Strategic management

Instructor : PhD. Eldi MetushiStudent : Zakariya Albaroudi

Toyota automobile manufacturer

• Introduction

• Mission

• Vision

• Goal

• SWOT Analysis

• Porter's five forces analysis for Toyota

• Operation Strategies

• Conclusion

Contents

• 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

• 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

• 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.

• 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

• 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

• 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

• 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

• 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

• 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

• competition between existing players is likely high

• there is not much differentiation between players and their products

Degree of rivalry :

Toyota’s Way

Toyota’s Way

• 1. Toyota Production System (TPS)

• 2. Re-engineering

• 3. Superior Technology & Quality

Operation strategies

• Lean Manufacturing

• Just-In-Time (JIT)

• Kaizen

• Jikoda

• Kanban

• Andan

• Pull System

Toyota Production System (TPS)

• 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

• 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

• 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

• 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

• 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

• 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.

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.

• 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

• 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

•Thank you