Toyota. Background and Company History - Essay Example

? Toyota Case Background and Company History Toyota is amongst the largest car makers in the World and has her headquarters in Aichi, Japan with several international branches and dealership in various continents. They sold almost 7.47 vehicles globally in 2004. It enjoys a market share of about 45% in Japan alone. Cho was the executive officer who catapulted Toyota into its current state due to his hard work and determination. Cho derived management experience and skills from Taichi Ohno who was the founder of legendary Toyota Production System. Toyota is known to be producing numerous models of cars that ranging from Corolla, Lexus to the Scion xB (Bremner & Dawson, 2003). Toyota enjoys huge revenues and profits from various parts of the world. The company has thousands of employees across the world. The company’s success is attributed to the fact that they build on every challenge and maximize on every opportunity that comes across. Toyota has relaxed her flexes by being able to adapt to any positive change without being too rigid (Bremner & Dawson, 2003). The company has had booming sales across the globe especially in areas where they have bigger market shares. Toyota’s share in the U.S market is 11.2% where they made sales of 1.94million and 756, 000 sales in Europe where they have market share of 4.4%. Toyota’s model leaders in North America are Lexus while in Europe the leading models are Yaris and new Avensis. In Southwest Asia, Toyota made sales of 268, 000 where their durable Qualis suv was a big hit in India. In Southeast Asia the company made sales 455, 000 where they assemble cars in seven countries with an intention of expanding their operations in Thailand and Indonesia. Some other markets where Toyota is doing exceptionally well are South America, Africa, China and Japan where they made sales of 97, 000, 140,000, 58, 000 and 1.68 million respectively (Bremner & Dawson, 2003). Cho’s positive attitude towards the company has seen it surviving amid fierce competition from other companies such as General Motors. He initiated adaptation of cost competitiveness in the 21st century that is currently used in the company. Frugality is an important aspect that has contributed to the success of Toyota (Bremner & Dawson, 2003). Toyota usually minimizes cost of production in various ways such as reducing of prices on the major constituents of the new models by around 30%. The company concentrates on how to reduce wastage of time and money as much as possible. Also Toyota pays close attention to the customers’ demand as a way of coming up with car models that are consistent with what the customers want (Bremner & Dawson, 2003). Customer/Target market Toyota Company is working on better ways of enhancing their economy, market share and maintaining a sustainable and stable world market. As a tool of global expansion the company creates and invests in various strategies. The company tirelessly works on a number of strategies to enable it reach her set goals and objectives over a given period of time (Bremner & Dawson, 2003). Toyota enjoys a wide range of expertise assisting it in carrying out research and development which are essential in the growth of the global market. R&D has ensured high class delivery of products and services. The company also has an extensive array of distribution network globally that enables it to reach a bigger share of the market. Toyota’s customers are really diverse and they comprise of low income earners as well as high income earners who are widespread globally. The company successfully caters for the needs and wants of their customers by creating a wide range of motor vehicles stretching from small sports cars, vans, large family vehicles and trucks. The high class customers are provided with classy and elegance cars while the low income earners also enjoy an opportunity of having a basic mode of transportation which sufficiently satisfy their needs and income (Capon & Hulbert, 2007).Toyota enjoys a good share of North America and Japan’s market with sales of 1.94 and 1.68 million respectively. The market shares for the two big markets comprise of 11.2% and 40% in North America and Japan respectively. Lexus really sold in America while in Japan some of the models that comprises of a big share are Sienta compact minivan, sportier Wish minivan and Harrier suv. Toyota targets to expand her operations in Europe where it performs poorly. Toyota intends to increase her production in Britain and France as well as other countries in Southeast that involve Thailand and Indonesia. Furthermore, the company enjoys good sales in Africa with their Corolla sedan and Prado suv. They also expect to boost their growth in China from 1.5% to 10% by 2010. Various models of Toyota cars have done very well in various markets thus boosting their revenues in those particular markets. Toyota targets global market of 15% as well as 15% of global sales in the future which is an increase of 5%. They believe that targeted increase in market share would give them an edge over GM and become world’s number one car maker (Bremner & Dawson, 2003). The company’s effort to boost their market size is attributed to the advantage they took in psychological aspects of cars such as introduction of Prius. Their models target various markets such as Scion xB which solely targets young people and Lexus RX330 that targets rich customers who love luxurious life. Toyota Company is targeting to reach worldwide market through meeting the needs of particular markets due to diversification in the various markets. For instance they attempt to meet the market needs for Europe in order to increase their market share in Europe. Toyota intends to enhance their production by offering high quality models and services at lower prices and also separating their luxurious Lexus brand so that it can establish her own heritage (Capon & Hulbert, 2007). Situation Analysis Toyota’s superb performance in the global market is exclusively dependent on her internal environment. Toyota has managed to be on top of production, speed, efficiency and quality standing because of their splendid internal environment. Top managers such as Cho have successfully ensured efficient production process through their recognizable aptitude. For a deep understanding of Toyota’s situational analysis it is advisable to consider SWOT analysis. Considering the SWOT analysis, strengths and weaknesses may be classified as internal factors since their influence begin from within while the external factors are threats and opportunities. Under competent leadership of Cho, Toyota reached greater heights in production process by embarking on cost production techniques and reducing the steps of making a car (Hino, 2006). Toyota further managed to offer hybrid products which were customer friendly by diverting from production which was only intended to satisfy the Japanese market. Also, Toyota ensured increase in plants, distribution branches and dealership as a way of boosting their sales and covering a wide market. The workforce of Toyota is also empowered through better pay and even encouraging faster delivery of quality materials and services from their suppliers. However, the company has had various weaknesses such as failure to gain revenues from sales of their hybrid cars such as Lexus as well as the expense of establishing distribution network (Hino, 2006). Toyota projects stability of future market expansion however, their low price products may imply that the quality of their product is low. The company has managed to differentiate their products as a way of setting competitive edge and also ensuring distinction in the market. Distinction of their car models such as Lexus has given the model an advantage over other great models such as BMW and Mercedes Benz. They have embarked on high technology models that are also eco-friendly (Hino, 2006). Nevertheless, their competitors such as GM and ford are also working hard to come up with high technology models that impose great threat to Toyota’s brands. Decrease in consumer income especially during global recession negatively affected the company’s revenue. References Bremner, Brian and Dawson, Chester. (2003, November 17). Can Anything Stop Toyota? BusinessWeek,114-122. Capon, N., & Hulbert, J. M. (2007). Managing Marketing in The 21st Century: Developing And Implementing The Market Strategy. Bronxville, N.Y: Wessex Inc. Hino, S. (2006). Inside The Mind of Toyota: Management Principles For Enduring Growth. New York, N.Y: Productivity Press. Read More