Define the terms and state the mission, vision, objectives, goals and core competencies of Toyota. (Outcome 1. 1) Mission The Mission defines the purpose and nature of the business (Schools, Johnson 1997). The Mission of Toyota is to provide a safe and sound journey and in the next 5 years is to minimize environmental impact by advancing technologically to reduce carbon emissions and enforcing quality and reliability with a commitment to continuous improvement in all its activities.
Toast’s ultimate goal is to improve the safety of its customers. Other goals include providing customers with high quality parts and goods by putting the customer first and genuinely listening to and espousing to customers feedback and responding to these speedily and easily. As an employer, Toast’s goals are to provide stable employment with fair working conditions, create a safe and healthy working environment, and be conscientious in its manufacturing and in the development of its staff, creating an environment for staff to be proud that they work for Toyota.
Another goal of Toast’s is to establish a low carbon society as well as a recycle-based society (www. Toyota-global. Com). Objectives Objectives are a more tangible and specific and measurable description of the goals. Objectives are more short term and are consistently in need of updating. They direct the goals. They should be SMART, specific, measurable, attainable, and relevant and time bound. For example, increasing sales in developed countries as a goal is translated into the objective of maintaining a domestic production of 3 million units per year.
Goals and objectives are linked, for example, a goal of Toyota would be to enter into countries with an emerging middle class, such as the emerging BRICK (Brazil, Russia, China, India) markets, the objective pertaining to this is to boost sales of 3. 7 million units in Hess countries to 5 million (vim. Japanese. Co. JP). Core Competencies A core competency is at the heart of what the Company does best. It is this ability that gives it advantage over the competition.
Knowing its core competency is a valuable tool to have when releasing new products or going into new markets (Johnson, Schools 1997). The core competencies of Toyota are its cost leadership strategies in Its design and build processes. It has the ability and the resources and manufacturing units which operate with efficiency keeping the cost of cars low and affordable for the mass consumer racket. IQ . 2 Describe the key issues encountered by Toyota in strategic planning. (Outcome 1 . ) A strategic plan brings into fruition the Company’s vision, goals, mission and strategy or future direction for a set time period. Strategic planning is one way of dividing responsibilities by the top level of management to other departments as separate units make sure tasks and projects are fulfilled correctly. The organization informs each department separately of what to do, giving them step by step instructions. These instructions feed their way down the hierarchy of the corporate structure.
One of the key problems with strategic planning is that there is very little room for feedback from lower level staff to trickle upwards to management. There is also very little interdepartmental communication, thus hindering collaboration. As the whole company is supposedly working towards the same end goals this may cause repetition, hence wastage Of time and energy and resources. In many cases those designing the strategic plans know nothing about the subject they are instructing.
If Leadership was united with workers at Toyota and there was open communication between the internal implants department and management, the recall of 8 million faulty cars in 201 0 may never have occurred. Toast’s strategic management did not interact with the labor force (Loti, 2010). IQ . 3 Compare and contrast two different planning techniques which you could apply to Toyota. (Outcome 1. 3) In order to plan which products to focus on and how to allocate resources, it is necessary for Toyota to look at its various product lines to Identify which ones are generating profit and which ones require investment.
A tool useful in this scenario is the Boston Matrix, otherwise known sans the BCC Matrix (Boston Consultancy Group). In this, the two factors considered are Market growth, (vertical grid) and market share (horizontal grid). This grid is broken down into 4 segments. If the item is selling well and the sales in its product area are still growing rapidly for example the phone 5 it is a star, which means it has a high market share and high market growth.
Its costs will reduce over time. The cash cow is an item which is now requires little investment but generates sales easily die to its high market share already being established , it’s in the mature stage of the product lifestyle so does not have high market growth the product his in growing market but reached an impasse and its not known whether the popularity of the product with take a nosedive or suddenly improve but with significant investment it is a question mark.
The dogs are items which have a low market share as well as low market growth. They may be costing the company money and it is necessary to consider divestment or liquidation as an option Monsoons, Schools 1997). Boston Matrix for Toyota cars. MARKET SHARE HIGH LOW HIGH MARKET GROWTH LOW STARS Lexus Pries Hybrid Land Cruiser SUB QUESTION MARKS Low cost affordable cars in emerging markets such as India Cell Vehicles) Auras- hybrid
Campy-hybrid New fuel models such as Bio- fuel cars, solar and hydrogen powered cars CASH COWS Campy Corolla RAVE 4 Dadaists DOGS Estimate (minivan)-withdrawn Us par- withdrawn MR. Corona-withdrawn Crown-withdrawn Stakeholder Mapping The stakeholder mapping tool, is like the BCC Matrix in that it is based on a grid system, but it differs in that instead of looking at the product, it looks at the stakeholders.
On the horizontal axis lies the level of interest a stakeholder has, and on the vertical axis lays the level of power that a stakeholder has. A stakeholder who has a low level of interest and a low level of power does not once the strategy makers as much as a stakeholder with a high level of interest but a low level of power. However a stakeholder with a high power and low interest would concern the strategists and management more and they would strive to keep these stakeholders satisfied.
In the same way, those with a high level of interest in addition to a high level or power would concern the strategists the most and they would create strategies that would please these stakeholders the most as they are the “key players” ( Johnson Schools 1997) A stakeholder power interest matrix is below for Toyota. Level of Interest LOW
POWER A MINIMAL EFFORT environmental activists non car users B KEEP INFORMED Indonesian customers Small shareholders Potential customers C KEEP SATISFIED Employees Government Global society, Local community Customers in established markets such as USA, Europe and Japan D KEY PLAYERS Business partners Investors, Bankers Managers, Coos, Directors Large shareholders Both the stakeholder mapping power/interest matrix and the BCC Matrix make things clearer when planning, however both are limited in their scope. For these tools to be of relevance, a separate BCC Matrix would have to be done for each market entered into.
Both must be reviewed regularly as factors change. For example, in the BCC matrix factors could be introduced that means the cash cow such as the RAVE 4 are now redundant because the market demands only echo-cars. Equally, on the Power/interest matrix, if Indonesian markets continue to rise, they may move from the B to the C category as they will make up a higher percentage of Toast’s profits thus having more power. Q. 1 Conduct an organizational audit by carrying out a SOOT analysis on Toyota. (Outcome 2. 1) Strengths The strengths of Toyota are in its history; it has been built up over several cascades and has a brand image.
Toyota pioneered a holistic system integrated throughout the business called Toyota Production System, which eliminates waste of time, money, materials, energy of the workers and lag time. It includes the systems of Awaken, Six Sigma and Just in time, giving it the advantage over European companies not using this technique. Over other Japanese rivals such as Ionians, it has developed hybrid and fuel cell technology and is seen as a leader in innovation and beings sustainable and taking care of the environment.
Its focus on being a good employer means hat people stay at the Company for a long time and it has a low staff turnover so the company is stable. Weaknesses Toyota recalled around 8 million cars early in 201 0, and then (Loti, 201 0) more than 180, 000 cars were recalled the following year. Toyota has suffered from brand damage in the mind of the consumers, many of which are now looking to its competitors, Honda and Ionians. The market share of Toyota in developed markets such as Europe and North America are declining. In China the company deliveries in the first 11 months of the 2012 fell 3. Percent to 749,600 units. (Mukluk, 201 2) Opportunities The hybrid market and the new plants that Toyota has opened in this area as well as its Fuel Cell Vehicles division puts it ahead of its competitors. It now has a commitment to be the leader in road technology safety, conducting human model tests known as T HUMS with 1600 collision tests annually. (Toyota-global. Com). The power of its suppliers means that Toyota can work with the local communities building a sustainable way for them to live, thus gaining the trust of the global community at large.
The new markets in developing countries including Manner and Indonesia, in which Toyota has n estimated market share of 40% and the launch of the low cost models in India Threats Sales of Honda in the US are growing by 10. 5 per cent (Young, 2014) There is a general decline in the automotive industry in the North American market (Young, 2014). The fluctuation of the Yen could value Toast’s assets and net value lower than it is perceived, causing problems in cash flow. Q. 2 Evaluate Toast’s business environment by doing a PESTLE analysis. (outcome 2. 2) There are several factors to consider when doing an external audit of the market.
These are political, economic, social, technological, environmental and legal factors and are collectively known as the PESTLE analysis. Political The political factors to consider include government policies and regulations as well as government stability and determine which countries can work well together. Trade policies in many developing countries have opened up and reduction of tariffs has made it easier. In Indonesia, Toast’s fastest growing market, the government introduced tax breaks for low cost echo-friendly cars, which is Toast’s specialization.
Economic The economic factors to consider are GNP trends, inflation, disposable income of various markets and labor rates. Toyota has a high market share in developing countries where many automobile financing companies have established themselves leading a higher number of loans being allocated for the purchase of vehicles as well as a growing middle class emerging in these countries. The increase in fuel prices since 2008 has resulted in the development of hybrid cars and also added to the urgency for them to become the mainstream by the general public (mad. Toyota;global. Mom). Sociological This includes population demographics, social mobility, lifestyle changes and consumer demands and levels of education. Consumers are becoming more informed of where their vehicle comes from and how it is produced. They are more aware of issues such as safety and sustainability as well as how staff is treated in various parts of the world. It is good for Toast’s reputation that they profess to take good care of workers and listen to them. That the Company is claiming its ultimate goal of zero casualties is certainly a boost to the public image of Toyota.
Technological This involves government spending on research, new developments and discoveries and the speed of technology transfer (Johnson and Schools, 1997). Low carbon technology is becoming a norm. The use of electric battery powered cars is increasing due to an increase in charging stations. Today electronics count for more than 25% of a vehicles value and this is estimated to reach 40% in the near future. This means technology of the car is becoming of increasing value to consumers (drivingworkforcechange. Org).
The automotive industry has an excellent track record in innovation, investing 4 per cent of its annual turnover in research and development (Baseball 2012). Environmental Factors included are those surrounding the external environment such as environmental offsets, climate change, weather and geographical location. Zero congestion charges being set by the government for echo cars in London. In the US, new standards were proposed last year in 2013, to reduce emissions of sulfur gas. These new rules will make it more transparent and easier for automobile companies to set benchmarks for emissions (Goldenberg, 2013).
Legal This includes safety laws, safety standards and labor laws. The European Commission (CE) sets legal frameworks which are rigid and must be adhered to regarding emissions. EX. guidelines have been a key factor in fostering a lose co-operation between car companies, their suppliers and the E, with large sums of public money committed to joint, pre-competitive strategic research. Q. 3 Define and explain the significance of a stakeholder analysis. (Outcome 2. 3) A stakeholder is anyone who has an interest in the business and a Stakeholder analysis is the identification of the Company’s key stakeholders.
It looks at internal stakeholders, external stakeholders as well as connected stakeholders. Internal stakeholders are those who are within the company such as employees, co-workers, managers and Coos, external stakeholders re those which are outside the business, such as local community, press, potential customers and potential employees as well as would be customers and connected shareholders are institutions or individuals such as banks, lenders, trade institutions, suppliers and large scale buyers or sub contractors, partners or manufacturers.
A stakeholder analysis can help strategists to assess a project environment and inform them of current situations, in the knowledge of each stakeholders position. The Business can therefore be more effective in communicating to each stakeholder. A stakeholder analysis also allows Toyota to be aware of the extent of information each stakeholder needs, as well as how satisfied they need to keep each shareholder and how much allocated resources to invest in each stakeholder group. To do this an audit in the form of stakeholder mapping can be carried out. A stakeholder power interest matrix is below for Toyota. Urge shareholders Stakeholders in the A Category These stakeholders may not be communicated with directly and may only come to hear about the activities of Toyota via third parties or the press Stakeholders in the B category These stakeholders will be kept informed byway of annual reports or swelters Stakeholders in the C category These stakeholders are important as they hold power but they are not very interested so they must be informed prior to projects being passed and involved while taking decisions Stakeholders in the D category Stakeholders in this category will give approval for projects to be passed.
Q. 1 Define four strategic Options available and explain how they may be implemented within Toyota. (Outcome 3. 1) Market Entry Strategy for Toyota Four strategic options for Toyota or any business are organic growth, growth by merger, acquisition or by building strategic alliances. Organic Growth This is a method of growth which focuses on the Company’s existing business, rather than merging with or partnering with another business. It is ideal for those businesses who want to maintain their corporate integrity and avoid the dilution of values that comes with merging.
It is an ideal strategy for market penetration; it could be used in market development as well as product development. It is said to be risky for product or market diversification (Johnson, Schools, 2009). Growth by Merger This occurs when a company combines itself with another company, merging al its assets, it is usually 2 equal companies mutually combining to form one legal entity. The intention of a growth by merger is that the resulting combination of products, people and pipelines will take the business to new heights. For example, in 1 998, American Automaker, Chrysler Corp.. Urged with German Automaker, Daimler Benz to form Demolisher’s (Gonzalez, 2001). The benefits include an expanded customer list, resource pool including equipment, facilities and staff, not to mention cash flow. Other benefits include an increase in market share. However, management can rove difficult as the two companies involved may have different company cultures or values and may not be flexible in their approach. Growth by Acquisition This involves a takeover, or the purchase Of a smaller company or companies by a larger company.
An example of an acquisition would be how the Walt Disney Corporation bought Paxar Animation Studios in 2006. Building Strategic Alliances A strategic alliance is an agreement between two or more players to build resources, strength and knowledge against competition. It is a way of entering a new market while offsetting the weaknesses and threats and must infinite both parties. In 2011 , Toyota and BMW formed a strategic alliance to enter the fuel cell and power train market for electric cars (Whether, 2012).
Neither company merged assets, and retained individual management Substantive Growth Strategies for Toyota A company can achieve substantive growth by integration with another business. There are a few ways to do this. A company can integrate with a business that specializes in activities which are further back in the value chain. This is known as backward integration. For example, in Toyota this could be integration with a company that specializes in production. Horizontal integration occurs when a company integrates with a company at the same stage of production in the value chain For example, if Toyota were to merge with Ionians.
Forward integration involves a Company integrating with a business whose activities lay further forward in the value chain. In Toast’s case this would apply if it were to take over or merge with repair and service shops and showrooms. Forward and backward integration are called vertical integration. The disadvantages with these can be that the new alliance can make the supply chain less flexible to demand and the two companies can come co-dependent on each other, failing to reap rewards from a diverse base of suppliers.
It could also lose loyalty from customers as it changes its business practices to meet the other company’s. Unrelated diversification is also known as conglomerate diversification. This occurs when a Company moves beyond its current industry usually by acquiring or integrating with another company that has no relationship whatsoever to its current output. For example, Proctor and Gamble owns hundreds of unrelated brands in the Fast Moving Consumer Goods market. Toast’s lack of expertise in other areas would suggest that this is not the way for them.