Toyota is being known world-wide and being accepted as the world most popular car manufacturer. Wherever we go, not even a single soul did not know what a Toyota is. This is what we called as Toyotaism. But, to accomplish this was not that easy compared to how it sounds. Toyota had to face several issues and problems also had taken multiple actions to solve them. Hiroshi Okuda had identified 3 issues relating to the management of Toyota. Those management issues are; (1) Lag in product Planning, (2) Declining market share in Japan, and (3) was behind in overseas expansion. Due to these main issues, Toyota had taken several steps for the manufacturer to survive in its own name in own country and also to the world outside.
For Toyota to make known of its brand name, a number of development strategies had been taken by Toyota.
The first stage of Toyota’s development strategy is Cross-Nation Space Strategy. It is where Toyota implemented a strategy of marketing its product in Japan and in other nations around the world. It is a strategy of blanketing the nations with all Toyota’s product. Manufacturing of product for Toyota started in 1938 where its first plant was built which is the Honsha Plant. It is after 20 years of incorporating that Toyota could construct their second plant which was in the year 1959. Upon incorporating, there were three major strategies being taken to ensure their success. First and foremost was to have high quality auto suppliers. Second, was for Toyota to built affiliates like providing housing and entertainment facilities for its own employees and families. This was because Toyota is making its employees and families as their crucial factors of Toyota’s success. And thirdly was webbing Toyota dealers in which they developed on their channel of distribution.
It was up until 1960s that Toyota adopted nation-specific strategies to provide their automobiles throughout the nations outside. Due to that, Toyota Motor Sales (TMS) had set up export department for the main reason to pioneer the overseas market. First exporting activities being done by Toyota was after receiving an order from Brazil for 100 units of Model FXL large trucks. As Brazil was a developing country at the moment, it was a golden opportunity for Toyota to introduce its brand name overseas and highly potential to penetrate the automobiles market in Brazil. But, because Brazil eventually had a poor infrastructure, Toyota grabbed this opportunity and tend to market its Four-wheeled-Drive (4WD) Land Cruiser as this vehicle is able to withstand the poor road conditions of Brazil. Starting from this point, Toyota had Ipiranga, Brazil, and had the first-mover advantage to meet the demand locally. This enabled Toyota the chance to export its product to other Latin America nations like Colombia, Costa Rica, Venezuela, and Puerto Rico. For the South-East Asia, the first export was to Thailand which is in 1950s to 1960s. The action of Toyota Motor Sales to gain market in Thailand has enabled Toyota to receive for the second time the advantage as the first-mover in the Thailand’s local automobiles industry. And as for the Middle-East, it was in 1947 that the first exporting activity being done by Toyota which was to the King of Egypt. During this period also Toyota had already started exporting its products to gain market on the automobiles industry in China. Toyota hesitated in exporting its products to the Europe at first because Europe is known as the world’s most sophisticated market. So, Toyota had no intention to do any transaction with the Europe during that particular period. But, a European representative had come all the way to Tokyo asking Toyota to exports its automobiles. As a result, Toyota had export its model, Crown and Land Cruisers to Denmark and Ethiopia.
After the expansion of products to the Latin America, Toyota had expanded its automobiles to the North America Continent especially the United States of America. This is where the second stage of Toyota’s Development Strategies took place. In this stage, Toyota implemented the Cross-Continent Space Strategy by establishing 5 assembly factories. However, due to the weather condition in the USA, it brought some difficulties to Toyota in promoting its vehicles. Thus, Toyota started to export the new Corona and Corolla to Canada. Another core factor that influenced Toyota to expand its cars to United States is due to the existence of large port cities in the West Coast Region that were crucial for Toyota in distributing its products to the USA. Toyota Crown was the first model that arrived in United States, specifically Los Angeles. After a while, Toyota’s cars being condemned as it vibrates badly and easily overheated while driving all the way on United State’s highway. To replace the failure of Toyota Crown, Toyota had produced another improved car, Tiara, to the consumers of the USA. But, the Tiara also had not fulfilled the demand of the consumers and Toyota having serious problems in selling its cars. From this, Toyota had learned its lesson motor vehicles that are not competitive in performance, price, and brand names had no chances at all of being accepted by the markets. Until then, Toyota had been striving eminently to develop its new international product of the new Corona.
As for the development on the automobiles market in Thailand, Toyota had made a joint-venture with one of the car manufacturer of Thailand to become Toyota Motor Thailand. This was later enabled Toyota to establish its own assembly plant in Thailand where it provided multiple job opportunities to the locals indirectly.
The expansion of Toyota’s products continued to the West Region, then to the Central Region and lastly to the East Region of United States especially to New York City. This expansion process was successfully carried out with one of the factor of the establishing of the second wholly-owned subsidiary of Toyota which located in Brazil. The expansion leads to a success when Toyota Do Brazil (TDB) merged with Toyota of Argentina to export Toyota’s automobiles to Latin America and Central America. As Toyota was backed with high political influence due to its several contributions to the local politician during the election years, this guaranteed the successfulness of Toyota to world generally.
Approaching 1970s, two major developments occurred to the Toyota manufacturer. First is the oil crisis. As the price of oil increased tremendously during the period, Toyota’s cars are highly demanded as Toyota promoted a reasonable price on its cars. Another development occurred was the appreciation of Japanese currency. For this reason, Toyota had swift its manufacturing of high grade of small cars to sporty cars. The examples are Celica and multi-use pick-up trucks.
Next strategy implemented was the establishment of the product plants. The main factor that leads Toyota to put this strategy into action was due to the oil crisis that eventually increase the number of units sold of Toyota’s products. In January 1982, Toyota Motor Company (TMC) and Toyota Motor Sales (TMS) combined to form Toyota Motor Corporation. This restructuring and merger initiative was to grasp the capabilities of Toyota to the fullest. Toyota had been in a joint venture with General Motors (GM) with the reason that a voluntary restriction on Japanese exports to USA was initiated in 1981. This was after an action to joint-venture with Ford Motors failed. As a result, facilities of its own by Toyota being able to set up in the United States of America. The advantages towards this plan were to reduce risks and to accumulate experience in the local production. In this strategy also, Toyota decides to build production plants in developing countries and targeting places in Urban City like the Shenyang and Tianjin in China. In 1998, Toyota acquired Tianjin Motor Group to become Tianjin Toyota Motor Engine where they were in charged in supplying Daihatsu and later exported to Japan.
Up until 1995, Toyota implemented its third stage of development strategy which stressed on the globalization strategy. New global business plan being initiated with the efforts to further localize (overseas) and increase imports of automobiles produced overseas (in Japan). One of the strategy made was the New Sienna which was made by the manufacturer of Toyota in Kentucky, USA. Other globalization plan that were made was the published of supplier’s guide with the intention to aim at providing the first timer suppliers a greater understanding on Toyota’s purchasing activities and giving outlines on how to sell supplies to the Toyota. In 1997, Toyota made another plan which providing internet services where it makes overseas supplier request for auto parts easier. As up to March 1998, Toyota had already had 34 overseas subsidiaries and affiliates throughout the world, 150 distributors in 5 continents and 25 countries. This indicates that Toyota is successfully entered the foreign market.
One key factor that leads Toyota to be able to expand effectively is due to its active played the role of a good corporate citizen. Toyota is actively donating to social and cultural activities, exchange students programs and traffic safety campaign. This global business strategy has being a major plan for Toyota to keep consumers driving its products from generation to generation.
In short, all of the above strategies created by Toyota can be explained as; first, Toyota started to target the international market by focusing on the national level, then the global level. Ways of making its products known throughout the world are through exporting at first, joint ventures and later towards the establishing of Toyota’s own subsidiaries to manufacture its products in the host country. After creating a potential hopes on the 5 continents’ market, Toyota began to be part of the local communities’ choice of automobiles in their own country.
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FAQs
The strategy that generally based both Toyota company and most Japanese companies is KAIZEN strategy which means continuous improvement and the impact that it has on the level of product quality. ”KAIZEN” is an integrative strategy, which means a cross-functional strategy that appoints the gradual improvement, ...
What were the challenges that Toyota encountered throughout its history? ›
During World War II the company suspended production of passenger cars and concentrated on trucks. Faced with wrecked facilities and a chaotic economy in the aftermath of World War II, the company did not resume making passenger cars until 1947 with the introduction of the Model SA.
What problems are faced by Toyota company? ›
In as much as the problems faced by Toyota Motor Corporation are numerous, it is necessary to explore the most distinct which are bureaucracy, overconfidence, weak management and fall out.
How can Toyota improve its strategy? ›
Improving Toyota's production systems
- Fully using existing plants and facilities. ...
- Reducing investment needed to produce new models. ...
- Increasing plant competitiveness. ...
- Making ever-better cars in the field of production engineering.
Toyota's main intensive growth strategy is market penetration. This intensive strategy supports business growth by reaching and attracting more customers in the firm's current markets. To fulfill this intensive growth strategy, Toyota ensures that it offers products for every market segment.
How does Toyota use differentiation strategy? ›
The differentiation strategy adopted by Toyota helps the company produce products that are different from those of competitors. The strategy allows Toyota to price the products strategically, because its products are different from those of competitors.
How Toyota changed the way we make things summary? ›
Toyota knows how to make cars. It does it so well, it became the first company to produce more than 10 million cars a year. Its success is rooted in a special system and began what is now known as lean manufacturing and its ethos is emulated by companies around the world to make products faster, cheaper, and better.
What happened in the Toyota incident? ›
In August, 2009, the improper installation of an all-weather floor mat from an SUV into a loaner Lexus sedan by a dealer led to the vehicle's accelerator getting stuck, causing a tragic, fatal accident and launching the most challenging crisis in Toyota's history.
How did Toyota become successful through quality management? ›
Toyota has three basic perspectives of TQM that are customer-oriented. These are based on its manufacturing process traced back to the 1950s. The strategies towards achieving quality manufacturing, planning, and having the culture towards quality accomplishment are paramount for TQM implementation to remain successful.
How are problems solved in Toyota? ›
Toyota, on the other hand, uses a systematic problem solving process which carefully frames the problem, finds true root cause and uses experiments to test countermeasures to ensure the problem is fixed once and for all.
THE CRISIS
The sudden unintended acceleration (SUA) was the main crisis that Toyota faced; causing a chain of reaction that resulted in a series of other problems. Sudden unintended acceleration (SUA) occurs when the vehicle accelerates from a stationary position without the driver's intention or control.
What are the key activities of Toyota? ›
Toyota is one of the world's best-known and most successful businesses, building cars and trucks in 28 countries for sale in more than 170 markets around the globe. Worldwide production of Toyota Motor Corporation group vehicles was 9.528 million (8.692 million for Toyota and Lexus brand vehicles) in 2020.
What is Toyota's pricing strategy? ›
Toyota uses the market-oriented pricing strategy to determine prices based on market conditions and the prices of competitors. This pricing strategy is notable in the vast majority of Toyota products, such as sedans and trucks.
Why is Toyota the best? ›
Along with durability, Toyota vehicles are known for having impressive resale value. According to Kelley Blue Book, the Toyota brand is ranked as having one of the highest resale values. Safety is also another critical factor to consider when purchasing a vehicle, and Toyota makes that a top priority.
What gives Toyota a competitive advantage? ›
Huge, efficient R&D spending has allowed Toyota to gain a competitive advantage over its competitors and to become one of the largest automotive manufacturers in the world by researching and introducing the leading-edge technology and vehicles to the consumers.
How does Toyota achieve competitive advantage? ›
The company's strategy is guided by the word KAIZEN, which means continuous and consistence improvement. It aims at continually producing quality products and improving its production each day. Quality production has been essential for the success of Toyota.
What are the growth strategies does Toyota appear to be using? ›
The intensive growth strategies used by Toyota Motors include market penetration, market development, and product development. The company has used these strategies to grow its international customer base and market share in the automobile industry.
What makes Toyota different from other brand in the market? ›
No other automaker has a reputation for durability that Toyota does. This has a lot to do with the manufacturer's firm commitment to introducing new driver assist technologies, striking exterior designs, interior comforts, and more.
How does Toyota differentiate itself from competitors? ›
One of Toyota's leading ethos is “continuous improvement”, and they strive to make cars as efficiently as possible. If another automaker takes the lead in making cars faster, or better, Toyota will reimagine their processes to be better. They are always working towards being the best automotive brand in the world.
Does Toyota use a low cost strategy? ›
Toyota drive its cost lower through investments in efficient scale facilities, tight cost and overhead control, and cost minimization in such areas as service, sales force, and research and development.
The right process will produce the right results
Create continuous process flow to bring problems to the surface. Use the "pull" system to avoid overproduction. Level out the workload (heijunka). (Work like the tortoise, not the hare.)
What are the main principles of Toyota Production System discuss? ›
The Toyota Production System (TPS) was established based on two concepts: "jidoka" (which can be loosely translated as "automation with a human touch"), as when a problem occurs, the equipment stops immediately, preventing defective products from being produced; and the "Just-in-Time" concept, in which each process ...
What are the main objectives of the Toyota manufacturing system? ›
The way we make vehicles is defined by the Toyota Production System (TPS). It is an original manufacturing philosophy that aims to eliminate waste and achieve the best possible efficiency – what is often called a “lean” or “just-in-time” system. TPS is based on two concepts: jidoka and just-in-time.
How did Toyota deal with the recall crisis? ›
Toyota says recalled cars will have their gas pedals replaced with the new, redesigned unit. Until their car is serviced, owners are advised to remove floor mats and to report any problems to their local Toyota dealer.
What was the crisis faced by Toyota in 2010? ›
On January 21, 2010, after receiving customer complaints, Toyota recalled millions more vehicles (followed by another million or so three weeks later) for problems with accelerator pedals sticking in cars without floor mats.
What was the effect of Toyota's mishandling of the safety issue? ›
Although Toyota eventually recalled more than 6 million vehicles to make changes to its floor mats and sticky accelerator pedals, the slowness of its response resulted in a $1.2 billion settlement with the Justice Department and three fines totaling nearly $50 million from the National Highway Traffic Safety ...
What is the quality rule followed by Toyota? ›
“Quality is never an accident. It is always the result of an intelligent effort.”
What management theory does Toyota use? ›
The Toyota Way is a comprehensive expression of the company's management philosophy, which is based on the two foundational principles of Continuous Improvement (kaizen) and Respect for People.
How Toyota uses kaizen? ›
Toyota Production System and Kaizen
TPS relies on employees to keep an eye out for areas where waste can be removed, thus increasing efficiency. Each employee takes ownership of their work, which they look to make work easier on themselves, as well as on the company.
What are the 8 steps of problem solving? ›
8-Step Problem Solving Process
- Step 1: Define the Problem. What is the problem? ...
- Step 2: Clarify the Problem. ...
- Step 3: Define the Goals. ...
- Step 4: Identify Root Cause of the Problem. ...
- Step 5: Develop Action Plan. ...
- Step 6: Execute Action Plan. ...
- Step 7: Evaluate the Results. ...
- Step 8: Continuously Improve.
The problem solving tools include three unique categories: problem solving diagrams, problem solving mind maps, and problem solving software solutions. They include: Fishbone diagrams. Flowcharts.
What do you think is the root cause of Toyota's crisis? ›
One of the main reasons of Toyota crisis is massive recall of sold vehicles. Almost 9 million Toyota vehicles around the world had to be recalled within a few months.
How did globalization contribute to Toyota's success? ›
Toyota Company commenced globalization early in the nineties through FDI flow. This strategy turned out to be very successful because it has experienced growth in production plants and increased profitability. This strategy was characterized by production in other counties rather than home.
What was the crisis or crises that lead Toyota to make such a dramatic change in the way they do business? ›
The Toyota Story. While the catastrophe of American bombing in 1945 affected all of Japanese industry, Toyota's biggest crises came about five years later. This financial and labor crisis was the inspiration for what became the Toyota Production System.
What is Toyota's values? ›
We are a company driven by imagination, experimentation, humility, respect and innovation. And we believe it is people, our people, who will go the extra mile to deliver to our customers all that Toyota promises to be, today and into the future.
Who is Toyota's target market? ›
DETROIT – For the past half-dozen years, Toyota Motor Corp. has been highly focused on appealing to younger buyers, going as far as creating a whole new division – Scion – aimed exclusively at attracting Generation Y consumers, the youngest car-buying demographic.
What is Toyota competitive strategy? ›
Toyota's main intensive growth strategy is market penetration. This intensive strategy supports business growth by reaching and attracting more customers in the firm's current markets. To fulfill this intensive growth strategy, Toyota ensures that it offers products for every market segment.
How can Toyota improve its strategy? ›
Improving Toyota's production systems
- Fully using existing plants and facilities. ...
- Reducing investment needed to produce new models. ...
- Increasing plant competitiveness. ...
- Making ever-better cars in the field of production engineering.
Product-based Divisions.
The company has four of these divisions: (a) Lexus International, (b) Toyota No. 1 for operations in North America, Europe and Japan, (c) Toyota No. 2 for operations in all other regions, and (d) Unit Center, which is responsible for engine, transmission and other related operations.
What is Toyota's vision and mission? ›
Toyota will lead the future mobility society, enriching lives around the world with the safest and most responsible ways of moving people. Through our commitment to quality, ceaseless innovation, and respect for the planet, we strive to exceed expectations and be rewarded with a smile.
Based on a philosophy of “Customer First”, TOYOTA strives to provide attractive products and services that meet the needs of customers worldwide. TOYOTA also seeks to achieve the top-level world standard in environmental protection and safety measures.
How does Toyota segment its market? ›
They segment their market on the basis of world region , density of population & Climate.
What benefits does Toyota offer employees? ›
Toyota Financial Services offers a variety of employee benefits, including health insurance, dental and vision coverage, and a 401(k) plan. Financial Services also offers a variety of other benefits, such as tuition reimbursem*nt, paid time off, and a variety of discounts.
Who is Toyota's biggest competitor? ›
Toyota competitors include Volkswagen, Chrysler, Honda, Ford Motor Company and Chevrolet. Toyota ranks 1st in CEO Score on Comparably vs its competitors.
Does Toyota use Multidomestic strategy? ›
As a result, Toyota can produce their car which can be better adapted delegated ted to the local markets. In short, the use of multidomestic strategies can expand the firm's local market share because the firm can pay attention to the needs of the local clients.
What is transnational strategy in international business? ›
An international business structure where a company's global business activities are coordinated via cooperation and interdependence between its head office, operational divisions and internationally located subsidiaries or retail outlets.
Why did Toyota expand internationally? ›
Initially, Toyota developed and produced cars only in Japan and exported them abroad in order to ensure high quality and to maintain customer trust in the brand.
When did Toyota expand internationally? ›
In 1957, Toyota started on the road to international sales with a headquarters in Hollywood and the first of their vehicles to be registered in the U.S. Company president Shotaro Kamiya personally installed the California license plates in front of the state DMV.
Why is Toyota successful globally? ›
Toyota's success is no accident. It has been cultivated through high quality design, unyielding innovation, and bold moves. They're responsible for some of the most impressive sports cars ever produced. And they're also known for the dependability and class of their economy sedans.
How did Toyota enter the US market? ›
In August 1957, Managing Director Seishi Kato and two others from Toyota Motor Sales Co., Ltd. traveled to the United States as an advance team for exporting Toyota vehicles to the U.S. and began the work of establishing a sales company.
Toyota Motor Corporation is a leading automobile company and is operating in more than 170 countries in world. Toyota Motor Corporation is operating in many parts of the world and its primary markets are Japan, North America, Europe and Asia.
What are the 4 types of international strategies? ›
Multinational corporations choose from among four basic international strategies: (1) international (2) multi-domestic, (3) global, and (4) transnational. These strategies vary depending on two pressures; 1) on emphasizing low cost and efficiency and 2) responding to the local culture and needs.
What are the three types of international strategy? ›
There are three main international strategies available: (1) multidomestic, (2) global, and (3) transnational (Figure 7.23 “International Strategy”).
What is international strategy example? ›
An international strategy is usually the first approach most businesses take with global expansion: exporting or importing goods and services while maintaining a head office or offices in their home country.
Why did Toyota become successful? ›
No executive needs convincing that Toyota Motor Corporation has become one of the world's greatest companies because of the Toyota Production System (TPS). The unorthodox manufacturing system enables the Japanese giant to make the planet's best automobiles at the lowest cost and to develop new products quickly.
How Toyota changed the way we make things summary? ›
Toyota knows how to make cars. It does it so well, it became the first company to produce more than 10 million cars a year. Its success is rooted in a special system and began what is now known as lean manufacturing and its ethos is emulated by companies around the world to make products faster, cheaper, and better.
What is Toyota best known for? ›
Toyota is world-famous as the manufacturer of high-quality, high-value cars, vans and trucks that set the standard for long-term resale value and durability.
How has Globalisation affected Toyota? ›
Impact of Globalisation on Toyota
Toyota Company commenced globalization early in the nineties through FDI flow. This strategy turned out to be very successful because it has experienced growth in production plants and increased profitability.
How Toyota manages its quality? ›
To manage the quality in all organizational management system, the Toyota Production System incorporates different modernisms like strategy or kanri Hoshin use, overall value supervision, and just-in-time assembly.
What type of company is Toyota? ›
Toyota Motor Corporation (Japanese: トヨタ自動車株式会社, Hepburn: Toyota Jidōsha kabushikigaisha, IPA: [toꜜjota], English: /tɔɪˈjoʊtə/, commonly known as simply Toyota) is a Japanese multinational automotive manufacturer headquartered in Toyota City, Aichi, Japan.
