Toyota Motor Corporation is a Japanese firm that was founded in 1937 by Kiichiro Toyoda. Now, it is a multinational corporation that is employing more than 300,000 employees worldwide and has become the leader as a car manufacturer in terms of sales.
Toyota became very famous as it develops new processes; its production system has always inspired many other car manufacturers and its management style has been copied by competitors.
The multinational headquarters in Toyota city (Aichi, Japan) in Tokyo is also diversifying from its core activity, providing financial services and producing robots.
What makes Toyota so special? What has been its strategy to become the number one car seller?
The strategic analysis of Toyota is relevant as the strategies it has implemented over the decades has inspired many research studies and are now followed by other companies, not only from the automotive sector but also from other sectors. Its trademarks have always been safety and quality; Toyota received its first Japanese quality award in the 80s and is now renowned for the high standards of quality of its vehicles and the innovative solutions it introduces to the market every year.
[...] The customers There are several categories of customers in the automobile industry, the main are the following: Retail Consumers: they represent the larger market segment of customers and companies make the most profits with them. Employees/suppliers: Employees, suppliers and relatives have a significant discount for a determined number of vehicles per year. Fleet: These are rental companies, commercial fleet and government entities. The first one negotiates with each company a volume of cars per year. The second are companies that use cars for their employees' mission (for example taxi drivers or delivery persons). The last deal with automotive companies with specific and customized needs for vehicles (for example police cars). [...]
[...] The 2 pillars of Toyota are: respect for people and continuous improvement. Philosophy: long-term philosophy. Base your management decisions on a long-term philosophy, even at the expense of short-term financial goals (Be successful is a continuous challenge and people need purpose to find motivations and establish goals. Process: the right process will produce the right results; 3P is technically applied in this section. Create a continuous process flow to bring problems to the surface: Work processes are redesigned to eliminate waste (muda) through the process of continuous improvement (kaizen). [...]
[...] The TPS principles and methods go far beyond the production system level, they also include the global supply chain. To fully understand the automotive supply chain, we need first to define what are the product, the customers and the distribution models. The product The main product here is a truck. Each truck is composed of many elements, each element has different characteristics and a different terminology that makes it unique, this is called a “build combination”. This is a hierarchical method for ordering vehicle specifications. [...]
[...] Parts are shipped from Tier 1 suppliers to Toyota plants. The Tier 1 supplier are in charge of ordering their parts and materials from Tier 2 suppliers, it is their responsibility. Human Resources policies Mutual Trust Between Labour and Management Observations Toyota's labour-management relations are based on mutual trust between labour and management. Toyota takes for granted the sharing of values between managers and workers. However to make this system work, employees have to cooperate with corporate policies. The major builders of this mutual trust relationship are the leaders. [...]
[...] The strategic analysis of Toyota is relevant as the strategies they implemented over the decades inspired many research studies and are now followed by other companies, not only from the automotive sector. Its trademark has always been safety and quality; Toyota received its first Japanese quality award in the eighties and is now renowned for the high standards of quality of its vehicles and the innovative solutions they bring to the market every year. Corporate strategy The corporate strategy is a business strategy oriented toward a vision and how to realize it. [...]
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