Assignment on

With reference to value chain model, analyze the value chain of Toyota

SUBMITTED TO :

Md. Rabiul Kabir

PROFESSOR OF MBA DEPARTMENT

SUBMITED BY:

NAME: Md. Ridwan Rashid

ID: MBA07018180

Batch:70

DATE:
Value chain analysis is an analytical framework that assists in identifying business activities that
can create value and competitive advantage to the business. Figure 1 below illustrates the
essence of value chain analysis. You can learn the theory of value chain analysis

Figure 1 Value chain analysis

Primary Activities

Inbound logistics

Inbound logistics for Toyota comprises two separate operations. The first is the operation “that
transports parts from local suppliers to the local plants; the second is a separate operation,
global inbound logistics, to transport parts from Japan to the North American and European
plant”.

Operations

In 2013 Toyota automotive operations were reorganized into the following four units:

1. The Lexus International. The business unit is assigned the role of the global head
office for Lexus brand development, sales, marketing and advertising.
2. Toyota No.1. This unit is in charge of North America, Europe, and Japan.
3. Toyota No.2 unit caters for emerging markets of China, Asia & the Middle East, East
Asia & Oceania; Africa, Latin America & the Caribbean
4. Unit Cellar. This unit deals with unit-related technological development, manufacturing
technology development and production

Outbound logistics

Toyota has approximately 170 distributors and 8,900 dealers outside of Japan. The company
uses “common carriers, railroads and truck “car haulers,” to transport its vehicles from the
assembly plants to the dealers”. Toyota uses different distribution strategies in US, Europe and
Japan.

Distribution practices used in US can be further divided into three categories:

1Distribution of vehicles produced in North America. Once out of the plant, vehicles are
transported into the marshalling yard, where they are prepared for the shipment.

2Distribution of vehicles produced overseas. Large vessels are used to transport

vehicles produced in Japan to ports in North America and to be further transported to
dealerships.

3Scion model of distribution. This model relates to the distribution of vehicles produced in
Japan in the US, however there are some differences between the Scion model and the
previous model discussed above.

European distribution pattern of Toyota vehicles is different from US distribution due to the
location of dealers in urban areas and hence, the absence of room for vehicle stock. After the
production vehicles are taken to the marshalling yard to prepare them for the shipment.

Distribution of vehicles in Japan is similar to vehicle distribution in Europe in a way that

dealership offices have a small storage capacity

Marketing and sales practices at Toyota emphasize innovativeness and efficiency of the

brand, as well as, integration of brand with the best practices of Japanese ways of doing things.

Service. Toyota operates according to the principle of ‘The Customer Always Comes First’ as
declared in “The Toyoda Precepts” in 1935.
References

[1] Iyer, A., Seshadri, S. & Vasher, R. (2009). “Toyota Supply Chain Management: A Strategic
Approach to the Principles of Toyota’s Renowned System” McGraw-Hill Professional

[2] Iyer, A., Seshadri, S. & Vasher, R. (2009). “Toyota Supply Chain Management: A Strategic
Approach to the Principles of Toyota’s Renowned System” McGraw-Hill Professional, p.103

[3] Annual Report (2014) Toyota Motor Corporation

[4] Toyota Sustainability Report (2015)

[5] Toyota Management System (2009) Available at: http://www.ineak.com/toyota-logistics-

operation/

[6] Comprehensive Overview of Supply Chain (2009) Available at:

http://www.ineak.com/comprehensive-overview-of-supply-chain/

[7] Toyota Motor Corporation (2016). Available at:

https://www.toyota.co.jp/en/environmental_rep/03/kakawari.html