76990227 or Project on Toyota

7/31/2019 76990227 or Project on Toyota

1/62

MINOR PROJECT REPORT ON

TOYOTA

Submitted in partial fulfillment of the requirements

for the award of the degree of

BACHELOR OF BUSINESS ADMINISTRATION

to

GURU GOBIND SINGH INDRAPRASTHA UNIVERSITY,

DELHI

Ms. AASHIMA SHARMA SANYAM JAIN

III SEM

07117001711

Session 2012-13


2/62

Acknowledgement

This project work , which is my first step in the field of professionalism, has been successfully

accomplished only because of timely support of my well wishers. I would like to pay my sincere regards

and thanks those, who directed me at every step in my project work.

First of all, I would like to express my thanks to R.K. GUPTAgiving me such a wonderful opportunity to

widen the horizons of my knowledge.

I extend my thanks to my project guide MS. AASHIMA SHARMA for her scholarly guidance, constant

supervision and encouragement. It is due to her personal interest and initiative that the project work is

published in the present form.

Last but not the least, I would also thanks to the staff member of TECNIA, friends and parents who have

directly or indirectly contributed in making this project success. it is a tribute for there valuation.

Despite all efforts, I have no doubt that error and obscurities remain that seen to afflict all writingprojects and for which I am capable.

SANYAM JAIN


3/62

CHAPTER- 1

INTRODUCTION

Toyota Motor Corporation is headquartered in Toyota City, Aichi. Its Tokyo office is located in Bunkyo, Tokyo.

Its Nagoya office is located in Nakamura-ku,Nagoya. In addition to manufacturing automobiles, Toyota

provides financial services through its Toyota Financial Servicesdivision and also builds robots.

In predominantly Chinese-speaking countries or regions using traditional Chinese characters, e.g. Hong Kong

and Taiwan, Toyota is known as In predominantly Chinese speaking countries using simplified Chinese

characters(e.g. China), Toyota is known as (pronounced as "Fngtin" in Mandarin Chinese ). These are the

same characters as the founding family's name "Toyoda" in Japanese, which translate to "fertile rice paddies" inthe Chinese language as well.

The Toyota Company is a leader in the car manufacture, assembly and distribution the world over. A very efficient

management style that the company uses has been one of the reasons for the firms good performance. There are

many other salient factors that have made the company achieve the niche of market leader. The market structure the

company operates in cannot be definitely stated. Some may consider it to be a monopoly. This is due to the fact that

the company is a dominant market player in car exportation. In fact, its differentiation strategy has made it enjoy an

almost monopolistic presence especially in the developing nations of the world. On the other hand, the market

structure can be seen as an oligopoly. This is due to the fact that there are other key players like GM who are peer

competitors. Toyota is keen to see what these competitors are doing and make sure it reacts to their actions in a waythat will guarantee its market leadership.

Until recently, Fujitsu employed various strategies to improve productivity and efficiency at its plants and

business units. In 2003, however, we introduced the Toyota Production System (TPS) throughout the company
http://en.wikipedia.org/wiki/Toyota,_Aichihttp://en.wikipedia.org/wiki/Aichi_Prefecturehttp://en.wikipedia.org/wiki/Bunkyo,_Tokyohttp://en.wikipedia.org/wiki/Nakamura-ku,_Nagoyahttp://en.wikipedia.org/wiki/Nagoyahttp://en.wikipedia.org/wiki/Financial_serviceshttp://en.wikipedia.org/wiki/Toyota_Financial_Serviceshttp://en.wikipedia.org/wiki/Division_(business)http://en.wikipedia.org/wiki/Traditional_Chinese_characterhttp://en.wikipedia.org/wiki/Simplified_Chinese_characterhttp://en.wikipedia.org/wiki/Simplified_Chinese_characterhttp://en.wikipedia.org/wiki/Mandarin_Chinesehttp://en.wikipedia.org/wiki/Toyota,_Aichihttp://en.wikipedia.org/wiki/Aichi_Prefecturehttp://en.wikipedia.org/wiki/Bunkyo,_Tokyohttp://en.wikipedia.org/wiki/Nakamura-ku,_Nagoyahttp://en.wikipedia.org/wiki/Nagoyahttp://en.wikipedia.org/wiki/Financial_serviceshttp://en.wikipedia.org/wiki/Toyota_Financial_Serviceshttp://en.wikipedia.org/wiki/Division_(business)http://en.wikipedia.org/wiki/Traditional_Chinese_characterhttp://en.wikipedia.org/wiki/Simplified_Chinese_characterhttp://en.wikipedia.org/wiki/Simplified_Chinese_characterhttp://en.wikipedia.org/wiki/Mandarin_Chinese


4/62

to promote innovative manufacturing. This system is intended to achieve company-wide innovation not only at

the plant level, but also for product delivery processes from the sales sections to the customers and for processes

upstream of design and development. The system is still under construction, and we are now addressing various

problems posed at each plant and business unit. This system is also intended to bring innovation to the processes

performed between the plants, suppliers, and customers by linking with upstream development sections. This

paper examines the progress of introducing TPS, using its introduction at some of our Information and

Communication Technolo- gy product plants as examples.

1. Introduction

To overcome the difficulties caused by the deteriorating business environment and to accomplish continuous

improvement, Fujitsu has until recently employed various strategies to improve productivity at its plants and business

units.

In 2003, in response to the need to further implement these activities throughout the whole company, Fujitsu announced

a policy of introducing the Toyota Production System (TPS)1),2) as an extensive company-wide activity. First, the

manufacturing sites were designated as the starting points, and we started activities that focused on returning to total

supply chain management (SCM) of production activities and returning to the upstream design departments. To convertfrom the staff-led improvement activities approach that had been used to date, we focused on employee consciousness

and instruction and started implementing TPS from zero at each plant and manufacturing subsidiary. To

introduce TPS, we first sought guidance from well-informed outside consultants and then, in 2004, we stared

developing full-scale activities with the ultimate goal of reforming the corporate structure and climate.

In this paper, we describe the TPS introduction policy we developed for our production innovation activities and look

at its implementation at some of our Information and Communication Technology product plants . We then describe

these activities and the results that were obtained. Finally, we describe our plans for future development.

The new headquarters of the Toyota Motor Corporation

Opened in February 2005 in Toyota City


5/62

Logo and Branding

Employee at Toyota Museum explains development of Toyotaname and brand

In 1936, Toyota entered the passenger car market with its Model AA andheld a competition to establish a new logo emphasizing speed for its newproduct line. After receiving 27,000 entries, one was selected thatadditionally resulted in a change of its moniker to "Toyota" from the familyname "Toyoda." It was believed that the new name sounded better and itseight-stroke count in the Japanese language was associated with wealthand good fortune. The original logo no longer is found on its vehicles butremains the corporate emblem used in Japan.

Still, there were no guidelines for the use of the brand name, "TOYOTA",which was used throughout most of the world, which led to inconsistenciesin its worldwide marketing campaigns.

To remedy this, Toyota introduced a new worldwide logo in October 1989to commemorate the 50th year of the company, and to differentiate itfrom the newly released luxury Lexus brand. The logo made its debut onthe 1989 Toyota Celsior and quickly gained worldwide recognition. Thereare three ovals in the new logo that combine to form the letter "T", whichstands for Toyota. The overlapping of the two perpendicular ovals inside

the larger oval represent the mutually beneficial relationship and trust thatis placed between the customer and the company while the larger ovalthat surrounds both of these inner ovals represent the "global expansion of

Toyota's technology and unlimited potential for the future. Much like the
http://en.wikipedia.org/wiki/File:Toyota_Sign_Development_Bertel_Schmitt.jpg


6/62

design of the cars we sell, our logo has undergone a number ofrefinements and improvements over the years:

COMPANY AT A GLANCE


7/62

Type Public company

TYO: 7203

LSE:TYT

NYSE:TM

Industry Automotive

Robotics

Financial services

Founded August 28, 1937

Founder(s) Kiichiro Toyoda

Headquarter

s

Toyota, Aichi, Japan

Area served Worldwide

Key people Fujio

Cho (Chairman and

Representative Director)

AkioToyoda (President and

Representative Director)

Products Automobiles

Financial Services

Production

output

7,308,039 units (FY2011)[1]

Revenue 18.99 trillion (FY2011)[1]

(US$235.89 billion)

Operating

income

468.28 billion (FY2011)[1]

(US$5.82 billion)

Profit 408.18 billion (FY2011)[1]

(US$5.07 billion)

Total assets 29.818 trillion (FY2011)[1]

(US$370.3 billion)Total equity 10.33 trillion (FY2011)[1]

(US$128.32 billion)

Employees 317,734 (2010)[2]

Parent Toyota Group
http://en.wikipedia.org/wiki/Types_of_business_entityhttp://en.wikipedia.org/wiki/Tokyo_Stock_Exchangehttp://www.bloomberg.com/apps/quote?ticker=7203:JPhttp://en.wikipedia.org/wiki/London_Stock_Exchangehttp://www.londonstockexchange.com/exchange/prices-and-news/stocks/prices-search/stock-prices-search.html?nameCode=TYThttp://en.wikipedia.org/wiki/New_York_Stock_Exchangehttp://www.nyse.com/about/listed/quickquote.html?ticker=tmhttp://en.wikipedia.org/wiki/Automotivehttp://en.wikipedia.org/wiki/Roboticshttp://en.wikipedia.org/wiki/Financial_serviceshttp://en.wikipedia.org/wiki/Kiichiro_Toyodahttp://en.wikipedia.org/wiki/Toyota,_Aichihttp://en.wikipedia.org/wiki/Fujio_Chohttp://en.wikipedia.org/wiki/Fujio_Chohttp://en.wikipedia.org/wiki/Chairmanhttp://en.wikipedia.org/wiki/Akio_Toyodahttp://en.wikipedia.org/wiki/Akio_Toyodahttp://en.wikipedia.org/wiki/Presidenthttp://en.wikipedia.org/wiki/Financial_Serviceshttp://en.wikipedia.org/wiki/Toyota#cite_note-FinancialSummaryFY2011-0http://en.wikipedia.org/wiki/Toyota#cite_note-FinancialSummaryFY2011-0http://en.wikipedia.org/wiki/Earnings_before_interest_and_taxeshttp://en.wikipedia.org/wiki/Earnings_before_interest_and_taxeshttp://en.wikipedia.org/wiki/Toyota#cite_note-FinancialSummaryFY2011-0http://en.wikipedia.org/wiki/Net_incomehttp://en.wikipedia.org/wiki/Toyota#cite_note-FinancialSummaryFY2011-0http://en.wikipedia.org/wiki/Assethttp://en.wikipedia.org/wiki/Toyota#cite_note-FinancialSummaryFY2011-0http://en.wikipedia.org/wiki/Equity_(finance)http://en.wikipedia.org/wiki/Toyota#cite_note-FinancialSummaryFY2011-0http://en.wikipedia.org/wiki/Toyota#cite_note-Databook2010-1http://en.wikipedia.org/wiki/Holding_companyhttp://en.wikipedia.org/wiki/Toyota_Grouphttp://en.wikipedia.org/wiki/File:Toyota.svghttp://en.wikipedia.org/wiki/Types_of_business_entityhttp://en.wikipedia.org/wiki/Tokyo_Stock_Exchangehttp://www.bloomberg.com/apps/quote?ticker=7203:JPhttp://en.wikipedia.org/wiki/London_Stock_Exchangehttp://www.londonstockexchange.com/exchange/prices-and-news/stocks/prices-search/stock-prices-search.html?nameCode=TYThttp://en.wikipedia.org/wiki/New_York_Stock_Exchangehttp://www.nyse.com/about/listed/quickquote.html?ticker=tmhttp://en.wikipedia.org/wiki/Automotivehttp://en.wikipedia.org/wiki/Roboticshttp://en.wikipedia.org/wiki/Financial_serviceshttp://en.wikipedia.org/wiki/Kiichiro_Toyodahttp://en.wikipedia.org/wiki/Toyota,_Aichihttp://en.wikipedia.org/wiki/Fujio_Chohttp://en.wikipedia.org/wiki/Fujio_Chohttp://en.wikipedia.org/wiki/Chairmanhttp://en.wikipedia.org/wiki/Akio_Toyodahttp://en.wikipedia.org/wiki/Akio_Toyodahttp://en.wikipedia.org/wiki/Presidenthttp://en.wikipedia.org/wiki/Financial_Serviceshttp://en.wikipedia.org/wiki/Toyota#cite_note-FinancialSummaryFY2011-0http://en.wikipedia.org/wiki/Toyota#cite_note-FinancialSummaryFY2011-0http://en.wikipedia.org/wiki/Earnings_before_interest_and_taxeshttp://en.wikipedia.org/wiki/Earnings_before_interest_and_taxeshttp://en.wikipedia.org/wiki/Toyota#cite_note-FinancialSummaryFY2011-0http://en.wikipedia.org/wiki/Net_incomehttp://en.wikipedia.org/wiki/Toyota#cite_note-FinancialSummaryFY2011-0http://en.wikipedia.org/wiki/Assethttp://en.wikipedia.org/wiki/Toyota#cite_note-FinancialSummaryFY2011-0http://en.wikipedia.org/wiki/Equity_(finance)http://en.wikipedia.org/wiki/Toyota#cite_note-FinancialSummaryFY2011-0http://en.wikipedia.org/wiki/Toyota#cite_note-Databook2010-1http://en.wikipedia.org/wiki/Holding_companyhttp://en.wikipedia.org/wiki/Toyota_Group


8/62

OBJECTIVES

Study any organization in detail. Collect data pertaining to the

following:-

Operations strategy

Financial strategy

HR policy

Marketing strategy

METHODOLOGY

All the analysis is done with the help of secondary data.

Technology
http://en.wikipedia.org/wiki/Hino_Motors,_Ltd.http://en.wikipedia.org/wiki/Toyota_Financial_Serviceshttp://en.wikipedia.org/wiki/Scion_(automobile)http://en.wikipedia.org/wiki/Subsidiaryhttp://en.wikipedia.org/wiki/Hino_Motors,_Ltd.http://en.wikipedia.org/wiki/Daihatsu_Motor_Co.,_Ltd.http://en.wikipedia.org/wiki/Toyota_Financial_Serviceshttp://en.wikipedia.org/wiki/DENSOhttp://en.wikipedia.org/wiki/Toyota_Industries


9/62

The latest corporate crowd sourcing experiment comes to us from Toyota,which this week launched its "Ideas for Good" initiative--an opportunity forconsumers to repurpose Toyota automotive technology to benefit societyoutside of the automotive space. In return, winners will get to choose fromone of three Toyota cars (2011 Prius, 2011 Highlander Hybrid or 2011

Venza) and be part of an "Idea Design Session" event.The campaign, which is being produced in conjunction with Saatchi &Saatchi LA, asks entrants to work with five Toyota technologies:

Total Human Model for Safety (THUMS) An advanced injury-simulationsoftware that measures more than the conventional crash test dummycan.Hybrid Synergy Drive (HSD) HSD converts braking energy intoelectricity. The hybrid system helps lower emissions while raising mpg.Solar Powered Ventilation System The Toyota Prius offers this system

that helps keep the interior air temperature near the outside ambienttemperature, when the vehicle is parked in direct sun.Touch Tracer Display An advanced touch-activated display system thatallows drivers to control music, temperature and other features from thesteering wheel without taking their eyes off the road. Touch Tracer is thefirst display system in the world to allow steering wheel controls to readout on the instrument panel.Advanced Parking Guidance System (APGS) Available on the ToyotaPrius, this system utilizes ultrasonic sensors in the front and rear bumpersto detect open parking spaces and helps guide the car into those spaceswith only soft driver braking.Some of these technologies are already being used outside Toyota.

THUMS, for example, is being used by Wake Forest University to study theeffects of tackles and hits on football players. It is also being used byNASCAR to analyze the effects of high-speed impacts.

The benefits of Toyota's crowd sourcing experiment are twofold: the brandgains recognition for some of its more innovative technologies, and it getsto leverage the ideas of the crowd, to boot.

Toyota is far from the first company to dabble in online crowd sourcing.Pepsi's multimillion dollar Refresh grant program has been wildlysuccessful, and GE's recent $200 million EcomaginationChallengecaptured the attention of environmentally-aware Internet
http://www.fastcompany.com/1686659/pepsi-refresh-project-announces-do-good-for-the-gulf-finalistshttp://www.fastcompany.com/1669875/ges-200-million-ecomagination-challengehttp://www.fastcompany.com/1669875/ges-200-million-ecomagination-challengehttp://www.fastcompany.com/1669875/ges-200-million-ecomagination-challengehttp://www.fastcompany.com/1686659/pepsi-refresh-project-announces-do-good-for-the-gulf-finalistshttp://www.fastcompany.com/1669875/ges-200-million-ecomagination-challengehttp://www.fastcompany.com/1669875/ges-200-million-ecomagination-challenge


10/62

junkies. Toyota's promise of a shiny new car will probably be enough to geta decent number of participants in its contest.

About the Technologies

T.H.U.M.S.1. Solar Powered Ventilation System

2. Hybrid Synergy Drive3. Advanced Parking Guidance System4. Touch Tracer

T.H.U.M.S.T.H.U.M.S. (Total Human Model for Safety) is an advanced injury-simulationsoftware that measures injury to parts of the body not measurable withconventional crash test dummies.

T.H.U.M.S. (Total Human Model for Safety) is an advanced injury-simulationsoftware. T.H.U.M.S. has two million distinct parts, including bones,ligaments, tendons and the muscular systems, enabling Toyota to betterunderstand injury mechanisms in crashes that have historically beendifficult to analyze with current crash test dummies.

Toyota is using T.H.U.M.S. to better understand the mechanisms thatcause injuries to vehicle occupants and pedestrians in car crashes, usingthe data collected to help develop advanced safety technologies forairbags, seatbelt systems and vehicle body structures. In one case,

T.H.U.M.S. was used to study low-speed rear impacts to help reduce therisk of whiplash injuries.

Internal organs are particularly vulnerable during collisions, with injuries tothem accounting for approximately half of all injuries sustained duringautomobile collisions. T.H.U.M.S. provides Toyota with more data than everbefore to help them create the next generation of safety features on theirvehicles.

EnginesToyota's new-generation engines combine driving pleasure andenvironmental responsibility

Award Winning EnginesToyota prizes itself for its advanced and intelligent engines. Its VVT-Iengine won "Engine of the Year 2000" and recently the VVTL-I has won asimilar award for its revolutionary "lifting" valve control technology. And
http://www.toyota.com/ideas-for-good/technologies/THUMS.htmlhttp://www.toyota.com/ideas-for-good/technologies/solar-powered-ventilation-system.htmlhttp://www.toyota.com/ideas-for-good/technologies/hybrid-synergy-drive.htmlhttp://www.toyota.com/ideas-for-good/technologies/hybrid-synergy-drive.htmlhttp://www.toyota.com/ideas-for-good/technologies/advanced-parking-guidance-system.htmlhttp://www.toyota.com/ideas-for-good/technologies/touch-tracer-display.htmlhttp://www.toyota.com/ideas-for-good/technologies/THUMS.htmlhttp://www.toyota.com/ideas-for-good/technologies/solar-powered-ventilation-system.htmlhttp://www.toyota.com/ideas-for-good/technologies/hybrid-synergy-drive.htmlhttp://www.toyota.com/ideas-for-good/technologies/advanced-parking-guidance-system.htmlhttp://www.toyota.com/ideas-for-good/technologies/touch-tracer-display.html


11/62

the developments go on: At Paris Motor Show 2002 Toyota will launch itsnew D-CAT clean diesel technology.

Engines - VVT I

VVT-I (Variable Valve Timing with intelligence)

Why VVTI

In contrast to the fixed valve timing of conventional engines, the VVT-Isystem is an computer controlled mechanism that continually varies thetiming for opening and closing the intake valves in accordance with thevehicle's operating conditions.

BY determining the level of performance that is demanded of the engineat a given time by way of the driver's accelerator operation and theengine rpm, the VVT-I enables the overall performance of the engine tobe enhanced all the way from the low to the high rpm range.

DesignVVT-I is comprised of three major components

1.The electronic control unit(ECU), which calculates optimum intakevalve timing based on engine operating conditions.

2. The oil control valve (OCV), which controls hydraulic pressure underthe ECU's instruction and

3.The VVT pulley, which continuously changes the intake valve timingusing hydraulic pressure.

The VVT-I is an engine control system that has achieved high levels ofthe seemingly opposing performances of Higher power out-put, Lowerfuel consumption, Cleaner exhaust gases.

D-4D


12/62

D-4D High technology, clean diesel

Originally introduced in Europe in the top selling Avensis range, D-4D iswidely recognised as one of the most advanced diesel technologies on themarket today. Toyota D-4D engines are available on select models of Yaris,

Yaris Verso, Corolla Verso, Innova, Avensis, Avensis Verso, RAV4, Land

Cruiser and Prevail models.

Until recently, diesel engines relied on relatively simple technology with alow-pressure mechanical injector delivering fuel to a pre-combustionchamber in the cylinder head, where a single ignition - fired by the intenseheat of high compression - takes place.

The system was reasonably fuel efficient but lacked precision andrefinement, leading to vibration and noise. Fuel combustion can be

incomplete, allowing smoke and other emissions to pass into the exhaust.

D-4D componentsToyota's common rail system makes use of a high pressure pump andintelligent, computer controlled injectors to deliver precisely the rightamount of fuel, at precisely the right time, directly into the centre of thecombustion chamber.

SafetyWhile you're getting out of your car, we're thinking about how to keep youin.


13/62

The most important aspect of protecting passengers in acollision is to minimize collision forces transmitted to them.At Toyota, we design automobile bodies with crumplezones to absorb collision energy, and we have put a great

deal of work into designing ever more efficient passenger restraintsystems such as seatbelts and head restraints. We search for improvedwebbing elongation characteristics, improved ways of clamping thewebbing, and improved pretensioners. Passenger safety begins withbuckling up. And at Toyota, we are working hard to make seatbelts morecomfortable and easier to wear. In addition, we are making significantprogress with airbags as supplemental restraint systems (SRS).

In a collision, seatbelts are the primary safety device that helps protect theoccupants. During the development of a new automobile, Toyota uses

dummies of several different sizes to make sure the seatbelts, anchors,and buckles are positioned for a safe and comfortable fit. While road-testing prototypes, real people use the seatbelts and report on their fit andcomfort. Adjustable shoulder anchor are provided for wearers to changethe height of the belt for additional comfort and safety.

Toyota continually strives to design new and better seatbelts that makethe most of the ride-down effect of our automobiles' crumple zones andenhance the deceleration effects. Toyota even designs the structure andshape of the seats in its cars to complement the restraint of the seatbelts.

Making the shape of the seats and the position of the anchors to ensurethat the belts fit low across the pelvis.

Depending upon the seating configuration, some of our vehicles have 3-point belts for the passenger sitting in the middle of the back seat.

Our Tension-Reducing Emergency Locking Retractor (ELR) automaticallylocks when you pull on the belt to ensure its secure enough to work, yetloose enough to feel comfortable.

And some of our vehicles have Pre-Tens ioner Sensors which quickly pull

the seatbelt back at the first shock of a severe head-on collision, while theForce Limited keeps that tension from injuring you. It all works to keep yousafe and secure in the event of an accident.

BrakesOur brakes allow you to do something you never thought possible


14/62

Toyota has developed new electronic control systems thatmake the most of the basics and add to overallperformance. These electronic systems include ABS for thebrakes and TRC for traction control. ABS helps preventwheel lock. When the brakes are applied, the tyres begin to

slip. ABS measures the degree of slip to determine whenwheel lock will occur from the degree of slip, and reduces hydraulicpressure to prevent it. Because ABS allows the wheels to roll - albeit at aslower speed than the vehicle velocity - the vehicle maintains directionalcontrol and steerability. A cars wheels may tend to spin when starting offor accelerating. In some cases, loss of traction can cause the tyres to losetheir grip and allow the vehicle to slide sideways. Toyota's TRC systemregulates engine and brakes to help provide as much control of wheel slipas possible during start-off or acceleration. If a wheel loses traction, the

wheel speed sensor detects a sudden increase in wheel rotation speed.This information goes to the TRC electronic control unit (ECU), whichcommands the engine to reduce torque. At the same time, the ECUcommands the brake actuator to engage the brakes on the affected wheeluntil it regains traction. Obviously, driver awareness of road hazards andappropriate response is also required to avoid dangerous situations and togive the various systems time to operate. Toyota's TRC system usescomponents of ABS and engine management systems, as well ascomponents designed specifically for TRC. The system helps the driver

maintain control of the automobile and optimizes traction, even on slipperysurfaces.


15/62

Operation Strategy of Toyota

Toyota is Japan's biggest car company and the second largest in the world

after General Motors. It produces an estimated eight million vehicles peryear, about a million fewer than the number produced by GM. Thecompany dominates its home market, with about 40% of all new carsregistered in 2004 being Toyotas.

Toyota also has a large market share in both the United States and Europe.It has significant market shares in several fast-growing South East Asiancountries. The - 1 -company produces a large range of vehicles which arehighly regarded for their quality, engineering, and value; their designs setglobal standards for safety, reliability and ease of maintenance.

The Company Philosophy "Do the right thing for the company, itsemployees, the customer and the society as a whole."

OriginsThe story of Toyota Motor Corporation began in September 1933 whenToyoda Automatic Loom created a new division devoted to the productionof automobiles under the direction of the founder's son, Kiichiro Toyoda.Soon thereafter, the division produced its first Type A Engine in 1934,

which was used in the first Model A1 passenger car in May 1935 and theG1 truck in August 1935. Production of the Model AA passenger car startedin 1936.Although the Toyota Group is best known today for its cars, it is still in thetextile business and still makes automatic looms (fully computerized, ofcourse), and electric sewing machines which are available worldwide.During the Pacific War, the company was dedicated to truck production forthe Imperial Army. Because of severe shortages in Japan, military truckswere kept as simple as possible. For example, the trucks had only one

headlight in the centre of the hood.Toyota earns $1250 per vehicle produced while GM loses $2311 pervehicle produced.

JUST IN TIME (JIT)

Just-In-Time (JIT) is a Japanese manufacturing management method thatwas developed in the 1970s. It was first adopted by Toyota manufacturingplants by Taiichi Ohno. One motivated reason for developing JIT was a


16/62

need of a better production technique after World War II. Japanese peoplehad a very strong incentive to develop a good manufacturing technique tohelp them rebuild the economy. They also had a strong working ethnicwhich was concentrated on work that caused continuous improvement.

These kinds of motivation had driven Japanese economies to succeed.Because of the natural constraints and the economy constraints after

World War II, Japanese Manufacturers looked for a way to gain the mostefficient use of limited resources. The Toyota Company implemented thisinto their plant and turned the management and accounting principlesaround to effectively and efficiently move inventory in and out very quicklywhile also concentrating on the manufacturing aspects of their cars. Afterthe first introduction of JIT by Toyota, many companies followed up andaround mid 1970sand it gained extended support and widely used bymany companies around the world.

Just in Time is an inventory strategy implemented to improve the return on

investment of a business by reducing in-process inventory and itsassociated carrying costs. JIT can lead to dramatic improvements in amanufacturing organization's return on investment, quality, and efficiency.

Just-in-time means, quite literally, that an assembler on a line receives hisconsignment of parts "just in time" to use them. The system is based on anideal situation in which a part arrives just in time to be used. The systemalso operates on the strength of very small lot quantities of replacementparts. This type of system produces only quantities necessary to fulfill thedemands of the next operation. The quantity is pulled when it is needed,

where it is needed, and in the exact quantity which is needed. Thecompany will also need to ensure that the process has adequate responsetime to maintain an uninterrupted schedule. Companies can make greatstrides in JIT by reducing setup and changeover times for machinery. JITrecognizes that any motion which does not add value to a productincreases the no value added cost of the product. Reduction of setup andchangeover time reduces the no value added costs attached to a product.With Just in Time management, a company can dramatically improve itsproduct quality. Using JIT, a company only holds enough inventories for

current production, zero defects must be maintained. Once parts are putinto production, attention to quality must continue since no finished goodsinventory will be held. JIT is generally recognized that the implementationof JIT will result in significant reduction in inventory. Inventory levels are akey measurement of the JIT process. The JIT philosophy on inventorymanagement is simple. It includes: strive for a level of zero inventories,produce items at a rate required by the customer, eliminate allunnecessary lead times, reduce setup costs to achieve the smallesteconomical lot size, optimize material flow from suppliers through the

production process to the point of sale of the finished product, so thatinventories are minimized, ensure high quality just-in-time delivery fromsuppliers, minimize safety stocks, implement a total quality controlprogram which will minimize scrap, rework, and resultant delays in


17/62

production. In the JIT manufacturing environment, inventory is "demand"pulled into and through the process on a part-by-part basis in smallquantities. The movement of inventories is no longer from the storeroomto a work centre, to a storeroom, to another work centre and so on. JITaccounting systems are similar to process costing; the vehicle forcollecting costs is the time in the system, not a work order.

There was a major need for this process because before the introduction ofJIT, there were a lot of manufacturing defects for the existing system atthat time. This included inventory problem, product defects, risen cost,and large lot production and delivery delays. The inventory problemsincluded the unused accumulated inventory that was not onlyunproductive, but also required a lot of effort in storing and managingthem. Other implied problems such as parts storage, equipmentbreakdowns, and uneven production levels. For the product defects,manufacturers knew that only one single product defects can destroy theproducers creditability. They must create a "defect-free" process. Insteadof large lot production - producing one type of products, they awarded thatthey should produce more diversified goods. Lastly, the system before JITdid not manage well for fast delivery request, so, there was a need to havea faster and reliable delivery system in order to handle customers needs.

Thus, JIT manufacturing management was developed based on theseproblems.

JIT was highly needed especially in the automotive industry thats whyToyota was the first company to use it. In order to have an efficientproduction system in the automotive industry, there were many issuesthat needed to be solved. The first main problem was that the automotiveindustry is a typical mass production assembly type where each vehicle isassembled from several thousand parts that have undergone numerousprocesses. Therefore, a trouble in any of the processes will have a largeoverall effect. The second issue was there are very many different modelswith numerous variations and with large fluctuation in the demand of eachvariation. The last issue is every few years, the vehicles are completelyremodelled and there are also often changes at a part level. The ordinaryproduction control system in such an industry consists of fulfilling the

production schedules by holding work-in-process inventory over allprocesses as a means of absorbing troubles in the processes and changesin demand. However, such a system in practice often creates excessiveunbalance of stock between the processes, which often leads to deadstock. On the other hand, it can easily fall into the condition of havingexcessive equipment and surplus of workers, which is not conformable to

Toyotas' recognition. In order to avoid such problems as inventoryunbalance and surplus equipment and workers, Toyota recognizednecessity of schemes adjustable to conform to changes due to troubles

and demand fluctuations. For this purpose, they put their efforts indevelopment of a production system which is able to shorten the lead timefrom the entry of materials to the completion of vehicle. This is where Justin Time was needed. The just-in-time production is a method whereby the


18/62

production lead time is greatly shortened by maintaining the conformity tochanges by having all processes produce the necessary parts at thenecessary time and have on hand only the minimum stock necessary tohold the processes together". In addition, by checking the degree ofinventory quantity and production lead time as policy variables, thisproduction method discloses existence of surplus equipment and workers.

This was the starting point of the Toyota Production System.There are many advantages in using the Just in Time inventory. One majorbenefit of JIT is the elimination of separate raw materials and work-in-process inventory accounts. These accounts are replaced by one accountcalled Raw and in-Process Inventory. All materials and conversion costs arecharged to this account. Due to the reduction of in-process inventories, thecomputation of equivalent units of production is simplified. Some otheradvantages include minimizing raw material, minimize defects goods,simplify the production process, and create a timely, multi-skilled workforce. By using the JIT production planning approach, managers reduceinventory to a minimum level, keeping on hand only the amount needed inproduction until the next order arrives. This approach eliminates thedouble handling of products which occurs when storage is relocated to thework area or shipping area. The JIT production stage is driven by havingcontinuous delivery of items. The use of production planning eliminates theneed for material requirements planning (MRP) as a production planningtool. In contrast to the JIT system, a MRT system is a "push-through"system driven by forecasted demand. It examines the finished goodsrequirements before determining the demand for raw materials,components, and subassemblies. JIT is an attempt to change themanufacturing process and to eliminate non-value-added activities in orderto judge the cost high or low. This method can also help organizationtremendously.

There are also some disadvantages that JIT can bring. The JIT systems canbe disastrously affected by outside forces. September 11, 2001 causedmassive amount of financial damage to companies operating JIT Inventoryor Production systems because so many large transport systems like Fed-Ex, United Parcel Service (UPS), and the Post Office could not get the

goods delivered. It also affected the other transportation industries. Withthe increased security at the U.S. border crossings with Canada andMexico as well as at U.S. ports, trucks reportedly waited 18 to 20 hours atsome crossing points. Not only did crossing times increase but, moreimportantly for JIT systems, they became unpredictable problems andincreased financial losses especially in perishable products.

There is a definite downside to JIT. In the JIT system often a sole supplier isused for products for the manufacturing process. A company becomesvulnerable if that sole supplier shuts down for some reason. The General

Motors Corporation recently faced such a problem. When the Lordstownbody stamping and fabrication plant went on strike, the GM Saturn divisionwas forced to shut down. Lordstown is the sole supplier for about 300Saturn parts. Eight more GM plants followed suit within days, at a daily


19/62

cost to GM of between $8 and $10 million in pretax profits. It is easy to seethat a JIT inventory management system intensifies the impact of a strike.General Motors plight painfully illustrates the risk of a JIT strategy: It puts acompany at the mercy of its key suppliers.Companies that use JIT principles are frequently used by large regionalcompanies, or companies that expand nationally or even globally. Take for

instance Sears Department store. Whenever a sale is made, thatinformation is transferred to the computer and stored, to later besubmitted to various computers that use the information to updateinventory, calculate sales and create other statistical reports. Anotherexample would be a restaurant such as Applebees. When food is ordered,the waiter submits this into a computer. At the present time, theinformation is used for the cooks and for check calculation. Later, thestored information is used in reports for management to clearly see whatitems have been sold and need to be reordered. The uses span far, asmanagement can also use this data to see sale progressions of certainitems and to see what sells the most at various times of the day, week ormonth. Other companies such as, The Quincy, Ill., plant of QuincyCompressor, Inc. has reduced its inventory to $4 million from $21 millionover 10 years. Quincy uses JIT techniques to speed up delivery time for itslarge industrial air compressors, used in service stations, factorymachinery, and climate-control systems. "We are producing more than weever did, with less people," says David Irick, traffic manager. "When Istarted here 13 years ago, if you called for a basic air compressor, wequoted you nine months' delivery time. Now we quote 10 days, and we areaveraging about five. That's just the way the market is. Nobody carries anyinventory."

The JIT inventory method is now being used just about anywhere. It is acommon practice that many companies have adopted and many more arerealizing the need to pursue the concept. This method is becoming themost effective and efficient in operations today. Eliminating waste, whichis the most of important in JIT, can be used for all levels of operation in acompany, not just inventory. More and more uses of JIT will be introducedand implemented as businesses seek to maximize the quality of their

operations.

Toyota adopting three-stage plan

The Japanese carmaker was a latecomer to the China market. Within itsglobal strategies, North America is the top priority, followed by its homecountry Japan.


20/62

China has been included in Toyota's top development strategy in recentyears with its first China-made VIOS sedan produced in Tianjin in October2002.

Considering China is an immature auto market, the company has adopteda three-stage development plan -- first to establish a local sales networkand launch brand promotions, then to build auto parts manufacturingbases, and, finally, to establish joint ventures (JVs) with local players andproduce automobiles.

About 57 per cent of respondents said Toyota adopted the right strategyfor expansion in China and avoided possible risks.

Although a latecomer, Toyota has jumped to the front in terms of importedcar volume -- 50,000 units annually. It has 57 JVs and wholly funded autoparts companies scattered across China.

Now, the company is stepping into the most important and critical stage --speeding up the localization of its products, since its rivals, such as Hondaand General Motors, are accelerating their penetration into China.

After the market entry of the Prado and Land Cruiser with China's FirstAutomobile Works, its new product with Guangzhou AutomobileManufacturing Co -- Camry, which was a great success in the United States-- is also being developed.

About 80 per cent of the respondents predicted Toyota will continue itsbrilliant performance in the US market, since the company has establisheda far-reaching sales network (35.6 per cent) and its product brands arehighly recognized by Chinese customers (52.9 per cent).

However, there are also unsatisfactory results of the developmentstrategy. Seventy-five per cent of the 104 senior company managerssurveyed said Toyota only wants to sell cars in China, but does not want toshare technological know-how.

Some 40.4 per cent of respondents said the company does not giveenough attention to China market.

Forbes magazine commented on Toyota's success in the US auto market,saying that once the company sets goals, it will manage to exceed thetargets. What is more challenging to its rivals is Toyota's strategy torealize these goals.

That assessment may well apply to its China expansion. Although Toyotamissed the first opportunities, it will likely catch up if it pays moreattention to the China market and introduces high-end brands.


21/62

Toyota Motor Corporation - SWOT Framework

Analysis

SWOT Analysis, is a strategic planning tool used to evaluate the Strengths,

Weaknesses, Opportunities, and Threats involved in a project or in abusiness venture. It involves specifying the objective of the business

venture or project and identifying the internal and external factors that are

favourable and unfavourable to achieving that objective.

The aim of any SWOT analysis is to identify the key internal and external

factors that are important to achieving the objective. SWOT analysis

groups key pieces of information into two main categories:

Internal factors - The strengths and weaknesses internal to the

organization.

External factors - The opportunities and threats presented by the external

environment

The internal factors may be viewed as strengths or weaknesses depending

upon their impact on the organization's objectives. What may represent

strengths with respect to one objective may be weaknesses for anotherobjective. The factors may include all of the 4P's; as well as personnel,

finance, manufacturing capabilities, and so on. The external factors may

include macroeconomic matters, technological change, legislation, and

socio-cultural changes, as well as changes in the marketplace or

competitive position. The results are often presented in the form of a

matrix.

SWOT analysis is just one method of categorization and has its ownweaknesses. For example, it may tend to persuade companies to compile

lists rather than think about what is really important in achieving


22/62

objectives. It also presents the resulting lists uncritically and without clear

prioritization so that, for example, weak opportunities may appear to

balance strong threats.

Toyota production systemHarmonizing with the Environment

Globally, Toyota has indicated a

strong and diverse commitment to

the pursuit of harmonious growththrough its technically advanced

and environment-friendly products.

There have been relentless efforts

in the crucial fields of mobility, city

transportation, resources, society

and environment, through research

& development.

Protecting the environment has

always been a priority at TKM,

starting with the eco-friendly

engines that are manufactured for

the Toyota vehicles, to the

advanced technology that is used

for purification or recycling of waste

water at the plant. Apart from this,the plant at Bidadi, Karnataka, is

surrounded by a green belt, meets

high environmental standards and

has achieved the ISO 14001

certification in its very first year of

operations.


23/62

Setting benchmarks for Production

Excellence

Quality is ensured in every

vehicle that rolls out of Toyota

Kirloskar Motor, through in-built

audits at every process of thesystem. The company's

operational excellence is based

on the improvement tools and

methods developed by Toyota

under the Toyota Production

System (TPS), greatly

emphasizing superlative quality

and minimal waste.

In line with Toyota's growing

comfort with its India operations,

the company set up Toyota

Kirloskar Auto Parts (TKAP),

which commenced production of

transmissions in May 2004, for

its global requirements. Another

initiative is the Toyota Techno

Park India (TTPI), a non-profit

industrial infrastructure

company aimed at boosting local

industries and related job

opportunities.

Setting benchmarks for the

automobile industry, the

manufacturing facility consists of

4 divisions (shops) Press, Weld,

Paint and Assembly.


24/62

Production System

A production system which is steeped in the philosophy of "the completeelimination of all waste imbues all aspects of production in pursuit of themost efficient methods.

Toyota Motor Corporation's vehicle production system is a way of "makingthings" that is sometimes referred to as a "lean manufacturing system" ora "Just-in-Time (JIT) system," and has come to be well known and studiedworldwide.

This production control system has been established based on many years

of continuous improvements, with the objective of "making the vehiclesordered by customers in the quickest and most efficient way, in order todeliver the vehicles as quickly as possible."

The Toyota Production System (TPS) was established based on two


25/62

concepts: The first is called "Jidoka" (which can be loosely translated as"automation with a human touch") which means that when a problemoccurs, the equipment stops immediately, preventing defective productsfrom being produced; The second is the concept of "Just-in-Time," in whicheach process produces only what is needed by the next process in acontinuous flow.

Based on the basic philosophies of Jidoka and Just-in-Time, the TPS canefficiently and quickly produce vehicles of sound quality, one at a time,that fully satisfy customer requirements.

TPS Concept

Jidoka Highlighting/visualization of problems

-Quality must be built in during the manufacturing process

If equipment malfunction or a defective part is discovered, the affectedmachine automatically stops, and operators cease production and correctthe problem.For the Just-in-Time system to function, all of the parts that are made andsupplied must meet predetermined quality standards. This is achieved

through Jidoka.

Jidoka means that a machine safely stops when the normal processing iscompleted. It also means that, should a quality / equipment problem arise,the machine detects the problem on its own and stops, preventingdefective products from being produced. As a result, only productssatisfying quality standards will be passed on to the following processes onthe production line.

Since a machine automatically stops when processing is completed orwhen a problem arises and is communicated via the "andon" (problemdisplay board), operators can confidently continue performing work atanother machine, as well as easily identify the problem's cause to preventits recurrence. This means that each operator can be in charge of manymachines, resulting in higher productivity, while continuous improvementslead to greater processing capacity.

Just-in-Time Productivity improvement
http://www.toyota-global.com/company/vision_philosophy/toyota_production_system/jidoka.htmlhttp://www.toyota-global.com/company/vision_philosophy/toyota_production_system/just-in-time.htmlhttp://www.toyota-global.com/company/vision_philosophy/toyota_production_system/jidoka.htmlhttp://www.toyota-global.com/company/vision_philosophy/toyota_production_system/just-in-time.html


26/62

- Making only "what is needed, when it is needed, and in the amountneeded!"

Producing quality products efficiently through the complete elimination ofwaste, inconsistencies, and unreasonable requirements on the productionline.In order to deliver a vehicle ordered by a customer as quickly as possible,

the vehicle is efficiently built within the shortest possible period of time byadhering to the following:

1. When a vehicle order is received, a production instruction must beissued to the beginning of the vehicle production line as soon aspossible.

2. The assembly line must be stocked with required number of allneeded parts so that any type of ordered vehicle can be assembled.

3. The assembly line must replace the parts used by retrieving the same

number of parts from the parts-producing process (the precedingprocess).

The preceding process must be stocked with small numbers of all types ofparts and produce only the numbers of parts that were retrieved by anoperator from the next process.


27/62

MARKETING STRATEGY

Strategic Focus and PlanThere are three aspects of the existing corporate strategy that aredeveloped in relation to their overall impacts caused to the marketing planof Toyota Company. These are;

Mission Statement of the Company

Toyota seeks to create a more prosperous society through automotivemanufacturing (Hiroshu, 2003). Therefore, the Company is aimed atachieving a stable and long-term growth in future, and this is supposed tobe in synchronization with a number of factors: the significantenvironment, global economy, local communities served, and the InternalEnvironment of stakeholders.

The Companys Goals

The company has committed itself to offering of hybrid alternatives forevery model that is sold in the market. This is aimed at enabling theCompany to make a total sale of 1 million hybrid vehicles within a year,and this goal has been set to have been achieved by the year 2012.

Toyota Company has improved its 2011 Environmental Action Plan and it is

committed in six different key areas, which are: the EnvironmentalManagement; changes in Energy and Climate; the Quality of Air;concerned Substances; the aspects of Recycling and Improved Resourceutilization; and Societal Cooperation. The Company is committed to reducecarbon dioxide emission and it is believed to take combined actions ofensuring that the environment is kept clean all the time by observing thestated fuel economy values.

Core Competency and Sustainable Competitive Advantage

Toyota Company is working towards the achievement of a better and moresustainable economy by having a stable global market. With advancementin new technology and other related matters, the Company is investing in


28/62

various strategies that will enable it to realize its set goals and objectivesover a period of time. The Company has a well developed and equippednetwork of expertise that are into research and development over aspectsthat are to keep the Company on top in product and service delivery to itsglobal market..

Situation Analysis

Toyotas capacity to stay on top of productivity efficiency and qualityrankings can be credited to its internal environment. This entails the wayproduction process is managed by the top management who are famous fortheir competency. The production team has an insatiable obsession toimprove the efficiency and effectiveness of its manufacturing operations.

Therefore, to fully understand the situation analysis of Toyota Company, aSWOT analysis is determined and it mainly consists of the Companysstrength, weaknesses, available opportunities, and finally the threats thatthe Company is experiencing or projected to go through.

SWOT AnalysisStrength and weaknesses are referred to as internal factors of theCompany as their impact starts from within the Company, whileopportunities and threats normally originates from outside of theCompany, hence referred to as external factors.

Figure 1: SWOT Analysis of Toyota Company (Internal Factors)

Internal Factors Strengths Weaknesses

Management Having competent and

experienced management team

and board members

Large size of management

team reduces chances of

moving fast into the targeted

market, because of slow rate in

decision making

Offering Hybrid products that are

customer friendly

Expensive in proofing the

market that are right products

for them

Marketing Distribution of products into

the market through wide range

of identified branches

Expensive in establishing this

distribution network

Personnel Have good skilled workforce

who are relied upon

The gap will be big if the

employees left the Company

Finance Improved revenues from salesmade in the global market

Limited workforce andmaterial may slow down the

growth of the Company in

relation to competitors


29/62

Manufacturing Main supplier of material

ensure fast and quality material

Different supply interests

among the Company suppliers

and other competitors.

R&D Quality of products delivered

is enhanced through out the

period of doing business

Figure 2: SWOT Analysis of Toyota Company (External Factors)

External Factors Opportunities Threats

Consumer/social Stability of theupcoming market ishighly projected

Low priced productsmay proof that thequality of theproducts is quite low

Competitive Differentiatedproducts and pricesmake the Companyto be quitedistinctive in themarket

Products of hightechnology are beingintroduced into themarket by othercompetitivecompanies

Technological Break-through intechnologicalstandings is a bettercourse for theCompany to improveon the quality of itsproducts

Economic Improved consumerincome has made it

convenient for theCompany to getdeep into the market

Individuals opting forother products since

they have enoughdisposable income

Legal/Regulatory Regulatorymeasures ensuringfairness in themarket and avoidover-exploitation by

other competitors


30/62

Figure 3: The SWOT Analysis Matrix

Strengths:

investment in new factories

diverse range of products

improved marketing techniques

Opportunities:

hybrid cars

selling technology

rising urban youth population

Weaknesses:

Maintaining client base

Maintaining production

Threats:

Faulty products

Upcoming manufacturers

Industry AnalysisToyota Company is able to apply its strengths and opportunities it has tocreate a competitive edge in the industry. For instance, the widelydifferentiated product line is helping the company to have more global

presence. This can also be achieved through entering new markets likeChina and Europe. Toyota has previously concentrated on the Japan andAmerican markets and it needs to setup strategies to penetrate the othermarkets as well.

Toyota has taken a good position as far as sustainable development isconcerned. With the fear of depletion of the fossil fears coupled with theglobal warming effects, there is a ready market for the Toyotas hybrid car.

The company can also use this opportunity t sell its technology to otherfirms

Company analysis

Toyota Company is one of the worlds leaders in car export and it appears toliterally be living its mission, which is to be the world leader in the creationof automotives that are best in terms of value. The company is workingtowards the end of creating a society that is prosperous by providing theirclientele with the best value for their money. They believe in giving the bestprices for the client yet still deliver a vehicle that is at per with those being

offered by their other major competitors. This could be the reason why theirproducts are having a very good market in the developing nations. TheCompany is also conscious about sustainable development, and this can beclearly seen in its different corporate social responsibilities as well its


31/62

sustainable development initiatives aimed at reducing the pollution of theenvironment.

Customer Analysis

Toyotas customers are very diverse and they range from the low income

earners to the very rich. They are widespread around the world. Toyota hascatered for all car needs that may arise for any individual with their widerange of motor vehicles. They range from small sports cars to big familyvehicles and trucks as well as vans. The customers comprise a varied groupof people, with differing ages, incomes, geographical locations, and socialand cultural statuses. Customers go for Toyota products to satisfy differentwants and needs. Low income earners are provided with a basic mode oftransportation that is both within their price range and efficient. Clientsgoing for class and elegance are also catered for.

Customers purchase Toyota products on individual basis according to theirspecific needs. In some cases we have organizations purchasing cars fortheir firms usage or for their employees. In such a case, the product buyerand purchaser is not actually the product user. Once individuals purchasethe companys product, there is an increased exposure to its other products.Product awareness is enhanced through advertisements, newsletters,website information, and other informational sources. The opportunity for

Toyota to generate income from complimentary products such as books andseminars by members is very big.

Where do they Purchase?

Most of Toyotas products are sold through retail distributors located all overthe world. Purchase can also be made directly from the factories, as is thecase with limited edition models. The increase in the use of electroniccommerce,Toyota as well, that is, purchasing products on-line. Majority ofthe advertising materials can be obtained in full, on-line view over theInternet. On-line publications diminish paper waste while giving existing and

direct availability of the product to clients. Customers are able to order aproduct in stores and with a toll-free number directly from the company aswell (Booz, 2007). This grants customers around the world access to thecompanys products.

When do they Purchase?

Individuals can purchase the companys products anytime that they like, atany time of the year. This is because Toyota sells its cars all year round,except for the limited editions which are purchased directly from the

factories. New users often purchase cars after acquiring a drivers licence inthe case of some countries when going to high school or to college in others.Other users usually purchase a new car when the old one breaks or gets tooold or when they want to trade in for a newer car or a different model.


32/62

Why do they Purchase?

Customers select Toyota products over other manufacturers primarilybecause of their comprehensive, yet specialized, nature. Toyota offers adiverse range of cars that encompass all needs of the clients. They arefocussed on building and maintaining high standards when it comes to theproducts. They offer cheaper alternatives to the clients for the sameproducts from other manufacturers that are quite expensive. Toyota hasalso invested heavily on safety in their cars. As the globe goes green andclients call for an appropriate response from their car manufacturers, Toyotahave responded by investing in hybrid cars, the Prius. This may be thefuture of the motor industry. The high quality products make it all that easyfor a customer to go back to the shop and purchase another Toyota product(Flanagan, 2007).

Why Potential Customers Dont Purchase?

As is the case for many large organizations, Toyotas target market definesa much wider population than their customer base actually reflects. Thereare many car manufacturers who have come up and the motor industry iscurrently flooded with many products. Many of these products are similar,often differing due to one or two features that may or may not besignificant. In this case, it comes down to personal like and dislike. The otherreason is the issue of class and social status. Toyota products do not alwaysgive the implication of a high social standing. A customer may choose to buya car from a competitor and not from Toyota simply because of that, and yetthe car is the same.

Product-Market Focus

In this section, the Company three year development projections is clearlyexplained in various categories, which are developing of a strategic focus;marketing goals and objectives; target market; and the Company position inthe market.

Developing a Strategic FocusToyota has already embraced product differentiation as a major strategy inmarket penetration and the strategy is working well. It is determined touse a pricing mechanism that will give it a competitive edge over its maincompetitors. The cost of production of a unit for Toyota is projected to belarge but due to possible mass production plants, the overall cost will notbe a huge issue in this case. This means the company will be able to sellits products at an even lower price yet still remain profitable. The companyis taking an advantage of this and using it to penetrate the markets of

emerging economies with affordable products.


33/62

Marketing Goals and ObjectivesToyotas enormous size and capacity is a great advantage in meetingindustry growth. The number of clients in need of cars is constantlyincreasing, thus creating a bigger market for Toyota and requiring more oftheir products. The perceived importance of owning a car due to increasedtravelling needs in todays largely corporate world is constantly increasing

as well. Toyotas great size will enable them to successfully meet theneeds of this growing population of customers in need of cars (Dobbin,2002, p.41).

The company keeps making quality product and make it a rule notcompromise on this, and not to give in to the competitors pressure andraise their prices then clients will remain loyal to the company (Armstrong& Kotler, 2002). Then, everyone has a chance to know the real valuesbehind Toyotas past, current, and hopefully future existence (Armstrong &Kotler, 2003).

Toyota is in the process of engineering lesser platforms to be used in theassembly of its different models. This is as a cost cutting measure; theyintended to compress their platforms from 20 to ten in the ambitiousexercise. This is especially important since their chief rivals; GM and Fordhave made notable improvements in their production process. Toyota isalso thinking twice about its bloated assembly points. It is thinking of bestways to reduce them without hindering its efficiency (Mullins, Walker &Boyd, 2010).

Target Market

Each of Toyotas products is designed to target a specific market. Thedesign criteria range from top speed, capacity and exterior appearancelike colour and shape. There is a high speed, small, two-seat model cars forthe relatively younger and single people who are adventurous to the bigfive-seat models for the family set up. Demographically, they also targetsituations on the smooth tarmac road as well as the rough and rugged offroad terrain.

Toyota has been previously blamed by the American Markets that theirproducts are lacking in flair and design unlike those of GM and Ford. Thishas led the company to be more attentive to its American designers tomake sure this needs are met. The V8 pickup which was launched recentlywas as a result of this ambitious. The hybrid model, Primus, has also beentransformed since at its inception, it didnt hit the American market. Whenthey made it look more futuristic, it resulted in big volumes of sales.

Overly, the Toyota Company is giving its competitors a hard time. Eventhough it has experienced challenges like the recent recalls, it is stillnotable in market leadership position. If the current impressive results and


34/62

global positioning of the company is anything to go by, then this is aposition Toyota is not likely to lose any time soon.

Company Position in the Market

Toyota Company has been producing vehicles and significant products thatare not expensive and readily available. This has been a significant factorthat has enabled the Company to have a major cut in the market , and it isprojecting to have most of the market by the end of 2013, as it has put across a number of strategies to enable it reach the set target.

Market Program

This consists of the four marketing mix elements that are designed to fit themarket in terms of their needs and ability to access such products andservices.

Product Strategy

The Company is believed to be moving with a strategy of mass productionof which it has enabled it to sell widely in the global market. It has also

included the strategy of hybrid product, where it can double the amount ofproduction for the arising needs in the market.

Price Strategy

The reputation of the Company has been developed by producing highquality vehicles that can be bought at a reasonable price. The Companyhas also been using tactful pricing strategies through price differentiationso that they are different from other automobile producers.

Location Strategy

Being a global producer and supplier of Toyota automobiles and theircomponents, Toyota Company has positioned itself all over the world givingit a clear cut within the market. Within three years to come, it is workingtowards the achievement of about 35 percent of the market share, and thiswill make it to be best and top supplier of automobile products.

Promotion Strategy

The Company is determined to use a pricing mechanism that will give it acompetitive edge over its main competitors. This is a mechanism that it isusing to market itself so that it can get hold of market share that will see itbetter in achieving the highest level in the market.


35/62

Marketing Implementation Analysis

Toyotas main focus will be in reaching the new markets of China andEurope. It will also be concerned about the competition from other firmslike Ford and GM. An advantage the company has is the widelydifferentiated product range. Establishing new factories in these newmarkets as well as opening up new franchises will help the company ingetting an ease of penetrating the new markets

Human resource is one of the most important aspects in this plan. Thecompany should always make sure they have highly motivated staff as thisis directly proportional to good production both in the qualitative and

quantitative aspects. Toyota can do this by coming up with schemes ofrewarding their employees like helping them own cars subsidized rates.

The company should also make sure the personnel are the best in terms oftechnical know-how. The company needs to carry out frequent trainingtowards this end.

Financial data and Projections

The previous years have seen Toyotas profit grows each year with anexception of 2009 due to the economic downturn as well as the recalls.

The figures below illustrate this

Figure1: Toyotas impressive performance in the last four years(Johnson, 2009)

With the advent of more efficient production technologies coupled with theentrance into the new markets, it is expected that the increase in profitswill continue for the next five years. Below are the projections for the nextfive year period


36/62

Figure2: Projected financial returns for the next five years(Johnson, 2009)

Sales Forecast Millions of YenYear 2009 2010 2011 2012 2013

Net SalesOperatingincomeOrdinaryIncomeNet IncomeResearch

Dividends/yen

1,243,445

54,12070,91246,12330,05132

1,455,650

65,02380.63647,99932,05144

1,900,340

89,954108,48460,23130,05150

1,957,879

98,0530125,44481,23420,05160

2,000,534

99,76014,34357,57630,05178

Tactical Marketing ActivitiesToyota has taken a bold step in being a leader in sustainable development.This position will need some innovations which translate to expenditure.They are however necessary as a way of staying ahead of competition. Theactivities the company will embark on are given in figure 3

Figure 3: Tactical Marketing activities

Specific Tactical Activities

Person/Department

Responsible

Required

Budgetmillions ofyen

Completion

Date

Product Activities

1.Car air conditioning

compressor2.DC-DC converters for fuelefficiency

3.Low Exhaust Emission Engine

Productionengineersand Product

management

30.45 2011

Pricing Activities

1.New Technologies

2.Compression of Productionplatforms

3.Merger of Assembly points

Operationsmanagement

15.25 2012


37/62

Distribution Activities

1. Opening up of new factoryin America and china

2. Machine handling

3.Logistical operations

Logisticsmanagement

21.40 2010

IMC (Promotion) Activities

1.Concerts

2.Volunteer

3Youth Invention club

Marketingmanager

9.20 2012

Implementation PlanThere are a number of activities that have been projected within a life spanof three years and the following representation shows the aspects thathave been targeted and within what strategic period of time.

Year To beAchieved

NewTargetedMarkets(millions)

CumulativeTargetedMarkets(millions)

Today (2010) Workingtowards hybridproducts

250 250

1st Year(2011)

Introduction ofpricingmechanismand pricedifferentiationstrategies.

320 600

2nd Year(2012)

Enhancinghybrid productsby use of newtechnologies

370 970

3rd Year(2013)

Productdifferentiation

to meet theneeds of themarket

420 1320


38/62

Evaluation and Control

There is a monitoring and evaluation team that will be set to watch over theprogress of the company in realizing the strategic goals. The short termgoals will be clearly watched and corrections put in place where targets aremissed for they are the keys to fulfilling the long term goals. Currently, theCompany has made a clear step forward in ensuring that hybrid vehicles arebeing produced, and so far the market has started improving in terms ofoverall reception of these brands of vehicles. Another aspect that issupposed to be considered here is the speed of the roll-out program ofpricing mechanism introduced. Currently, it has taken the market by

surprise as most of Toyota products are found to be customer friendly. TheCompany has been able to come up with a differentiation program for itsproducts and this has helped it to have a huge market share. It is projects toimprove and reach the target within three years and this will be determinedby the rate of growth and the total number of market reached.


39/62

FINANCIAL SOLUTION

Income Statement

View: Annual Data All numbers in thousands

Period Ending31-Mar-

201131-Mar-

201031-Mar-

2009

Total Revenue229,171,00

0202,814,00

0207,852,00

0

Cost of Revenue200,474,00

0178,551,00

0186,856,00

0

Gross Profit 28,696,000 24,263,000 20,996,000

Operating Expenses

Research Development - - -

Selling General and Administrative 23,046,000 22,685,000 25,663,000

Non Recurring - - -

Others - - -

Total Operating Expenses - - -

Operating Income or Loss5,650,000 1,579,000 (4,668,000

)

Income from Continuing Operations

Total Other Income/Expenses Net 1,500,000 1,898,000 (531,000)

Earnings Before Interest AndTaxes

7,150,000 3,477,000 (5,199,000)

Interest Expense 354,000 358,000 475,000

Income Before Tax 6,796,000 3,119,000 (5,674,000)

Income Tax Expense 3,774,000 992,000 (571,000)

Minority Interest (691,000) (372,000) 246,000

Net Income From Continuing Ops 4,925,000 2,242,000 (4,424,000)

Non-recurring Events

Discontinued Operations - - -

Extraordinary Items - - -


40/62

Effect Of Accounting Changes - - -

Other Items - - -

Net Income4,925,000

2,242,000(4,424,000

)

Preferred Stock And Other Adjustments - - -

Net Income Applicable To CommonShares

4,925,0002,242,000

(4,424,000)

Currency in USD.

ANNUAL DATA OF INCOME STATEMENT


41/62

Balance Sheet

View: Annual Data All numbers in thousands

Period Ending 31-Mar-2011 31-Mar-2010 31-Mar-2009

Assets

Current Assets

Cash And Cash Equivalents 25,105,000 19,967,000 24,748,000Short Term Investments 17,246,000 23,394,000 5,472,000

Net Receivables 78,403,000 75,859,000 62,997,000

Inventory 15,737,000 15,222,000 14,776,000

Other Current Assets 6,243,000 5,472,000 6,404,000

Total Current Assets142,734,000 139,914,000 114,396,000

Long Term Investments 132,933,000 105,241,000 97,746,000

Property Plant and Equipment 76,124,000 71,820,000 74,939,000Goodwill - - -

Intangible Assets - - -

Accumulated Amortization - - -

Other Assets 7,985,000 7,823,000 7,159,000

Deferred Long Term Asset Charges - - -

Total Assets359,775,000 324,800,000 294,240,000

Liabilities

Current Liabilities

Accounts Payable 40,892,000 41,159,000 29,274,000

Short/Current Long Term Debt 78,803,000 64,966,000 70,748,000

Other Current Liabilities 10,506,000 8,240,000 7,189,000

Total Current Liabilities130,200,000 114,364,000 107,212,000

Long Term Debt 77,814,000 75,079,000 63,799,000

Other Liabilities 10,229,000 9,674,000 9,398,000

Deferred Long Term LiabilityCharges

9,775,000 8,703,000 6,503,000


42/62

Minority Interest 7,090,000 6,108,000 5,462,000

Negative Goodwill - - -

Total Liabilities228,018,000 207,822,000 186,912,000

Stockholders' Equity

Misc Stocks Options Warrants - - -

Redeemable Preferred Stock - - -

Preferred Stock - - -

Common Stock 4,791,000 4,249,000 4,020,000

Retained Earnings 142,805,000 123,808,000 116,752,000

Treasury Stock (15,219,000) (13,489,000) (12,766,000)

Capital Surplus 6,102,000 5,365,000 5,075,000

Other Stockholder Equity (13,812,000) (9,063,000) (11,216,000)

Total Stockholder Equity124,667,000 110,870,000 101,865,000

Net Tangible Assets124,667,000 110,870,000 101,865,000

Currency in USD.

Quotes delayed, except where indicated otherwise. Delay timesare 15 min. for NASDAQ, NYSE and Amex. See also delay timesfor other exchanges. Quotes and other information supplied by

independent providers identified on the Yahoo! Finance partnerpage. Quotes are updated automatically, but will be turned offafter 25 minutes of inactivity. Quotes are delayed at least 15minutes. All information provided "as is" for informationalpurposes only, not intended for trading purposes or advice.Neither Yahoo! nor any of independent providers is liable for anyinformational errors, incompleteness, or delays, or for anyactions taken in reliance on information contained herein. Byaccessing the Yahoo! site, you agree not to redistribute the

information found therein.

Fundamental company data provided by Capital IQ. Historicalchart data and daily updates provided by Commodity Systems,Inc. (CSI). International historical chart data, daily updates, fundsummary, fund performance, dividend data and MorningstarIndex data provided by Morningstar, Inc.
http://help.yahoo.com/l/in/yahoo/finance/basics/fitadelay2.htmlhttp://help.yahoo.com/l/in/yahoo/finance/basics/fitadelay2.htmlhttp://help.yahoo.com/l/in/yahoo/finance/basics/fitadelay2.htmlhttp://www.capitaliq.com/http://www.csidata.com/http://www.csidata.com/http://www.morningstar.com/http://help.yahoo.com/l/in/yahoo/finance/basics/fitadelay2.htmlhttp://help.yahoo.com/l/in/yahoo/finance/basics/fitadelay2.htmlhttp://help.yahoo.com/l/in/yahoo/finance/basics/fitadelay2.htmlhttp://www.capitaliq.com/http://www.csidata.com/http://www.csidata.com/http://www.morningstar.com/


43/62

CASH FLOW OF TOYOTA MOTORS

View: Annual Data | All numbers in thousands

Period Ending31-Mar-

201131-Mar-

201031-Mar-

2009

Net Income 4,925,000 2,242,000 (4,424,000)

Operating Activities, Cash Flows Provided By or Used In

Depreciation 14,184,000 15,139,000 15,138,000

Adjustments To Net Income (1,260,000) 1,408,000 2,919,000

Changes In Accounts Receivables 5,085,000 (6,172,000) 8,013,000

Changes In Liabilities (2,504,000) 10,325,000 (11,452,000)

Changes In Inventories 625,000 600,000 1,948,000

Changes In Other Operating Activities 2,675,000 3,468,000 3,056,000

Total Cash Flow From OperatingActivities

24,421,000 27,382,000 14,953,000

Investing Activities, Cash Flows Provided By or Used InCapital Expenditures (7,593,000) (6,470,000) (13,816,000)

Investments (18,561,000) (24,594,000) 880,000

Other Cash flows from Investing Activities 619,000 562,000 480,000

Total Cash Flows From InvestingActivities

(25,535,000)

(30,503,000)

(12,455,000)

Financing Activities, Cash Flows Provided By or Used In

Dividends Paid (1,703,000) (1,846,000) (4,455,000)

Sale Purchase of Stock (345,000) (110,000) (715,000)

Net Borrowings 7,288,000 (1,019,000) 12,245,000Other Cash Flows from Financing Activities - - -

Total Cash Flows From FinancingActivities

5,240,000 (2,975,000) 7,075,000


44/62

Effect Of Exchange Rate Changes (1,533,000) (95,000) (1,314,000)

Change In Cash and Cash Equivalents 2,594,000 (6,192,000) 8,259,000


45/62

Toyota Motor Corporation Common

(NYQ: TM )Last

Trade:67.34

TradeTime:

10:39PM

Change:1.11

(1.62%)

Prev.

Close:68.45

Open: 68.03

Bid: 67.35 x 200

Ask: 67.38 x 300

1y TargetEst.:

57.34

Day'sRange:

67.00 - 68.14

52wkRange: 60.37 - 93.90Volume: 149,117

Avg. Vol.(3m):

539,989

MarketCap:

105.58B

P/E (ttm): 40.87

EPS (ttm): 1.65

Div &Yield: 0.95 (1.40%)

Quotes delayed, except where indicated otherwise. Currency in USD.


46/62

FINANCIAL DATA

Capital investment and R&D Vehicle production


47/62

Vehicle production by region Vehicle sales

Vehicle sales by region


48/62

Net revenues operating income

Financial Performance (Consolidated)

Fiscal

Year

Financial Indicator

Operatingincome return

on revenues

Pretaxreturn on

revenues

Pretaxreturn on

capital

Return onassets

(R.O.A.)

Return onequity

(R.O.E.)

Shareholders'

equity ratio


49/62

FY201

12.5% 3.0% 1.9% 1.4% 3.9% 34.7%

FY201

00.8% 1.5% 1.0% 0.7% 2.1% 34.1%

FY200

92.2% 2.7% 1.8% 1.4% 4.0% 34.6%

FY200

88.6% 9.3% 7.5% 5.3% 14.5% 36.6%

FY200

79.3% 9.9% 7.8% 5.4% 14.7% 36.3%

FY200

68.9% 9.9% 7.9% 5.2% 14.0% 36.8%

FY200

59.0% 9.5% 7.6% 5.1% 13.6% 37.2%

FY200

49.6% 10.2% 8.4% 5.5% 15.2% 37.1%

FY200

38.2% 7.9% 6.2% 3.8% 10.4% 35.3%

FY200

27.7% 6.9% 5.4% 3.1% 7.8% 37.6%

FY200

16.1% 8.5% 6.6% 4.0% 9.6% 41.6%

*Financial figures are based on U.S. GAAP (Generally AcceptedAccounting Principles)

Dividend Policy (As of March 31, 2011)


50/62

TMC (Toyota Motor Corporation) deems the benefit of its shareholders asone of its priority management policies, and it is working to improvecorporate structure towards the realization of sustainable growth in orderto enhance its corporate value.

TMC will strive to continue to pay dividends while giving due considerationto factors such as business results for each term, investment plans and itscash reserves.

In order to survive stiff competition, TMC plans to utilize its internal fundsfor the early commercialization of technologies for the next-generationenvironment and safety, giving priority to customer safety and sense ofsecurity.

TMC pays dividends twice a year an interim dividend and a year-enddividend. In order to secure an opportunity to directly seek shareholders'

opinions, TMC treats payments of year-end dividends as a matter to beresolved at the General Shareholders' Meeting, even though TMC's articlesof incorporation stipulate that retained earnings can be distributed asdividends pursuant to the resolution of the board of directors.

Considering these factors, an annual dividend of 50 yen per share was paidfor fiscal 2011, consisting of a year-end dividend of 30 yen per share andan interim dividend of 20 yen per share.

Note: The Board of Directors determined the interim dividend for the lastterm on November 5, 2011.

Dividends per share

Notice Concerning Distribution of

Interim Dividends from Surplus

At a meeting held on November 8, 2011, theBoard of Directors of Toyota MotorCorporation ("TMC") resolved to distributedividends from surplus, with record datedated September 30, 2011. In relation to theabove, we hereby inform you of the following:

1. Details of dividends

Interim dividend

for

Most recent


51/62

FY 2012 dividend forecast FY 2011

Record

Date

September 30,

2011

September 30,

2011

September 30,

2010

Dividend

per share20.00 yen Not reported 20.00 yen

Total

amount

of

dividends

62,713 million

yen-

62,719 million

yen

Effective

date

November 30,

2011-

November 26,

2010

Source of

dividends

Retained

earnings -Retained

earnings

2. Reason for the dividend amount

TMC deems the benefit of its shareholders as one of its priority

management policies and strives to continue to pay stable dividends while

giving due consideration to factors such as business results for each term,investment plans and its cash reserves.

In order to successfully compete in this highly competitive industry, TMC

will focus on the early commercialization of technologies for the next-

generation environment and safety, giving priority to customer safety and

sense of security.

Based on the foregoing, TMC's interim dividend for the year is 20 yen per

share.

Details of Dividends through the fiscal year


52/62

Dividend per share (yen)

Record dateEnd of interim

period

End of fiscal

periodTotal

Dividends for

FY2012

(ending March 31,2012)

20.00 - -

Dividends for

FY2011

(ended March 31,

2011)

20.00 30.00 50.00

.

.


53/62

GROWTH OF TOYOTA MOTORS IN 5 YEAR

PRICE CHART


54/62

HR POLICIES

PURPOSE:Embodiment of management that respects people to create perpetualprosperity for the company.

BASIC PRINCIPLE:Establishment of relationship of mutual trust and respect.

BY:- Building a relationship, in which, employee him/herself takes up part ofresponsibility in corporate activities.- Contributing to self realization of employees through continuouslyexercising their facilities through the job

The Eight HR Processes That Contributed to Toyotas

Success

1. Rewards and recognition The purpose of any corporate rewardprocess is to encourage and incant the right behaviours and todiscourage the negative ones. Its important for the reward process toincant the gathering of information about problems. Its equallyimportant to reward employees who are successful in gettingexecutives to take immediate action on negative information.

2. Training The purpose of training is to make sure that employeeshave the right skills and capabilities to identify and handle all

situations they may encounter. Toyota is famous for its four-stepcycle plan

Documents

76990227 or Project on Toyota