Professional Documents
Culture Documents
Mission
Japan 8,152,884
North America 8,771,495
Europe 3,346,013
Asia 1,969,957
Others 1,707,742.
Toyota International Portfolio
Passenger
Avalon Camry Corolla Avensis
Sports
MR2 Camry Sportivo Corolla Sportivo Celica
4 W/D
Rav 4 LandCruiser Prado LandCruiser 100 Kluger
Commercial
LandCruiser 78 Hiace Coaster Hilux
Town Ace
Toyota In Pakistan
Indus Motors
Indus Motor Company (IMC) is a joint venture between the House of Habib , Toyota
Motor Corporation Japan (TMC) , and Toyota Tsusho Corporation Japan (TTC) for
assembling, progressive manufacturing and marketing of Toyota vehicles in Pakistan
since July 01, 1990. IMC is engaged in sole distributorship of Toyota and Daihatsu Motor
Company Ltd. vehicles in Pakistan through its dealership network.
IMC's Product line includes 6 variants of the newly introduced Toyota Corolla, Toyota
Hilux Single Cabin 4x2 and 2 versions of Daihatsu Cuore.
Quality Policy
Environmental Policy
To be the market leader and satisfy the requirements of its customers, the company
has set certain objectives. These are:
1. Improve Quality
2. Enhance Efficiency
3. Minimize Cost
4. Increase Productivity
Over the previous years, the company has put in its best efforts to manufacture
quality cars designed for its customers. To improve their efficiency, the company
gives great importance to its human resource as the company believes that satisfied
and quality conscious team can produced quality products.
The company is using the philosophy of Kaizen for continuous improvement. It has
become a way of life for the management of the company by doing these efforts
towards their objectives.
Corolla
HiLux
Cuore
Corolla, HiLux and cuore are manufacturing in Pakistan, 65% of the car manufactured in
Pakistan which includes body and other parts except the engine which is being imported
from Japan Known as CKD (completely knocked down) Engine.
Portfolio Analysis:
A tool by which management identifies and evaluates the various businesses that
makes up the company.
There are two different techniques used for the portfolio analysis:
Boston Consulting Group Matrix BCG Approach
General Electric Matrix GE Approach
TO
TOYOTA COROLLA BCG MATRIX
HIGH
Business
Growth
Rate
LOW
HIGH LOW
2. Competitive strength replaces market share as the dimension by which the competitive
position of each SBU is assessed. Competitive strength likewise includes a broader range of factors other
than just the market share that can determine the competitive strength of a Strategic Business Unit.
3. Finally the GE / McKinsey Matrix works with a 3*3 grid, while the BCG Matrix has only
2*2. This also allows for more sophistication.
Typical factors that affect Market Attractiveness: Typical factors that affect Competitive Strength of a
STAR QUESTIONStrategic Business Unit:
- Market size MARK
2.0D
- Market growth rate - Strength of assets and competencies
Xli 1.3 GLI
- Market profitability - Relative brand strength
- Pricing trends - Market share
- Competitive intensity / rivalry + -DOGS
Market share growth
- Overall risk of returns in the industry
CASH COWS - Customer
SEloyalty
Saloon
- Opportunity to differentiate products and2.0D
services - Relative cost position (cost structure compared with
- Demand variability Saloon competitors)
- Segmentation Altis - Relative profit margins (compared to competitors)
- Distribution structure - Distribution strength and production capacity
- Record of technological or other innovation
- Access to financial and other investment resources
GROWTH STRATEGIES
MARKET PENETRATION
PRODUCT DEVELOPMENT
Macro Environment
The larger societal forces that affect the microenvironment- demographic, economic,
natural, technological, political, and cultural forces. These factors represent constraints
within which all organizations including the automobile industry must function. The
various components of general environment are:
1. Political
2. Economic
3. Demographics
4. Cultural
5. Technological
1. Political Factors
Government at all levels is an important component of the general environment no
organization or industry is immune from the various decisions made by the
government. The Pakistan, Governments in consistent policies, frequent change in
duty tariff and smuggling are main reasons of unstable market conduction. Like other
motor companies Toyota is also affected by the current changing policies of the
government.
Previously the automobile industry had to cope with more than 77000 yellow cabs
that were imported during the yellow cabs scheme and was later turned lose to the
market after a change of government and the policy scrapped.
In 1995, all the previous taxes and duties were rolled into one import duty of 30
percent on CKD kits as well as CBU vehicles. In 1996 the sales tax on CBU was
increased cost to 18 percent. In 1997 the ministry of industries and production
recommended that duty on CKD be reduced form 40 percent to 35 percent while the
car sales should be exempted from CVT and the deletion programme should be
accelerated.
Just a few days back the general sales tax has been increased to 15 percent
promoting more price like. So there is going to be a Rs.20000 increase in
vehicles.
2. Economic Forces
Government economic policies at the federal level clearly influence the ability of the
industries to survive and progress. Inflation is a major economic factor which has
affected the Pakistan. Automobile industry including Toyota. The current inflation
rate is 21% to 23% annually prices in the auto market were deregulated in 2000 and
grew almost 20 percent to 30 percent per annum to allow Toyota to bring their prices
to profitable levels. After three years of Still Market, the market picked up.
The recent increase of 15 percent sale tax is however, going to result in a price
increase.
3. Demographics Forces
Society holds a global or summary belief that an organization is proper and worthy of
support. Toyota takes pride in being the most trusted name all over Pakistan. Its
vehicles are regarded as a status symbol. It is the guiding principles of Toyota which
has strongly developed trust in the people.
4. Cultural Factors
Toyota respects the culture and customs of every nation and community and
contributes to the economic and social development through corporate activities in
the communities. Toyota believes in honouring the language and spirit of the law of
every nation and undertake open and fair corporate activities to be a good corporate
citizen of the world. This is the reason that Toyota is proud of the fact that Pakistani
society considers Toyota vehicles to be a symbol of reliability, comfort, luxury and a
have to be trusted.
5. Technological Forces
Technology is of particular importance because it has been and continues to be the
main source of increases in productivity. Despite changes in the means used to
motivate people and the variety of incentives that have been offered to stimulated
production, the resulting increase has been negligible when compared to that of
created by technology.
The locally produced Toyota Corolla introduced in May 1993 is now in its 11 th
year. Its excellent quality, low maintenance cost and high resale value has won it
the support and loyalty of its customers. Product diversification and a wide range
of colours has allowed customers to exercise greater options and has sustained
this threat. The total companys product range comprises of 8 variants of Corolla
and 5 variants Hilux. As a result of the Safety First commitment; for the first
time in Pakistan SRS Secondary Restrain System Airbags have been
introduced in the GLI Automatic and GLI manual models, side impact bars
which protect vehicles for side collisions have however been routinely fitted in
all Corolla variants since inception. The process of making a car more durable
includes Pitospaate Primer, total immersion in a catholic Electro-deposit
primer, which assures long term anti corrosion and an extra thick colour coat
that is better than all others, ensuring that New Car look New for years to
come.
MICRO ENVIRONMENT
The boundary between an organizations Macro and Micro environment should not
be viewed as static. Changes in the former will inevitably redefine the latter.
The various components of micro environment for Toyota have direct influence on
its performance. Moreover components of Toyotas micro environment are also
related to its macro environment.
1. CUSTOMERS
Toyota aims at developing loyal customers relationship. For this reappoint tries its
best to understand who its buyers are and what are their needs. It tries to listen to its
customers, realizing that they may be their best collaborators. Customers feedback
drive their product development.
To be the market leader and satisfy the requirements of its customers, the
company has set certain objectives. These are
a) Improve Quality
b) Enhance Efficiency
c) Minimize Cost
d) Increase Productivity
Over the previous years the company has put in its best efforts to manufacture quality
cars designed for its customers. In Pakistan, more and more people want to
experience the unique pleasure of motoring. Exhaustive, in-depth research and
consumer surveys conducted over the past years revealed trends of customers and the
environmental factors relating to use.
2. SUPPLIERS
Suppliers constitute a second component in a typical organizations micro
environment. Toyota has to respond not only to the customers they supply, but also to
the sources from which they receive supplies. Suppliers are given importance and
respect by Toyota. It continuously aims at developing a strong relationship with its
suppliers. This is done to ensure that Toyota suppliers provide quality materials
which is the most important factor for Toyota vehicles.
Toyota Indus aims for good relations with both the local and foreign
suppliers. To achieve maximum level of customers satisfaction is
Toyotas mission. This can be proved by the fact that dealership is authorized
to these selective people who offer 3 Ss. That is sales, services, spare parts.
This is done to ensure convenience for its customers. They are offering the
following services to cater to the needs of their customers:
a) One year free servicing from any Toyota service center all over
Pakistan.
b) Free checkup camps are set annually.
c) Spare parts easily available all over Pakistan.
d) The dealership network comprises of seventeen dealerships all
offering sales, services and spares.
e) The customer retention department at the dealerships is also improved
and consolidated periodically.
The company believes on the fact that favorable supplier relations lead to improve
quality, better shipping arrangements early warming of major price changes and
advance information about technological or marketplace developments. So, the aim is
to develop friendly, professional relations with suppliers in which both will profit.
3. Internal Public
It is the action, of employees by which a companys objectives are accomplished. In
order to achieve its goals and objectives Toyota makes sure that highly competent and
skilled people are employed. Emphases is laid to ensure that the person being hired
meet the criterion for the respective departments.
4. COMPETITORS
Market competition is the cornerstone of managerial capitalism. The five forces that
shape the degree of market competition operating within an organizations micro
environment are
a) Rivalry among existing organization.
b) Relative power of customers.
c) Relative power of suppliers.
d) Threat of new entrants.
e) Threat of new substitutes.
Presently Toyota is proud to have the most market share. Honda stands
second followed by Suzuki and Nissan. Since its start it was only in 95-96
that Honda managed to sale 200 more units of vehicles than Toyota. Still,
Toyota is proud to be in a strong position. However to the spirit of
competition is strong and this has lead Toyota to continuously try to improve
itself, at all levels. Continuous emphasis is laid on to attract more customers,
maintains healthy relations with its suppliers and makes efforts to improve
technology. Careful strategic planning at al levels has enabled Toyota to
achieve the highest market share and have an edge over other automobile
companies.
5. Intermediaries
Banks, Leasing companies and car agents are some of the intermediaries for
Toyota. These intermediaries basically giving the boost to the sales of Toyota, by
offering the cars to the consumers, in easy installments and making the cars affordable
for the customers to the higher extent.
SWOT ANALYSIS
In formulating sound strategic plans, an organization must assess its internal
strengths and weaknesses in relation to the external opportunities and threats it
faces. An effective strategy will take advantage of an organizations strengths and
opportunities at the same time it minimizes or overcomes weaknesses and threats.
Regular assessment and SWOT analysis is thus given importance.
Strengths
Competitive pricing.
High market share.
High durability.
Easy availability of spare parts.
Aerodynamic body shape.
Elegant body features.
Comfortable ride.
Luxurious car interior.
High goodwill.
Prestigious car history.
Good resale value.
Swift distribution channels.
Updated safety features (Air-bags, seat-belts, ABS braking,Safety beams etc.)
Low fuel consumption
As production of vehicle is based on foreign joint ventures of
Japanese origin, the product quality is of international standard.
Weaknesses
People often criticize the breaking of the car although that
braking system of the car has been updated to ABS but still the
body rolls when the brakes are applied at high speed.
The cheesy of the car is not stable while doing high-speed sharp turns.
Opportunities
Making a sporty version of the car just like the CIVIC TYPE-R,
this is the faster racing version of HONDA CIVIC having 200bhp
and a sports body frame.
Threats
Swift competition from other manufacturers mainly Japanese
and Korean car-makers.
High oil prices resulting in decrease in demand of fuel thirsty
sedans. But the fuel Consumption of Toyota Corolla is fairly decent.
IFE MATRIX
Major weakness (rating = 1), Minor weakness (rating = 2)
Minor strength (rating = 3), Major strength (rating = 4).
Strengths Weight Rating Score
1 Competitive pricing. 0.03 2 0.06
2 High market share. 0.07 4 0.28
3 High durability. 0.08 3 0.24
4 Easy availability of spare parts. 0.07 3 0.21
5 Aerodynamic body shape. 0.02 2 0.04
6 Elegant body features. 0.05 2 0.1
7 Comfortable ride. 0.03 4 0.12
8 Luxurious car interior. 0.09 3 0.27
9 High goodwill. 0.07 4 0.28
10 Prestigious car history. 0.06 3 0.18
11 Good resale value. 0.05 4 0.2
12 Swift distribution channels. 0.02 3 0.06
Updated safety features (Air-bags, seat-belts, ABS braking, Safety
13 beams etc.) 0.05 2 0.1
14 Low fuel consumption 0.05 3 0.15
As production of vehicle is based on foreign joint ventures
15 of 0.05 2 0.1
Japanese origin, the product quality is of international
standard.
Weaknesses
1 People often criticize the breaking of the car although that 0.07 3 0.21
braking system of the car has been updated to ABS but
still the
body rolls when the brakes are applied at high speed.
EFE MATRIX
1 = The response is poor.
2 = The response is below average.
3 = Above average.
4 == The response is Superior
Threats
1 Swift competition from other manufacturers mainly Japanese 0.08 3 0.24
and Korean car-makers.
2 High oil prices resulting in decrease in demand of fuel thirsty 0.09 3 0.27
sedans. But the fuel Consumption of Toyota Corolla is fairly
decent.
3 Global inflation due to increase in population and high oil prices 0.07 2 0.14
may result in decrease in demand of sedans.
4 Increase in demand of other cars may result in downward trend 0.06 2 0.12
of the brands goodwill.
SUZUKI MOTORS :
Honda:
Honda started its operation in Pakistan in 1994. Honda is enjoying its
key position in the segment of 1300 cc and above. Honda has
launched many models like Civic 1.5 cc, City 1.3 cc to 1.5 cc etc. VTI
brand continued to be popular among customers.
During FY08, Honda Atlas Cars sales soared by 17 per cent to
28,134 units as against 24,066 units previously. Currently, Honda
Atlas assembles only two vehicles namely Honda Civic and Honda
City to tap the upper-end segment of car market. On MoM basis,
Honda City sales stood at 1,229 units in June, almost double
compared to 626 units during the preceding month. Demand of
Honda Civic declined by 61 per cent to 341 units MoM.
Daihatsu:
Daihatsu, another new player in the market with its Cuore 850 cc,
increased the competition in the market . Daihatsu and Indus Motor
signed an agreement to launch the Coure in market. The project
worth Rs 750 million was developed at Port Qasim between Daihatsu
and Indus Motor to produce Coure. Daihatsu also heated up the
competition in small car segments.
Suzuki for the first time faces competition in small car business. It is
for the first time that Daihatsu will produce its car in Toyota Plant in
Karachi. The assembly plant of Daihatsu has the capacity to produce
10,000 Cuore cars in the year. But the expected level of output in
future will be some about 5000 cars in the starting year of its
operation