tomer %a!e' +he size #0 the /ust#)er 2ase

deter)ines the te/hn#l#g$ reGuire)ents, hardare and

s#0tare. (0 $#u have a large /ust#)er 2ase, $#u ill


61/95

reGuire a e2site and supp#rting appli/ati#ns that /an

handle a l#t #0 /#n/urrent traE/. +his di/tates the

te/hn#l#g$ $#u use and the t$pe #0 net#r:, servers and

#ther hardare reGuired. +his in turn di/tates the size and

eDpertise #0 $#ur devel#p)ent tea). aving a /#st 0#rhiring s:illed pe#ple 0#r a2#ut th#usands #0 d#llars #r

depends #n /#)pan$s l#/ati#n.

Supporting appication!' +he industr$ uses the ter)

?*P 5?nterprise *es#ur/e Planning t# des/ri2e a h#st #0

s#0tare that )anages $#ur invent#r$, shipping 5;3P%,

inv#i/ing and #ther 2a/:-#E/e servi/es. A large /#)pan$

)a$ have )ultiple ?*P s#luti#ns. S#)e ?*P s#luti#ns /an

/#st #ver X1, 0#r a single annual li/ense. (ntegrating

th#se ith a e2site /an als# ta:e hundreds #0 h#urs #0

pr#gra))ingMar:etingL nline and #Yine )ar:eting is an i)p#rtant

eDpense that needs t# 2e 0a/t#red int# ever$ 2usiness

e2site. As #pp#rtunities 0#r )ar:eting in/rease, su/h as

s#/ial )edia, vide#, )#2ile )ar:eting and '*M 5dire/t

resp#nse, et/., /#)pan$s 2udgets have t# in/rease t#)aintain )ar:et share and drive traE/. A larger 2usiness

li:e +#$#ta )ight spend #ver X1, a )#nth in

)ar:eting.Heatures and Hun/ti#nalit$L A large /#)pan$ )ust pr#vide

the latest, /##lest, intera/tive 0eatures t# pr#)#te their

pr#du/ts and sta$ /#)petitive and this als# in/ludes in

)ar:eting aspe/ts.

e2site C#ntentL +his in/ludes pr#du/t i)ages, pr#du/tdes/ripti#ns, pri/ing and teDt /#ntent a2#ut the /#)pan$,

et/.iii+ Potentia %ene"t! of the !trategy

• /e&uce& o)erhea&!' in general, an #nline sh#p /#sts

less t# set up and run than a ph$si/al st#re, alth#ugh its


62/95

i)p#rtant t# re/#gnize that )a:ing e-/#))er/e #r:

reGuires /#ntinuing invest)ent.

• Lo#er mareting co!t!' ith 2etter targeting, #nline

pr#)#ti#n /an 2e )#re pre/isel$ ai)ed at p#tential

/ust#)ers than using /#nventi#nal )edia. (ts als# )u/h

/heaper.

• E(pan&e& geographica reach' (t /an idens the

/#)pan$s #rldide )ar:et ust thr#ugh having an

ee/tive e-/#))er/e strateg$.

• Being open for %u!ine!! >?:@' ith aut#)ated #rder

and pa$)ent pr#/essing, sales /an 2e )ade at an$ ti)e,

and /ust#)ers /an 2u$ hen it suits the).

• Greater e(i%iity' an #nline st#re /an 2e updated

instantl$ and as #0ten as $#u li:e I 0#r eDa)ple, t#

pr#)#te a Zdeal #0 the da$ #n $#ur 0r#nt page, ith#ut

the need 0#r eDpensive printed displa$ )aterial.

• Broa&er potentia cu!tomer %a!e' an e-/#))er/e

2usiness is an additi#nal 2u$ing /hannel, /apa2le #0

attra/ting /ust#)ers h# have n#t 2#ught 2e0#re.

• Impro)e& cu!tomer pro"ing' ith the #pp#rtunit$ t#

target pr#du/ts and servi/es at spe/iF/ gr#ups 2ased #n

2u$ing data.

• Increa!e& )i!i%iity for your %u!ine!!' ith an

invest)ent in sear/h engine #pti)izati#n and #nline

pr#)#ti#n, an #nline sh#p 2e/#)es )#re a//essi2le t#

/ust#)ers sear/hing 0#r $#ur pr#du/ts.

• The a%iity to te peope a%out your %u!ine!!L this is

parti/ularl$ valua2le hen an #nline st#re #perates

al#ngside a /#nventi#nal high-street #utlet, pr#viding


63/95

in0#r)ati#n a2#ut #pening h#urs, /#nta/t details and

ansers /#n/erns.

• Another mareting channe' #nline st#re /an supp#rt

#nline )ar:eting e#rts 2$ in/luding /ust#)er revies

and testi)#nials. (*ource$ usinessyell.com)

i)+ Ba!i! of Strategy

An #nline /ar-2u$ing pr#gra) that targets S/i#nNs

$#ung /ust#)er 2ase is 2arel$ # the gr#und. But

eDe/utives are alread$ preparing t# r#ll #ut a si)ilar

s$ste) [as s##n as p#ssi2le[ 0#r the +#$#ta 2rand. +hatNs

a//#rding t# Bill Ha$, general )anager #0 +#$#ta 'ivisi#n,hi/h en/#)passes 2#th 2rands. Ha$ t#ld Automotive

News this )#nth at a press laun/h here 0#r the 16

+a/#)a that +#$#ta 2rand ai)s t# r#ll #ut its #n versi#n

#0 S/i#nNs v#luntar$ Pure Pr#/ess Plus #nline transa/ti#n

pr#gra) in siD t# 1 )#nths. Bla)e the shi0t #n the :ids.

[Millennials are starting t# eDpress the 0a/t that

the$Nd li:e t# d# )#re sh#pping #nline,[ Ha$ said.

[+he$Nd li:e t# /#nne/t that sh#pping t# a 2u$ing

eDperien/e ... that needs t# 2e Gui/:er and )#re

transparent.[ +he S/i#n and +#$#ta initiatives are part #0

a 2r#ader )#ve 2$ aut#)a:ers, dealers and third parties

t# si)pli0$ /ar 2u$ing thr#ugh #nline and )#2ile t##ls.

%arge dealership gr#ups su/h as Aut#


64/95

has 2uilt its 2usiness ar#und /#nne/ting its net#r: #0

dealers ith leads generated thr#ugh its e2sites and

)#2ile apps t# )ini)ize pri/e haggling. Ha$ said the

+#$#ta and S/i#n pr#gra)s arenNt an e#rt t# /#)pete

ith hat the 2ig dealership gr#ups and +rueCar are

d#ing. *ather, he said, the$ are a resp#nse t# /hanging

/#nsu)er 2u$ing ha2its and a a$ t# #r: ith dealers

t# pr#vide a )#re integrated eDperien/e. +#$#ta dealers

h# #pt in t# the $et-unna)ed pr#gra) ill have

KeDi2ilit$ in h# the$ i)ple)ent it in their st#res, the

/#)pan$ said. Ha$ said +#$#ta ill use hat itNs learning

0r#) Pure Pr#/ess Plus t# shape the +#$#ta pr#gra),

in/luding the in0#r)ati#n te/hn#l#g$ and Fnan/e and

insuran/e sides #0 the #perati#n. +he g#al, he said, is t#

redu/e the ti)e a /ust#)er spends in the ph$si/al

dealership t# a2#ut an h#ur. S/i#nNs setup all#s a user

t# g# #nline, pi/: and spe/ #ut a S/i#n vehi/le sear/h

l#/al dealerships 0#r the eDa/t vehi/le get pri/e in0#,

in/luding taDes and 0ees /al/ulate )#nthl$ pa$)entsget an esti)ate #n a trade-in, and appl$ 0#r and get

appr#ved 0#r /redit ith a /ertiF/ate t# ta:e t# the

dealership.

S/i#nNs pil#t pr#gra) has a2#ut 6 parti/ipating

=.S. dealers, ith 3 )#re eDpe/ted t# #in 2$ $ear end.

+he /#)pan$ sa$s 1" are eDpe/ted 2$ the end #0 16,

#ut #0 a2#ut 1, S/i#n dealers t#tal. +#$#ta dealers

ill get a previe #0 the #nline servi/e at a nati#nal

dealer )eeting neDt )#nth. 5aut#nes./#) 16


65/95

)+ Strength! to %e &e)eope& or #eane!! to %e

o)ercomeenerating a strateg$ t# 2e/#)e a /ust#)er

#riented ill help t# have a g##d relati#nship ith the

/lients and having a advan/e use #0 in0#r)ati#n

te/hn#l#g$.)i+ 3o# can the !trategy hep the company attain it!

o%=ecti)e!

B$ this strateg$, +#$#ta /an easil$ rea/h /ust#)ers

and sustain their g##d /ust#)er relati#nship. +he

p#tential higher v#lu)e #0 2u$ers )a$ prevail 2$

in/reasing the visi2ilit$ #0 the /#)pan$ that /an help

2##sting their sales.

&+2 Competiti)e A&)antagei+ Pre!ent Competiti)e A&)antage!

C#)petitive advantage #//urs hen an #rganizati#n

a/Guires #r devel#ps an attri2ute #r /#)2inati#n #0

attri2utes that all#s it t# #utper0#r) its /#)petit#rs, it /an

2e /#n/luded that +#$#taNs phil#s#ph$, its uniGue /#ntinu#usi)pr#ve)ent pr#/ess as ell as its highl$ ee/tive and

eE/ient * )anage)ent s$ste) and the deepl$-r##ted

pr#2le) s#lving /ulture are trul$ sustained /#)petitive

advantages and 0#r that reas#n essentiall$ /#ntri2ute t#

+#$#taNs leading p#siti#n in the gl#2al aut#)#tive industr$

Phio!ophy

+he /#rp#rate phil#s#ph$ #0 a /#)pan$ /an 2e deFned as

the set #0 rules and attitudes that g#vern the use #0 the

/#)panies res#ur/es

At +#$#ta M#t#r C#rp#rati#n, this 2asi/all$ )eans that

)anage)ent de/isi#ns are 2ased #n a l#ng-ter) phil#s#ph$,

even at the eDpense #0 sh#rt-ter) Fnan/ial g#als. +# 2e


66/95

)#re spe/iF/, the )ain ideas #0 +#$#taNs phil#s#ph$ are t#

2ase )anage)ent de/isi#ns #n a [phil#s#phi/al sense #0

purp#se[, t# thin: l#ng ter), t# have a pr#/ess 0#r s#lving

pr#2le)s, t# add value t# the #rganizati#n 2$ devel#ping its

pe#ple, and t# re/#gnize that /#ntinu#usl$ s#lving r##t

pr#2le)s drives #rganizati#nal learning.

Pr#/esses

+he s# /alled +#$#ta Pr#du/ti#n S$ste) 5+PS. B#th

ele)ents, +#$#taNs /#rp#rate phil#s#ph$ and its spe/ial

)anu0a/turing )eth#d, are the d#u2le heliD #0 +#$#taNs '


67/95

ne #0 the greatest advantages #0 +PS is its

str#ng 0#/us #n lean pr#du/ti#n. %ean pr#du/ti#n is

ai)ed at the eli)inati#n #0 aste in an$ area #0

pr#du/ti#n in/luding /ust#)er relati#ns, pr#du/t

design, supplier net#r:s and 0a/t#r$ )anage)ent.

(ts g#al is t# in/#rp#rate less hu)an e#rt, less

invent#r$, less ti)e t# devel#p pr#du/ts, and less

spa/e t# 2e/#)e highl$ resp#nsive t# /ust#)er

de)and hile pr#du/ing t#p Gualit$ pr#du/ts in the

)#st eE/ient and e/#n#)i/al )anner p#ssi2le

+#$#ta invented &ust-in-+i)e 5&(+, an invent#r$

strateg$ that strives t# i)pr#ve a 2usinesses return

#n invest)ent 2$ redu/ing in-pr#/ess invent#r$ and

ass#/iated /arr$ing /#sts, 0#ll#ing the si)ple

phil#s#ph$ that invent#r$ is aste. +# )eet its

#2e/tives, #ne #0 the pri)ar$ t##ls #0 a &(+ s$ste)

are signals 2eteen dierent p#ints in the pr#/ess,

hi/h tell pr#du/ti#n hen t# )a:e the neDt part.

Su/h signals )aintain an #rderl$ and eE/ient K# #0 )aterials thr#ugh#ut the entire )anu0a/turing

pr#/ess, i)pr#ving a )anu0a/turing #rganizati#nNs

return #n invest)ent, as ell as Gualit$ and

eE/ien/$.

+#$#taNs &(+ prin/iple is the /#)pan$Ns

#utstanding suppl$ /hain )anage)ent, as the high

eE/ien/$ and ee/tiveness #0 a &(+ invent#r$ s$ste)

is heavil$ dependent up#n the s)##th /#-#rdinati#n

#0 a /#)pan$Ns supplier net#r:. +#$#ta as ell as

#ther &apanese /ar )anu0a/turers are a2le t# ensure

su/h a s)##th /#-#rdinati#n and /l#se and trust0ul

/##perati#n ith their suppliers thr#ugh the s# /alled


68/95

\eiretsu. A :eiretsu is a traditi#nal &apanese

instituti#n and /an 2e deFned as a set #0 /#)panies

ith inter l##:ing 2usiness relati#nships and

shareh#ldings. (n general, there are three dierent

t$pes #0 :eiretsuL

igyo !hu&an 9 #riz#ntall$ diversiFed 2usiness

gr#ups

Sei!an eiret!u 9 >erti/al )anu0a/turing net#r:s

/yut!u eiret!u 9 >erti/al distri2uti#n net#r:s

+#da$, +#$#ta is idel$ /#nsidered the 2iggest

#0 the verti/all$-integrated :eiretsu gr#ups, ith

/#)panies li:e the 'ens# C#rp#rati#n - the #rldNs

se/#nd largest aut#)#tive /#)p#nents )anu0a/turer

- as ell as 3 #ther /#)p#nent suppliers 2eing

)#re #r less dire/tl$ lin:ed t# the /#)pan$.

+he high eE/ien/$ #0 +#$#taNs )anu0a/turing

plants is als# due t# a high level #0 standardizati#n.

H#r +#$#ta, standardized tas:s and pr#/esses are the

0#undati#n 0#r /#ntinu#us i)pr#ve)ent ande)pl#$ee e)p#er)ent. (n this /#nteDt, #ne #0 the

)#st i)p#rtant prin/iples 0#r +#$#ta is t# visualize

standards t# ensure that n# pr#2le)s are hidden.

(n/luded in this prin/iple is the s# /alled "S Pr#gra)

/#)prising Fve steps that are used t# )a:e all #r:

spa/es eE/ient and pr#du/tive, help pe#ple share

#r: stati#ns, redu/e ti)e l##:ing 0#r needed t##ls

and i)pr#ve the #r: envir#n)ent.

A)oi&ing error!

ne #0 the )#st i)p#rtant aspe/ts hen

#r:ing ith a )ini)u) st#/: #0 )aterials and &(+

invent#r$ s$ste)s is t# ensure that ea/h part


69/95

entering the neDt step #0 the pr#du/ti#n pr#/ess

)eets the highest p#ssi2le Gualit$ standards. +#

)eet this reGuire)ent, it is n#t en#ugh t# ta:e

sa)ples. (n 0a/t, all e)pl#$ees #r:ing in pr#du/ti#n

and l#gisti/s )ust 2e trained and sensi2ilized 0#r this

set #0 pr#2le)s.

At +#$#ta, this is ensured 2$ the s# /alled +#tal

Rualit$ Manage)ent 5+RM appr#a/h.

strategic management for toyota

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