47924195 Toyota Motor cCorporation

8/6/2019 47924195 Toyota Motor cCorporation

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Table of Contents

1.0 INTRODUCTION 22.0 A BRIEF HISTORY OF TOYOTA 23.0 STRATEGIC AUDIT 3

3.1 PERFORMANCE RESPONSIBILITY AND INTERACTION 33.2 STRATEGIC POSTURE 3

3.2.1 VISION 33.2.2 MISSION 43.2.3 OBJECTIVES 43.2.4 STRATEGIES 43.2.5 POLICIES 43.2.6 TOYOTA'S 14 PRINCIPLES: KEY SUCCESS FACTOR 53.2.7 THE TOYOTAPRECEPTS 53.2.8 THE TOYOTAPRECEPTS 6

3.3 SWOT ANALYSIS of TOYOYA 63.3.1 INTERNAL ENVIRONMENT: Strengths & Weaknesses 63.3.2 EXTERNAL ENVIRONMENT: Threats and Opportunities 8

3.4 FIVE PORTERS FORCES ANALYSIS IN TOYOTA 114.0 CHALLENGES OF TOYOTA 135.0 CORPORATE GOVERNANCE 19

5.1 BOARD OF DIRECTORS 195.2 TOP MANAGEMENT 195.3 CORPORATE CNTRIBUTION & TALENT 20

6.0 TOYOTA BUSINESS STRATEGY 207.0 MARKETING STRATEGIES OF TOYOTA 21

7.1 PRODUCTS 217.2 TOYOTAPRICING DECISION STRATEGY 237.3 TOYOTAS PROMOTION STRATEGY 247.4 TOYOTAS DISTRIBUTION STRATIES 25

8.0 OPERATION STRATEGIES 269.0 HUMAN RESOURCES STRATEGIES 2710.0 FINANCIAL STRATEGY 2811.0 CONCLUSION 35


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TOYOTA MOTOR CORPORATION: STRATEGIC ANALYSIS

1.0 IntroductionToyota Motor Corporations (TMC) was established on 28August, 1937, headquarter located

in Toyota City,A

ichi, Japan.P

roducing vehicles in 26

countries and regions and marketingvehicles in more than 170 countries. Toyota Motor Corporation during fiscal yearApril 2006

March 2007 has 299,394 employees and collects net income 1,644 billion yen.

In year 2005 International organization of motor vehicle manufactures (OICA) reported that

Toyota is still the second largest automaker in the world after General Motors [2], in fiscal

year 2006 Toyotas global output rose 10 percent to 9.018 million vehicles, while General

Motors produced 9.18 million vehicles. This small gap eventually ending in first quarter

2007, Toyota became the number one automaker company in the world surpassed domination

of General Motors for since 1931. Toyota succeeded to reach sales 2.35 million cars, about

109.000 more than Generals Motors did in the same period.

2.0 A Brief History of TOYOTAThe history of Toyota Motor Cooperation was started from producing model A1 passenger

car in May 1935 and G1 truck in August 1935. After a decade offered its product to local

market in Japan, Toyota Motor Corporation introduced their products to the world by

exporting its product (Toyota Crown) for the first time, to United States in April 1965. To

increase production capacity, Toyota affiliated with General Motors under a joint venture

relationship called by NUMMI (New United Motor Manufacturing, Inc) in 1984. The

NUMMI plant is located in Fremont, California and currently produces Toyota Corolla and

Toyota Tacoma.

Enlarging market share in European continent Toyota established Toyota Motor Europe

Marketing & Engineering (TMME) located in U.K and created joint venture with French and

Russia to produce automobiles in Europe

Toyota has reputation on making high quality cars with more efficient fuel consumption than

other automotive brand. Toyota positioning its product on medium class market and creating

separately brand for high class market called by Lexus. Toyota uses distributors and dealers

as sales forces to deliver its product to customers . The distributors are under control of

Toyotas management.


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With a company that is as active in as many diverse projects and interests as The Toyota

Motor Corporation, there are numerous objectives and goals, on varying levels, being

pursued at any one particular time. The following section outlines some of the most definitive

and prominent of TMC's objectives, strategies and policies.A discussion will also ensue as to

whether these points correlate, overall, each supporting the promotion of the others,

presenting consistency throughout. Unlike other corporations, the promotion of these goals is

not just implied or presented on paper, but actually facilitated through practical application,

proving that TMC is not a company that is just "all talk", but one that truly aims to achieve its

goals, maintain standards, and keep its word. This is evident not only in a fiscal sense, but in

the many ethical initiatives and other endeavors presently being executed by the company.

Some of these pursuits will be elaborated on in detail later in this report.

3.0 StrategicAudit3.1 Performance Responsibility and Interaction

The performance achievements of Toyota Motor Corporation are a function of employees at

all levels. This is due to the reciprocal relationship within the corporation. While the Board of

Directors and high level key officials may compose the company laws and guidelines that

must be followed to insure success in all areas, it is often the input of other employees,

especially management, that determine what guidelines need to be changed and what new

ones need to be defined. Further, it is ultimately the compliance of lower level personnel that

determine, through their behavior and interactions, whether or not these tenets are applied

resulting in either success or failure. Top managers are integral in this process, often acting as

a liaison between the guidance of key executives and the input of employees "lower on the

ladder". Further, it is the supervisory skills of these managers that monitor adherence to

standards of the employee population and the success it yields. In this sense, managers are an

absolute key component in the process of strategic management.

3.2 Strategic Posture:

3.2.1 VISION

Toyota's vision is contributing to the development of a prosperous society through the

manufacture of automobiles"


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3.2.2 MISSION

A bove all, the overlying mission of The Toyota Motor Corporation is to "develop and

provide innovative, safe and outstanding high quality products and services that meet a wide

variety of customers' demands to enrich the lives of people around the world". In order to

insure that each and every segment of TMC excels in this mission, a number of principles and

philosophies have been outlined in order to meet the corporation objectives in the most

beneficial manner, demonstrating enhanced efficacy. In 2001, The Toyota Way was

published as a means of clarifying "the values and beliefs that all employees should embrace

in order to carry out the Guiding Principles at Toyota...".Prior to this, TMC's management

philosophies, business methods and values were simply passed on as implicit knowledge.

However, with the increased growth of the employee population and the corporation 's

international growth, it became a necessity to define such principles in print.

3.2.3 OBJECTIVES

In order to uphold the TMC mission, specific goals and objectives have been identified as the

aim of the company in keeping with its beliefs and building on its prior sales and financial

success. The three main corporate goals are the following: 1) to steadily increase corporate

value as a top management priority, 2) continue to introduce and produce products that fully

cater to customer needs, and 3) to become an even more competitive global company.

Overall, these intentions translate into increasing sales and profit, maintaining superior

quality, and continuing expansion.

3.2.4 STRATEGIES

Consistent with the overall corporate goals, Toyota Motor Corporation has adopted several

strategies in order to implement the objectives above. These include:

a unique management system-focused on prompt decision-making and speeding up

operations a range of in-house committees a system that emphasizes problem-solving and

preventative measures-done by immediately flagging problems and sharing them with the

appropriate individuals/departments.

3.2.5 POLICIES

Although realization of Toyota's goals are of the utmost importance, TMC recognizes the

importance of increasing their feasibility by instituting an underlying set of policies and


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principles that must be considered in all activities in order to meet these objectives. The first

is a set of Guiding Principles that outline the policies and philosophy by which all

transactions should take place. The second is a set of behavioral guidelines, known as The

Toyoda Precepts, which dictate the manner in which all transactions should occur. Both of

these are summarized in the tables below.

3.2.6 GUIDINGPRINCIPLES

1. Honor the language and spirit of the law of every nation2. Respect the culture and customs of every nation and contribute to economic and

social communities

3. Provide clean and safe products4. Create and develop advanced technologies5. Foster a corporate culture that enhances individual creativity and teamwork value6. Pursue growth in harmony with the global community through innovative

management.

7. Achieve long-term growth open to new partnerships

3.2.7 TOYOTA'S 14 PRINCIPLES: KEY SUCCESS FACTOR

Toyota is clearly a dominate leader in automobile manufacturing today. The principles

employed at every level of the company have certainly led to a standard of quality that no onein the automotive industry can argue with. What these principles are and how they are

implemented within the Toyota Corporation can certainly help the automakers of the United

States and indeed the world achieving the same success.

When these 14 principles are listed and compared with some of the strategies that United

States automakers have employed, it becomes clear why Toyota has succeeded as it has.

The 14 principles are known as the "Toyota Way" and are listed below:

1. Base your management decisions on long term philosophies, even at the expense ofshort term goals

2. Create continuous process flow to bring problems to the surface3. Use pull systems to avoid over production4. Level out the workload


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5. Build in a method to stop and fix problems when they are discovered, this ensuresquality the first time

6. Standardized tasks provide the foundation for continuous improvement and employeeempowerment

7. Use visual control so no problems are hidden8. Use only reliable, thoroughly tested technology that serves you people and processes9. Grow leaders who thoroughly understand the work, live the philosophy and can and

do teach it to others

10.Develop exceptional people and teams who follow your company's philosophy11.Respect your extended network of partners and suppliers by challenging them and

helping them improve

12.Go and see for yourself so that you completely understand the situation13.Make decisions slowly by consensus, thoroughly consider all options; implement

decisions rapidly

14.Become a learning organization through relentless self examination and continuousimprovement

3.2.8 THE TOYOTA PRECEPTS

Be contributive to the development and welfare of the country by working together Be at the vanguard of the times through endless creativity & inquisitiveness Be practical and avoid frivolity Be kind and generous Be reverent and show gratitude...

3.3 SWOT ANALYSIS of TOYOYA

3.3.1 INTERNAL ENVIRONMENT:

- Strengths:

1- Toyota is the Worlds second largest car manufacturer, surpassing Ford. BiggestJapanese car manufacturer, it is classified as a global organization, with a strong

international position in 170 countries worldwide.

2- High financial strength (1997, sales turnover, 131,511 million), sales growth of29.3%.

3- Reliable and High Quality Image, strong brand image based on quality, environmentalfriendly (greener), customized range.


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4- R&D, biggest spend amongst car manufacturers; innovative. Industry leader inmanufacturing and production. Maximizes profit through efficient lean manufacturing

approaches (e.g. Total Quality Management) and JIT (Just in Time) manufacturing

and first mover in car research and development.

5- Excellent penetration in key markets (US, China, EMEA).6- Corolla; is bestselling car, 20 million units to date.7- Lexus brand, other strong brands.

In 2003, Toyota knocked its rivals Ford into third spot, to become the worlds second largest

car market with 6.78 million units. The company is still behind rivals General Motors with

8.59 million units in the same period. Its strong industry position is based upon a number of

factors including a diversified product range, highly targeted marketing and a commitment to

lean manufacturing and quality. The company makes a large range of vehicles for both

private customers and commercial organization, from the small Yaris to large trucks. The

company uses marketing techniques to identify and satisfy customer needs. Its brand is a

household name. The company also maximizes profit through efficient manufacturing

approaches (e.g. Total Quality Management). Toyota also holds various other strong brands

in many segments. New investment by Toyota in factories in the US and China saw 2005

profits rise against the worldwide motor industry trend, net profits rose 0.8% to 1.17 trillion

yen ($11 bn; 5.85 bn), while sales were 7.3% higher at 18,55 trillion yen. Commentators

argue that this is because the company has the right mix of products for the markets that it

serves. This is an example of very focused segmentation, targeting and positioning in a

number of countries.

- Weaknesses:1- Japanese car manufacturer - seen as a foreign importer.2- Production capacity. Toyota produces most of its cars in US and Japan whereas

competitors may be more strategically located worldwide to take advantage of global

efficiency gains.

3- Some criticism has been made due to large-scale re-call made in 2005, quality issues.Being big has its own problems. The world market for cars is in a condition of oversupply

and so car manufactures need to make sure that it is their models that consumers want .

Toyota markets most of its products in the US and in Japan . Therefore it is exposed to

fluctuating economic and political conditions those markets.Perhaps that is why the company


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is beginning to shift its attentions to the emerging Chinese market. Movements in exchange

rates could see the already narrow margins in the car market being reduced .

The company needs to keep producing cars in order to retain its operational efficiency. Car

plants represent a huge investment in expensive fixed costs, as well as the high costs of

training and retaining labour. So if the car market experiences a down turn, the company

could see over capapacity. If on the other hand the car market experiences an upturn, then the

company may miss out on potential sales due to under capacity i.e.it takes time to

accommodate. This is a typical problem with high volume car manufacturing.

3.3.2 EXTERNAL ENVIRONMENT: Threats and Opportunities

Societal Environment:

Excess CapacityNumerous variables are presently factoring into the present and future sustainability of the

Toyota Motor Corporation and the auto industry, as a whole. Of the various potential

influencers, perhaps the most significant are those of an economic nature. The first of these is

the issue of Excess Capacity. This is an area of concern that can certainly be considered a

detriment to any auto corporation.Addressed by CSM Worldwide, a firm specializing in auto

industry research, their findings indicated that in N.America and Europe (the two localities

where the majority of revenue and profits are earned) "...excess capacity was an estimated

17% and 14%, respectively... (and that)...excess capacity conditions in N. America could

continue for several more years but could be mitigated by the capacity reductions announced

by Ford and GM"

Pricing PressureAnother influencing factor is Pricing Pressure. However, while this is certainly another issue

of concern within the industry, it is foreign companies, such as Toyota, that have been the

catalyst for such an event. Undoubtedly, excess production of vehicles (as alluded to above)

has caused the need for lower prices in order to liquidate product that is overstocked. This has

caused a pricing competition between manufacturers, each attempting to drop their prices

lower or offer better rebates and lower-rate financing than the next. The result is a benefit for

the consumer, translating into a "buyer's market". However, for the auto manufacturers,

pressure to continually lower prices to generate sales is resulting in significantly lower profit

margins. Despite this, Toyota may actually find such an occurrence to be an advantage. This

is because foreign auto manufacturers who are setting up shop in the United States (often


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referred to as "transplants") are the cause of this pricing environment. The lower prices that

they can offer with the construction of new, huge, efficient production plants in The States

has forced American automakers to follow suit or lose sales. Therefore, in this case, it seems

that Toyota is not a victim, but a perpetrator.

Consumer spendingThe spending trends of consumers are yet another variable that affects the success and

sustainability of, specifically, TMC, as well as the rest of the industry.Presently, this appears

to surprisingly be an asset. Despite the competition to lower prices, current trend projections

have identified a spending pattern that is predicted to persist for at least the next ten years by

marketing research data. This is the more frequent purchase of the upper scale clients who are

purchasing high- end models at significant price points. These frequent sales of high-end

vehicles, such as The Lexus, bode well for TMC, off-setting any deficits due to lower

economy class prices, and even increasing overall sales.

Energy CostsThis discussion of influential economic factors could not possibly be complete without

mentioning the inflating cost of energy. With little explanation needed, the increasing gas

prices over the past few years have undoubtedly made it more expensive to operate vehicles,

resulting in the diminished sales of vehicles requiring larger amounts of fuel to run and

exhibiting less fuel efficiency-- most specifically SUVs and other full-sized vehicles.

Rising Commodity PricesRising prices of commodities used in vehicle production, such as certain resins and steel,

have also affected the "bottom line", increasing production costs and shrinking profit margins

across the market.

Rate of Currency ExchangeFluctuations in the exchange rate of currency, specifically the diminished exchange rate of

the U.S. dollar as compared to most other world currencies, has "created downward margin

pressure on auto manufacturers that have U.S. dollar revenue with foreign currency cost".

Socio-culturalFrom a socio-cultural perspective, the result of an increased number of women working over

the past decades has been elevated household incomes, allowing for more frequent purchases

of new vehicles. Another example of a socio-cultural factor affecting not only the

Toyota Motor Corporation, but the industry, as a whole, is an enhanced awareness of

spending behavior patterns, based on targeted populations for different vehicle models. For


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example, middle-income families will be the market focus of SUV's, while sports models will

be marketed to single purchasers with more of an expendable income.

Technological:The Toyota Motor Corporation has been affected by the environmentally-friendly demand for

hybrid technology, promoting their development of such vehicles. This market demand is

further supported by the necessity to find alternate means of fuel as an alternative to gas and

the rising prices associated with it.

Task Environment:

Industry CompetitionCompetition within the industry is a major influential factor for any auto

manufacturer.As discussed above, lower pricing and excess capacity has generated a buyer's

market and a rivalry between autos dealers not present to such an intensive extent prior.

Naturally, Toyota must consider such factors when marketing their own product lines.

Immediate Environmental InfluencesA majority of the immediate influences that have the capacity to currently affect operations or

performance at The Toyota Motor Corporation have been addressed prior, such as

competition, economic issues, and buyer-biased market conditions.

Future Threats & Opportunities:

Toyota Motor Corporation is in a unique position compared to its rival American

auto manufacturers. While there are overlying external factors that inevitably affect the

sustainability and performance of the industry, as a whole, TMC is in a position to benefit

from some of these. Some of these, specifically, are the pressure to lower prices due to excess

capacity, inflated prices of gas and commodities, and production costs. Fortunately, TMC is

the part of the catalyst in this situation, forcing the dominant American companies (their

fiercest competitors) to diminish prices in an attempt to solidify sales . This, in turn, weakens

the profit margin that these companies previously enjoyed, allowing the previously

considered "underdog", TMC, to now gain momentum in catching up to "the Big Three":

Ford, GM and Chrysler. This is partly a function of TMC's increased growth and production

of significant manufacturing plants (such as in Texas), which allow them to provide more

cost-efficient manufacturing.


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In addition, TMC has become a front-runner in the new environmentally conscious market,

researching and manufacturing hybrid vehicles that address both the issues of environmental

concern and gas inflation. Complimenting this, the aggressive promotion of their Lexus line

caters to the current economic buying behavior pattern of higher income consumers who are

making more frequent and more expensive purchases. Overall, it appears that in an auto

market that is presently falling victim to less than satisfactory selling conditions, the Toyota

Motor Corporation has evaded the detrimental impact. Their strengths of smart and cost-

efficient production (including avoidance of producing excess product, which will be

elaborated on in detail later), their strategic marketing and management practices, as well as

their ability to capitalize on consumer patterns and concerns to promote sales is evidently

paying off. In a selling environment that is presently diminishing the "bottom line" for others,

the ability to overcome such obstacles is perhaps one of TMC 's greatest strengths. The

growth figures presented in the first part of this analysis are indicative of TMC 's ability to

conform to adversity and take advantage of otherwise negative influences when more

dominant industry competitors could not.

Lexus and Toyota now have a reputation for manufacturing environmentally friendly

vehicles. Lexus has RX 400h hybrid, and Toyota has it Prius. Both are based upon advance

technologies developed by the organization. Rocketing oil prices have seen sales of the new

hybrid vehicles increase. Toyota has also sold on its technology to other motor

manufacturers, for example Ford has bought into the technology for its new Explorer SUV

Hybrid. Such moves can only firm up Toyota's interest and investment in hybrid R&D.

Toyota is to target the 'urban youth' market. The company has launched its new Aygo, which

is targeted at the streetwise youth market and captures (or attempts to) the nature of dance

and DJ culture in a very competitive segment. The vehicle itself is a unique convertible, with

models extending at their rear! The narrow segment is notorious for it narrow margins and

difficulties for branding.

Product recalls are always a problem for vehicle manufacturers. In 2005 the company had to

recall 880, 00 sports utility vehicles and pickup trucks due to faulty front suspension systems.

Toyota did not give details of how much the recall would cost . The majority of affected

vehicles were sold in the US, while the rest were sold in Japan, Europe and Australia.


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As with any car manufacturer, Toyota faces tremendous competitive rivalry in the car market.

Competition is increasing almost daily, with new entrants coming into the market from

China, South Korea and new plants in Eastern Europe. The company is also exposed to any

movement in the price of raw materials such as rubber, steel and fuel . The key economies in

the Pacific, the US and Europe also experience slowdowns. These economic factors are

potential threats for Toyota.

3.4 FIVE PORTERS FORCES ANALYSIS IN TOYOTA

Five forces analysis is an analysis of the factors that impact on an organization, particularly

those that can be used to provide competitive advantage. The ideas and models which

emerged during the period from 1979 to the mid-1980s (Porter, 1998) were based on the idea

that competitive advantage came from the ability to earn a return on investment that was

better than the average for the industry sector (Thurlby, 1998).A business has to understand

the dynamics of its industries and markets in order to compete effectively in the marketplace.

Porter (1980a) defined the forces which drive competition, contending that the competitive

environment is created by the interaction of five different forces acting on a business. In

addition to rivalry among existing firms and the threat of new entrants into the market, there

are also the forces of supplier power, the power of the buyers, and the threat of substitute

products or services.Porter suggested that the intensity of competition is determined by the

relative strengths of these forces.


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Figure 1 Explanation of Porters 5 Forces Analysis

Industry analysis by Porter's five forces can be said that

1- Threat of new entrants is low due to huge capital and cutting-edge technology.2- Suppliers are weak because they are spread all over the world and cannot easily

forward integrate in addition to the frequent financial crises. To stay competitive in

this area, Toyota keeps a large database of small business suppliers for their

operations in North America.Via this database, Toyota puts an emphasis on using

smaller businesses for suppliers in order to gain a competitive advantage.

Overall, Toyota has done an excellent job following Porter's five forces model for

gaining a competitive advantage. By using is Hybrid Synergy Drive in their

revolutionary hybrid vehicles, they have cornered the market on hybrids and gained asignificant advantage that boosts sales. Also, Toyota's addition of the Highlander

Sport Utility Vehicles (SUV) to the hybrid drive market has successfully maintained

their advantage. Moreover, the use of smaller businesses as suppliers allows Toyota to

protect themselves from pricing shifts.


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3- Buyers are weak due to low demand for non-consumer goods (automobile) and highswitching costs; moreover, buyers are not able to backward integrate.

4- Substitutes are moderately strong due to different and less-expensive transportationfacilities. Toyota continues to dominate the market for hybrid vehicles. Other

companies could potentially enter the hybrid market by developing a similar drive and

neutralizing Toyota's advantage. In fact, Nissan and Honda have developed similar

technologies for their sedan models. However, Toyota currently is adding Sport

Utility Vehicles (Toyota Highlander) to their line of vehicles using the HSD in order

to still dominate the market for hybrid vehicles because Honda and Nissan do not

have a significant impact on the market yet. By being the first to add SUV's to the

hybrid market, they have currently protected their competitive advantage from

substitute products.

5- On the other hand, intensity of rivalry is strong because of major players are dominantin the market by nearly same technology and manufacturing processes, suppliers

relationship and distribution systems.

4.0 Challenges of TOYOTAProblems Faced by Toyota Information Systems Department and Causes of the

Problems:

The major problems faced by Toyota information system department are the isolation and thevaguenesss scattered around IS operations due to the absence of collaboration and lack of

understanding and correlation with Toyota business needs. Therefore the executives fingered

out the achievements of the Information system as following:

- Failed to respond clearly revealing their outcomes- Matching Business needs with Information System performance- Information System did not know their financial outflow due to the weaknesses in

capital budgeting.

- Lack of implementing the predetermined business goals- Mismanaged expectations and splintered placements of business.

Toyotas vice president of Customer Services Bob Daly pointed that the business

disappointed with the outcomes of Information system even Toyotas expended a huge

amount of money on IT projects less outcome and enormous financing . Toyotas


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Information system failed to handle effectively the projects therefore there was a delay in

People Soft Enterprise Resource Planning (ERP) implementation and a protracted parts

inventory initiative.

In fact Information system carried a huge tasks over the capacity and failed to mention and

identify their main problems to the executive also they did not reveal their obstacles and

challenges that why they put themselves in the table of suspiciousness from Toyota

executives and received enormous complains from and others in Toyota.

Hence the Information System staff was sunken under the weight of six enterprise wide

projects called the Big Six and this cause Information System to become tireless and

overwhelmed but without their consciousness they created an oversight of not explaining to

the business all the things it was doing and how much it all cost . The big Six operations of

information System included:

- A new extranet for Toyota dealers- The PeopleSoft ERP rollout,

Also other four new systems such as:

- Order management- Parts forecasting- A

dvanced warranty- Financial document management

The other problems of information system department noticed by Cooper since her arrival

that the employee did not clue on technology and behaving like primitive also there were

isolated she described it as almost 1970s-like since business units were buying their own

Information Technology systems because in-house Information Technology couldn't deliver.

There were no computers or network management and basic Information Technology

disciplines-such as business relationship management and financial management-were largelyabsent. The most of all is that even no one understood the cost of delivering Information

Technology. The main reason of this is that the information system employee did not

understand the objectives of technology very well and they have a narrow image and vision

about it.


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The solutions and challenges taken by Barbra Cooper & the potential benefits of each

solution

Barbara Cooper succeeded within six month to entirely make a radical changes is the

structure of Toyota's Information System department in order to compromise Information

Technology functions to become more closely into the daily business operations. Even

though it was more difficult task and big challenge but there was no any alternatives Barbara

did endless efforts to restore back the reputation of Information System departments and to

gain the trust of business therefore she take a long time in analyzing and deeply observing the

issue before coming up with new vision and strategies. Here are the main solutions

implemented by Barbara Cooper and the benefits of each solution to the enhancement of the

informations system department and overall reaching the Toyata objectives.

- EMPLOYEE INTEGRATING: Cooper merged information system employees jobsalso forced her staff into business offices by doing so she can address and manage

business expectations. Because the staff who joined the Information System

department can exactly mach between Information system performance and business

needs since the employee already familiar with the business expectations from

Information system.

Also the one who transferred from information system can easily translate structure

and combine information system performance with business wants after

understanding the exact way of business operations and this can be reached only

through mixing the employee of both parts. The main benefits is the business are now

standing shoulder-to-shoulder when planning and implementing IT projects and also

exposing all of Information Systems shortcomings.

- HIRING CONSULTANCY: initially cooper exposed there was poor communicationand education from the side of information system department which finally leads to

the accumulation of projects so she started to congregate casual comments and

feedbacks from a wide range of business people after that she hired a consultancy

from outside the company to interview Toyotas Motor Sales top 20 executives and

main purpose from this was to get straightforward ideas about how information

system was doing.


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The main benefits from the survey was she become able to determine and clarify the

hot spots of information system therefore the process of handling and solving become

easily since the main cause of the problem was effectively and efficiently identified

- FORMULATING NEW VISION FOR INFORMATION TECHNOLOGY:cooper succeeded to develop a strategy that orient the decentralized and transparent

Information System organization to focus all of its potential power on business

segment then she called senior Information System staffers into discussion room and

presented her vision as following:

Setting up the action plan for Toyota Value Program. Establishing a team consist of eight members who were responsible

to interpret her vision into actionable acts

The team prepared a list down to 18 initiatives by Using theexecutive's survey results and Cooper's direction, the list including

increasing employee training and development, gaining cost

savings, making process improvements, ridding IS inefficiencies

and implementing a metrics program Each initiative got a project

owner and a team.

Finally creating a mechanism standard to check the success.Hence the most significant benefit of this stage was the improvement alignment with

the business side.At the heart of this new effort would be a revamped Office of the

CIO structure-with new roles, reporting lines and responsibilities.

- EMBEDDING DIVISION INFORMATION OFFICERS (DIOS): the DIOsembedded in all of the business units and are accountable for Information Technology

strategy, development and services, and they sit on the management committees

headed by top business executives. The DIOs' goal is to forge relationships with tier-

one execs (Daly, for example) and tier-two execs (VP-level). The main benefits from

this is that business operation managers and relationship managers from Information

system sat alongside the business folks then incumbent physically distribute of

Information Technology into the businesses.

Hence the new DIOs have complete accountability and responsibility for the vertical

area they serve. Goltara, for instance, now heads up a smaller group of internal


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customers-which includes Toyota, Lexus and Scion-as well as the entire vehicle

ordering systems, logistics and dealer portals.

- COPING WITH THE CHANGE AFTER KICKING AND SCREAMING:Change is scary for anyone since the unknown is always a concern, especially during

a disturbance of an entire 400-person Information System department. Since Cooper

changed the tasks of fifty percent of her employees within six months and some took

on new responsibilities while others took on expanded or completely new roles.

Therefore some mid- and upper-level employees were initially uncomfortable with

their new roles.

Within all of the above challenges Cooper did not forgive up but she spent a lot of

time and efforts in fostering a new attitude about the change in order to convince the

employee to cope with the changes. She dragged them into the conversations kicking

and screaming.

The main benefits for Cooper by making such great efforts to convince the employee

to cope with the change was she knew that unless they think and understand of what it

means to change they will never make it happen. Also Information System senior

management held a town-hall meeting to announce the changes and deal with

questions then staff members did express some concerns at that meeting and

subsequent monthly staff meetings.

- TYING MANAGERS BONUSES: for the first time cooper tied part of the seniorInformation System managers' bonuses to their success in meeting the goals of each

of their annual plans. These managers are judged on 10 areas and on how well they

meet the objectives in those areas-for example, meeting project-based goals (whether

the project was done on time, on budget) and operational goals (implementing new

governance and portfolio management processes).

- CHARTING EXECUTIVE STEERING COMMITTEE (ESC): Cooperestablished this committee to further strengthen the Information System business bond

and to approve all major Information Technology projects. Hence the committee

consists of Cooper; Cooper's boss, Senior Vice President and Planning and

Administrative Officer Dave Illingworth; Senior Vice President and Treasurer


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18

Mikihiro Mori; and Senior Vice President and Coordinating Officer Masanao

Tomozoe. By exposing its inner workings to the business side at Toyota Motor Sales.

The main benefits of this new transparency are to lessen Information Systems role on

Information Technology project selection and monitoring also increasing business's

responsibility.

- STRENGTHEN TOYOTAS TEAM COLLABORATION: There was lack of partnership relationship and the business managers played the role of "order taker

rather than "let's build the solution together" Cooper succeeded to strength the relation

and the cooperation among business people the Toyota Customer Services and Toyota

Motor Sales. The main benefits of this are the smoothness of tackling all issues and

problems and enhancement of Toyota business reputation.Also when any problem

emerge all Toyotas executives, employees do their endless efforts to settle the

problem.

Finally, the executive steering committee now controls all of the project funds in one pool of

cash, and it releases funds for each project as each phase of the project 's goals are achieved.

Everyone in the company can look at which dollars were (and were not) going to be spent,

the pool's administrators can sweep unused funds out, and other projects can go after those

funds.And there are no more spending swings; projects are regularly paced throughout the

year.

Information System has also won more fans in corporate headquarters because of the new

metrics. One industry metric all the business execs understand is how much each Toyota

vehicle costs to manufacture. Now they know how much IS costs per vehicle, and each

division head also knows how much all of his IT costs him.

Toyota Motor Sales' board was particularly delighted and was able to give back to TMS 16%

of the costs of running Information Technology projects. Barbra's stock is high and reports

that the Japanese parent company is interested in her revamped IS model and wants to apply

some of the techniques over there. Information System staffers now spend a huge time

crossing the courtyard between Toyota Motor Sales' business offices and the Data building

hence it's a change that the business side welcomes.


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19

5.0 CORPORATE GOVERNANCE:5.1 Board of Directors, Key Players

The Toyota Motor Corporation has several key members, including founding President and

Board Member: Katsuaki Watanabe. In addition, fellow board members and key personnel

include: Fujio Cho, Chairman, Katshuhiro Nakagawa, Vice Chairman, as well as several

Senior Managing Directors. Most notable of these is Takeshi Suzuki of the Finance and

Accounting Group. Several additional Board Member and Executive Vice Presidents also

reside in posts pertaining to different factions of the corporation. Other individuals earning

mention are Honorary Chairman: Shoichiro Toyoda, and Hiroshi Okuda as a SeniorAdvisor

and Member of the Board.

Unlike the turnover rate and attrition of many corporations, key executives at Toyota seem to

make it a lifetime investment. Undoubtedly, this is at least in part, a function of the family-

oriented, team-driven, ethically-motivated environment that Toyota emulates. However, these

corporate characteristics will be discussed in later pages of this analysis.Also both notable

and impressive is the level of participation demonstrated by executives, even at the highest

level. Fostering a genuinely reciprocal dynamic, top officials are highly involved in all

aspects of the company, often presiding over many facets, while always promoting the

underlying ethical tenets of the corporate philosophy. Managers and personnel below the

Board of Directors are not known to simply "rubber stamp" the decisions passed down to

them, but are instead encouraged and even expected to engage in input and create

improvements. In turn, the appropriate executives welcome such critique and utilize this

constructive criticism to create a better product, enhanced work environment and improve

production methods.

5.2 TOP MANAGEMENT, Top Players and Expertise

Just below the Board of Directors exist several key management personnel. Too numerous to

name each and every one of them, some of the most significant members of this prestigiousgroup are as follows: Yukitoshi Funo, Chairman and CEO Toyota Sales, U.S.A., James E.

Press, Chief Operating Officer, Toyota Motor Sales ,U.S.A., and finally, Bob Carter, Vice

President and General Manager of The Lexus Group. These particular employees, as well as

their counterparts, share many of the personal traits, as well as industry expertise, as their

mentors on the board discussed above. Skills that they may not already possess are fostered


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20

through the corporation. While they all possess the qualifications and skill sets to perform in

their respective functions, additional training and mentoring is an integral component of

TMC. In addition, while all new hires are screened for the ethical and personal qualities that

are consistent with the company's ideal, working in the Toyota environment nurtures

continued understanding of the benefits of these assets through the strict adherence to the

Toyoda Precepts expected of all.

5.3 CORPORATE CONTRIBUTION & TALENT

In relation to corporate contribution, Toyota Motor Corporation has a significant, and

consistently growing, international presence. Because of this, it is absolutely imperative for

such a company to possess within it the knowledge, skills, cultural expertise and a broad

spectrum of other talents essential to successfully functioning at its optimal potential.A vast

array of skills is necessary to address the many diverse facets of such a large corporation. In

addition to addressing the cross-disciplinary needs of such a large business entity, marketing

at an international capacity presents its own set of challenges pertaining to cultural issues and

foreign business practices. Employing high level executives in both Japan and the United

States, those who hold the most power within TMC are well-versed and educated in both

business and cultural issues. However, in an effort to cover all bases, both domestic and

foreign, TMC has also established a committee specifically for the purpose of insuring

appropriate management in all of these areas that is commonly referred to as the IAB.

6.0 Toyota Business Strategy:Toyota has been working on a new cost-saving strategy called "VI" forValue Innovation

since 2005. This strategy aims to combine its thousands of components in a car into modules

and systems. Toyota's long-term strategy involves developing both global and regional car

models in order to compete worldwide with a full line of products


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21

Toyota Industries Corporation was founded in 1926 by Sakichi Toyoda to manufacture and

sell the automatic looms which he had invented and perfected. Since that time Toyota

Industries has promoted diversification and expanded the scope of its business domains to

include textile machinery, automobiles (vehicles, engines, car air-conditioning compressors,

etc.), and materials handling equipment, electronics, and logistics solutions.

With production bases in North America, Europe, and Asia (China and India), as well as a

worldwide sales network, centered around our Materials Handling Equipment and Textile

Machinery Segments, the operations of the Toyota Industries Group span the globe.

In November 2006, Toyota Industries celebrated its 80th anniversary. We remain committed

to the further development of our businesses and the unwavering pursuit of sustained

innovation and creativity.

7.0 Marketing Strategies of TOYOTA:Toyota has grown to a large multinational corporation from where it started, and expanded to

different worldwide markets and countries by becoming the largest seller of cars in the

beginning of 2007, the most profitable automaker along with increasing sales in, among other

countries, the United States. Toyota brands include scion and lexus and the corporation is part

of the Toyota group.

7.1 Products:

Brand strategies of Toyota is creating global product that reflect local needs and market

environments, for example to take steps to tap local demand in markets worldwide, Toyota

have taken full-scale marketing of scion vehicles and local production of full-size pickup

truck in 2006 in North America. Toyota had reputation in making efficient-fuel vehicles, high

quality manufactured cars/long life cars and relatively low prices . Toyota sales are booming

because of its good image around the world about reliability and ecological technology.

7.1.1 Positioning product through quality/prices discrimination

Toyotas product ranges from high fashion/quality and high price to relatively low price with

good value. Toyota Motor Corporation creates separate brand for high prices automobiles and

luxury cars (the Lexus series) and using Toyota brand for non-luxury cars.

High class vehicles: For example the Lexus IS series, it is a Lexus line up which is intended

to compete against the BMW 3 series and Mercedes-Benz C-Class and Nissan


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22

Skyline/Infiniti G35 sports sedans.Another example of high price and high quality Toyota

products is The Lexus LS series, a full-size luxury sedan that serves as the flagship of Lexus

brand.

Price for High class vehicles

USA

Price for Medium class vehicles

USA

Netherlands

Type: Lexus LS 460

Price ($71.000*)

Type: Lexus GS 450 H

Price ($54.000*)

Type: Lexus IS 250

Price ($65.000)

Type: Corolla LE

Price ($15.000)

Type: Camry CE

Price ($19.000)

Type: Yaris S

Price ($12.000)

Type: Avensis 2.2 D-4D

Price $49.870

Type: Yaris 1.4 D-4D

Price: 29.422

Type: Auris 2.3 D-CAT

Price:46.507


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Malaysia

RM 141,109.10 RM 167,620.90 RM 72,990.00

7.1.2 POSITIONING PRODUCT BASED ON USE OR APPLICATION

TOYOTA

Motor Corporation also classifies their product in terms of use or application:

the sport utility vehicle (SUV), multipurpose vehicles (MPV), compact car, pick-

up, truck and sedan.

7.2 TOYOTA PRICING DECISION STRATEGY

Toyotas pricing decision mainly directed by competitive behavior and market demand.

Toyota realizes that competition in automotive business is so tight; the lower price with high

quality product will be effective strategy to attract customers. The president of Toyota motor

corporation, Hiroshi Okuda in year 2000 said that

Our other challenge is increasingly heated competition worldwide. In the past, we

thought of competing in Japan...or in the U.S. But now competition will heat up in

SUV

Toyota 4 RunnerToyota Alphard ToyotaCorollaTOYOTA

Toyota Dyna

PICK UP TRUCK MPV COMPACT CAR


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24

Australia, Europe, the Middle East, and Southeast A sia. Because the competition is

spreading, we can't fail to produce high quality cars at low prices.

Statement from president of Toyota above indicated that Toyotas price decision is influenced

by market condition, their strategy on producing high quality cars with lower prices can be

superior competitive advantage for Toyota Motor Corporation. Selling the product with

relatively low prices doesnt mean loosing the profit. The profit can be gained trough

continuously reducing the cost.

7.3 Toyotas promotion strategy

Toyota use several approach in promotion including trade show, public relation TV

advertising, online ads, social activities and sponsorship.

TVadvertising:Toyota motor sales USA dealer associations spent $ 384.2 Millions in 2006

to purchase TV advertising spot and recorded as the top five TV advertisers in United States

during 2006.

Web ads: Toyota also promote its product through internet media, Nielsen net ratings

reported that Toyota Motor Corporation is top 2 advertisers in internet among automotive

industries after DaimlerChrysler Corporations.

Fig

ure Toyotas Formula One team

Sport sponsorship: Toyota are active in a wide variety of motor sport event, the Toyota

motorsport participated in motor sport since Australian rally 1957 and now Toyota is one of

the Formula one teams affiliated with other partner such as Panasonic, Denso and

Bridgestones. Toyota became main sponsor forValencia football club, a Spanish football

club, since session 2006/2007 as reported by www.forbes.com


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Art exhibition: Toyota also became sponsorship in social activities such as to be the general

sponsor of the 13th

International Tchaikovsky competition, the world's most prestigious

classical music competitions, in Moscow in June and July 2007.

7.4 TOYOTAS DISTRIBUTION STRATEGY

The distribution channel in Toyota uses direct involvement strategy by selling the products

directly to customer by using owns sales networks (distributor, dealers and point of contact

with end customers). Toyota supports its sales network in various ways to enhance customer

satisfaction with the network.

Figure: Distribution channel Toyota

7.4.1 Distribution in Japan

In Japan, Toyota Motor Corporation concludes contract directly with 300 dealers operates in

5,700 sales outlets (including used car outlets) throughout Japan. The Toyota way in Japan

Sales and Marketing, adopted in 2000, sets forth fundamental principles as putting the


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Customer first, dealer second, manufacturer third and promotes mutually beneficial

relationship between the manufacturer and dealer based on the Customer firs policy.

7.4.2 Distribution in Europe

Concerning with cost reduction policy Toyota always seeks for the new strategy to reduce fixcost (transportation cost and operational cost). One of the alternatives is by producing

automobiles near the marketplaces. Toyotas target is selling 1.2 million vehicles in the

European market by 2010. To achieve this target Toyota increases production capacity, sales

capabilities, and localization strategy.

7.4.3 Distribution in North America

To manage market in North America region Toyota established Toyota Motor North

America, Inc.(TMA) in 1996 with activities such as Liaison, public relation, and survey

activities throughout North America and in April 2006 Toyota set up a The Toyota Motor

Engineering & Manufacturing North America, Inc (TEMA) which handles research and

development activities and manufacturing support.

8.0 OPERATION STRATEGIES :Jidoka and "Just-in-Time" Operational Systems Consistent with Toyota's philosophy-oriented

environment the corporation has established an operations system for production that is

tailored to not only their goals, but the strategy and awareness by which they conduct all

business. It is a "system that is steeped in the philosophy of the complete organization and

imbues all aspects of production...it has come to be well known and studied worldwide" It is

primarily based on two principles: Jidoka and "Just in Time" manufacturing.

8.1 JIDOKA

Jidoka is a concept that highlights the visualization of problems and identifies them before

manufacturing is completed. Utilizing state of the art equipment, this technology identifies a

malfunction or a defective part immediately at its time of production. The machine involved

is programmed to recognize this deficiency and automatically stop, forcing the operators to

address the problem. "As a result, only products satisfying the quality standards will be

passd on to the next process on the production line" (TMC, 2006). Such a process promotes

cost efficiency within the corporation, while ensuring an absolute standard of quality at all


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27

times. Undoubtedly, this is also a response to TMC's earlier litigious problems resulting from

safety defects, providing an example of the company's pursuit to address a prior weakness

and transform it into a positive strength. This process also exemplifies the corporation's

ability to adapt, conforming to requirements not previously met and changing to better the

entire operation.

8.2 JUST-IN-TIME

The second concept inherent in the Toyota manufacturing system is that of "Just-in-Time"

manufacturing, which declares that products or vehicles are produced only as consumer

orders and demand require. It is this system that has, in part, allowed Toyota to evade the

issues of excess capacity that Ford and GM have encountered. By adhering to such a system,

costs can be kept at a minimum, while profit can still be maximized avoiding the necessity of

selling at a loss just to move aging product.

9.0 HUMAN RESOURCES STRATEGIESHuman Resources at Toyota Motor Corporation serve to meet the needs of all employees, as

well as create an environment that is both productive and conducive to employee satisfaction.

Toyota's HR department is fully aware that happy employees translate into better job

performance. This equates to the kind of increased production and quality that renders

satisfied customers. Ultimately, how well Human Resources addresses the needs of the

employee population and how well they maintain an emotionally intelligent workplace

environment directly correlates to Toyota's "bottom line" and overall financial success. This

involves several areas of the employee experience that Human Resource Managers must

attend to.

These include: hiring quality individuals that possess characteristics consistent with company

standards, continued training of existing employees, promotion of diversity, resolution of

disputes, maintenance of an overall system of positive reinforcement, executing standards of

evaluating job performance, and all other issues pertaining to maintaining satisfied employeesand an environment conducive to this goal.


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Selling/General/Administrative

Expenses, Total

2,534,781.0 2,498,512.0

Research & Development 0.0 0.0

Depreciation/Amortization 0.0 0.0

Interest Expense (Income), Net

Operating

0.0 0.0

Unusual Expense (Income) 0.0 0.0

Other Operating Expenses,

Total

0.0 0.0

Operating Income -461,011.0 2,270,375.0

Interest Income (Expense), Net

Non-Operating

0.0 0.0

Gain (Loss) on Sale ofAssets 0.0 0.0

Other, Net -189,140.0 38,112.0

Income Before Tax -560,381.0 2,437,222.0

Income Tax Total -56,442.0 911,495.0

Income After Tax -503,939.0 1,525,727.0

Minority Interest 24,278.0 -77,962.0

Equity In Affiliates 42,724.0 270,114.0

U.S. GAAPAdjustment 0.0 0.0

Net Income Before Extra.

Items

-436,937.0 1,717,879.0

Total Extraordinary Items 0.0 0.0

Net Income -436,937.0 1,717,879.0

Total Adjustments to Net0.0 0.0


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30

Income

Basic Weighted Average

Shares

3,140.42 3,177.45

Basic EPS Excluding

Extraordinary Items

-139.13 540.65

Basic EPS Including

Extraordinary Items

-139.13 540.65

Diluted Weighted Average

Shares

3,140.42 3,178.66

Diluted EPS Excluding

Extrordinary Items

-139.13 540.44

Diluted EPS Including

Extraordinary Items

-139.13 540.44

Dividends per Share -

Common StockPrimary Issue

100.0 140.0

Gross Dividends - Common

Stock

313,551.0 443,199.0

Interest Expense,

Supplemental

46,882.0 46,113.0

Depreciation, Supplemental 1,495,170.0 1,491,135.0

Normalized EBITDA 1,034,159.0 3,761,510.0

Normalized EBIT -461,011.0 2,270,375.0

Normalized Income Before

Tax

-560,381.0 2,437,222.0

Normalized Income After

Taxes

-503,939.0 1,525,727.0

Normalized Income Available

to Common

-436,937.0 1,717,879.0


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Basic Normalized EPS -139.13 540.65

Diluted Normalized EPS -139.13 540.44

Balance Sheet Statement

Assets

03/31/2009

03/31/2008

Cash and Short Term

Investments

2,984,784.0 2,305,530.0

Total Receivables, Net 5,616,877.0 6,864,908.0

Total Inventory 1,459,394.0 1,825,716.0

Prepaid Expenses 632,543.0 526,853.0

Other Current Assets, Total 605,331.0 563,220.0

Total Current Assets 11,298,929.0 12,086,227.0

Property/Plant/Equipment,

Total - Net

7,401,681.0 7,812,002.0

Goodwill, Net 0.0 0.0

Intangibles, Net 0.0 0.0

Long Term Investments 3,929,249.0 5,527,794.0

Note Receivable - Long

Term

5,725,068.0 6,045,532.0

Other Long Term Assets,

Total

707,110.0 986,765.0

OtherAssets, Total 0.0 0.0

Total Assets 29,062,037.032,458,320.0

Liabilities and

Shareholders' Equity

Accounts Payable 1,299,455.0 2,212,773.0

Payable/Accrued 0.0 0.0


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Accrued Expenses 1,540,681.0 1,606,964.0

Notes Payable/Short Term

Debt

3,617,672.0 3,552,721.0

Current Port. of LT

Debt/Capital Leases

2,699,512.0 2,675,431.0

Other Current Liabilities,

Total

1,431,973.0 1,892,853.0

Total Current Liabilities 10,589,293.0 11,940,742.0

Total Long Term Debt 6,301,469.0 5,981,931.0

Deferred Income Tax 642,293.0 1,099,006.0

Minority Interest 539,530.0 656,667.0

Other Liabilities, Total 928,245.0 910,447.0

Total Liabilities 19,000,830.020,588,793.0

Redeemable Preferred

Stock

0.0 0.0

Preferred Stock - Non

Redeemable, Net

0.0 0.0

Common Stock 397,050.0 397,050.0

Additional Paid-In Capital 501,211.0 497,569.0

Retained Earnings

(Accumulated Deficit)

11,531,622.012,408,550.0

Treasury Stock - Common -1,260,895.0 -1,192,437.0

Other Equity, Total -1,107,781.0 -241,205.0

Total Equity 10,061,207.0 11,869,527.0

Total Liabilities &

Shareholders Equity

29,062,037.032,458,320.0

Total Common Shares3,135.88 3,149.28


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Outstanding

Total Preferred Shares

Outstanding

0.0 0.0

Cash Flow Statement

03/31/2009 03/31/2008

Net Income/Starting Line -436,937.0 1,717,879.0

Depreciation/Depletion 1,495,170.0 1,491,135.0

Amortization 0.0 0.0

Deferred Taxes -194,990.0 81,458.0

Non-Cash Items 750,968.0 -20,456.0

Changes in Working Capital -137,306.0 -288,392.0

Cash from Operating

Activities

1,476,905.0 2,981,624.0

Capital Expenditures -

2,324,897.0

-

2,759,975.0

Other Investing Cash Flow

Items, Total

1,094,677.0 -

1,114,911.0Cash from Investing Activities -

1,230,220.0

-

3,874,886.0

Financing Cash Flow Items 0.0 0.0

Total Cash Dividends Paid -439,991.0 -430,860.0

Issuance (Retirement) of Stock,

Net

-70,587.0 -311,667.0

Issuance (Retirement) of Debt,

Net

1,209,419.01,448,716.0

Cash from Financing Activities 698,841.0 706,189.0

Foreign Exchange Effects -129,793.0 -84,759.0


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Net Change in Cash 815,733.0 -271,832.0

Net Cash - Beginning Balance 1,628,547.01,900,379.0

Net Cash - Ending Balance 2,444,280.01,628,547.0

By analyzing these financial statements we can come out with efficiency and how effective

Toyota runs its business, For example:

Return on investments = net income/investments

Net income / total equity + Total Long Term Debt

-436,937 / 10,061,207 + 6,301,469 = -0.0267

This ROI reflects how good Toyota uses its finance either from shareholders or from

creditors, but this consequence does not express the whole activity, because it is only for one

year.

Return on total assets = Net income / Total assets

-436,937 / 29,062,037 = -0.01503.

A Green Advantage Aim: Zero Emissions

For Toyota, minimizing the impact cars have on environment is a top priority. Our aim is not

only to reduce emissions from our vehicles, but we want to make the entire life-cycle of a

car more environmentally friendly.

Toyota has been taking a leading role in developing advanced environmental technology.

This technology can help you to keep the environmental impact of your company fleet to a

minimum, but in addition it can also save costs through lower fuel consumption and make a

clear statement towards environmental protection.


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11.0 CONCLUSIONOverall, Toyota Motor Corporation is a corporation that has the potential to become the front-

runner of the auto manufacturing industry. In addition, it has the sustainability to remain a

dominant entity and not just a periodic success. Of the many qualities that are conducive to

making such an accomplishment possible, there are a few that seem to have the most

significant impact in this area. The first of these strengths is TMC's all encompassing

emphasis on the value of humans and the necessity of instilling within them a sense of value.

Through the Guiding Principles, the Toyoda Precepts, and the manner in which management

is executed, employees at Toyota are aware of their unique, and appreciated, position within

the company. Unlike many American based companies, Toyota recognizes the value in

valuing employees.

Ironically, another of TMC's strengths is in its application of technology and the utilization of

machinery to aid in the manufacturing process. One of the first to execute such a system, their

unique concepts of Jidoka and Just-in-Time have allowed them the speed and precision in

manufacturing vehicles that has afforded them the opportunity to increase production profits

and close the gap between themselves and theirAmerican based rivals, such as Ford and GM.

Despite these most recent accomplishments, Toyota, like any company, has not been without

its disadvantages. One significant weakness of the corporation is its prior litigious issues and

the claims of inadequate safety standards brought against them. Quite impressively, Toyota

has undoubtedly turned this weakness into a lesson learned and implemented a standard of

quality and safety that is now hard to match. However, the memory of the public is often

unforgiving and opinionated, making it difficult for Toyota to overcome the preconception of

negativity that such prior publicity may have instilled in some consumers. TMC must also

work diligently to promote sustainability within The States, despite the current trend reflected

by the mantra "Buy American".

Toyota may also face future challenges as a function of its diverse expansion. Seemingly

enjoying exploration into areas other than the auto industry, TMC must be cautious not to

spread itself too thin. This is the downfall of many a corporation who enjoy success, seize the

opportunity to expand into broader areas, and then lose sight of their fundamental area of


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expertise. However, in light of TMC's continual growth, it appears that this would not be an

issue at this time or any time in the near future.

Lastly, Toyota has the unique opportunity to play a role in the overall advancement of

culture.

Not only does it possess the ability to make fiscal gains, but also the potential toactually change the future of mobility. Through its continued emphasis on environmentally-

friendly research and alternative designs, TMC will continue to be a pioneer in the realm of

improved transportation. While the corporation has already proven themselves with their

Prius, the first mass-marketed hybrid vehicle, their present technological projects will

certainly set future trends. In light of the information presented in this report, as well as the

historical patterns of TMC, itself, it is fairly safe to assume that the results of their research

and design team will not only set trends, but more possibly set the standard by which all

future manufacturers will follow.

The price strategy of Toyota is directed by competitive behavior and market demand;

however Toyota always positioning the price as lower as possible and they expect to gain the

profit from cost reduction strategy. Toyota uses cost leadership strategy to stay competitive in

automotive market. Through lean manufacturing, zero waste manufacturing process,

producing cars close to the market Toyota can reduce fix cost and eventually increase profit

margin.

In consideration of Toyota Motor Corporation's continued growth, the manner in which it

executes its business, the value it places on human resources and the technological advances

that are not only conducive to, but aimed at the improvement of culture, as a whole, it is

hereby a safe assumption that Toyota will be the driving force in the auto industry before

long--a force with the sustainability and feasibility to drive both American and international

culture into the next era of mobility and convenience.


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mpany_pg4.html

5. Wikipedia. (2006). The Toyota Motor Corporation: Multinational Corp. Info.,www.wikipedia.net

6. Yahoo.(2006). Yahoo! Financials Page. www.yahoo.com/finance7. Hoover. (2006). Hoover's Sales Performance Center. www.Hoover.com/AutoMobility

Trends. (2006). The Mobility Trends Conference,. www.mobilitytrends.com

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