Professional Documents
Culture Documents
Subject:
International Marketing
Submitted By:
Mr.HiteshRohra
Roll No. 117
M.Com. Part II, Semester -III
UNIVERSITY OF MUMBAI
2015 2016
This is to certify that, Mr. Hitesh Rohra of M.Com Part II, has successfully
completedtheprojectin InternationalMarketing titled InternationalMarketing
Of Toyota under my guidance for the academic year 201516. The information
submittedistrueandoriginalaspermyknowledge.
Mr.PrakashMulchandani
(InternalGuide)
Prof.GopiShamnani
(Coordinator,M.Com)
Dr.PadmaV.Deshmukh
(I/CPrincipal)
________________
ExternalExamine
DECLARATION
_______________
Mr.HiteshRohra
ACKNOWLEGEMENT
To list who all have helped me is difficult because they are so numerous
and the depth is so enormous.
I would like to acknowledge the following as being idealistic channels and
fresh dimensions in the completion of this project
I take this opportunity to thank the University of Mumbai forgiving me
chance to do this project.
I would like thank my Principal, Dr. Padma V. Deshmukh for providing
the necessary facilities required for completion of this project.
I would also like to express my sincere gratitude towards my project
guide Prof. Mr. Prakash Mulchandani whose guidance and care made
the project successful.
I would like to thank my college library, for having provided Various
reference books and magazines related to my project.
Lastly I would like to thank each & every person who directly or indirectly
helped me in completion of the project especially my parents & peers
who supported me throughout my project.
Executive Summary
In 2003, Toyota Motor Corporation released their third division known as Scion.
Scion is a youth oriented company that produces stylish and affordable transportation that
meets the needs for the everyday Generation Y person. Generation Y is typically defined
as someone who is in their late teens to early twenties, and who tends to be informationrich,
time-poor, and technologically-savvy. Scion keeps everything as simple as possible
in the car buying experience, from monospec vehicles to pure pricing.
One of the best factors helping Scion is that it is a division of Toyota Motor
Corporation, one of the leading automobile manufacturers in America. This division was
created in attempt to make up for the failure of Toyotas Project Genesis, an earlier
attempt to gain the teenage buyer. The lesson Toyota learned from this failure was that
young people generally categorize the Toyota logo as an older persons car. With this
knowledge in hand, Scion seemed to be a sure fire way to go.
With three vehicles currently in production, Scion has surprised many with having
over 150,000 units sold in 2005 alone. This number has toppled some of the veteran car
manufacturers of today. These numbers still continue to rise, with Scion showing a
thirtyseven percent increase in sales from April to May of this year.
Scion sees direct competition from other small car manufacturers like Honda,
Mazda, and Kia. However with the introduction of the tC they are also seeing
competition from some of the bigger cars from Chevrolet and Ford.
Objectives
1. To study the international market.
2. To study the Comparison of Domestic Marketing with International Marketing.
3. To study the Challenges Firms Faced In International Marketing.
4. To study the International Marketing Process.
5. To study the types of innovations.
Content
a) Abstract & Introduction .03
b) Definitions Of International Marketing .05
c) Challenges Firms Faced In International Marketing..06
d) Five Steps Of International Marketing Process.07
e) Types Of Innovations..09
f) Advantages For Companies11
g) Benefits To Customers..11
h) Introduction Of Toyota ..12
i) History 13
j) Toyotas Global Vision 18
k) Toyotas Mission.20
l) Strategy: Unrelated Diversification21
(Creation of Toyota Motors from Toyota Industries)
m) Analysis..22
n) Toyota Industries: Sales by Business Segment..22
(FY 2012, Consolidated Basis)
o) Logo and Branding24
p) Marketing.25
q) Company strategy26
r) Principles of Toyota27
s) Worldwide presence..28
Abstract
Until a few years ago, the international market had been an avenue to absorb the spillover
from extra production. The entrepreneur used to look at export only if he could spare part of his
production after meeting the national domestic demand. With the economy opening up its doors to
international manufacturers and marketers immediately after foreign exchange crunch of the early
90s, however the scenario changed rapidly. The liberalized economy also provided Indian
consumers internationally acclaimed brands at competitive prices. Today, international market offer
unlimited opportunities to companies like Infosys, Wipro, Videocon, Ranbaxy, Dr. Reddys Labs,
Asian Paints and many others. As a result, these firms now look at international markets to gain
global competitiveness through technological advancement, superior marketing strategies and
continue product and service innovations.
10
Introduction
There are 192 countries in the world, each offering an independent yet interdependent market to
manufacturers, service providers and knowledge and skill- based marketing operators. The
domestic markets now face competition not only from within but even from all remote corners of
the world. The multinational and transnational firms offer tough competition to the domestic
industry by setting vey steep and high standards.
The Indian economy witnessed this when leading multinationals and mega-billion dollars
corporations like Samsung, LG, Panasonic, Whirlpool, Bridgestone and automobile manufacturers
like Hyundai, General Motors, Toyota, Suzuki and Honda walked into the Indian market and not
only created their own space, but also virtually look over more than 60% share of the market from
Indian manufacturers. In the white goods market, such as color television and refrigerators,
multinationals control more than 90% of the market share today. Goods imported from china have
been responsible for the closures of many small-scale manufacturers in the dry cell battery,
kitchenware, cosmetics and toy industries.
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International Marketing is the performance of business activities that directs the flow of
goods and services to consumers or users in more than one nation.
-
Cateora
It is the performance of business activities designed to plan, price, and promote &direct the
flow of a companys goods & services to consumers or users in more than one nation for a
profit.
-
Cateora &Graham
The process of planning and conducting transactions across national borders to create
exchanges that satisfy the objectives of individuals and organizations.
International Marketing can be defined as exchange of goods and services between different
national markets involving buyers and sellers.
A Comparison of Domestic Marketing with International Marketing
Some of the comparative advantages and disadvantages of both marketing systems remain
similar. The firms undertaking international & domestic marketing follow the same basic principle
of marketing. i.e. they adhere to the rules for selecting products that are design on the basis of
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customers needs, fix the price band according to the segment they want to cater to, look for
logistics and distribution channels necessary to reach the end consumer in cost effective ways and,
fully, in order to generate necessary demand, these companies also undertake country- specific
promotional efforts for international marketing. Yet, at times, international marketing poses
problems to the firms at their different levels of operational efficiency such hurdles make
international marketing more challenging than domestic marketing.
13
2) Selection of Target MarketOnce the marketer has identified the potential opportunities in the first step now is
the time to select the groups of potential international customers (target markets) to whom to
sell the products or services. This step also involves identifying the potential buyers,
demand measurement & forecasting, market segmentation, market targeting & market
14
positioning. Segmentation involved identifying groups of potential customers from the total
potential market that are homogeneous on certain aspects of identity and behaviour and are
heterogeneous on the same aspects from others in the target population. This step also
requires the marketers to decide what key benefits in a product or service to offer to the
selected target customers and on what aspects to differentiate from the competition.
3) Offers to Potential CustomersSince a firm needs to offer best value to the potential customers to makes its
products and services more profitable compared with competitors, firms have to adopt
appropriate business and marketing strategies. Many activities are to be undertaken in a firm
by many people and in a number of departments to produce and deliver final products and
services to its customers, this requires aligning and coordinating numerous activities and
efforts. At the same time to achieve best value for the buyer and bet profits for the firms, the
firm needs to optimize all the activities, efforts undertaken and resource utilization. This
requires the firm to adopt a coherent and appropriate logic or strategy to direct and control
the alignment, coordination and optimization of its business and marketing effort.
4) Developing The International Marketing MixThe fourth step in the marketing process is developing the international marketing
mix, product, place, price & promotion. Marketing mix identifies four key areas for
developing a well coordinated marketing strategy. To create a strong marketing impact a
firm needs to develop appropriate programs in these four key areas and also need to ensure
that all these four aspects of a firms marketing program are well coordinated and in
conformity with each other to give a clear image to the target market of the firms brands
and its products.
5) Proper Implementation of Marketing ProgramDeveloping a good marketing program is not good enough for success. A firm also
needs to manage the international marketing effort properly. Quite often firms fail not
because they did not have a viable marketing program, but that they failed in properly
implementing their well designed plans. Firms also need proper analysis, planning,
implementation and control of their marketing programs.
Types of Innovations
1) A product innovation is "introducing a good or service that are new or significantly
Improved in terms of their characteristics or intended uses." These include significant
Improvements in technical specifications, components and materials, the embedded
software, the user-friendly attitude of other functional characteristics. Product innovations
15
can use new knowledge or technology, or may be based on new uses or combinations of
existing knowledge and technologies. Product term is used to cover both goods and services.
16
b) Niche Business Innovation "which allows creation of new markets using existing
technology.
Media agency Universal McCann has made an interactive mega poster Coke Zero which
Proved to be very beneficial for the brand. A building under construction was completely covered
with posters imitating a very good coffee machine. Poster was displayed on a phone number to
which to send a message puteu Spanish with the word "zero." As a reward, they receive a code that
could get a free bottle of Coke.
ING Wegwijzer is an application for mobile, which allows users to find the nearest ATM.
For this, the application uses the phone's camera and GPS. The user must choose one of the camera
settings and positioning it as if taking a picture. The application displays the picture immediately
above that which is the fastest way to a nearby ATM.
Fun Text, a provider of mobile messaging, has developed a function that allows users to
Send MMS content on Facebook. This can send animations, videos and virtual gifts.
Employees with the necessary know-how and skills to develop holistic solutions for
customers.
17
Interrelated understanding of product and services marketing and sales and service
execution for global brand management.
When products and services conform to International Standards consumers can have
confidence that they are safe, reliable and of good quality.
For example, ISO's standards on road safety, toy safety and secure medical packaging are
just a selection of those that help make the world a safer place.
International Standards on air, water and soil quality, on emissions of gases and radiation
and environmental aspects of products contribute to efforts to preserve the environment and
the health of citizens.
Introduction
18
History
1920s-1930s
19
Toyoda invented the Toyoda Model G Automatic Loom. The principle of Jidoka,
which means the machine stops itself when a problem occurs, became later a part of the Toyota
Production System. Looms were built on a small production line. In 1929, the patent for the
automatic loom was sold to a British company, generating the starting capital for the automobile
development.
Vehicles were originally sold
under the name "Toyoda" , from
the family name of the
company's founder, Kiichir
Toyoda. In April 1936, Toyoda's
first passenger car, the Model
AA, was completed. The sales
price was 3,350 yen, 400 yen
cheaper than Ford or GM cars.
In September 1936, the company ran a public competition to design a new logo. Of 27,000 entries,
the winning entry was the three Japanese katakana letters for "Toyoda" in a circle. But Risabur
Toyoda, who had married into the family and was not born with that name, preferred "Toyota"
because it took eight brush strokes (a lucky number) to write in Japanese, was visually simpler
(leaving off the diacritic at the end) and with a voiceless consonant instead of a voiced one (voiced
consonants are considered to have a "murky" or "muddy" sound compared to voiceless consonants,
which are "clear").
20
Since "Toyoda" literally means "fertile rice paddies", changing the name also prevented the
company from being associated with old-fashioned farming. The newly formed word was
trademarked and the company was registered in August 1937 as the "Toyota Motor Company".
1940s-1950s
From September 1947, Toyota's small-sized vehicles were sold under the name "Toyopet" .The first
vehicle sold under this name was the Toyopet SA, but it also included vehicles such as the Toyopet
SB light truck, Toyopet Stoutlight truck, Toyopet Crown, Toyopet Master, and the Toyopet Corona.
The word "Toyopet (Japanese article)" was a nickname given to the Toyota SA due to its small size,
as the result of a naming contest the Toyota Company organized in 1947. However, when Toyota
eventually entered the American market in 1957 with the Crown, the name was not well received
due to connotations of toys and pets. The name was soon dropped for the American market, but
continued in other markets until the mid-1960s.
1960s-1970s
By the early 1960s, the US had begun placing stiff import tariffs on certain vehicles. The chicken
tax of 1964 placed a 25% tax on imported light trucks. In response to the tariff, Toyota, Nissan
Motor Co. and Honda Motor Co. began building plants in the US by the early 1980s.
1980s
Toyota received its first Japanese Quality Control Award at the start of the 1980s and began
participating in a wide variety of motorsports. Due to the 1973 oil crisis, consumers in the lucrative
US market began turning to small
cars with better
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1990s
In the 1990s, Toyota began to branch out from
producing mostly compact cars by adding many
larger and more luxurious vehicles to its lineup,
including a full-sized pickup, the T100 (and later
the Tundra); several lines of SUVs; a sport
version of theCamry, known as the Camry
Solara; and the Scion brand, a group of several
affordable, yet sporty, automobiles targeted
specifically to young adults. Toyota also began production of the world's best-selling hybrid car,
the Prius, in 1997.
With a major presence in Europe, due to the success of Toyota Team Europe, the corporation
decided to set up Toyota Motor Europe Marketing and Engineering, TMME, to help market
vehicles in the continent. Two years later, Toyota set up a base in the United Kingdom, TMUK, as
the company's cars had become very popular among British drivers. Bases in Indiana, Virginia,
and Tianjin were also set up. In 1999, the
company decided to list itself on the New
York and London Stock Exchanges.
2000s
In 2001, Toyota's Toyo Trust and
Banking merged with two other banks to
form UFJ Bank, which was accused of
corruption by Japan's government for
making bad loans to alleged Yakuza crime
syndicates with executives accused of
blocking Financial Service Agency
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2010s
From November 2009 through
2010, Toyota recalled more than
9 million cars and trucks
worldwide in several recall
campaigns, and briefly halted
production and sales. Toyota
initiated the recalls, the first two
with the assistance of the
U.S.National Highway Traffic
23
Safety Administration (NHTSA), after reports that several vehicles experienced unintended
acceleration.
In 2011, Toyota, along with large parts of the Japanese automotive industry, suffered from a series
of natural disasters. The 2011 Thoku earthquake and tsunami led to a severe disruption of the
supplier base and a drop in production and exports. Severe flooding during the
2011 monsoon season in Thailand affected Japanese automakers that had chosen Thailand as a
production base. Toyota estimated to have lost production of 150,000 units to the tsunami and
production of 240,000 units to the floods.
In October 2012, Toyota announced a recall of 7.43 million vehicles worldwide to fix
malfunctioning power window switches, the largest recall since that of Ford Motor Company in
1996. The move came after a series of recalls between 2009 and 2011 in which it pulled back
around 10 million recalls amidst claims of faulty mechanics.
24
Future of Mobility
Commitment to Quality
25
Constant Innovation
26
The Statement gives voice to who they are as a global enterprise, the values they embody, an the
good that they are striving to accomplish. Designed to inspire all Team Members to even greater
things, the Statement emphasizes Toyota's commitment to quality, innovation and respect for the
planet. At its heart is this signature statement: We aim to exceed expectations and be rewarded with
a smile.
One aspect of the vision is respect to the planet
The process for developing an Environment Action Process begins with the parent company in
Japan, Toyota Motor Corporation (TMC). Every five years, TMC develops a global five-year
environmental action plan (EAP).
Eg The ingenuity and persistence of team members at their Cambridge, Ontario plant, have found a
way to reduce annual water consumption of water by more than 13.2 million gallons (50,000 cubic
meters).
This has made their plant in Princeton, Indiana, honor as one of only two North American
recipients of the Water Champion award.
MISSION
A mission statement is a statement of the purpose of a company, organization or person, its reason
for existing. The mission statement should guide the actions of the organization, spell out its overall
goal, provide a path, and guide decision-making. It provides "the framework or context within
which the company's strategies are formulated.
Toyotas Mission
27
To provide safe & sound journey. Toyota is developing various new technologies from the
perspective of energy saving and diversifying energy sources. Environment has been first and most
important issue in priorities of Toyota and working toward creating a prosperous society and clean
world.
The mission statement of Toyota Indus Motors Company Ltd, defines the organization's purpose
and primary objectives. Its prime function is to provide a safe and sound journey.
It provides a reason for being, which is one of the most important aspect of a mission statement.
The mission statement is clear and concise and provides focus and a sense of direction.
Toyotas focus as mentioned in the mission statement is to develop new technologies and to
conserve energy. They also seek to be environment friendly.
Background
In 1933, Toyoda Automatic Loom Works, Ltd created a new division devoted to the production
of automobiles under the direction of the founder's son, Kiichiro Toyoda.
Toyoda Automatic Loom Works, Ltd was encouraged to develop automobile production by the
Japanese government, which needed domestic vehicle production partly due to the worldwide
money shortage and partly due to the war with China
Toyota Motor Co. was established as an independent and separate company in 1937.
The company was eventually founded by Kiichiro Toyoda in 1937 as a spinoff from his father's
company Toyota Industries to create automobiles.
28
Toyota currently owns and operates Lexus and Scion brands and has a majority shareholding
stake in Daihatsu Motors, and minority shareholdings in Fuji Heavy Industries Isuzu Motors, and
Yamaha Motors.
Toyota Industries has promoted diversification and expanded the scope of its business domains
to include textile machinery, automobiles (vehicles, engines, car airconditioning compressors, etc.),
and materials handling equipment, electronics, and logistics solutions.
In 1983, Toyota Financial Services became a new subsidiary of Toyota Motor Corporation in
Japan. The Toyota Financial Services brand identity was officially launched in December 1999.
TFS is a service mark that acts as an umbrella brand name used to market the products of
Toyota Motor Credit Corporation (TMCC) and Toyota Motor Insurance Services, Inc.(TMIS).
TMCC was incorporated in California on October 4, 1982, and commenced operations in May 1983
by approving a finance contract for a used Toyota Corolla in Denver, Colorado. TFS provides retail
and wholesale financing, retail leasing, vehicle protection plans and certain other financial services
to authorized Toyota, Lexus and Scion dealers, Toyota forklift and Hino dealers as well as Toyota
Material Handling, U.S.A. dealers, affiliates, and their customers in the United States.
"FY 2012" refers to the fiscal year ended March 31, 2012, and other fiscal years are referred to in a
corresponding manner.
1. Why is it unrelated diversification?
At the time of establishment of Toyota Motor Company, present day Toyota Industries was in
the business of making handlooms.
29
30
31
In 1936, Toyota entered the passenger car market with its Model AA and held a competition to
establish a new logo emphasizing speed for its new product line. After receiving 27,000 entries, one
was selected that additionally resulted in a change of its moniker to "Toyota" from the family name
"Toyoda". The new name was believed to sound better, and its eight-stroke count in the Japanese
language was associated with wealth and good fortune. The original logo no longer is found on its
vehicles, but remains the corporate emblem used in Japan.Still, no guidelines existed for the use of
the brand name, "TOYOTA", which was used throughout most of the world, which led to
inconsistencies in its worldwide marketing campaigns.To remedy this, Toyota introduced a new
worldwide logo in October 1989 to commemorate the 50th year of the company, and to differentiate
it from the newly released luxury Lexus brand. The logo made its debut on the 1989 Toyota Celsior
and quickly gained worldwide recognition. The three ovals in the new logo combine to form the
letter "T", which stands for Toyota. The overlapping of the two perpendicular ovals inside the larger
oval represent the mutually beneficial relationship and trust between the customer and the company,
while the larger oval surrounding both of these inner ovals represents the "global expansion of
Toyota's technology and unlimited potential for the future." The new logo started appearing on all
printed material, advertisements, dealer signage, and the vehicles themselves in 1990.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 and Singapore), Toyota is known as "
" (pronounced as "Fngtin" in Mandarin Chinese and "Hng Tshan" in Minnanese). These are the
32
same characters as the founding family's name "Toyoda" in Japanese, which translate to "fertile rice
paddies" in the Chinese language, as well.
Marketing
Toyota's marketing efforts in North America have focused on emphasizing the positive experiences
of ownership and vehicle quality. The ownership experience has been targeted in slogans such as
"You asked for it! You got it!" (19751979), "Oh, what a feeling!" (1979 September 1985, in the
US), "Who could ask for anything more?" (September 1985 1989), "I love what you do for me,
Toyota!" (19891997), "Everyday" (19972001)", "Get the feeling!" (20012004), "Moving
Forward" (20042012), and "Let's Go Places" (2012present).
Japan
33
In Japan, Toyota currently maintains separate dealership sales channels. The first sales channel
established in 1946 called "Toyota Store" sells large luxury sedans such as the Toyota Century, and
the Toyota Crown. In 1955 the "Toyopet Store" arrived, originally established to sell the Toyota
Corona and the Toyopet ToyoAce truck. (Toyota's five channel dealerships in Japan chronology in
Japanese.) Toyota also operated a commercial dealership called Toyota Diesel Shop from 1957 until
1988, that sold various commercial platform trucks, buses, and forklifts, such as the Toyota
Dyna and the Toyota Coaster. Hino products were sold at specific Hino locations, and shared at
Toyota Diesel Store locations after Toyota acquired the company in 1967. Starting in 1980, the
Diesel Shop also sold the Starlet, Corolla, Corona, Vista and Crown installed with diesel engines.
When the Toyota Diesel Store was disbanded, commercial products were divided between Toyota
Store and Toyopet Store locations.
Company Strategy
Toyota's management philosophy has evolved from the company's origins and has been reflected in
the terms "Lean Manufacturing" and Just In Time Production, which it was instrumental in
developing. Toyota's managerial values and business methods are known collectively as the Toyota
Way.In April 2001, Toyota adopted the "Toyota Way 2001", an expression of values and conduct
guidelines that all Toyota employees should embrace. Under the two headings of Respect for
People and Continuous Improvement, Toyota summarizes its values and conduct guidelines with the
following five principles: Challenge Kaizen (improvement)
Respect
Teamwork
34
Operations
Toyota has long been recognized as an industry leader in manufacturing and production. Three
stories of its origin have been found, one that they studied Piggly-Wiggly's just-in-time distribution
system, one that they followed the writings of W. Edwards Deming, and one that they were given
the principles from a WWII US government training program (Training Within
Industry). Regardless of the origin, the principles described by Toyota in its management
philosophy, The Toyota Way, are: Challenge, Kaizen (improvement), Genchi Genbutsu (go and
see), Respect, and Teamwork.
Principles of Toyota
35
1. Base your management decisions on a long-term philosophy, even at the expense of shortterm goals
2. Create continuous process flow to bring problems to the surface
3. Use "pull" systems to avoid overproduction
4. Level out the workload
5. Build a culture of stopping to fix problems, to get quality right the first time
6. Standardized tasks are the foundation for continuous improvement and employee
empowerment
7. Use visual control so no problems are hidden
8. Use only reliable, thoroughly tested technology that serves your people and processes
9. Grow leaders who thoroughly understand the work, live the philosophy, and teach it to
others
10.Develop exceptional people and teams who follow your companys philosophy
11.Respect your extended network of partners and suppliers by challenging them and helping
them improve
12.Go and see for yourself to thoroughly understand the situation (genchi genbutsu)
13.Make decisions slowly by consensus, thoroughly considering all options; implement
decisions rapidly
14.Become a learning organization through relentless reflection and continuous improvement
(kaizen).
Worldwide Presence
36
Toyota has grown to a large multinational corporation from where it started and expanded to
different worldwide markets and countries. It displaced GM and became the world's largest
automobile maker for the year 2008. It held the title of the most profitable automobile maker
(US$11 billion in 2006) along with increasing sales in, among other countries, the United States.
The world headquarters of Toyota are located in its home country in Toyota City, Japan. Its
subsidiary, Toyota Financial Services sells financing and participates in other lines of business.
Toyota brands include Scion and Lexus and the corporation is part of the Toyota Group. Toyota also
owns 51% of Daihatsu, and 16.7% of Fuji Heavy Industries, which manufactures Subaru vehicles.
They also acquired 5.9% of Isuzu Motors Ltd. on November 7, 2006 and will be introducing Isuzu
diesel technology into their products.
Toyota has introduced new technologies including one of the first mass-produced hybrid gasolineelectric vehicles, of which it says it has sold 2 million globally as of 2010, Advanced Parking
Guidance System (automatic parking), a four-speed electronically controlled automatic with buttons
for power and economy shifting, and an eight-speed automatic transmission. Toyota, and Toyotaproduced Lexus and Scion automobiles, consistently rank near the top in certain quality and
reliability surveys, primarily J.D. Power and Consumer Reportsalthough they led in automobile
recalls for the first time in 2009.
In 2005, Toyota, combined with its half-owned subsidiary Daihatsu Motor Company, produced
8.54 million vehicles, about 500,000 fewer than the number produced by GM that year. Toyota has
a large market share in the United States, but a small market share in Europe. Its also sells vehicles
in Africa and is a market leader in Australia. Due to its Daihatsu subsidiary it has significant market
shares in several fast-growing Southeast Asian countries.
According to the 2008 Fortune Global 500, Toyota is the fifth largest company in the world. Since
the recession of 2001, it has gained market share in the United States. Toyota's market share
struggles in Europe where its Lexus brand has three tenths of one percent market share, compared
to nearly two percent market share as the US luxury segment leader.
37
In the first three months of 2007, Toyota together with its half-owned subsidiary Daihatsu reported
number one sales of 2.348 million units. Toyota's brand sales had risen 9.2% largely on demand for
Corolla and Camry sedans. The difference in performance was largely attributed to surging demand
for fuel-efficient vehicles. In November 2006, Toyota Motor Manufacturing Texas added a facility
in San Antonio. Toyota has experienced quality problems and was reprimanded by the government
in Japan for its recall practices. In 2007, Toyota maintained over 16% of the US market share and
was listed second only to GM in terms of volume. Toyota Century Royal is the official state car of
the Japanese imperial family, namely for the current Emperor of Japan.
Toyota was hit by the global financial crisis of 2008 as it was forced in December 2008 to forecast
its first annual loss in 70 years. In January 2009 it announced the closure of all of its Japanese plants
for 11 days to reduce output and stocks of unsold vehicles.
Akio Toyoda became the new president and CEO of the company on June 23, 2009 by replacing
Katsuaki Watanabe who became the new vice chairman by replacing Katsuhiro Nakagawa.
Toyota has factories in most parts of the world, manufacturing or assembling vehicles for local
markets. Toyota has manufacturing or assembly plants in Japan, Australia, India, Sri Lanka, Canada,
Indonesia, Poland, South Africa, Turkey, Colombia, the United Kingdom, the United States, France,
Brazil, Portugal, and more recently, Argentina, Czech Republic, Mexico, Malaysia, Thailand,
Pakistan, Egypt, China, Vietnam, Venezuela, the Philippines, and Russia.
Toyota's net revenue by geographical regions for the year ended March 31, 2007.
Geographic region
Japan
North America
Europe
Asia
Others
In 2002, Toyota initiated the "Innovative International Multi-purpose vehicle" project (IMV) to
optimize global manufacturing and supply systems for pickup trucks and multipurpose vehicles, and
to satisfy market demand in more than 140 countries worldwide. IMV called for diesel engines to
be made in Thailand, gasoline engines in Indonesia and manual transmissions in India and the
Philippines, for supply to the countries charged with vehicle production. For vehicle assembly,
Toyota would use plants in Thailand, Indonesia, Argentina and South Africa. These four main IMV
production and export bases supply Asia, Europe, Africa, Oceania, Latin America and the Middle
East with three IMV vehicles: The Toyota Hilux (Vigo), the Fortuner, and the Toyota Innova.
38
We will conduct business that is strongly rooted in the countries in which we operate by adapting to
local needs and pushing for 100% localization.
Toyotas emerging market sales ratio reached 45% in 2011, an increase of 10% in the three years
since we achieved 35% in 2008. The Toyota Global Vision calls for an emerging-market sales ratio
of 50% by 2015, and we are striving to hit this target ahead of schedule by strengthening our global
supply system in emerging markets and increasing localization, with Asia as an important base. In
addition, we will actively release compact vehicles specifically designed for emerging markets.
The
Shift
to
Emerging
Making Cars that Meet National and Local Needs
Markets
and
Toyota's
Strategy
39
The IMV Project constitutes an important sales strategy in emerging markets. Launched in 2004,
sthe IMV series consists of five vehicles
sthree pickup trucks, a minivan and an
SUV
V
sspecially
developed in 2004 for introduction in
over 140 countries. Currently, the IMV
series is manufactured in 11 locations,
with sales of locally manufactured
vehicles underway in approximately
170 countries. Toyota applied the genchi
genbutsu (onsite, hands-on experience)
approach to observing and analyzing the
kinds of vehicles used in various parts
of the world, and developed and
introduced IMVs to meet the needs of
each region. Thorough aftersales service
programs for IMVs have gained the
trust of customers around the world.
The scale of the market will continue to grow, and Toyota plans to increase capacity in Thailand,
where the auto parts supply industry is concentrated, as the global supply base. Increases in new
investment to strengthen other supply bases, including Indonesia, and sequential production bases,
are planned.
Strengths of the IMV Project
The aims of the IMV Project are product appeal, low cost and efficiency, followed by exchangerate-fluctuation response capability. Toyota aims to enhance product value by developing
specialized models optimized to the tastes and environments of consumers in emerging markets. We
have also sought to reduce costs and gain efficiency by consolidating production, transitioning from
40
smallscale production at 11 companies to large-scale production at four global supply bases. We are
coping with the ever-strengthening yen by creating a structure that maximizes local procurement.
The IMV Project is currently accelerating the process of globalizing production and supply. Among
the four global supply bases, Thailand serves as the base for Asia, with the other global sites
handling exports throughout the rest of the world, such as to Oceania, Europe, the Middle East, and
Central/South America, developing into centralized bases. Localized procurement is also evolving,
so that parts procurement is not handled within individual countries, but rather through a globally
optimized procurement structure for parts.
Asia makes up half of the sales of the IMV series, but sales in the Middle East, Africa, and
Central/South America are also solid, with sales structures based on locally made core models.
Production capacity recovered comparatively quickly amidst the supply shortages caused by the
Japan Earthquake and Thailand floods in 2011, with the number of vehicles sold increasing greatly.
As a result, sales improved from 460,000 in 2005 in the immediate aftermath of the IMV Project
launch to 770,000 in 2011, and with markets predicted to grow from 2012 on, sales are also
expected to increase.
41
42
Africa
Africa, where economies and
populations are steadily growing, is
seen as a market that will continue to
grow. From our base in the Republic
of South Africa, Toyota is looking
into building a vehicle supply system
that can meet the special
characteristics of each African nation.
We aim to open and penetrate new
markets through sales measures
closely aligned to each region. Also,
in April 2012, we started contract
assembly production of the Fortuna
IMV model in Egypt.
India
Indias auto market is expected to keep pace with India's growing economy. Toyota will continue to
develop products that meet the needs of the region's growing consumer base, as we did with the
Etios.
In addition, TKM established the
Toyota Technical Training Institute in
2007 with the goal of providing
specialized technical training for
manufacturing, and we intend to
continue to engage in human
resources development and job
creation so as to contribute to the
development of the Indian economy.
Asia
43
Toyota's definition of "Asia" (for business purposes) does not include China, India, Pakistan,
Bangladesh and Japan. In 2012, this market is expected to recover from the impact of the Thailand
floods, with demand rising above that of 2011. This market is expected to grow in tandem with the
expansion of the regional economy in the medium- to long term, and we are aiming to increase sales
from the current 1.6 million-1.7 million annually to 2 million in the future. Hitting that target will
require an expansion in production facilities in Thailand, Indonesia and elsewhere.
Brazil
We have established a new plant in Sorocaba, in the state of So Paulo, Brazil, and beginning in the
second half of 2012, we will produce and sell the Etios, a new compact model. In the future we will
offer products that meet the needs of a broad array of consumers. Our goal is to steadily expand and
cultivate the Brazilian market through corporate activities deeply rooted in the region, such as
localized production.
Vehicle
Production,
Sales and
Exports By Region
Production by region
Region
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
North America
1,278.4
1,444.0
1,535.1
1,519.3
1,636.9
1,404.8
1,189.1
1,404.0
1,206.1
1,720.6
Latin America
58.1
80.4
138.5
177.9
183.1
194.8
181.5
204.3
195.1
242.8
Europe
466.1
582.5
638.1
808.8
806.5
688.3
507.3
461.7
460.3
461.4
Africa
93.3
108.8
121.1
143.8
145.7
179.2
102.8
123.4
150.8
151.7
Asia
548.4
717.0
1,029.2
1,137.7
1,387.3
1,590.0
1,501.4
2,027.4
2,062.8
2,565.7
Oceania
113.6
109.9
109.2
111.6
148.9
141.4
96.8
119.4
93.7
101.4
Overseas total
2,558.0
3,042.7
3,571.2
3,899.0
4,308.6
4,198.4
3,579.0
4,340.4
4,168.8
5,243.6
Japan
3,520.3
3,680.9
3,789.6
4,194.2
4,226.1
4,012.1
2,792.2
3,282.8
2,760.0
3,492.9
Worldwide total
6,078.3
6,723.7
7,360.9
8,093.2
8,534.7
8,210.5
6,371.3
7,623.3
6,928.8
8,736.5
44
Sales by region
Region
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
North America
2,031.3
2,230.3
2,436.1
2,738.3
2,822.2
2,441.8
1,975.4
1,935.5
1,806.9
2,274.6
Latin America
162.1
214.9
270.5
339.4
379.4
370.2
293.6
342.1
333.5
406.6
Europe
851.5
946.9
995.2
1,124.1
1,238.6
1,119.5
886.0
785.8
801.9
817.7
Africa
160.6
206.7
227.2
265.7
313.5
288.1
201.4
197.6
211.9
243.0
Asia
682.4
846.3
1,062.9
1,106.7
1,329.6
1,438.6
1,533.9
1,895.9
1,998.2
2,340.5
258.8
Oceania
215.1
232.8
236.9
250.3
275.9
277.7
231.2
249.6
215.9
Middle East
251.4
270.9
325.3
404.8
482.7
590.1
482.5
554.6
527.5
683.9
Overseas total
4,354.5
4,948.8
5,554.1
6,229.3
6,841.9
6,526.1
5,604.0
5,961.1
5,895.9
7,025.1
Japan
1,715.9
1,758.8
1,713.1
1,692.3
1,587.3
1,470.0
1,375.5
1,566.1
1,201.0
1,692.2
Worldwide total
6,070.4
6,707.6
7,267.3
7,921.6
8,429.3
7,996.1
6,979.6
7,527.3
7,096.9
8,717.3
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
North America
782.8
813.5
939.6
1,344.7
1,244.1
1,124.2
574.0
628.2
494.7
704.6
Latin America
71.5
95.6
120.2
148.9
178.9
146.4
61.3
106.9
95.6
116.4
Europe
424.6
419.0
360.7
375.1
441.5
420.3
230.4
293.7
343.0
311.9
Africa
58.2
92.0
107.2
130.0
147.0
148.7
67.5
72.4
54.7
64.9
Asia
154.7
156.2
129.8
112.3
151.2
169.1
127.1
184.0
183.0
205.4
Oceania
154.1
164.6
159.2
171.6
175.2
184.2
144.4
165.8
146.3
174.3
Middle East
182.6
202.1
226.5
246.7
328.3
393.4
240.0
288.6
247.7
363.6
Total
1,836.0
1,951.7
2,043.2
2,529.3
2,666.1
2,586.3
1,444.7
1,745.0
1,568.9
1,945.7
45
46
The firms have also agreed to work on a standard set of practices for in-car phone, navigation and
entertainment systems.
Ford recently announced its move further towards on board digital services, byscrapping CD
players in its latest Focus range in a bid to shift to an all digital in car entertainment offering
Year
1990
|
1999
Engine
Aluminium crankshaft
damper pulley
Cylinder head with laser
cladding
5 Valve Engine
Driving/Braking Suspension
Body
Electoronics
Materials
Bumper made
Magnesium cylinder
head cover
Air conditioner with
new refrigerant
Fabric with
deodorizing function
Front-passenger
seat airbag
Comprehensive vehicle control
system(i-Four)
Next-generation lean-
burn engine
Head Up Display
Back guide monitor with CCD
camera
47
4-valve direct-injection
diesel engine
Flex Lock-up System
TSOP-5 for interior
parts
Multi-zone automatic air
conditioning
UV-reducing
door glass
Water-repellent
door glass
Titanium nitride coating
Brake Assist
(FCEV)
Seatbelts with
force-limiter
Direct-injection
engine(D-4)
Tire pressure warning system
Toyota Hybrid System
(THS)
SRS curtain
shield airbag
Blind corner monitor
Radar cruise control system
Navigation shift control
Bumper
recycling
technology
ARS
Lift-intelligent (VVTL-i)
Diesel oxidation
catalyst
Common-rail directinjection diesel turbo
engine(D-4D)
ABS for EBD
Super CVT
2000
|
2009
Dual-stage SRS
48
Bio-plastics
Air conditioner with
electric heat pump
system using
G-BOOK
Power back door
system
SRS knee
airbags for driver
Pre-crash
(Toyota FCHV)
seatbelt
chamber airbag
Radar cruise contral with lowspeed tracking mode
S-VSC + Active Control 4WD
Integrated Control
Active stabilizer suspension
system
Pre-crash Safety System with
millimeter-wave radar and stereo
camera fusion system
(Pedestrian detection, steering and
obstacle-avoidance assist system)
49
Toyota Eco-plastic
D-4S
G-BOOK ALPHA
HELPNET
THS II with monitor
speed reduction device
THS II with two-stage
driver-monitoring system
(Millimeter-wave radar type)
to automatically deliver
differential map data to car
navigation systems
tracking function
Anti-mite allergen
seat fabric
50
(TOYOTA FCHV-adv)
SRS rear
window curtain
shield airbag
Interior vehicle parts
using Ecological Plastic
Front-side Pre-crash Safety
System
Pre-crash Seatback
SRS rear-seat
Eco-Drive monitor
center airbag
Touch Tracer Display
Solar-ventilation system
Remote Air Conditioning
system
Harmonious Driving
Navigator
Multi-terrain Select switch
DSRC Unit
Multi-terrain Monitor
Self-restoring coat
ESPO system
THSII Plug-in (with
motor speed reduction
device)
2010
|
2012
LDH
System
ion Battery
G-Station
DSSS
(Driving Safety Support
System)
2.5 liter 4 cylinder inline
Atkinson cycle engine
Laser screw
welding
Majority-Owned Subsidiaries
Toyota Industries Corporation (founded in 1926)
JTEKT Corporation (1935)
Toyota Motor Corporation (1937)
High-power Lithium-
51
A. STRENGTHS:
52
i. New Investments:
a). New investment by Toyota in factories in the US and China saw profits rise, against the
worldwide motor industry trend which was suffering heavy losses. Net profits
rose 0.8% to 1.17 trillion yen ($11bn; 5.85bn), while sales were 7.3% higher at 18.55 trillion yen.
b). ANALYSIS : The company had the right mix of products for the markets that it served.
USA believes in living life king size and is obsessed with bigger cars.
Toyota primarily sold bigger cars like Fortuner and Qualis in the American market and this was a
great success.
China on the other hand prefers fuel-efficient sedans. Toyota in China marketed and sold cars
like Prius, Corolla and Camry.
This was possible because of much focused segmentation, targeting and positioning of their
products.
ii. Manufacturing:
a). In 2003 Toyota knocked its rivals Ford into third spot, to become the World's second largest
carmaker with 6.78 million units. The company is still behind rivals General Motors with 8.59
million units in the same period.
b). ANALYSIS : Its strong industry position is based upon a number of factors including a diversified product
range, highly targeted marketing and a commitment to lean manufacturing and quality.
The company maximizes profits through Total Quality Management or TQM which is an
integrative set of principles and behavior adopted by Toyotas management for continuously
improving the quality of products and processes.
The company makes a large range of vehicles for both private customers and commercial
organizations, from the small Yaris to large trucks. Therefore, if the demand in one sector decreases,
the company always has other sectors as back up and the chances of a complete loss are low.
iii. Strong Brand Image :
a. Toyota currently sells 70 models of cars under its namesake brand with Corolla and Prius as
flagship models. Toyotas brand image is also associated with environment friendly cars as it is a
leader in manufacturing of green cars.
b). ANALYSIS : Toyota increases brand awareness, sells more cars in order to increase the existing brand image.
Toyota through a series of surveys and studies of customer behaviour understood that customers
are growing selective in terms of fuel efficiency and CO2 emissions.
The management quickly decided to invest in green technology and Toyota became one of the
first companies to manufacture environment friendly, hybrid and efficient cars like the Auris.
This greatly boosted their Brand image giving them competitive advantage over their
competitors.
B. WEAKNESSES
i. Large scale Recalls :
a) Toyota had quite a few large-scale vehicle recalls over the past few years. The company recalled
9 million vehicles in 2009-2010 and 7.43 million cars in 2012. Such recalls does not only hurt the
firm financially but significantly damages firms brand.
b) ANALYSIS: Recalls have taken place mostly because of safety issues that have not been met or because of
certain defects in the cars produced.
Toyota must ensure that the cars produced are faultless and of good quality.
An increase in recalls not only results in losses but also harms the brand image of the company.
53
C. OPPORTUNITIES
i. Hybrid and Eco friendly Technology :
a) Lexus and Toyota now have a reputation for manufacturing environmentally friendly vehicles.
Lexus has RX 400h hybrid, and Toyota has it Prius. Both are based upon advance technologies
developed by the organization. Toyota has also sold on its technology to other motor manufacturers,
for example
Ford has bought into the technology for its new Explorer SUV Hybrid.
b) ANALYSIS: Increasing fuel prices have boosted the demand for more efficient cars. Customers today are
more aware of the harm air pollution by vehicles causes to the environment. Therefore, there is a
big demand for environment friendly cars.
Since Toyota already has a first mover advantage in making hybrid eco friendly cars, it should
capitalize on this opportunity and invest more on hybrid R&D and produce more environment
friendly cars.
This will result in huge profits and increase Toyotas market share.
ii. New Customer Segments :
a) Toyota is to target the 'urban youth' market. The company has launched its new Aygo, which is
targeted at the streetwise youth market. The vehicle is a unique convertible with inbuilt sub
woofers.
b) ANALYSIS : The youth of today have become more independent and wealthy. This has created a big market
for cars. Therefore Toyota is trying to capitalize on this opportunity by introducing the new Aygo
for the youth. It attempts to capture the DJ culture and the nature of dance to market this car.
Even though the profits earned through the new Aygo are not big, it has helped Toyota increase
its market segment, which is crucial for expansion. Moreover, this segment may prove to be highly
profitable in the future.
54
since we achieved 35% in 2008. The Toyota Global Vision calls for an emerging-market sales ratio
of 50% by 2015.
b) ANALYSIS : Emerging economies have a huge demand for cars. Toyota must make sure it increases its market
share in the developing economies in order to survive and compete in the global scenario.
By increasing localization and strengthening the supply chain system, Toyota is slowly
expanding into emerging markets.
D. THREATS:
i. Competition :
a) Toyota faces tremendous competitive rivalry in the car market. Competition is increasing almost
daily, with new entrants coming into the market from China, South Korea and new plants in Eastern
Europe. Volkswagen group is strongly growing and GM steps up after its reorganization to become
more competitive than ever.
b) ANALYSIS : There is nothing much that can be done to curb the rising competition. But, competition can be
fought by introducing new products, slashing prices, increasing market segments and innovation.
Toyota has introduced the Yaris which is a very cheap car and has also sliced the costs of older
versions of Corolla. The Aygo and Prius are examples of innovative products by Toyota.
ii. Shifts in exchange rates :
a) Most of Toyotas revenue and raw material come from foreign countries. The profits earned
abroad must be sent back to Japan and converted to yen. Appreciating yen exchange rate against
other currencies means lower profits for Toyota.
b) ANALYSIS : This is a threat, which is very difficult to minimize. Toyota will have to wait till the Yen
depreciates but, this will result in delayed payments and increased debts which is bad for the
company.
Another solution could be setting up new bases in other countries so that they can enjoy their
profits through the exchange rate of that country.
55
Conclusion
Toyota Industries has promoted diversification through continuous innovation all through its life
and expanded the scope of its business domains to include textile machinery, automobiles (vehicles,
engines, car air-conditioning compressors, etc.), and materials handling equipment, electronics, and
logistics solutions. All these Expansion Strategies adopted by Toyota has resulted in making Toyota
one of the largest Conglomerates.
Toyota Motors in itself has 522 Subsidiaries some of which are individually present in Forbes
Fortune 500 list.
Today Toyota is the largest carmaker in the world leading General motors and the top selling
automaker. The Japanese company has sold 9.7million cars and trucks in 2012 leaving GM in
second place with 9.29million cars.
The backbone of their success being their sharp, well thought out and excellently implemented
strategies. It yielded excellent result over the years it brought them to the No. 1 position and if
maintained, there is no doubt about the fact that theyll maintain their position for years to come.
56
References
http://www.toyotafinancial.com,
http://www.toyota.com
http://www.toyotaindustries.com/corporateinfo/corpdata/
http://www.toyoland.com/history.html
http://www.toyota-global.com/investors/ir
http://www.marketingweek.co.uk/toyota-and-fordcollaborate-to-build-hybrid-cars/3029482.article
http://www.toyotaglobal.com/investors/ir_library/annual/pdf/2012/feat
ure/
57