Professional Documents
Culture Documents
Submitted by:
Beloy, Leah Joy P.
Dela Cruz, Mary Joy M.
Isidro, Ma. Leomily D.
Rodriguez, Judy Ann T.
Submitted to:
Mr. Gerard Boz Tungol
Executive Summary
This strategic management paper provides a detailed outline of the
current strategies of Toyota Motor Philippines with the proposed strategies
based on the SWOT analysis.
Toyota
Motor
Philippines
Corporation
(TMP)
is
an
automotive
population
demographics,
societal
values
and
lifestyles,
TABLE OF CONTENTS
I.
II.
Executive Summary
Table of Contents
Acknowledgements
Introduction
a. Company Profile
i. Background
ii. Vision
1. Analysis
2. Suggested Revision, if any
iii. Mission
1. Analysis
2. Suggested Revision, if any
iv. Products
b. Products of the Company
External Environment Analysis
a. Industry
b. Market
i. Market Definition
ii. Market Size
c. Analysis of Present Task Environment
i. Threat of New Entrants Barriers to Entry
ii. Determinants of Rivalry among Existing Competitors
iii. Threat of Substitutes
iv. Bargaining Power of Buyers
v. Bargaining Power of Suppliers
d. Analysis of Potential Changes in the Macroenvironment
i. General Economic Conditions
ii. Population Demographics
iii. Societal Values and Lifestyle
III.
IV.
iv. Technology
v. Ecological
vi. Infra structural
vii. Political Environment
viii. Legislations and Regulations
e. Threats and Opportunities
i. Threats
ii. Opportunities
Analysis of Internal Environment
a. Financial Analysis
b. Financial
Ratios
in
Comparison
to
Industry/Competitor
Performance
c. Value Chain Analysis
d. Strengths and Weaknesses
i. Strengths
ii. Weaknesses
Strategic Plan
a. Objectives
i. Social
ii. Financial
iii. Strategic
b. Evaluation of Present Corporate Strategies
i. Generic Competitive Strategy
ii. Dimensions of Competitive Strategy
c. Proposed Corporate Strategy
i. Details of the strategy
ii. Cost of the strategy
iii. Potential benefits of the strategy
iv. Basis of Strategy
v. Strengths to be developed or weakness to be overcome
vi. How can the strategy help the company attain its
objectives?
d. Competitive Advantage
i. Present Competitive Advantages
ii. Why is the present competitive advantage deteriorating?
iii. Proposed Competitive Advantage
iv. How can this help the company increase/retain its position
V.
VI.
in the industry?
Strategy Implementation using the 7S Framework
Projections
a. Balance sheet
b. Income Statement
c. Statement of Cashflows
d. Assumptions
Acknowledgement
We have immense pleasure in successful completion of this work entitled:
Strategic Management Paper for Toyota Motors.
First and foremost we would like to express our gratitude to God Almighty
for giving us strength and wisdom in writing this strama paper.
We would like to express our deepest appreciation to our professor Mr.
Gerard Boz Tungol for showing his support and encouragement to accomplish
this study. Without his guidance and persistent help, this paper would not
have been possible.
We acknowledge with gratitude all the references that we use for our
strategic management paper.
And lastly, we want to take this opportunity to thank our group members
who have contribute to this project with their invaluable opinions and
suggestions which has done a long way in soothing our rough edge as a
team.
I.
Introduction
a. Company Profile
i. Background
TOYOTA MOTOR PHILIPPINES CORPORATION (TMP) is an
automotive
manufacturing
company
incorporated
on
and
environment-friendly
processes
while
mutual
trust,
mutual
responsibility,
and
COMPONENTS:
STATEMENT:
Not Stated
Customers
To
Products or Services
produce
vehicles
and
components of outstanding
quality
Markets
Not Stated
Technology
Advanced technology
To
sustain
Company
Concern
for
Survival,
profitability,
stability,
in
effective
financial
and
resource
management
for
the
delivery
of
products,
with
customer
attractive
excellent
service
continuous
product
improvement
continuously
Self-Concept
and
improving
processes
maintaining
safe
while
working
conditions
Not stated
Concern for Public Image
To sustain Team Member's
morale and productivity by
developing
Concern for Employees
potential
their
and
full
total
well-
trust,
mutual
open
communication.
SUGGESTED REVISION
To dominate automotive industry through dynamic
selling and timely delivery of attractive products, excellent
customer service and continuous improvement.
To produce vehicles and components of outstanding
quality, using advance technology that would fit the taste of
the
customer
environment
continuously
friendly
improving
processes
while
methods
and
maintaining
safe
working conditions.
So sustain company profitability, stability, productivity
and growth by engaging in effective financial and resource
management for the collective gain of the Toyota family of the
society we serve.
To sustain team members morale and productivity by
developing their full potential and total well-being and by
establishing mutual trust, mutual responsibility concern for
public image and harming through open communication.
iv. Products
Automotive Cars
Automotive Services
Oil Changes
Tire Rotation and Alignment
Transmission Repair and Service
Car Washes and Detail
Fluid Top Off/ Flushes
Tiring Belt Repair/Replacement
Parts and Accessory Installation
Free VA State Inspections
Tire Pressure Evaluation
LEXUS
PASSENGER
CARS
CT 200H
ES 350
GS 350
GS 450H
IS 350
IS- C
LS-200H
LS 460
COMMERCIAL
VEHICLE
Alvanza
Alphard
Coaster
FJ Cruiser
Fortuner
Hace
Hilux
HSPU
Innova
LC200
Previa
Rav
COMMERCIAL
VEHICLE
GX 460
LX 570
RX 350
RX 450H
II.
the automotive
vehicles
such as
private
President
MichinobuSugata
attributed
its
strong
Description
Ratings
The industry has a huge 1 = Weak threat of new
size of companies and entrants
most of them are leading New
in the market.
The
cannot
competitors
easily
worldwide because
of
enter
the
big
in
the
and
profitability,
annual
and of
sales
reached
scale
for
have companies
small
and
new
levels
in
some
regions. (strategyand.pw
Proprietary
c.com)
product Automobile
differences
can
upgrade
improve
their
products Companies
with
can
also
help
should
upgrade
them research
their
and
competitiveness
because
technologies
constantly
competitors
quality
of
automobiles in market as
well
as
reduces
throughout
cost
the
manufacturing
process.
(psu.edu)
Products
of
companies
different
are
mainly
differentiated by design
and engineering quality
Brand identity
(Nkomo)
Almost
all
companies
of
in
entrants
cannot
build
up
their
the
large
existing
in
the
have
their
own
identity
of
companies is based on
quality,
safety,
design/style
and
technology/innovation.
(Toyota
Switching cost
2011)
Some
Annual
clients
complain
about
Report
may 3 = Moderate threat of
the new entrants
switching
it
companies, which
including
the
difficult
to
for
change
products
m)
costs
they
Capital requirements
Automobile
entrants
firms
that
are
is
required
purchase
to industry
with
low
manufacturing
hire
and
employees.
It
train
takes
only
for
manufacturing
the
process,
industry
leaders.
(psu.edu)
to New entrants
in
entrants
can
distributors
distribution
like
in
other companies.
It
can
difficult
sometimes
for
be
new
find
means
an
of
adequate
distribution
and
(psu.edu)
cost Todays
advantages
automobile
and
efficiency, products
well-planned
structures,
that
new
differ
size,
management of brands,
attention to underserved
markets,
focused
strategy,
and
respected
Government policy
well-
brands
and
the
industry,
they entrants
that
by
government.
The
follow
government
worldwide regulations
automotive
industry
is comply
with
government requirements.
including
environmental
and
to
many
vehicles.
The
government
may
also
controls.
Annual
Report
2011)
Since big companies are 3 = Moderate threat of
in the industry it cannot new entrants
be avoided that they are Due to the companies
providing high prices to big
name
in
the
there
are
retaliations
retaliation
from
companies
entrants
them.
is
existing
if
new
would
bring
Description
Ratings
Industry Growth
rivalry
worldwide Companies
can
grow
capturing
relatively
prerecession
(strategyand.pwc.com)
Automotive industry has 3 = High intensity of
undifferentiated
rivalry
cars
vehicles.
and
But
regards
to same.
advancements
in
But
not
that
advancement.
Technology
behind
differentiation
auto
Brand Identity
product
in
the
industry.(Ed
Richardson)
Almost all of the firms in 5 = High intensity of
the industry have their rivalry
own brand identity with Customers
regards
quality.
to
price
are
widely
Automakers
that
impact
when
it
among
potential
buyers.
Switching Cost
(luxurydaily.com)
The switching cost is low 1 = Low intensity of
because
of
the rivalry
undifferentiated
Due to undifferentiated
products.
products,
customers
(termpaperwarehouse.c
Concentration
Balance
om)
and There
are
competitors
lot
in
of 5 = High intensity of
the rivalry
automotive market.
Other
competitorsare
happy
with
their
(http://papers.ssrn.com/)
If a firm will decide to 5 = High intensity of
leave the industry, the rivalry
capital
that
was There
are
firms
to
high
that
exit
prevent
leave,
like
for
them
to
continuously
altogether.
(ukessays.com)
Total Average
3.33
There
moderate
is
intensity
of
rivalry
iii. Threat of Substitutes
Analysis Criteria
Description
The
relative
price Increasing fuel
performance
substitutes
of have
been
Ratings
prices 3 = Moderate threat of
pushing substitution
public prices
transportation.
vehicle
owners
agree
that
continuously
of
public
But
if
automobile
manufacturers are not
able to provide a more
cost-efficient
solution,
(ukessays.com)
It is cheaper for the 3 = Moderate threat of
customers to use public substitution
mode of transportation Some
people
or by walking.
substitute
The
choose
switching
to
may
mode
fulfill
their
same
transportation, such as
train, may be high in
terms of personal time
(i.e.,
independence),
products
because
environmental
of substitution
substitute
vehicles
no
to
with
the safety.
that
railways
The
provide.
evolution of consumer
reliance
on
motor
producing
of
automobiles.
(Grant,
2008, p. 41)
TOTAL AVERAGE
threat
of
substitution
iv. Bargaining Power of Buyers
Analysis Criteria
Description
Buyer concentration Large
numbers
vs.
concentration
Firm manufacturers,
big
or
Ratings
of 3
=
either bargaining
small,
Moderate
power
of
are buyers
boomers,
between
1946
largest
group,
consumer companies.
buying
38
frame.(autonews.com)
Some
buyers
are 5 = Strong bargaining
individuals that buy only power of buyers
one or two vehicles and The more frequent your
some are corporations customer purchases and
or government agencies the more they are likely
that buy large quantities to negotiate on price,
that they will give in quality and service
reasonable prices and
request
Switching cost
(Nkomo)
Firms in
for
the
discounts.
industry 3
Moderate
tend
to
that
to
might buyers
switch
switching
Buyer information
to
brand
to
of
costs
for
another
brand). (marsdd.com)
Meanwhile, consumers 3
are
switch
vehicle.
to
to another
another company.
Few
of
issues buyers
regarding
products
power
awash
in
easily bargaining
Moderate
power
of
accessible
information buyers.
about
specifications,
prices, these
days
too
they
strict
are
with
buyers
greater
bargaining
power.
(Strategy&.pwc.com)
The buyer should have
full
information
(knowledge of demand,
market
prices
and
to
integrate
with
leverage).
(marsdd.com)
backward Buyers cannot
backward
integrate
the industry.
The
worldwide large
firms
in
the
automotive
market
in
the industry .
is
highly
competitive, companies
Substitute products
faces
intense
competition.
(Toyota
bicycle
technological
developments
that
cars,
suggest
as
used
(buses,
trolleybuses,
subways,
trains,
monorails,
tramways),
walking,
and
Product differences
cycling,
rollerblading
skateboarding.
(wikipedia.org)
The factors that affect 3
consumer
to
Moderate
make bargaining
power
of
quality Each
firms
offer
effect
that
one from
other
buyers
varieties
brand. (Sun.2008)
Almost
all
of
choose from.
the 3
=
companies
this bargaining
in
companies
has
to
Moderate
power
of
provide
quality
products
identity
of
companies is based on
quality,
safety,
design/style
and
technology/innovation.
(Toyota Annual Report
Buyers Profits
2011)
Some clients are willing 3
Moderate
power
of
wants,
and The
expectations.
The
mass
demanding
are
less
buyers
are
product
also buying
they
meets
are
their
sophisticated
basing
infotainment
their
buying
3.22
There
moderate
is
bargaining
power of buyers
v. Bargaining Power of Suppliers
Analysis criteria
Differentiation
inputs
Description
of There
are
products
Ratings
innovated 3
=
that
Moderate
may
also
manufacturers materials
require
inputs-labor, same
offer
and
at
time,
new
the
the
The
cost
effect
on
profitability.
Switching
cost
(ukessays.com)
of There
are
multiple 3
Moderate
power
of
price
materials
cannot
specification
a
fair
initial
of
raw
be
investment.
Presence
substitute inputs
(ukessays.com)
of There are alternative 3
Moderate
and
of
of
industry,
suppliers
power
the
compatibility
of switch
from
one
raw
(ukessays.com)
There
is
a
concentration
large 3
Moderate
suppliers
competition
because
of
high
accessibility of materials
or supply.
If
manufacturer
is
that
the
keep
satisfied,
requires
manufacturer
the
supplier
especially
if
are
of
must
assurance
be
that
an
the
component
have
power
by suppliers
Moderate
the
ability
engineering
changes
that
affects
with
their
own
profitability
requirements.
(ukessays.com)
Impact of inputs on Buyers
are
price 3
their bargaining
and
Moderate
power
of
how
vehicle
much
cost
do
and
that
are
meet
the
needs
and
on
profitability.
(ukessays.com)
TOTAL AVERAGE
bargaining
Moderate
power
of
suppliers
d. Analysis of Potential Changes in the Macro-environment
i. General Economic Conditions
Automotive sales in the Philippines moved up from 165,056
units in 2011 to over 180,000 in 2012 (wikipedia.org). A
2013 Canadian market research report predicted that
further
investments
in
the
automotive
sector
were
vehicles
in
the
country
(Oslowski,
Justins
popularization
of
hybrid
cars
(ivythesis.typepad.com).
Effect on Barriers or Determinants: Threat of new
entrants is nearly moderate because proprietary product
differences
is
high
with
regards
to
quality
and
high
with
regards
to
the
companies
to
the
private
vehicles
environmental
aspects,
one
of
v. Ecological
Environmentalists say that fossil fuels greatly harm the
environment as it causes climate change. Toyota and other
and
environmental
matter
is
one
of
the
done
by
the
government
including
skyways,
and
some
are
already
being
constructed,
is
weak
the
because
number
of
the
government
vehicles
are
policies
limiting
the
of
Chamber
of
Automotive
Manufacturers
Intensity of Rivalry
Brand Identity almost all companies in the
industry have created their own names and identities
which is a threat to Toyota in attracting customers.
Concentration and Balance there are a lot of
competitors in the automotive market that are not
satisfied with their current position, creating a threat
to Toyotas position in the market.
Exit Barriers those new firms that entered the
industry cannot exit anymore due to a huge cost and
this is a threat to Toyota because there will be more
competitors that will try to remove them from their
current position.
Bargaining Power of Buyers
Buyer Volume there are a lot of buyers in the
market but there are also a lot of competitors that
will try to target Toyotas prospective customers.
Substitute Products other than private vehicles,
customers may choose to transport using public
vehicles to save fuel and the cost of maintenance.
ii. Opportunities
New Entrants
Economies of Scale big companies in the industry
prevents new entrants to establish their own firms,
causing Toyota to still be the number one in sales.
Brand Identity new entrants cannot make their
own names in the industry while Toyota is still
making it to the top.
their
own
companies,
while
Toyota
still
III.
in fiscal
1.07
0.84
1.07
0.84
liquidity
ratios
Current ratio
Quick ratio
1.09
0.85
Ratio
Current ratio
Description
A
liquidity
calculated
assets
as
The company
ratio Toyota Motor
divided
current liabilities.
A
liquidity
Quick ratio
Corp.'s
ratio
improved
investments
receivables) divided by
current liabilities.
Leverage Ratios
Toyota
Corp.,
leverage
ratios
Debt-to-Equity
1.13
1.13
1.16
Ratio
Times-Interest-
140.98
141.57
72.20
Earned Ratio
Ratio
Debt-to-Total
Description
The company
Assets
Ratio
Debt-to-Equity Ratio
solvency
ratio Toyota
Motor
Corp.'s
by
ratio
shareholders' equity.
Times-Interest-Earned
Ratio
calculated
to 2015.
ratio Toyota Motor
solvency
divided
as
by
Corp.'s
payments.
Activity Ratios
Toyota
10.55
10.50
Corp., short-term
activity ratios
Inventory
9.78
Turnover
Ratio
Inventory Turnover
Description
An
activity
calculated
as
The company
ratio Toyota Motor
cost
of inventory
Corp.'s
turnover
2014
but
then
deteriorated
significantly from 2014
to 2015.
Profitability Ratios
Toyota
Corp., profitability
ratios
Gross
Profit 19.80%
19.04%
15.51%
Margin
Operating
Profit 10.10%
8.92%
5.99%
Margin
Net Profit Margin
7.98%
Return on Total 4.55%
7.10%
4.40%
4.36%
2.71%
Assets (ROA)
Return
12.60%
7.92%
on 12.95%
Stockholders
Equity (ROE)
Ratio
Gross Profit Margin
Description
Gross
profit
The company
margin Toyota Motor
indicates
the gross
profit
Corp.'s
margin
available
to
operating
and
other 2015.
expenditures.
A
profitability
ratio Toyota
Motor
Corp.'s
divided
revenue.
Net Profit Margin
An
indicator
profitability,
(ROA)
calculated
as
net ROA
improved
from
calculated
income
2014 to 2015.
ratio Toyota Motor
as
divided
net ROE
Corp.'s
improved
from
shareholders' equity.
2014 to 2015.
Growth Ratio
Toyota
Corp.,
11.17
6.45
growth
ratio
Earnings
Per 11.51
Share
i. Primary Activities
The primary activities in Toyota's value chain analysis
include Inbound Logistics, Operations, Outbound Logistics,
Marketing and Sales,and Service.
Inbound Logistics
Inbound logistics use JIT (Just-in-Time) system of
production as it decreases the inventory cost. JIT
helps Toyota to optimize their assembling and
production process as well as to minimize parts going
to waste or getting unused as inventory. Inbound
logistics are the goods that the company receives
from its suppliers and store for some period of time
until the moment when they will be used in the
productionand process. Toyota company does not
have and is not able to create own raw materials that
are needed for assembling of cars, thus it has to
collaborate with a third party. Toyota orders the raw
materials from all over the world and in the interest
of maximizing their availability of raw materials; they
maintain good relationships with their suppliers.
Toyota uses Just-in-Time system to manage the
supply of raw materials as well as optimizing the
supply and production processes
Operations
These
activities
comprise
mainly
of
the
final
engine
tuning.
Toyota
Motors
have
is
credited
to
their
comprehensive
operational
problems
occur.
Operational
of
tasks
in
the
correct
order
and
emphasizes
on
overall
check-up
of
all
mix
and
marketing
communication
for
meeting
the
expectations
of
the
competitive advantage.
ii. Support Activities
methods
to
manage
procurement
Toyota
environmental
supports
pollution
that
the
reduction
occurs
during
of
the
delivery of supplies.
Technology
These activities are the integration of constantly
developing technologies in the processes used and
help
to
create
and
maintain
their
competitive
The
main
focus
on
technology
of
distribution.
Toyota
has
highly
Other
manufacturing
companies
in
the
ii. Weaknesses
Large-scale recalls
SOURCE: Financial Statement
DISCUSS: Toyota had quite a few large-scale vehicle
recalls over the past few years. The business recalled
9 million vehicles between 2009 and 2010 and 7.43
million cars in 2012. Such recalls does not only hurt
the firm financially but significantly damages firms
brand.
Weak presence in the emerging markets
SOURCE: Value Chain Outbound Logistics
DISCUSS: Toyotas main markets are Japan, United
States, and Europe, while such emerging economies
such as China or India make only a small percentage
of all Toyotas sales. Due to poor presence in the
largest automobile market which happens to be
China. Toyota will find it hard to compete with GM
IV.
ii.)
needed material
Lowering level of wastage
Raise the revenue up to 5% using different strategies
iii.)
b.)
company
Continuous
innovate
products
to
introduce
Company Strategies)
i.)
Generic Competitive Strategy
Cost leadership
Toyota is the low cost producer in the industry.
Toyota achieves its cost leadership strategy by
adopting lean production, careful choice and control
of suppliers, efficient distribution, and low servicing
costs from a quality product.(Michael E. Porter) This
quote from Michael Porter sums up how Toyota
achieves this low cost strategy. Through research, it
is evident that Toyota is still the low cost leader in
the automotive industry.
Recent events have suggested that Toyota has
focused too much on low cost, losing market share
and their market positioning of superior design and
quality,
which
historically
they
have
used
DIFFERENTIATION
Toyotas uses both differentiation and low cost as
generic strategies to try and gain a competitive
advantage over their competitors in the automotive
industry.
for
the
eco-friendly
customers
that
are
cars
for
general,
everyday
use.
Another, area
Toyota
ii.)
Technological Leadership
TOYOTA
GM
LEADER
FOLLOWER
number
underpinned
by
one
using
automaker
new
has
know-how,
been
new
essence
of
lean
production
dictates
the
the
manufacturer
build
in
redundancy
to
Geographic Scope
TOYOTA
HONDA
LOCAL
GLOBAL
they
are
both
global
company.
Toyota
did.Toyota
already
conquered
America,
number
of
33
countries.
(https://www.google.com.ph/search?sclient=psyab&biw=1137&bih=721&q=branches%20of
%20toyota%20in%20world&oq=branches%20of
%20toyota&gs_l=hp.1.3.0l3j0i22i30.4576852.458246
6.0.4587923.22.13.2.7.7.0.335.2527.0j9j3j1.13.0....0.
..1c.1.64.psyab..0.21.2362.mYIvSs94Zdk&pbx=1&dpr=0.9&ion=1
&cad=cbv&sei=MtaVVpipNoWq0ASTvqjwAw&rct=j)
(http://www.strategyand.pwc.com/perspectives/2015auto-trends)
(https://www.toyota.co.jp/worldwide/toyota/asia.html)
Specialization
Toyota Motor Philippines Corporation is doing
more on specialization of their product line which
is the automobile line. They produce cars and
vehicles of different styles and also provide
services that are for cars and vehicles, as well. In
the spectrum line below, it can be seen that TMP
is far in customizing product lines of different
segments because TMP is not creating other
products or providing services that are out of their
line of specialization. (www.toyota.com.ph)
Toyota
Specialize
one product
line
Customize
product
lines of
different
Brand Identification
By the year 2014, TMP is the top seller of cars
with 106, 110 units sold. (motioncars.inquirer.net)
It simply explains that the company is well-known
and its brand identification is strong enough to
attract more buyers.
Toyota
Weak brand
identificatio
n
Strong
brand
identificatio
n
time
is
manufacturers,
procedure
and
being
this
worked
on.
can
be
be
quite
can
For
car
time-saving
profitable.
It
Pull strategy
one-third
of
air
pollutants
are
auto
related.
countries'
main
issues
regarding
energy,
(via
Japan's Chunichi
advancement
is
way
out
to
provide
by promoting its
in low cost.
Growth in the market of Toyota will be in a good scale by
increasing the numbers of buyers because of this
innovation
Increase bargaining of power in Toyota in terms of buyer's
profitability. It is affecting how much people are willing to
pay for automobiles. That willingness is also affected by
the waning of product differentiation, due partly to a
general
increase
industry.
iv. Basis of Strategy
in
vehicle
quality
throughout
the
autonomous
driving aids such as automatic parallel parking and lanekeeping assistance as well as sensor-based reporting on
car maintenance and usage, also present the chance to
forge a closer relationship with customers and increase
margins. For example, Original Equipment Manufacturers
(OEMs) and dealers can offer more convenient proactive
service, alerting a car owner to upcoming maintenance or
repairs. In addition, telematics features afford opportunities
for tie-ins with insurers, such as offering discounts for
customers who drive safely.
The increasing importance
of
infotainment
and
and
becoming
as
services.
critical
as
Software
breakthroughs
hardware
innovation,
are
and
Ever
more
vital
software
content
has
also
to
be
overcome
General Motors are a company of many firsts in China. In
1997, we set up the first technical center JV in Chinathe
Pan Asia Technical Automotive Center (PATAC)between
GM and SAIC. It is now one of their core advantages. It
means other company will have difficulties on patronizing
by Chinese people.
Toyota can compete with other company in providing the
customer needs and wants since they can make products
with high quality, always perfecting and innovating
automotive technologies, creating new models, showing
concern for consumption, but also for the environment
sustains
the
quality
of
Increased
visibility
for
your
business: with an
consumers
transaction
complete
online.
many
General
facets
Motors'
of
typical
Shop-Click-Drive
strategy
to
become
customer
and
having
advance
use
of
information
technology.
vi. How can the strategy help the company attain its
objectives?
By this strategy, Toyota can easily reach customers
and
sustain
their
good
customer
relationship.
The
Competitive Advantage
i. Present Competitive Advantages
Competitive advantage occurs when
acquires
or
develops
an
attribute
or
an
organization
combination
of
so
called
Toyota
Production
System
(TPS).
Both
increase
thoroughly
production
eliminating
efficiency
waste.
This
by
consistenly
concept
and
developed
Lean manufacturing
carrying
costs,
following
the
simple
throughout
the
entire
manufacturing
on
investment,
as
well
as
quality
and
efficiency.
Toyota's
JIT
principle
is
the
company's
Keiretsu.
keiretsu
is
traditional
Japanese
inter
looking
business
relationships
and
for
continuous
improvement
and
facilities.
Only
if
the
machinery
and
the
be
ensured
that
the
machine
uptime
is
Toyota,
this
in
ensured
through
the
Toyota's
production
factories,
the
continuous
manufacturing,
improvement
engineering,
of
processes
supporting
in
business
reflection
of
processes
through
intensive
improvement
is
on
incremental,
and
radical
business
to
achieve
processes
redesign
of
dramatic
However,
this
approach
results
in
losing
the
Ford,
Toyota
has
managed
to
create
an
to
improve
productivity,
equipment
thereby
lowering
reliability
maintenance
and
and
operating costs.
In
general,
Toyota's
human
resource
and
learning
is
deeply-rooted
in
is
the
present
competitive
advantage
deteriorating?
Toyota faces different issues regarding on our product in
terms on safety issues. The number of safety-related recalls
kept growing and there is no question that Toyotas quality
image among consumers suffered with the recalls. Not only
is the decline visible in survey data, it has also been greatly
amplified by the media (MITSloan.2011). These issues also
reflect their competitive advantages in terms of its efficient
and effective relevance but by having those issues Toyotas
competitive advantage are not deteriorating
iii. Proposed Competitive Advantage
Maintaining
of
Toyotas
current
competitive
Mc
Present
Proposed
Actions
Kinsey
Strategy
Strategy
be taken
7s
Strategy
Cost
Cost
leadership
through
Financial,
selection,
owned
introduction
business
the
People,
and evaluation
Advance
emerging strategic
markets
Car
Application
Needed
Leadership Require
Online
to Resources
System
partner, follow
by integration
Advancement
of of two firms
Information
Technology
Online
Car online
Shopping
shopping
by
acquiring
advance
System
Structure
system
None
TPS(Toyota
TPS(Toyota
Production
Production
People,
System
Lean
System)
Lean
Technology
None
organization
Organization
None
Financial,
Staff
Highly
People,
and
knowledgeable
training
Financial
Style
knowledgeable
Teamwork
Teamwork
none
None
Share
Task Culture
Task Culture
none
None
Valued
Skills
High
and none
None
and High
advanced
Advanced
technology
Technology
VI.
Projections
a. Balance Sheets
Exchange: NYSE
Period Ending:
Tre
3/31/20153/31/20143/31/20133/31/2012
nd
Current Assets
Cash and Cash
Equivalents
Short-Term Investments
Net Receivables
Inventory
Long-Term Assets
Period Ending:
Tre
3/31/20153/31/20143/31/20133/31/2012
nd
Long-Term Investments
Fixed Assets
Goodwill
$0
$0
$0
$0
Intangible Assets
$0
$0
$0
$0
Other Assets
Total Assets
$0
$0
$0
$0
Current Liabilities
Accounts Payable
Short-Term Debt /
Current Portion of LongTerm Debt
Period Ending:
Tre
3/31/20153/31/20143/31/20133/31/2012
nd
Long-Term Debt
Other Liabilities
Deferred Liability
Charges
Misc. Stocks
$0
$0
$0
$0
Minority Interest
Total Liabilities
Period Ending:
Tre
3/31/20153/31/20143/31/20133/31/2012
nd
Common Stocks
Capital Surplus
Retained Earnings
Treasury Stock
Other Equity
Total Equity
b. Income Statements
Exchange: NYSE
Period Ending:
Total Revenue
Cost of Revenue
Gross Profit
Tre
nd
000
000
000
000
000
000
000
000
000
$0
$0
$0
$0
Operating Expenses
Research and
Development
Sales, General and
Admin.
00
00
00
00
Non-Recurring Items
$0
$0
$0
$0
$0
$0
$0
$0
Operating Income
Period Ending:
Tre
nd
5
000
Add'l income/expense
items
Interest Expense
Income Tax
Minority Interest
Equity Earnings/Loss
Unconsolidated
Subsidiary
Net Income-Cont.
Operations
4
000
3
000
2
00
00
00
00
00
0)
0)
0)
00
00
Tre
Period Ending:
nd
Net Income
000
000
000
00
000
000
00
c. Statements of Cashflows
Exchange: NYSE
Period Ending:
Net Income
Tren
3/31/2015 3/31/2014 3/31/2013 3/31/2012
d
$18,122,0 $17,703,0 $10,217,0 $3,446,00
00
00
00
0
Depreciation
Net Income
Adjustments
($1,880,000($2,616,000
($322,000) ($943,000)
)
)
($579,000) ($1,184,000($1,787,000($7,114,000
Period Ending:
Tren
3/31/2015 3/31/2014 3/31/2013 3/31/2012
d
)
Changes in
Inventories
Other Operating
Activities
Liabilities
($1,426,000($1,076,000
$536,000
)
)
$303,000
)
($4,191,000
)
$13,290,00
0
($9,559,000($9,419,000($9,074,000($8,792,000
)
)
)
)
Investments
($22,587,00($33,067,00($23,488,00($9,184,000
0)
0)
0)
)
Other Investing
Activities
$346,000
$381,000
$416,000
$445,000
Tren
3/31/2015 3/31/2014 3/31/2013 3/31/2012
d
Period Ending:
($2,900,000
$89,000
)
$27,000
($1,000)
Net Borrowings
$10,657,00 $13,297,00
($1,958,000
$7,543,000
0
0
)
Other Financing
Activities
$0
Effect of Exchange
Rate
$543,000
$0
$0
$909,000
$0
$1,464,000 ($680,000)
$2,029,00 $3,135,00
($4,879,00
$415,000
0
0
0)
d. Assumptions
Total revenue got increased from 2012 to 2014 but decreased in the
last quarter of 2015 and Gross Profit also decreased. The decreased
in revenue and gross profit is just mild but Toyota can boost up their
profitability
strategies.
by
providing
and
implementing
new
corporate
REFFERENCES:
www.strategyand.pwc.com/perspectives/2015-auto-trends
http://www.telegraph.co.uk/motoring/carmanufacturers/toyota/10594637/Toyota-still-the-worlds-biggest-carmanufacturer.html
http://www.slideshare.net/manvi27/toyota-ppt-5670748?related=5
http://driving.ca/toyota/corolla/auto-news/news/the-top-10-largestautomakers-in-the-world
http://newsroom.toyota.co.jp/en/corporate/companyinformation/worldwide
http://www.statista.com/statistics/294192/number-of-toyota-employees/
http://panmore.com/toyota-marketing-mix-4ps-analysis
http://www.mbaskool.com/fun-corner/top-brand-lists/9828-top-10automobile-companies-in-the-world-2014.html?start=9
http://www.reuters.com/finance/stocks/companyProfile?symbol=TM
http://www.mb.com.ph/toyota-widens-ph-market-share/
https://business.yell.com/knowledge/what-are-the-benefits-of-an-onlinestore-for-businesses/
http://www.chinabusinessreview.com/general-motors-races-ahead-in-thechina-market/
http://www.emarketer.com/Article/2-Billion-Consumers-WorldwideSmartphones-by-2016/1011694
http://www.strategyand.pwc.com/perspectives/2015-auto-trends
http://www.srl.gatech.edu/Members/bbradley/me6753.industryanalysis.team
A.pdf
http://www.cleart.com/e-commerce-website-development-cost.html
http://www.executionists.com/blog/how-much-does-an-e-commerce-websitecost/
https://www.academia.edu/5661995/AUTOMOBILE_INDUSTRY_ANALYSIS
http://scholar.harvard.edu/files/tnkomo/files/analysis_of_toyota.pdf
http://internationalbusinessreview.blogspot.com/2015/07/value-chainanalysis-toyota.html
http://php.scripts.psu.edu/users/l/a/law5039/assign5.html
http://www.nasdaq.com/symbol/tm/financials?query=
competitive
By contrast, the differentiation focus and cost focus strategies are adopted in
a narrow market or industry.
Cost leadership
With this strategy, the objective is to become the lowest-cost producer in
the industry. The traditional method to achieve this objective is to produce
on a large scale which enables the business to exploit economies of scale.
Why is cost leadership potentially so important? Many (perhaps all) market
segments in the industry are supplied with the emphasis placed on
minimising costs. If the achieved selling price can at least equal (or near) the
average for the market, then the lowest-cost producer will (in theory) enjoy
the best profits. This strategy is usually associated with large-scale
businesses
offering
"standard"
products
with
relatively little
differentiationthat are readily acceptable to the majority of customers.
Occasionally, a low-cost leader will also discount its product to maximise
sales, particularly if it has a significant cost advantage over the competition
and, in doing so, it can further increase its market share.
A strategy of cost leadership requires close cooperation between all the
functional areas of a business. To be the lowest-cost producer, a firm is likely
to achieve or use several of the following:
Differentiation focus
In the differentiation focus strategy, a business aims to differentiate
within just one or a small number of target market segments. The
special customer needs of the segment mean that there are opportunities to
provide products that are clearly different from competitors who may be
targeting a broader group of customers.
The important issue for any business adopting this strategy is to ensure that
customers really do have different needs and wants - in other words that
there is a valid basis for differentiation - and that existing competitor
products are not meeting those needs and wants.
Differentiation focus is the classic niche marketing strategy. Many small
businesses are able to establish themselves in a niche market segment using
this strategy, achieving higher prices than un-differentiated products through
specialist expertise or other ways to add value for customers.
There are many successful examples of differentiation focus. A good one is
Tyrrells Crisps which focused on the smaller hand-fried, premium segment of
the crisps industry.
Differentiation leadership
With differentiation leadership, the business targets much larger markets and
aims to achieve competitive advantage across the whole of an industry.
This strategy involves selecting one or more criteria used by buyers in a
market - and then positioning the business uniquely to meet those criteria.
This strategy is usually associated with charging a premium pricefor the
product - often to reflect the higher production costs and extra value-added
features provided for the consumer.
Differentiation is about charging a premium price that more than covers the
additional production costs, and about giving customers clear reasons to
prefer the product over other, less differentiated products.
There are several ways in which this can be achieved, though it is not easy
and it requires substantial and sustained marketing investment. The
methods include:
STARBUCKS
PepsiCo
With cost leadership strategy, the main aim is for the company to produce its
products at the lowest cost. By PepsiCo trying to minimize the cost of
production, it can sell at low price in the market. As long as the achieved
selling price can be equal or close to the market price, PepsiCo would enjoy
more profit due to economies of scale.
Coca-Cola
In cost focus, Coca-Cola may notice it wise to charge low price on the same
product some sections of the market. This strategy is usually associated with
large scale production companies with products accepted to the majority of
consumers. The company may decide to label differently the same product
and low prices tagged for the benefit of specific consumers. This would lead
to more sale hence can outdo PepsiCo in the same market environment
(Jack, 2009).
http://qualitycustomessays.com/blog/competitive-strategies-for-coca-colaand-pepsico-companies/
BSBA MANAGEMENT
Competitive Advantage
The term can be defined to mean anything that a firm does especially well
when compared with rival firms. Note the emphasis on comparison with
rival firms as competitive advantage is all about how best to best the rivals
and stay competitive in the market.
Competitive advantage accrues to a firm when it does something that the
rivals cannot do or owns something that the rival firms desire.
Examples:
The airline company Ryanair is removing two of its three toilets in each
airplane to increase the number of seats and drive down ticket costs.
Dangote Group of companies became one of the leading
conglomerates in Africa because of its ability to produce goods on high
volume and ensure a uniform price throughout Nigeria.
General Electric has stood the test of time because of the several
patents held.
References:
http://study.com/academy/lesson/types-of-competitive-advantage-costproduct-niche-sustainable-advantages.html
http://www.managementstudyguide.com/competitive-advantage.htm
http://www.mytopbusinessideas.com/example-companies-competitiveadvantage/
COMPETITIVE ADVANTAGE
An advantage that a firm has over its competitors, allowing it to generate
greater sales or margins and/or retain more customers than its competition.
There can be many types of competitive advantages including the firm's cost
structure, product offerings, distribution network and customer support.
Competitive advantages give a company an edge over its rivals and an
ability to generate greater value for the firm and its shareholders. The more
sustainable the competitive advantage, the more difficult it is for competitors
to neutralize the advantage.
There are two main types of competitive advantages: comparative
advantage and differential advantage. Comparative advantage, or cost
advantage, is a firm's ability to produce a good or service at a lower cost
than its competitors, which gives the firm the ability sell its goods or services
at a lower price than its competition or to generate a larger margin on sales.
A differential advantage is created when a firm's products or services differ
from its competitors and are seen as better than a competitor's products by
customers.
EXAMPLES:
1. Strong research and Innovation
The technology industry is one of the leading industries with respect to
strong research and innovation. And when it comes to setting the pace using
innovation as leverage; Apple and Sony are the two companies that have
held their leadership position using innovation as a competitive advantage.
2. Brand Popularity
Being recognized all over the world as a respected brand is a sustained
competitive advantage that companies such as Virgin, Apple and Coca cola
have used as leverage to hold the market sway for years. Virgin is a
company that has used its brand name as leverage to break into new
markets in completely new territories.
3. Corporate reputation
Corporate reputation is a form of sustained competitive advantage that
companies such as Price Waterhouse and Berkshire Hathaway have
leveraged to become world class entities.
CDCMC (Mc Kinsey 7S)
7s - Present Strategy - Proposed Strategy
Strategy - Producing high quality products - Continue producing high quality
products
System - Time-in/Time-out - Adopt another system
Structure - Lean organization - Lean organization
Staff - Departmental - Departmental
Shared Values - Teamwork - Teamwork
Skills - Hardworking Hardworking