TOYOTA

TOYOTA: GLOBAL EXPANSION STRATEGIES

Presented by: Aditya Agarwal Aditya P.S.Jadon Avdesh Singh Dewesh Thakur Manish Vijay

INTRODUCTION
‡ Founded in 1937 ‡ Headquarters: Toyota City, Tokyo, Japan. ‡ Toyota has annual sales of $120 Billion ‡ Produces : 5.8 million vehicles per year ‡ Has 53 overseas manufacturing companies, in 27 countries/regions ‡ Employees :3,16,000 people ‡ 3rd largest automobile manufacturer

TOYOTA - INDIA
‡ In India, Toyota Motor Corporation entered in a joint venture with Kirloskar Group. ‡ Toyota Kirloskar Motor Private Limited (TKM) aims to play a major role in the development of the automotive industry and the creation of employment opportunities.
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‡ 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. delighting customers with a wide range of products and solutions in the automobile industry with the best people and the best technology.Vision and Mission ‡ Vision is to be the most respected and successful enterprise. 4 . ‡ Mission of Toyota is to provide safe & sound journey.

± Fostering the spirit of Teamwork.Core Values ± World class product quality. 5 . ± Achieving the ultimate goal of complete customer satisfaction. ± Inculcating ethical and honest practices.

Second reason was the increased competition from Chevrolet Tavera which was perceived to be a more refined upmarket SUV. Further. Qualis was a major success among the tour operator segment but was not popular at the individual/home segment.PRODUCT LIFE CYCLE TKM IS IN BETWEEN THE GROWTH AND MATURITY STAGE . Toyota wanted to appeal to the individual/home users rather than the commercial segment. 6 . Toyota also wanted to bring in the latest products in the Indian market. Toyota decided to replace Qualis because of two reasons. Qualis was only a test product.

2)Attempting to gain some type of location economies.Why to choose Globalization ? ‡ Firms engage in international activities for two primary reasons. 7 . 1)Transferring competencies/resources in a search for new customers.

‡ As of the end of March 2008. Toyota's vehicles are sold in more than 170 countries and regions. and uses a plan-do-check-act cycle to carry them out.WORLD WIDE OPERATIONS ‡ In the beginning of 2007. Toyota has grown to a large multinational corporation from where it started and expanded to different worldwide markets and countries by becoming the largest seller of cars. Toyota conducts its business worldwide with 56 overseas manufacturing companies in 27 countries and regions. ‡ Toyota has a balanced scorecard which notes specific outcomes and measures of environmental action. 8 .

‡ providing comfort of life. The encompassing motto of Toyota "innovation into the future" is "working with passion and dedication to create a prosperous society. ‡ excitement for the world.Four key components for Toyota These are linked to the pursuit of a new global image with : ‡ being kind to the earth." 9 . ‡ and respect for all people.

example Ford has bought into the technology for its new Explorer SUV ‡Economic instability Hybrid ‡Toyota is to target the 'urban youth' market. 10 . want versus competitor's. highly ‡Manufacturers need to make sure targeted marketing and a commitment that it is their models that consumers to lean manufacturing and quality. ‡#1 carmaker in 2007 ‡Company needs to cautiously keep producing cars in order to retain its operational efficiency Opportunities: Threats: ‡Toyota has also sold on its technology ‡Toyota faces tremendous competitive to other motor manufacturers.SWOT Analysis Strengths: Weaknesses: ‡Diversified product range. for rivalry in the car market.

The bigger oval implies global expansion of Toyota s technology and unlimited potential for future. 11 .LABELLING ‡ The label may be a simple tag /logo attached to the product . the label is the mark which consist of 3 ovals : 2 perpendicular ovals represent a relationship of mutual trust between customer and the company . Might carry a brand name or a great deal of information. In Toyota .

Pricing Strategy ‡ Optional-Feature Pricing e. ‡ Promotional Pricing : Low Interest financing : This technique is for short period and is mainly used in festive seasons. Longer Payment Terms : The company stretches loans over longer periods and thus lowers the monthly payments. side steppers or other accessories.g. an Innova customer can order mud flaps. 12 .

‡ Differentiated Pricing : Location Pricing : Toyota cars are priced differently in different states. Car cost remains the same across the country but the road tax and insurance rates differ in different states.‡ Warranties and Service contracts : The company provides 3 year or 1 lakh Km (whichever earlier) warranty on all repairs using Toyota genuine parts. 13 .

Four-speed electronically controlled automatic with buttons for power and economy shifting. Advanced Parking Guidance System. l 14 . 1. Eight-speed automatic transmission. 2. 4.Innovation ‡ Toyota has introduced new ideas & technologies which enable them to lead the innovation among others competitors. 3. Example Hybrid gas-electric vehicles.

Aamir managed to carve out a niche for himself among the superstars as well as changed his persona in tune with the character he was playing in case of ³Toyota Innova´. 15 .-Promotion ² INNOVA" All you desire " ‡ Very few actors in Bollywood possess the international standards of expertise that Aamir Khan does. ‡ It is precisely this characteristic of this talented actor that is sought to be celebrated in the Toyota Innova advertisement.

. It contributed to Tsunami. Toyota Kirloskar signs MOU with Bangalore University for promotion of Japanese language. Toyota observes earth day by supporting local schools. 3. 2.CSR Strategy Toyota company contributed to public relation¶s in the following manner : 1.

Q2FY2010 (July-Sep 2009) and Q3FY2010 (Oct-Dec 2009) 17 .

78 million vehicles world wide ‡ Ford ± 6.Casting a Global Spell: ‡ Jan 2004 Toyota replaced Ford Motors as the world¶s second largest automobile manufacturer. ‡ Ford was in that spot for 7 decades ‡ In 2003 Toyota sold 6.72million ‡ GM ± 8.60 million l 18 .

‡ Toyota had emerged as a strong foreign player in : ‡ Europe ‡ China ‡ South America ‡ South West Asia ‡ South East Asia ‡ Africa 19 .Contd« ‡ Toyota aided by its new product offerings & strong financial muscle had successfully used this to surpass Ford.

Globalization Efforts: ‡ Aggressive Globalization efforts that began in mid 1990s ‡ 3 Globalization programs ‡ New Global business plan (1955-1998) ‡ Global vision 2005 (1996 ±2005) ‡ Global vision 2010 (2002 ± 2010) 20 .

Global Vision 2005 ‡ 1995 Hiroshi Okuda became President ‡ To improve domestic sales ± focus on dealer network ‡ Incentives to increase sales to dealers ‡ Aggressive means to attract youngsters to its products ‡ Functional discrepancies among the dealers 21 .

‡ Heavy investments in advertising ‡ Okuda decided to focus on improving global sales performance 22 .

Early Globalization Efforts: ‡ June 1995 Toyota announced ³New Global Business Plan´ aimed at localization of production and increasing imports over a 3 yr period ‡ Localization was the focus ‡ Apart from this short ±term global business plan Toyota also came up with a long-term global vision in June 1996 23 .

Global Vision 2005: ‡ Asserting a competitive edge in technology ‡ Accelerating globalization 24 .

Globalization Efforts: Increasing production of automobiles by improvement in three core areas: ‡ Upgrading its R&D ‡ Developing new line of products ‡ Replaced engines of its Lexus range of cars with stronger models & made design changes as per customer feedback 25 .

Customization in Europe ‡ 1997 launched Prius a gasoline electric car ‡ April 1998 new small car in Europe market ± Yaris 26 .

Domestic Problems: ‡ ‡ ‡ ‡ ‡ Excessive capacity Choosy customers Surplus workforce Intensified competitors 1998 Japan sales ± 38% of total sales as compared to 52% in 1990 ‡ US contributed 80% followed by Europe l 27 .

Solutions: Upgraded versions of its existing models De-emphasizing Toyota brand Dealer outlet more appealing Netz as dealership chain Contract employees 1999 Okuda replaced Chairman Shoichiro Toyoda & Fujiocho became the President ‡ Company¶s shares listing in New York and London stock exchange l ‡ ‡ ‡ ‡ ‡ ‡ 28 .

development and purchasing ‡ Kaizen. PDCA. JIT ‡ Management hybrid 29 .Second Phase of Globalization: ‡ Focus more on localization ‡ Cho define Globalization as ³Global Localization´ ‡ Localizing design.

‡ Engage European designers to design more cars ‡ Started the French Riviera Design Center ‡ Increase manufacturing capacity in Europe ‡ Local procurement.Europe ‡ Yaris launched for targeting European market. locally produced units ‡ Entered into partnerships with other automobile companies ‡ Partnered with PSA Peugeot 30 .

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China: ‡ Late entry in 1989 ‡ 1999 J/V to manufacture Toyota Coaster bus ‡ 2002 entered into strategic alliance with state-owned China FAW group Corporation to manufacturing automobiles ‡ 2000 constructed new plant in Tainjin l 32 .

2010 Global Vision: ‡ Recycling based society ‡ Age of information technology ‡ Development of motorization on global scale ‡ Diverse society 33 .

Revolutionary Production System ‡ Revolutionized manufacturing industry ‡ At its core is ³lean´ ± a relentless drive to improve efficiency and eliminate waste ‡ Beginnings of TPS were born out of necessity due to lack of resources in post-war Japan. 34 .

Toyota Production System Key Main Concepts ‡ SMED ± Single Minute Exchange of Dies ± Promoted flexibility of production runs ‡ JIT ± Just In Time manufacturing ± Small batches which reduced inventory costs. tightened relationship with suppliers and improved quality control ‡ ³5 Whys´ Quality ± Asking ³Why?´ 5 times to locate source of problems ± Stopping the production line whenever there are quality problems to ensure they are not repeated ‡ Low cost supplier ± Long term supplier relationships 35 .

New systems for storing. * A new organizational design -.Less focus on process standards and more focus on product standards and design results.A rethinking of engineering management roles and skill sets. accessing and using engineering data. 36 . * A new approach to knowledge management -. * A new approach to the development process -.The Toyota Product Development System's implementation challenges ‡ Toyota Product Development System challenges involve: * A new approach to engineering leadership -.Creation of the "Big Room" and use of visual management for the development process. * A new approach to design variations -.Implementation of set-based concurrent engineering.

Market Share worldover .

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