Analysis of a Transnational Company in Asia

R&D and marketing powers to each individual foreign market. They market their products through the use of the same coordinated image/brand in all markets.  Multinational companies have investment in other countries.  Transnational companies are much more complex organizations.  Global companies have invested and are present in many countries. have a central corporate facility but give decision-making. Emphasis on volume. More focused on adapting their products and service to each individual local market. but do not have coordinated product offerings in each country. cost management and efficiency. they have no investment outside of their home country.  . They have invested in foreign operations.International companies are importers and exporters. Generally one corporate office that is responsible for global strategy.

Toyota has   317716 consolidated employees 69125 non-consolidated employees   Main business activities are motor vehicle production and sales. Revenue of 18993 billion in 2011.  In 1937 Toyota Motor Co Ltd was established in Japan. .

.. begins. business partnership with Hino Motors Ltd.  2001 Toyota Motor Manufacturing France S. Inc.S.  2000 Sichuan Toyota Motor Co. begins production in China. Ltd. begins production in France. 1966 The Corolla is launched. is established.  1967 Business partnership with Daihatsu Motor Co.    .A.  1984 Joint venture with General Motors begins production in the USA.1938 Toyota Honsha Plant begins production.. begins.  1997Toyota entered India through JV with Kirloskar group.S. Ltd. 1957 Toyota Motor Sales U.A.

Operation Toyota use various systems to be efficient and effective. TKAP is a joint venture among Toyota Motor Corporation. only when it is needed and only in amount that is needed. Bangalore.  JUST IN TIME ▪ Making only what is needed.Inbound logistic TKM procure raw material from Toyota Kirloskar Auto Parts Pvt(TKAP). Japan and Kirloskar Systems Limited. Toyota Industries Corporation. . Japan.  JIDOKA ▪ Building quality into production process. ▪ Defective items should not proceed to next stage.

Outbound logistic           These product are delivered to distributors which in turn sell the car to the end consumer  It has more than 150 dealerships in 96 cities across 22 states and 3 union territories of India Toyota Corolla (Launched 2003) Toyota Innova (Launched 2005) Toyota Etios (Launched 2010) Toyota Etios Liva (Launched 2010) Toyota Fortuner (Launched 2009) Toyota Camry (Launched 2002) Toyota Land Cruiser Prado (Launched 2004) Toyota Land Cruiser (Launched 2009) Toyota Prius (Launched 2010) .

In India Toyota has A. . Service  Toyota quick network reach. Service is provided through extensive network of dealer’s.  Quick onsite support Dealership is extended free of cost under 24x7 Road Assistance. Toyota Kirloskar motor sold 140000 units in 2011.R Rehman as brand ambassador.Marketing & Sales     Toyota position itself in upper car segment. It customizes its product according to customer’s need.

No of units sold 9000 8000 7000 6000 5000 4000 3000 2000 1000 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 No of units sold .

Technician are groomed through Toyota Global Training System. . is robotic system with humans as the operator.   Technician are recruited under Toyota technical education program initiatives.Supporting Activities Firm Infrastructure Infrastructure owned by Toyota factory is very modern and sophisticated. Human resource management  TKM has around 5000 employee.

Technology development Toyota is a world leader in the research and development of advanced automobile technology. Toyota cooperate with them to promote environmental preservation and meet the other demands of society. Creating intelligent solutions for today's mobility challenges and taking responsibility for future generations Procurement Along with requiring suppliers to provide quality items at a low price and in a timely manner. In addition Toyota take a long term view toward our relationships with suppliers with an aim to realize an amicable relationship of mutual prosperity based on fair business practices. .

environmental friendly (greener).  Production capacity. Toyota produces most of its cars in US and Japan whereas competitors may be more strategically located worldwide to take advantage of global efficiency gains.g. surpassing Ford Weaknesses  Japanese car manufacturer .2011 quality issues. customized range.seen as a foreign importer.Strengths  Global organization.  Strong brand image based on quality.  Industry leader in manufacturing and production. EMEA) and now the second largest car manufacturer in the world. China. . Maximizes profit through efficient lean manufacturing approaches (e.  Some criticism has been made due to large-scale re-call made in 2005. Total Quality Management) and JIT (Just in Time) manufacturing and first mover in car research and development  Excellent penetration in key markets (US. with a strong international position in 170 countries worldwide.

and components reduces the impact on the environment. China and India.g. To produce cars which are more fuel efficient.this investment and widening of product portfolio fits consumers looking to alternative sources of fuels away from gas guzzling cars To expand more aggressively into new segments of the market. With oil prices at an all time high .especially in the emerging markets e.g. Toyota's Eco-Vehicle Assessment System (Eco-VAS) has helped in production. Prius model. where population and demand is accelerating. . The launch of Aygo model by Toyota is intended to take market share in youth market.Opportunities  Innovation -first to develop commercial mass-produced hybrid gas-electric     vehicles (gas and electric). hybrid fuels. and disposal Continued global expansion . The development of electric cars. To develop new cars which respond to social and institutional needs and wants. usage. Based on advanced technologies and R&D activity. e. Russia. have greater performance and less impact on the environment.

As household budgets tighten . Governments encouraging alternative forms of transport . Increase in families who have chosen not to own a car. or decided to use their car less.this could lead a decline in new car sales and possible rationalization of dealerships.cycling and incentives to use public transport across Europe. Rising oil prices (fuel costs) and the costs of maintaining cars. . Predictions of a downturn in the economy e.g. Undermining the demand for large family cars Changing usage . Home deliveries.g. number of large families is declining. Businesses . will affect car purchases (especially new cars).families using the car less for taking children to schools. intense marketing campaigns      increasing competitive pressures Shifts in the exchange rates affecting profits and cost of raw materials.Threats  Saturation and increased competition. recession. Changing demographics e.restricting business travel (tele-conferencing).

In most of the company’s investors had a premier role to play in the growth and development of the company . Foreign ownership regulations and technological cooperation’s between countries helping the Toyota in raising the funds and building the advanced models which can cope with the current scenario. Introduction of new business laws Impacts the Toyota to change its rules and regulations which are necessary to producing a quality vehicle. The labour unions should work according to the rules and regulations amended by the business laws. oil prices & free trade flows which influence the consumer to invest on the vehicles.Political Factors      Exchange rates. Investor’s climate. Forced Groups (Labour unions) who plays a major role in the production of a vehicle in Toyota manufacturing organization.

40 million every year  The availability of car loans.200)  Middle class expanding by 30 .consumer behavior Increasing customer emphasis on aesthetics and comfort. affordable rates of interest. Growing working population (441 million people in 2015/16) Upward migration of household income levels (600 million people have annual income of more than $10. Seeking “Value for money”.Economic factors     Increased access to credit and lower interest loans. Improvement in living standards of middle class Increased spending on Fashion & lifestyle comforts. Investment in Infrastructure spending can boost the commercial vehicles segment. A perfect marriage of rise in disposable income and demographic dividend (From US$ 556 per annum US$ 1150 by 2015) . smooth repayment facilities and the deductions offered to the customers by the retailers Social Factors       Rapid Urbanization of semi urban regions Rising aspirational levels.

because the consumers of car are more concerned about the ordering and when the company is going to deliver the car. It implements techniques like Jidoka and JIT. Technological Factors  Supply chain collaboration It is the Initial and crucial factor in Toyota. which makes the operation efficient  Research and Development Toyota Motors invests heavily in research and development specially in assessing the product according to the local needs . The Toyota Company is having strong supply chain collaboration which is in around Seventy countries.  Operations Capability Toyota Operation are more capable to provide the better service to consumers.

consumer protection and taxation.  Environmental factors   Other than the vehicles themselves.Legal Factors: The legislation covers areas such as competition law. Toyota motors. and emissions (air quality and fuels). India has also setup the special R&D centres to make environment friendly cars which meets the fuel emission laws as per Indian legal system .  When the auto parts industry reached full development. accelerated technological efforts were made to create a web of local suppliers that would make it possible to meet the growing legal requirements for the national integration of production. and the roads and fuel needed to run them the business is intricately tied to the manufacture of a wide range of components and the extraction of precious raw materials. intellectual property law.

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and ever-expanding financing options to rural residents. given India's incredible growth forecasts.Threat of new Entrants   In most markets. infrastructure progress (especially new and better roads). There are more than 20 foreign manufacturers selling in India (including ultra high-end such as Rolls-Royce and Lamborghini). we expect the threat of new entrants to be high. As such. the market is attractive. However. the capital and expertise needed to setup an auto or parts manufacturing facility. Of course there are also a plethora of incredibly choices . would be a great enough barrier to entry to prevent many new entrants from setting up. 2.1. The bargaining power of buyers/customers  Buyers in India have a wide variety of choice.

The amount of rivalry among competitors  High. The amount of bargaining power suppliers have  It is likely that the suppliers to the manufacturers have bargaining power. These are very real and obvious threats to auto manufacturers. They are not held ransom by one single manufacturer as they can market their products to any of the others in India. . The threat of substitute products India is famous for its two-wheelers (bikes and mopeds) and three-wheelers. 5. The industry is not yet in its shake-out phase and is still struggling to find the up-and-coming stars and possibly topple the leaders.3.  Public Transport is widely used in India for travelling  4.

once remaining technology challenges are solved  Electric Vehicle(EV) . . cost and range.  Hybrid Cars.  Plug In Hybrid Car (PHV) shorter range EV + longer range petrol hybrid  Fuel Cell Hybrid Vehicle(FCHV) future benefits.suitable for shorter journeys. . Huge investment on sustainable mobility with aim of “Right car at Right place at Right time”.limited by infrastructure.

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