Strategic Management For Toyota

MANILA BUSINESS COLLEGE
MBC Bldg., 1671 Alvarez St., Sta. Cruz, Manila, Philippines

741-3489/7434538
A Strategic Management Paper of Toyota Manufacturing

Corporation, Philippines
In Partial fulfillment with the requirements in Strategic Management
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
January 28, 2016
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
manufacturing company incorporated on August 3, 1988. TMP is a joint

venture of GT Capital Holdings, Inc., Toyota Motor Corporation and Mitsui &
Co. Ltd. TMP is the biggest automotive company and the market leader in the
country.
Having the vision statement, To be the No.1 AUTOMOTIVE COMPANY
where GREAT PEOPLE work as a TEAM to provide the BEST products and
service to our CUSTOMERS, the proposed strategies on this paper aim to
keep TMP the number one in the automotive industry.
TMP belongs to the automotive industry which addresses the needs for
land vehicles. TMPs target markets are those who are willing and capable of
purchasing the automotive vehicles enabling them to create different types
of vehicles for household and business consumers.
On the analysis of present task environment, the threat of new
entrants is of nearly moderate threat to the industry because entering a car
manufacturing market is very costly and risky. The initial capital investment
is extremely high, while the competition between the companies is very
intense and dominated by the well established companies. The well-known
brand, unshakable market presence in various segments, and large size
gives TMP a competitive advantage over new entrants in the auto
manufacturing industry.
The intensity of rivalry among competitors is nearly high because
considering that the automotive industry represents an oligopoly (especially
in United States) the constant competition for the market share and industry
dominance is prevalent. Continuously increasing competition is fueled by the

higher consumer expectations and anticipation for the lower prices.
Although Toyota has rather strong cost cutting strategy, the recent
natural disaster has put an additional pressure on Toyotas costs. Recently,
the Detroit Three have been offering higher sales discounts to counter price
competition, which puts Toyota under a heavier burden of efficient
production and cost cutting strategies. Yet, Toyota remains a leader in the
low cost manufacturing, while its production system caused other carmanufacturers to change the way they operate.
The threat of substitutes is weak because as the industry trends
indicate, the customers still have a solid reliance on the used-car market.
Considering the fact that the economy has not fully recovered, a significant
part of the car demand is taken by the used-car industry. With the ability to
cut costs more efficiently than its competitors, Toyota has narrowed the price
gap between the used-cars and its own automobiles. Therefore, compared to
its peers, the substitution with the used cars is less of a danger for Toyota.
The bargaining power of buyers is nearly moderate because the recent
trends indicate that the consumers are prone to seek out more fuel-efficient
cars due to the rising oil prices. This also results in the increasing demand for
the hybrid cars that offer cheaper alternatives for operating the vehicle
coupled with higher expectations of product quality. Moreover, since the
choices in the car market are abundant, the buyer has a quite strong
bargaining power and low switching costs. The cost cutting practices that
Toyota implements in its operations lowers the buyer power and puts its cars
into a more advantageous position compared to its competitors.
The bargaining power of suppliers is nearly moderate because the
suppliers in the auto-manufacturing industry are likely to be smaller than
manufacturers and thus tend to sell to multiple automakers. While we see
that suppliers network with automakers is pretty diversified, they provide
crucial elements for car making and most of the auto-manufacturers rely on
the suppliers timely operations and stellar quality. For this reason, the long-
term contracts accompanied by strict standards or quality on for the

suppliers are very common. Usually if a supplier does not comply with the
standards set by the carmakers and charge too much it is fairly easy for the
car manufacturer to find another supplier and even move the supply chain
towards the cheaper supply markets in a different country. One of the
competitive advantages of Toyota Co. is its strong relationship with the
suppliers. Its efficient manner of monitoring supply chain places low
bargaining power on the suppliers.
The analysis of potential changes in the macro-environment connected
with Porters Five Forces Model, this paper studied the general economic
conditions,
population
demographics,
societal
values
and
lifestyles,
technology, ecological, infrastructural, political environment, and legislations

and regulations affecting TMPs external environment. The threats and
opportunities of TMP are then based on the external analysis.
The strengths and weaknesses of TMP are based on the internal
analysis which involves the financial and value chain analysis.
Overall, TMP has outperformed the industry over the past years. The
financial ratios will be explained, as well as, the value chain analysis, with
the corresponding explanations in this paper.
On the strategic plan, the paper will explain the social, financial, and
strategic objectives. This will also explain the present corporate strategies of
TMP and the proposed corporate strategies, with the strategy
implementation using the 7S framework and the projections.
Above all, this paper will be a guide in decision-making processes of
TMP with regarding new strategies to stay on top of its competitors.
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
August 3, 1988. TMP is a joint venture of GT Capital

Holdings, Inc., Toyota Motor Corporation and Mitsui & Co.
Ltd.
In 1995, the Toyota Santa Rosa (Laguna) Industrial complex
was declared as a Special Economic Zone. The 82-hectare
Toyota Special Economic Zone (TSEZ) is home to Toyotas
manufacturing plant and head office and houses a number
of investors performing strategic roles in the manufacture
and export of automotive products to ASEAN, Japan and
other parts of the world.
TMP is the biggest automotive company and the market
leader in the country, with the widest vehicle line-up of 18
models and a sales distribution and service network
composed of 43 outlets nationwide as of February 2014. In
term of sales, TMP has achieved the much-coveted Triple
Crown award from 2002-2013, being No. 1 in Passenger
Car Sales, No. 1 in Commercial Vehicle Sales and No. 1 in
Total Sales.
The best-selling Vios and Innova are proudly made in Santa
Rosa City, Laguna.
ii. Vision
To be the No.1 AUTOMOTIVE COMPANY where GREAT
PEOPLE work as a TEAM to provide the BEST products and
service to our CUSTOMERS
VISION COMMENT
The company has a good vision
statement except for the
goal to be the no.1 automotive company. I think this is a

little ambitious since there are a lot of company in the
industry who are now producing electronic carsand Toyota
focuses themselves on hybrid cars. They can achieve their
vision if the innovation of the Research and Development
are active not limiting themselves in manufacturing only
hybrid cars However, the whole vision statement were
clearly stated.
SUGGESTED REVISION
To be the one of the leading automotive company
where GREAT PEOPLE work as a TEAM to provide the BEST
products and service to our CUSTOMERS.
iii. Mission
To dominate our markets through dynamic selling and
timely delivery of attractive products, with excellent
customer service and continuous product improvement.
To produce vehicles and components of outstanding
quality, using advance technology, continuously improving
methods
and
environment-friendly
processes
while
maintaining safe working conditions.

To sustain Company profitability, stability, productivity and
growth by engaging in effective financial and resource
management for the collective gain of the Toyota Family
and the society we serve.
To sustain Team Member's morale and productivity by
developing their full potential and total well-being, and by
establishing
mutual
trust,
mutual
responsibility,
and
harmony through open communication.

Evaluation of the Nine (9) Components of a Good
Mission Statement
STATED IN THE MISSION
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,
Growth, and Profitability
profitability,
stability,
productivity and growth by

engaging
in
effective
financial
and
resource
management
for
the
collective gain of the Toyota

Family and the society we
serve.
dynamic selling and timely
Philosophy
delivery
of
products,
with
customer
attractive
excellent
service
continuous
product
improvement
continuously
Self-Concept
and
improving
methods and environmentfriendly
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-
being, and by establishing

mutual
trust,
mutual
responsibility, and harmony

through
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
b. Products of the Company

TOYOTA
PASSENGER
CARS
86
Camry
Corolla Altis
LC Prado
Prius
Prius C
Vios
Wigo
Yaris
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.
External Environment Analysis

a. Industry
Toyota Company belongs to an automotive industry. This industry
addresses the needs for those land vehicles such as the trucks,
vans, private cars, and passenger cars. There are several company
included in this particular industry such as the BMW, Mitsubishi and
other company who offers the same product addressing the same
need to the people.
b. Market
i. Market Definition
Toyota motor targets people who are willing and capable of
purchasing
the automotive
vehicles
such as
private
vehicles, passenger cars, truck, vans and delivery vehicles.

They create different types of vehicles for household and
business consumer.
ii. Market Size
Toyota Motor Philippines (TMP) has further widened its
market share to 44.7 percent as of February this year while
second biggest car company Mitsubishi Motor Philippines
Corp. (MMPC), which posted a negative growth in the first
two months, had to contend with a contraction in its
market share to 18.6 percent.
TMP sold a total of 17,579 units in the January-February
period versus 13,988 units in the same period in 2014.
TMPs performance widened its market share to 44.7
percent from only 43.03 percent in the same period last
year.
On the other hand, MMPCs 24.06 percent market share in
January-February 2014 contracted to only 18.6 percent in
the first two months this year. MMPCs reduced market
share was due to its negative 6.5 percent sales growth to
only 7,313 units from 7,820 units in the same period in

2014.
In a statement, TMP sold 8,870 units in February for
another record monthly sales growth of 28 percent bringing
its total sales in the first two months this year to 17,579
units or 25 percent higher than its comparative period in
2014.
The strong sales of Toyota last month was made possible
through the continuous high demand of its best-selling
vehicle in the country, the Vios, with sales of 2,012 units.
Februarys sales were further reinforced by other strong
models in Toyotas line-up such as the Fortuner, Innova,
Wigo, Hilux, Avanza and Corolla Altis.
On the other hand, Toyotas luxury brand, Lexus, recorded
60 units last month. Leading the pack are its newly
launched luxury compact cross-over, the NX and its bestselling luxury sedan, the IS. All in all, this is Lexuss highest
year-to-date (YTD) sales since 2009.
TMP
President
MichinobuSugata
attributed
its
strong
performance to the markets positive outlook.

c. Analysis of Present Task Environment
i. Threat of New Entrants Barriers to Entry
Analysis Criteria
Economies of scale
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
automotive industry has companies
of
enter
the
big
in
the
been enjoying a period of industry. It will be hard

relatively strong growth to achieve economies
and
profitability,
annual
and of
sales
reached
scale
for
have companies
small
and
new
prerecession entrants. (Nkomo)
levels
in
some
regions. (strategyand.pw
Proprietary
c.com)
product Automobile
differences
can
companies 5 = Strong threat of
upgrade
improve
their
and new entrant
products Companies
with
quality innovation always
can
also
help
should
upgrade
them research
their
and
attract buyers that will development to sustain

give the new entrants their
strategies.
New
competitiveness
because
technologies
constantly
competitors
are can do it too.

being
discovered that improve

the
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
the 1 = Weak threat of new

this entrants
industry are well-known New
entrants
cannot
to provide good quality easily
build
up
their
products at reasonable brand identity because

prices. And because of of
the
large
that, new entrants will companies
existing
in
the
have to take more time industry.

to
have
their
own
identity in the industry.

Brand
identity
of
companies is based on
quality,
safety,
performance, value, fuel

economy,
design/style
and
technology/innovation.
(Toyota
Switching cost
2011)
Some
Annual
clients
complain
about
Report
may 3 = Moderate threat of
the new entrants
products or services for High

not being consistent and make
switching
it
they may tend to buy in customers

other
companies, which
including
the
difficult
to
buyers their expectations

in a product.
There isnt much brand
loyalty in the automotive
industry.
(termpaperwarehouse.co
for
change
products
new normally purchase.
entrants, which will offer
m)
costs
they
Capital requirements
Automobile
industry 1 = Weak threat of new
incurs high capital cost.
entrants
There is an extremely New
firms
that
are
high amount of capital planning to enter in the

that
is
required
purchase
to industry
with
low
physical capital cannot compete
manufacturing
plants, in the industry.
raw materials, as well as,

to
hire
and
employees.
It
train
takes
great amount of capital,

not
only
for
manufacturing
the
process,
but also to keep up with

the latest innovations in
order to compete with
the
Access
distribution
industry
leaders.
(psu.edu)
to New entrants
in
the 3 = Moderate threat of
industry could have an new entrants

access to distribution for New
entrants
can
their products but it will possibly have an access

not be easy for them to to
distributors
have their own method suppliers.

of
distribution
like
in
other companies.
It
can
difficult
sometimes
for
be
new
company in the industry

to
find
means
an
of
adequate
distribution
and
because space within a

dealership lot is limited.
Absolute
(psu.edu)
cost Todays
advantages
successful 3 = Moderate threat of
automobile
companies new entrants
possess at least some of Firms are competing for

the following attributes: innovation
production
and
efficiency, products
well-planned
structures,
that
new
differ
cost from other competitors

manageable that a new entrant can
size,
distributed also provide.
management of brands,
attention to underserved
markets,
focused
strategy,
and
respected
Government policy
well-
brands
and
products. (Team A 2005)

For the new firm to enter 1 = Weak threat of new
in
the
industry,
they entrants
must comply with the The companies that are

requirements
needed
that
by
are planning to enter the

the industry will have to
government.
The
follow
government
worldwide regulations
automotive
industry
is comply
with
subject to various laws government

and
regulations
government requirements.
including
those related to vehicle

safety,
environmental
matters, and number of
and
to
many
vehicles.
The
government
may
also
impose tariffs and other

trade barriers, taxes and
levies, or enact price or
exchange
(Toyota
Expected retaliation
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
their products which may industry,

cause new entrants to possible
in
the
there
are
retaliations
offer low prices, promos that will be thrown to

and discounts to buyers.
High
possible
retaliation
from
companies
entrants
them.
is
existing
if
new
would
bring
innovative products and

more affordable prices to
the industry. (Nkomo)
TOTAL AVERAGE
2.33 = There is a nearly

moderate threat of new
entrants.
ii. Determinants of Rivalry among Existing Competitors

Analysis Criteria
Description
Ratings
Industry Growth
Automotive industry is a 1 = Low intensity of

fast growing market.
The
rivalry
worldwide Companies
can
automotive industry has without
grow
capturing
been enjoying a period market share from each

of
relatively
strong other, which leads to
growth and profitability, decreased competition.

and annual sales have
reached
prerecession
levels in some regions.

Product Differences
(strategyand.pwc.com)
Automotive industry has 3 = High intensity of
undifferentiated
rivalry
products with regards to Customers can choose

their
cars
vehicles.
and
other any brand because the
But
with products are almost the
regards
to same.
advancements
in
But
not
that
the much if talking about
use of technology, there technological

is a big difference.
Information
advancement.
Technology
(IT) is the new driving

force
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
and dispersed with regards

to choosing a brand.
Automakers
that
promote strong branding

in campaigns make the
most
impact
when
it
comes to being top-ofmind
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
There isnt much brand dont need to sacrifice a

loyalty in the automotive lot of costs to switch
industry.
with another brand.
(termpaperwarehouse.c
Concentration
Balance
om)
and There
are
competitors
lot
in
of 5 = High intensity of
the rivalry
automotive market.
Other
In pursuit of growth and not

development,
competitorsare
happy
with
their
position in the market.
companies have tried to

strike a balance between
competition and across
time.
Exit Barriers
(http://papers.ssrn.com/)
If a firm will decide to 5 = High intensity of
leave the industry, the rivalry
capital
that
was There
are
rendered will not gain barriers

anymore.
firms
to
high
that
exit
prevent
leave,
like
Companies have already bankruptcy.

made the investment in
machinery and facilities
and so it makes more
sense
for
them
to
remain in the industry

and
continuously
decrease prices than to

exit
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
some urban drivers to If the increase in fuel

use
public prices
transportation.
vehicle
Most grows, most customers
owners
agree
that
continuously
still will tend to choose the

the use
of
convenience of using a transportation.
public
But
if
personal vehicle offsets not, they would rather

increases in fuel prices, choose to buy their own
however if this trend private cars that to use
continues
and public vehicles.
automobile
manufacturers are not
able to provide a more
cost-efficient
solution,
this threat will increase.

Switching cost
(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
costs product or service that
associated with using a will

different
may
mode
fulfill
their
same
of need with low cost
transportation, such as
train, may be high in
terms of personal time
(i.e.,
independence),
convenience, and utility

(e.g., luggage capacity)
(Team A 2005)
Buyer propensity to Buyers use substitute 3 = Moderate threat of
substitutes
products
because
environmental
of substitution
aspects Substitute products are
and for them to save often just temporary for

cost.
There
some buyers may tend

is
substitute
vehicles
no
realistic to buy their own car for
to
motor convenience, utility and
with
the safety.
exception of large scale

transportation
that
railways
The
provide.
evolution of consumer
reliance
on
motor
vehicles began with the

mass
producing
of
automobiles.
(Grant,
2008, p. 41)
TOTAL AVERAGE
3 = The industry has a

moderate
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
competing to a small With a large number of

volume of customers.
Baby
boomers,
between
1946
potential buyers, firms
born in the industry may also

and tend to increase their
1964, kept their spot as competition with other

the
largest
group,
consumer companies.
buying
38
percent of new vehicles

sold in the same time
Buyer volume
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
have been through in bargaining

different
tend
to
their It doesnt cost much for
that
to
might buyers
switch
switching
Buyer information
to
brand
to
of
costs
for
another
brand). (marsdd.com)
Meanwhile, consumers 3
are
switch
vehicle.
exist (little cost

moving
to
to another
another company.
Few
of
issues buyers
regarding
products
power
awash
in
easily bargaining
Moderate
power
of
accessible
information buyers.
about
automobile Buyers are being wise
specifications,
prices, these
discounts, quality, and being

performance,
days
too
they
strict
are
with
giving different aspect.
buyers
greater
bargaining
power.
(Strategy&.pwc.com)
The buyer should have
full
information
(knowledge of demand,
market
prices
and
supplier costs provides

them
Ability
to
integrate
with
leverage).
(marsdd.com)
backward Buyers cannot
backward
integrate
the industry.
The
easily 1 = Weak bargaining

in power of buyers
Buyers cant compete to
worldwide large
firms
in
the
automotive
market
in
the industry .
is
highly
competitive, companies
Substitute products
faces
intense
competition.
(Toyota
Annual Report 2011)

Buyers may tend to use 5 = Strong bargaining
substitutes like buses, power of buyers
trains,
bicycle
or People nowadays may
walking rather than to tend to use substitute

buy a private vehicle to products to save.
save money in terms of
fuel.
Current
technological
developments
that
cars,
suggest
as
used
today, will be replaced.

Established alternatives
to car use include public
transit
(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
buying decision are the buyers

appearance,
quality Each
firms
offer
price and environmental products that are differ
effect
that
one from
other
company is offering that that
buyers
differs from any other different

Brand identity
varieties
brand. (Sun.2008)
Almost
all
of
choose from.
the 3
=
companies
this bargaining
in
companies
has
to
Moderate
power
of
industry are well known buyers

that
provide
quality
good Brand identity of a one
products
and firm has an impact to
reasonable prices that buyers buying decision.

are new to entrants may
take more time to have
its own identity.
Brand
identity
of
companies is based on
quality,
safety,
performance, value, fuel

economy,
design/style
and
technology/innovation.
(Toyota Annual Report
Buyers Profits
2011)
Some clients are willing 3
Moderate
to buy with a higher bargaining
power
of
price just to meet their buyers

needs,
wants,
and The
expectations.
The
mass
demanding
are
less
concern to the price if

market
is they are profitable and
catching up with luxury. the

Consumers
buyers
are
product
also buying
they
meets
are
their
more expectation. Buyers are
sophisticated
basing
infotainment
their
buying
systems decision on variety of
and are expecting more lifestyles.

high-end features to be
standard.
(Strategy&.pwc.com)
TOTAL AVERAGE
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
attract bargaining of suppliers
customers to help them Suppliers of the industry

to save more.
Auto
may
also
manufacturers materials
require
inputs-labor, same
offer
and
at
time,
new
the
the
parts, raw materials and suppliers can increase

services.
The
cost
of their prices due to the
these inputs can have a innovations.

significant
effect
on
profitability.
Switching
cost
(ukessays.com)
of There
are
multiple 3
Moderate
suppliers and firms in choices of suppliers to bargaining

the industry
power
of
lessen cost so that it will suppliers

not affect the price of a Some
product.
price
materials
cannot
Establishing part designs avoided to rise.

and
requires
specification
a
fair
initial
of
raw
be
investment.
Presence
substitute inputs
(ukessays.com)
of There are alternative 3
Moderate
types of substitutes on bargaining

raw materials.
and
of
of
industry,
suppliers
The problem with the In

quality
power
the
equipment company can choose to
compatibility
of switch
from
one
raw
parts made by different material to another in

manufacturers
became order to save cost, but
too expensive as it was still, it is not of the same

costing more comparing quality.
to buying from suppliers.
Supplier
(ukessays.com)
There
is
a
concentration
population of suppliers bargaining of suppliers
large 3
Moderate
in the industry. Suppliers There are large numbers

in this market, either big of
suppliers
or small, may have a competing.

mild
competition
because
of
high
accessibility of materials
or supply.
If
manufacturer
is
reliant on one supplier

almost exclusively, this
creates a monopolistic
situation
that
that
the
keep
satisfied,
requires
manufacturer
the
supplier
especially
if
are
they are exploring other

manufacturing
opportunities with rivals.
Importance of volume The purchasing power of 3
to supplier
clients puts weight on bargaining

organizations
of high quality.
top
of
must
assurance
be
that
an
the
automobile concern for clients and
component
have
power
by suppliers
requesting less cost but There

The
Moderate
suppliers the quality of materials
the
ability
to delivered are met.
leverage their buyers to

accept
engineering
changes
that
affects
their production, dictate

supply availability and
dates, and set prices in
line
with
their
own
profitability
requirements.
(ukessays.com)
Impact of inputs on Buyers
are
price 3
cost or differentiation sensitive
their bargaining
and
Moderate
power
of
decision is often based suppliers

on
how
vehicle
much
cost
do
and
a Suppliers can produce

its materials
that
are
features or buyers will needed by the firms to

switch to another brand.
meet
the
needs
and
The cost of the inputs wants of the customers.

can have a significant
effect
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
expected to grow in the following years. Toyota sells the

most
vehicles
in
the
country
(Oslowski,
Justins
Automotive Production in the Philippines). The booming

Philippine auto market will be an additional source of
growth for parts suppliers (mb.com).
Effect on Barriers or Determinants: Threat of new
entrants is low because profitability requires economies of
scale. The intensity of rivalry is moderate because industry
growth is high and concentration and balance of the
companies in the industry is low because other firms are
not contented with their current position in the market.
ii. Population Demographics
There are 37% of age structures ranging from 25-54 years
old. People within this age bracket are mostly those who
have the capability to buy or purchase private cars. Among
other age structures, they have the highest percentage
(indexmundi.com).
Effect on Barriers or Determinants: Bargaining power
of buyers is moderately high because buyer concentration
and firm concentration is the same and buyer volume is

large enough to become potential customers.
iii. Societal Values and Lifestyle
Customers nowadays prefer to choose a brand with high
quality but low cost. That is why Japanese companies,
including Toyota, improvised tools to improve quality,
particularly the Six Sigma. Also, there are different health
organizations today that are motivating people to walk as a
perfect form of exercise that affects the automotive
industrys profitability. On the other hand, people are
becoming more aware of the negative impact of energy
consumption in our environment that makes customers
find products that has low impact in the environment,
emerging
popularization
of
hybrid
cars
(ivythesis.typepad.com).
entrants is nearly moderate because proprietary product
differences
is
high
with
regards
to
quality
and
improvement of products, brand identity is low because

many companies in the industry are well-known in
providing high quality products, absolute cost advantage is
somewhat
high
with
regards
to
the
companies
innovations, and government policy is affecting the new

entrants capacity to establish a firm. Threat of substitutes
is moderate because the relative price performance of
substitutes is somewhat high due to fluctuating fuel prices
and buyer propensity to substitutes is also somewhat high
due
to
the
private
vehicles
environmental
aspects,
convenience, and safety. Bargaining power of buyers is

moderate because there are substitute products that are
fuel-saving, product differences are somewhat high with
regards to environmental aspects, companies have their

own brand identity regarding the relation of price and
quality, and buyer profits are high that should meet the
requirements of their needs.
iv. Technology
Advancements in technology include safety standardization
among different automotive vehicles that Toyota aimed to
make a safe car which can protect occupants in the
event of car accidents or prevent accidents from occurring.
With the advent of new technology, robots are designed
and invented that made Toyota use industrial robots in
their production line to minimize errors (toyota.co.jp).
entrants is moderate because of the new technologies
being discovered affecting proprietary product differences,
safety and performance due to technology and innovation
that affects brand identity, the latest innovations are
requiring new firms to have a huge capital requirements,
and innovations, also, is
one
of
the absolute cost
advantages. Intensity of rivalry is moderate because

information technology is making product differences.
Bargaining power of buyers is somewhat strong because
technological advancements on safety and performance
affect both substitute products and brand identity.
v. Ecological
Environmentalists say that fossil fuels greatly harm the
environment as it causes climate change. Toyota and other
car manufacturers respond to this by making vehicles that

use ethanol instead of gasoline on their hybrid vehicles
(enotes.com).
entrants is weak because fuel economy is affecting brand
identity
and
environmental
matter
is
one
of
the
government policies. Threat of substitution is moderate

because fuel prices affect the relative price performance of
substitutes and buyer propensity to substitutes is affected
by the environmental aspects. Bargaining power of buyers
is moderate because fuel saving is a factor why customers
use substitute products, environmental effect of cars are
creating product differences, and fuel economy is making a
brand identity for automotive industry.
vi. Infrastructural
Congestion has gotten very bad as the economy grew
according to a taxi driver named RaniloBanez. Looking at a
bumper-to bumper traffic jams along any streets and road,
no one will be encouraged to buy new cars to add up to the
traffic, even the government will try to lessen or limit the
users of private cars (philstar.com). Improvements are now
being
done
by
the
government
including
skyways,
highways, and expressways wherein some are already

approved
and
some
are
already
being
constructed,
believing that additional roads will help lessen the traffic

(wikipedia.org).
Effect on Barriers or Determinants: The threat of new
entrants
regarding
is
weak
the
because
number
of
production of new vehicles.

vii. Political Environment
the
government
vehicles
are
policies
limiting
the
Anti-government protests took place in Thailand between

the latter part of 2013 until 2014, resulting in removal of
their prime minister and the naming of Thai army chief as
the new prime minister. The protests affected Thai auto
production which orders auto parts from the Philippines
(philstar.com).
entrants is low because the changing of politics will incur
new firms a lot of costs with regards to government
regulations. Bargaining power of suppliers is low because
with the change of leaders, contracts will also change.
viii. Legislations and Regulations
Toyota, along with other automotive manufacturers, is a
member
of
Chamber
of
Automotive
Manufacturers
Association of the Philippines, Incorporated (CAMPI). Being

a member, they have to follow rules, laws, and regulations
CAMPI is requiring them. It includes Republic Act no. 8750
(Seatbelt Law), Republic Act no. 8749 (Philippine Clean Air
Act), and Republic Act no. 9224 (Rationalization of Excise
Tax for Motor Vehicles) (pressroom.ph). The Republic Act
no. 10642 or the Philippine Lemon Law which is an act
strengthening consumer protection in the purchase of
brand new motor vehicles that begun and held in Metro
Manila on twenty-second day of July, year two thousand
thirteen (gov.ph).
entrants is low because there are many regulations to
follow regarding taxes and tariffs. Bargaining power of
buyers is high due to the governments regulation about
the customers rights and safety. Bargaining power of
suppliers is high because contracts are of high value for

the manufacturers.
e. Threats and Opportunities
i. Threats
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.
Capital Requirements new establishing firms

cannot compete with Toyotas capital, making it the
number one automotive brand in the Philippines.
Government Policy the government has a huge
effect on the new entrants capacity to establish or
build
their
own
companies,
while
Toyota
still
manages on the government policies that easy.
III.
Analysis of Internal Environment

a. Financial Analysis
Overall, Toyota has outperformed the industry over the past
years. Total assets increased 586.8 billion from the end of the
previous fiscal year to 3,243.7 billion due mainly to an increase
in market value of investment securities. Liabilities amounted to
1,718.8 billion, an increase of 259.7 billion from the end of the
previous fiscal year due mainly to an increase in deferred tax
liabilities. Net assets amounted to 1,524.9 billion , an increase of
327.1 billion from the end of the previous fiscal year. Cash flows
from operating activities increased by 151.2 billion
in fiscal
2013, due mainly, to posting income before income taxes of 80.1

billion . Net cash provided by operating activities increased by
49.5 billion compared with an increase of 101.7 billion in fiscal
2012. Cash flows from investing activities resulted in a decrease
in cash of 274.2 billion in fiscal 2013, attributable primarily to an
increase in payments for purchases of property, plant and
equipment amounting to 112.4 billion . Net cash used in
investing activities increased by 264.8 billion compared with a
decrease of 9.4 billion in fiscal 2012. Cash flows from financing
activities resulted in an increase in cash of 7.0 billion in fiscal
2013, due mainly to 51.7 billion
of net increase in short-term
loans payable, despite the redemption of bonds payable of 54.1
billion . After adding translation adjustments and cash and cash

equivalents at beginning of period, cash and cash equivalents as
of March 31, 2013 stood at 179.3 billion , a decrease of 117.5
billion , or 40%, over fiscal 2012.
b. Financial Ratios in Comparison to Industry/Competitor
Performance
Liquidity Ratio
Toyota
Corp.,
Motor Mar 31, 2015
Mar 31, 2014
Mar 31, 2013
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
current current ratio improved
divided
current liabilities.
A
liquidity
Quick ratio
by from 2013 to 2014 and

from 2014 to 2015.
ratio Toyota Motor Corp.'s
calculated as (cash plus quick

short-term
Corp.'s
ratio
improved
marketable from 2013 to 2014 and
investments
plus from 2014 to 2015.
receivables) divided by
current liabilities.
Leverage Ratios
Toyota
Corp.,
Motor Mar 31, 2015
Mar 31, 2014
Mar 31, 2013
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
calculated as total debt debt-to-equity

divided
by
ratio
total improved from 2013 to
shareholders' equity.
2014 but then slightly

deteriorated from 2014
Times-Interest-Earned
Ratio
calculated
to 2015.
ratio Toyota Motor
solvency
divided
as
by
Corp.'s
EBIT interest coverage ratio

interest improved from 2013 to
payments.
2014 but then slightly

deteriorated from 2014
to 2015.
Activity Ratios
Toyota
Motor Mar 31, 2015
Mar 31, 2014
Mar 31, 2013
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
goods sold divided by improved from 2013 to

inventory.
2014
but
then
deteriorated
significantly from 2014
to 2015.
Profitability Ratios
Toyota
Motor Mar 31, 2015
Mar 31, 2014
Mar 31, 2013
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
percentage of revenue improved from 2013 to
Operating Profit Margin
available
to
cover 2014 and from 2014 to
operating
and
other 2015.
expenditures.
A
profitability
ratio Toyota
Motor
Corp.'s
calculated as operating operating profit margin

income
divided
revenue.
Net Profit Margin
An
2014 and from 2014 to
indicator
profitability,
by improved from 2013 to

2015.
of Toyota Motor Corp.'s net
calculated profit margin improved
as net income divided from 2013 to 2014 and

by revenue.
Return on Total Assets A
profitability
from 2014 to 2015.

ratio Toyota Motor Corp.'s
(ROA)
calculated
as
net ROA
improved
from
income divided by total 2013 to 2014 and from

assets.
Return on Stockholders A
profitability
Equity (ROE)
calculated
income
2014 to 2015.
ratio Toyota Motor
as
divided
net ROE
Corp.'s
improved
from
by 2013 to 2014 and from
shareholders' equity.
2014 to 2015.
Growth Ratio
Toyota
Motor Mar 31, 2015
Corp.,
Mar 31, 2014
Mar 31, 2013
11.17
6.45
growth
ratio
Earnings
Per 11.51
Share
c. Value Chain Analysis
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
manufacturing and assembling process of the motor

vehicles. Other activities in the operations may
include motor tuning, configuration of motor parts
and
final
engine
tuning.
Toyota
Motors
have
established and maintained the image of producing

reliable and long lasting vehicles largely due to their
well-designed and moderated operation process. One
of the main factors of Toyotas successful sales
record
is
credited
to
their
comprehensive
implementation of an exquisitely planned operation

system.
Toyota Production System (TPS) is an operation
structure followed, which consists of the integration
of the lean production concept and Just-In-Time (JIT)
management, controls the production process in
accordance with the customer requirements. Other
operation activities also include the Jidoka system,
which stops the production process if any defects or
other
operational
problems
occur.
Operational
constancy is also a part of TPS and consists of

Heijunka concept which focuses on the uniform
distribution of work at any position of the production
process, Work Organization focusing on the accurate
distribution
of
tasks
in
the
correct
order
and
description, and Total Productive Maintenance (TPM)

which
emphasizes
on
overall
check-up
of
all
equipment and tools used in the production process.

Outbound Logistics
On completion of the operation process, final
products are transferred to the retailers, wholesalers
and, ultimately, to the final customers. Toyota
controls the whole process of vehicles distribution,
from the factory to their branches worldwide, to
ensure that the final products are delivered in the
right place and at the right time. Each Toyota dealer
is directly linked and controlled by Toyota, with few or
no subsidiaries involved in the distribution process.
Outbound logistics of finished vehicles are the
responsibility of Toyota Motor Sales. Parts Distribution
manages the supply of service parts from the plant
to the service center. It supports service parts
production and shipping preparation which includes

containerization and overseas shipping. This group is
also responsible for quality, technical support and
overseas logistics and customs.

Marketing and Sales
In these activities, Toyotas marketing department
assigns new products to the precise group of
targeted customers. Marketing and Sales activities of
Toyota also include emphasis on their planned
promotion
mix
and
marketing
communication
approaches, like advertising and sales promotions, as

well as building groundwork for offers that would be
suitable
for
meeting
the
expectations
of
the
customers and the company, as well.

Service
Service is the final aspect of the primary activities
that mainly adds value to the products and ensures
successful distribution, as well as, obtaining feedback
and response from the customers. This includes all
areas of service such as final checking, after-sales
service, maintenance, handling complaints, training,
repair services and additional customer services.
Toyota believes that customers are the driver of
the companys success, thus it provides and improve
several types of their offered services. As Toyota
products main factor is reliability, therefore services
are delivered by qualified personnel ensuring all
services provided are of high quality. The importance
of perfection ensures service excellence and more
satisfied customers, as well as, sustaining a greater
competitive advantage.
ii. Support Activities
Support activities include Procurement, Technology, Human

Resource Management, and Firm Infrastructure.
Procurement
These activities are associated with the purchase of
goods, materials, equipment and services, and focus
on reducing the cost on purchases and receiving
them on the assigned time. Toyota uses e-buying and
outsourcing
methods
to
manage
procurement
activities. Furthermore, in collaboration with its

suppliers,
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
advantage. Every department of Toyota is build up on

technologies.
The
main
focus
on
technology
development is to guarantee the customers of the

safety of the vehicles. Toyota combines forces with
Collaborative Safety Research Centre located in the
United States of America to reform safety checks of
the vehicles and improvise test-drives, as well as,
improve their overall product performance. Toyota
has integrated safety technological systems that are
aimed to provide safety for the drivers and the
vehicles. The first technology is PCS (Pre-Crash
Safety) system that helps to predict possible crash
and thereby minimizes the risk of damage and
injuries. The second is Pop-Up Bonnet technology
which is a definite design of the car frame structures
that was created by Toyota to avoid the damage
caused to other vehicles and the pedestrians. The

third one is Adaptive Driving Beam system which is
assimilated in some models of Toyota cars that helps
to regulate high beam in automatic way.

Human Resource Management
It is the important part of the whole organizational
business and Toyota uses different tactics to sustain
its employees. Other car manufacturing companies
are considered as producers of high quality cars,
however they cannot compete with Toyota in Human
Resource Management, as well as its suppliers and
methods
of
distribution.
Toyota
has
highly
integrated Lean Production System in order to use

the workforce in more productive and efficient way.
The main concept of managing human resource is to
expand the capacity and capability of the employees
by providing them a material encouragement for the
extra work, training them to develop their working
skills, and giving them various rewards. These
methods lead to friendly and comfortable working
atmosphere in the company that in turn increase in
productivity and quality of the product and results in
creating of the competitive advantage.

Firm Infrastructure
These activities are connected with developing the
strategic plans of the organization. MIS (Management
Information System) plays a vital role in designing
the strategic plan, organizing, and controlling the
various departments of Toyota such as finance,
accounting, and corporate strategy. Moreover, Toyota
uses robotics system where people act as operators
that make the production process fast and efficient.
d. Strengths and Weaknesses

i. Strengths
Lower Production Cost through the use of

JIT(Just in Time)
SOURCE: Value Chain Primary Activities (Inbound
Logistics)
DISCUSS: Toyota Company uses JIT as their practice
on buying the raw materials from the supplier in
preparation for the operation. This practice becomes
the strength of the company since they lead the
other company with this kind of training. Additionally,
this insures the supply of new raw materials rather
than using old stock of raw materials.

Strong Brand Portfolio that creates higher
profit
SOURCE: Value Chain Primary Activities (Marketing
and Sales)
DISCUSS: Currently, the company sells different
model of cars reaching up to 70 differentiated cars.
This creates a stronger brand portfolio.

Highly Integrated Lean Production System in
order to keep people
SOURCE: Value Chain Support Activities (Human
Resource Management)
DISCUSS: Toyota does a big investment when it
comes to the trainings and seminars to improve the
productivity of their people. Also to insure the
loyalty, they give reasonable benefits for their
people.
Other
manufacturing
companies
in
the
industry can produce higher quality cars; however

they cannot keep their people just like what Toyota
did.
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.
that has huge market share there.

Strategic Plan
a.)
Objectives
i.)
Social
To respond to the needs of the customers maximizing
the resources available in the society.

To develop products that will help both company and
the customers. Company in terms of gaining higher
profit and customers in terms of benefits from the
ii.)
products and service.

Financial
Achieves certain cost reduction in purchase of the
needed material
Lowering level of wastage
Raise the revenue up to 5% using different strategies
iii.)
b.)
To establish new strategic alliance yearly

Strategic
To have all the products meets the guidelines of the
company and meet the satisfaction of the customers.

Employ professionals that can create success to the
company
Continuous
innovate
products
to
introduce
something new in the market

Evaluation of Present Corporate Strategies (Actual
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 strategy. For Toyota, the biggest thing

they need to do is make sure that their low cost
strategy does not compromise their superior design
and quality. (www.wou.edu ~bneish06)
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.
The market scope that Toyota uses is a
broad one that encompasses nearly every type of

customer that is in the market to purchase an
automobile.
Toyota is able to target such a large
market because they have something for everyone.

Toyota has four wheel drive trucks and SUVs for the
outdoor types or those who live in areas that face
severe weather conditions, hybrid models like the
Prius
for
the
eco-friendly
customers
that
are
interested in saving the environment, along with the

standard
cars
for
general,
everyday
use.
Additionally, Toyota provides vehicles for all price

ranges. From the low price Toyota Corolla line of cars
to the high priced luxury line of cars and SUVs with
Lexus, Toyota has something for everyone.
Toyota differentiates on several levels form
their competitors. First of all, Toyota has been very
successful in differentiating on the basis of superior
design and quality. This has led to Toyota being able
to create a brand image that is very strong and one
that brings to mind quality, long lasting cars when a
potential customer sees it. The strength of Toyotas
brand image has been seen in recent years with the
recalls and problems Toyota faced in dealing with
these recalls.
Toyota was able to survive these
problems because they had such a long and proven

track record of quality and superior.
Another, area
that Toyota differentiates is in technology.
Toyota
was the first successful mass produce the hybrid car

on the market when it released the Prius in 2003.
Being the first to get their hybrid on the market
allowed Toyota to gain a large portion of the market

share in the area of hybrid cars.
ii.)
Dimensions of Competitive Strategy
Technological Leadership
TOYOTA
GM
LEADER
FOLLOWER
Toyota is not the technological leader in the

industry. The company chooses to be a follower in
order to maintain the image brand that they started.
They are known to be the manufacturer of hybrid
cars. Some companies in the industry already
launched an automotive cars powered by electricity.
Customers taste are always based on the trend.
Toyota's recent strategy is to become the
world's
number
underpinned
by
one
using
automaker
new
has
know-how,
been
new
technology and new materials to improve, perfect

and break through auto design and manufacturing.
However, the strategy also required that Toyota
shifted its focus from manufacturing engineering and
built-in-quality toward research and development
product design.
When a company shifts its focus form lean

production to technology - innovation, there is an
embedded obstacle - culture change. On one hand,
the
essence
of
lean
production
dictates
the
elimination of waste. On the other hand, the

uncertainties in new product development require
that
the
manufacturer
build
in
redundancy
to
manage the risks of the unknown and unsure a high

level of safety. Trying to balance lean production with
the need for redundancy is a difficult act that
requires the leadership to be instrumental in making
key decisions as well as leading and managing the
change
(http://www.ukessays.com/essays/marketing/strategi
c-management-report-on-toyota-marketingessay.php)
Geographic Scope
TOYOTA
HONDA
LOCAL
GLOBAL
Geographically, Toyota started its company in

Japan and expanded globally that reach up to the
Philippines and other county. Every country have
more than 10 outlets of the company. Similar with
Honda
they
are
both
global
company.
Toyota
penetrated the emerging market more rapidly than

Honda
did.Toyota
already
conquered
America,
Europe, Africa, Asian and Oceania. There were

total
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
Push and Pull Channel Selection

TMP is using the pull method wherein allowing a
single-piece flow system that could eliminate bulk
production and batch sizes since only one product
at
time
is
manufacturers,
procedure
and
being
this
worked
on.
can
be
be
quite
can
For
car
time-saving
profitable.
It
minimizes the expense of the need for space due

to overproduction and it allows a company to
reduce the cost of labor associated with stock
handling. (shmula.com)
Toyota
Push
strategy
c.)Proposed Corporate Strategy

i. Details of the Strategy
Pull strategy
Focuses on the weak presence in the emerging

markets
Since Toyotas main market are Japan, United States,
and Europe the economy of those country are higher than
other countries like China , India and Brazil where Toyota
has lack of presence wherein the General Motors has the
largest national market in China and followed by the
United States. The company has been the sales leader
among global automakers in China for six consecutive
years. (chinabusinessreview.com).
China is facing challenges in four main areas: energy,
environment, safety, and congestion. In terms of energy
more than 50 percent of Chinas oil is imported, and in the
last five years the countrys greatest increase in oil use
was from transportation. The huge concern is how China
will sustain an auto industry when roughly 96 percent of its
cars may run on gasolineand many other industries
consume energy as well. In terms of the environment,
although China has made major accomplishments reducing
auto emissions in the past 10-20 years, it still has many
buses and trucks with old technologies. In many major
cities,
one-third
of
air
pollutants
are
auto
related.
Concerning safety, although China has far fewer cars on

the streetprobably one-fifth to one-sixth of whats in the
USand far fewer auto-related accidents than in the US,
China has 10 or 12 times more auto-related fatalities than
in America. This is because most people that are hurt in car
accidents in China are pedestrians. Finally, many cities are
suffering from congestion.
By providing vehicles that will give solutions to China and
other
countries'
main
issues
regarding
energy,
environment, safety and congestion, Toyota can improve

their presence on tose markets. Come up strategies would
be promoting their hybrids cars or come up with a new
innovate vehicles that targeting energy efficiency and
environment concern aspects.
Expands on market in other countries in proposing low cost
cars that are differentiated from the other brand by design
and engineering quality.
The emerging markets in Asia have the most potential for
growth and the transportation of choice is either highend luxury vehicles or low-cost, basic transport for the
masses. Reuters reports
(via
Japan's Chunichi
Shimbunnewspaper) that Toyota is planning to introduce

something on the low-end of the spectrum (autoblog.com)
Advancement of vehicle's features can strengthens the
weak presence of Toyota in emerging markets.
Customers' demands are changing so vehicles should
upgrade accordingly to the preferences of potential buyers.
Technology
advancement
is
way
out
to
provide
innovative features in a product Increase in electronics and

software content that targeting the quality, demands and
safety.
ii. Cost of the Strategy
Increase selling of vehicles in emerging markets
from the aim of selling half of its vehicles last year.
Toyota may give more effort in strengthening their
presence in other emerging markets
by promoting its
products that can provide solution in some issues and meet

the needs of a potential buyers.
As we all know Toyota is a cost leader company, by wise
pick on suppliers and effecient tools and process withan
ensure quality so they can attain low cost.
By introducing cars that meet international needs in

rapidly growing emerging markets, seeking for an increase
in the share global sales made up by emerging markets,
from 40% to 50%.
Aiming to sell
more than a half produce of its
product for boosting presence in emerging markets.

The cost of electronics and software content in autos
was less than 20 percent of the total cost a decade ago.
Today it is as much as 35 percent, according to studies by
Manfred Broy, a professor of informatics at Technical
University, Munich. More importantly, electronics systems
continue to contribute more than 90 percent of innovations
and new features.
iii. Potential Benefit of the Strategy
Toyota Motor will be the one of the benefited on the
proposed strategy in increase their economic due to the
high sales of the products.

Potential buyers in emerging markets will be benefited in
terms of the buying cars by getting their satisfaction by
having a safety, energy efficient, and eco-friendly vehicle
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.
in
vehicle
quality
throughout
the
Toyota weakness on value chain outbound logistic is

having a lack or weak presence in some emrging markets
China currently registered the highest rate of economic
growth and so the other selected countries and the
automotive segment is a very large expansion, which
makes Toyota to hurry to take over the control of this
market.
A recent Consumer Reports survey found that
infotainment equipment was the most troublesome feature
in 2014 vehicles, suggesting a powerful upside for
companies that can devise superior systems.
Telematics features, including semi
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
telematics systems is disruptive for OEMs and traditional

suppliers, putting a premium on innovation and changing
the ways that industry players design and develop new
products
and
becoming
as
services.
critical
as
Software
breakthroughs
hardware
innovation,
are
and
competition is increasingly coming from nontraditional

players.
Ever
more
vital
software
content
has
also
accelerated the pace of change in products and features.

Whereas the time frame for new vehicle launches is
typically three to four years, the cycle for new software

iterations, often driven by interactivity with mobile devices,
is measured in months (Stragegy&.pwc.com).
v. Strength to be developed or weakness
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
surroundings, focusing on the consumer.

Toyota's strategies in advancement innovation is an edge
to their continous growth.

Technology advancement
sustains
the
quality
of
product so that Toyota can exceed the customers'

expectation.
vi. How can the strategy help the country
By meeting the need and providing solutions to a
customers, Toyota will attain it's social objectives and
boosting the revenue of the company.
brand identity and also their position in the market. The
continous innovation is an advantage of the company in
introducing a product.
Another Proposed Corporate Strategy
i. Details of the strategy
Online Car Shopping
Because of the numerous advantages and benefits,

more and more people say they prefer online shopping
over conventional shopping these days. Customer wants
easier life, in creating online car shopping exclusively for
Toyota Products where you can see all the products with its
features, the new introduce product. You can also give
feedbacks and suggestions.They can access Toyotas online
shop anytime and anywhere also through smart phones.
The number of smartphone users worldwide will
surpass 2 billion in 2016, this year, there will be over 1.91
billion smartphone users across the globe, a figure that will
increase another 12.6% to near 2.16 billion in 2016. For the
first time, more than one-quarter of the global population
will use smartphones in 2015, and by 2018, eMarketer
estimates, over one-third of consumers worldwide, or more
than 2.56 billion people, will do so. That 2018 figure also
represents over half51.7%of all mobile phone users,
meaning that feature phones will have finally become a
minority in the telecommunications world (emarketer.com)
ii. Cost of the strategy
Its hard to say precisely how much professional ecommerce development costs. Small projects can be a few
thousand dollars. Complex projects can be hundred
thousand dollars or more and theres a variety in between.
It may sound expensive but the earning online can go for
about millions of dollars. These different relevant factors
comes down with project scope for an e-commerce budget
Customer base: The size of the customer base
determines the technology requirements, hardware and
software. If you have a large customer base, you will
require a website and supporting applications that can

handle a lot of concurrent traffic. This dictates the
technology you use and the type of network, servers and
other hardware required. This in turn dictates the size and
expertise of your development team. Having a cost for
hiring skilled people for about thousands of dollars or
depends on companys location.
Supporting applications: The industry uses the term
ERP (Enterprise Resource Planning) to describe a host of
software that manages your inventory, shipping (3PL),
invoicing and other back-office services. A large company
may have multiple ERP solutions. Some ERP solutions can
cost over $100,000 for a single annual license. Integrating
those with a website can also take hundreds of hours of
programming
Marketing: Online and offline marketing is an important
expense that needs to be factored into every business
website. As opportunities for marketing increase, such as
social media, video, mobile marketing and DRM (direct
response), etc., companys budgets have to increase to
maintain market share and drive traffic. A larger business
like Toyota might spend over $100,000 a month in
marketing.
Features and Functionality: A large company must provide
the latest, coolest, interactive features to promote their
products and stay competitive and this also includes in
marketing aspects.
Website Content: This includes product images, product
descriptions, pricing and text content about the company,
etc.
iii. Potential benefits of the strategy
Reduced overheads: in general, an online shop costs

less to set up and run than a physical store, although its
important to recognize that making e-commerce work

requires continuing investment.
Lower marketing costs: with better targeting, online

promotion can be more precisely aimed at potential
customers than using conventional media. Its also much
cheaper.
Expanded geographical reach: It can widens the

companys worldwide market just through having an
effective e-commerce strategy.
Being open for business 24/7: with automated order

and payment processing, sales can be made at any time,
and customers can buy when it suits them.
Greater flexibility: an online store can be updated

instantly and as often as you like for example, to
promote a deal of the day on your front page, without
the need for expensive printed display material.
Broader potential customer base: an e-commerce

business is an additional buying channel, capable of
attracting customers who have not bought before.
Improved customer profiling: with the opportunity to

target products and services at specific groups based on
buying data.
Increased
visibility
for
your
business: with an
investment in search engine optimization and online

promotion, an online shop becomes more accessible to
customers searching for your products.
The ability to tell people about your business: this is

particularly valuable when an online store operates
alongside a conventional high-street outlet, providing
information about opening hours, contact details and

answers concerns.
Another marketing channel: online store can support

online marketing efforts by including customer reviews
and testimonials. (Source: businessyell.com)

An online car-buying program that targets Scion's
young customer base is barely off the ground. But
executives are already preparing to roll out a similar
system "as soon as possible" for the Toyota brand. That's
according to Bill Fay, general manager of Toyota Division,
which encompasses both brands. Fay told Automotive
News this month at a press launch here for the 2016
Tacoma that Toyota brand aims to roll out its own version
of Scion's voluntary Pure Process Plus online transaction
program in six to 12 months. Blame the shift on the kids.
"Millennials are starting to express the fact that
they'd like to do more shopping online," Fay said.
"They'd like to connect that shopping to a buying
experience ... that needs to be quicker and more
transparent." The Scion and Toyota initiatives are part of
a broader move by automakers, dealers and third parties
to simplify car buying through online and mobile tools.
Large dealership groups such as AutoNation Inc.
and Sonic Automotive have set up online storefronts that
let
consumers
transaction
complete
online.
many
General
facets
Motors'
of
typical
Shop-Click-Drive
program allows customers to find vehicles, negotiate

prices and handle paperwork online. And TrueCar Inc.
has built its business around connecting its network of

dealers with leads generated through its websites and
mobile apps to minimize price haggling. Fay said the
Toyota and Scion programs aren't an effort to compete
with what the big dealership groups and TrueCar are
doing. Rather, he said, they are a response to changing
consumer buying habits and a way to work with dealers
to provide a more integrated experience. Toyota dealers
who opt in to the yet-unnamed program will have
flexibility in how they implement it in their stores, the
company said. Fay said Toyota will use what it's learning
from Pure Process Plus to shape the Toyota program,
including the information technology and finance and
insurance sides of the operation. The goal, he said, is to
reduce the time a customer spends in the physical
dealership to about an hour. Scion's setup allows a user
to go online, pick and spec out a Scion vehicle; search
local dealerships for the exact vehicle; get price info,
including taxes and fees; calculate monthly payments;
get an estimate on a trade-in, and apply for and get
approved for credit with a certificate to take to the
dealership.
Scion's pilot program has about 60 participating
U.S. dealers, with 30 more expected to join by year end.
The company says 150 are expected by the end of 2016,
out of about 1,000 Scion dealers total. Toyota dealers
will get a preview of the online service at a national
dealer meeting next month. (autonews.com 2016)
v. Strengths to be developed or weakness to be

overcome
Generating
strategy
to
become
customer
oriented will help to have a good relationship with the

clients
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
potential higher volume of buyers may prevail by

increasing the visibility of the company that can help
boosting their sales.
d.)
Competitive Advantage
i. Present Competitive Advantages
Competitive advantage occurs when
acquires
or
develops
an
attribute
or
an
organization
combination
of
attributes that allows it to outperform its competitors, it can

be concluded that Toyota's philosophy, its unique continuous
improvement process as well as its highly effective and
efficient HR management system and the deeply-rooted
problem solving culture are truly sustained competitive
advantages and for that reason essentially contribute to
Toyota's leading position in the global automotive industry
Philosophy
The corporate philosophy of a company can be defined as
the set of rules and attitudes that govern the use of the
companies resources
At Toyota Motor Corporation, this basically means that
management decisions are based on a long-term philosophy,
even at the expense of short-term financial goals. To be
more specific, the main ideas of Toyota's philosophy are to

base management decisions on a "philosophical sense of
purpose", to think long term, to have a process for solving
problems, to add value to the organization by developing its
people, and to recognize that continuously solving root
problems drives organizational learning.
Processes
The
so
called
Toyota
Production
System
(TPS).
Both
elements, Toyota's corporate philosophy and its special

manufacturing method, are the double helix of Toyota's DNA.
They define its management style and what is unique about
the company.
The Toyota Production System (TPS)
The most important objective of the Toyota System has been
to
increase
thoroughly
production
eliminating
efficiency
waste.
This
by
consistenly
concept
and
developed
between 1948 and 1975 by Toyota's former president Toyoda

Kiichiro and later by Ohno Taiichi and Eiji Toyoda represents
a highly efficient production system that is similar to that of
Henry Ford several decades earlier, although Toyota's
approach to both product development and distribution
proved to be much more consumer-friendly and marketdriven. The main objective of TPS is to produce goods
synchronously to customer requirements, thus designing out
overburden (muri) and inconsistency (mura) and eliminating
waste (muda) for instance caused by overproduction,
unnecessary transports and waiting times.
Synchronization and standardization of processes
Lean manufacturing
One of the greatest advantages of TPS is its

strong focus on lean production. Lean production is
aimed at the elimination of waste in any area of
production including customer relations, product
design, supplier networks and factory management.
Its
goal is to incorporate less human effort, less
inventory, less time to develop products, and less

space to become highly responsive to customer
demand while producing top quality products in the
most efficient and economical manner possible
Toyota invented Just-in-Time (JIT), an inventory
strategy that strives to improve a businesses return
on investment by reducing in-process inventory and
associated
carrying
costs,
following
the
simple
philosophy that inventory is waste. To meet its

objectives, one of the primary tools of a JIT system
are signals between different points in the process,
which tell production when to make the next part.
Such signals maintain an orderly and efficient flow of
materials
throughout
the
entire
manufacturing
process, improving a manufacturing organization's

return
on
investment,
as
well
as
quality
and
efficiency.
Toyota's
JIT
principle
is
the
company's
outstanding supply chain management, as the high

efficiency and effectiveness of a JIT inventory system
is heavily dependent upon the smooth co-ordination
of a company's supplier network. Toyota as well as
other Japanese car manufacturers are able to ensure
such a smooth co-ordination and close and trustful
cooperation with their suppliers through the so called
Keiretsu.
keiretsu
is
traditional
Japanese
institution and can be defined as a set of companies

with
inter
looking
business
relationships
and
shareholdings. In general, there are three different

types of keiretsu:
Kigyo shudan - Horizontally diversified business
groups
Seisan keiretsu - Vertical manufacturing networks
Ryutsu keiretsu - Vertical distribution networks
Today, Toyota is widely considered the biggest
of the vertically-integrated keiretsu groups, with
companies like the Denso Corporation - the world's
second largest automotive components manufacturer
- as well as 300 other component suppliers being
more or less directly linked to the company.
The high efficiency of Toyota's manufacturing
plants is also due to a high level of standardization.
For Toyota, standardized tasks and processes are the
foundation
for
continuous
improvement
and
employee empowerment. In this context, one of the

most important principles for Toyota is to visualize
standards to ensure that no problems are hidden.
Included in this principle is the so called 5S Program
comprising five steps that are used to make all work
spaces efficient and productive, help people share
work stations, reduce time looking for needed tools
and improve the work environment.
Avoiding errors
One of the most important aspects when
working with a minimum stock of materials and JIT
inventory systems is to ensure that each part
entering the next step of the production process

meets the highest possible quality standards. To
meet this requirement, it is not enough to take
samples. In fact, all employees working in production
and logistics must be trained and sensibilized for this
set of problems.
At Toyota, this is ensured by the so called Total
Quality Management (TQM) approach.
Improvement of the production lines
Another fundamentally important pre-condition
for a highly efficient and effective production is the
continuous improvement of the production line and
the
facilities.
Only
if
the
machinery
and
the
equipment are at the forefront of technology and are

working reliably without any defects and failures, it
can
be
ensured
that
the
machine
uptime
is
predictable and the process capability is sustained,

avoiding that the process must keep extra stocks to
buffer against any uncertainties and that the flow
through the process will be interrupted.
At
Toyota,
this
in
ensured
through
the
application of Total Productive Maintenance (TPM).

TPM is a proactive approach that essentially aims to
prevent any kind of slack before occurrence and has
been the first methodology Toyota used to improve
its global position in the 1950s. According to the
motto "zero error, zero work-related accident, and
zero loss", in TPM the machine operators perform
much, and sometimes all, of the routine maintenance
tasks themselves. This auto-maintenance ensures
appropriate and effective efforts are expended since
the machine is wholly the domain of one person or

team
Employee training and qualification
At
Toyota's
production
factories,
the
workpeople are seen as the most important factor

within the whole production process. Toyota has
understood better than anybody else that investing
into employee training and qualification is the critical
success factor in the battle for quality and costs.
According to the understanding that continuous
process improvement means continuous employee
qualification, Toyota for instance offers trainings for
its assembly-line workers in its own training centers
to ensure that they are able to meet the company's
standards before they start working at the actual
assembly line. This procedure is aimed at avoiding
frustration among the employees due to excessive
performance requirements, thus guaranteeing a high
level of commitment and motivation among the
workforce.
Continuous improvement through Kaizen
The Toyota Production System is famous for the
strict implementation of a Continuous Improvement
Process (CIP) referred to as Kaizen ("improvement" or
"change for the better"). In general, the term Kaizen
describes the philosophy or the practices that focus
upon
continuous
manufacturing,
improvement
engineering,
of
processes
supporting
in
business
processes, and management. Its core principle is the

self
reflection
of
processes
through
intensive
feedback with the purpose of identifying, reducing
and eliminating suboptimal processes in order to

raise overall efficiency. In addition, the emphasis of
continuous
improvement
is
on
incremental,
continuous steps rather than giant leaps.

The concept of re-engineering
In addition to the famous Toyota Production
System, the concept of re-engineering has been
another major factor for the success of Toyota. Reengineering can be defined as the process of the
fundamental rethinking
and
radical
business
to
achieve
processes
redesign
of
dramatic
improvements in critical measures of performance

such as cost, service, and speed. It combines a
strategy of promoting business innovation with a
strategy of making major improvements to business
processes so that a company can become a much
stronger and more successful competitor in the
marketplace.
In the case of Toyota, one must just consider a
Toyota model which is newly introduced into the
market, but fails to impress the market. In this case,
Toyota's next strategic step will be to re-engineer the
model, which means completely altering the failed
model using the same production facility, learning
from the mistakes they made in the past. This
method is for instance not practiced at General
Motors and Ford. Once a GM or Ford model fails to
reach market expectations, the whole manufacturing
facility for producing the model will be scrapped and
the employees are often pushed out of the company.
However,
this
approach
results
in
losing
the
knowledge gained at great costs.

People and Partners
Toyota has a highly effective and efficient
human resource management system. For Toyota,
human resources is the cornerstone for a high level
of employee loyalty and commitment to quality. The
underlying principle is that a workplace with high
morale and a high level of job satisfaction is more
likely to produce reliable, high-quality products at
affordable prices.
In contrast to other car manufacturers like GM
or
Ford,
Toyota
has
managed
to
create
an
organizational culture that strengthens employee

motivation and encourages their participation, which
is an essential precondition for the functioning of the
TPS. For instance, in Toyota factories group activities
are promoted among the shop-floor team members.
In addition, the knowledge base of all employees is
used
to
improve
productivity,
equipment
thereby
lowering
reliability
maintenance
and
and
operating costs.
In
general,
Toyota's
human
resource
management aims at growing leaders who live the

Toyota philosophy and to respect, develop and
challenge its people, teams and partners (e.g.
suppliers).
Problem Solving
Willingness for problem solving and continuous
improvement
and
learning
is
deeply-rooted
in
Toyotas culture. And this does not only imply the

process of continual organizational learning through
Kaizen as mentioned before under point 2.1.5. In
fact, this also results in the belief that one always
has to see for himself in order to thoroughly
understand the situation and that making decisions
slowly by consensus, thoroughly considering all
options, is the key for sustainable problem solving
and long-term business success.
(Toyotas Competitive Advantage in The Automotive
Industry Marketing Essay. http://www.ukessays.com/)
ii. Why
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
advantages is stronger commitment which supported the

overall aim of the company.
iv. How can this help the company increase/retain its
position in the industry?
Despite its vulnerabilities, the Toyota production

system still represents state of the art in manufacturing
and continues to provide an important model to companies
in a wide range of industries.
Toyotas competitive advantages are sustainable as
time passes, by maintaining its tools and processes Toyota
can uphold its position in the industry.
V.
Strategy Implementation using the 7s Framework
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
to and choice of Technology
emerging strategic
markets
Car
Application
Needed
Leadership Require
through Wholly Partnership
Online
to Resources
System
partner, follow
by integration
Advancement
of of two firms
Information
Technology
and Invest on the
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
skilled Skilled and less Required
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
Based on the evaluation presented in the above table, a

Partnership is less costly and is better option in current economic
situation. Toyota is known as the cost leader in the industry, so the
proposed strategy can maintain the identity of the company. Also,
Toyota needs to penetrate the emerging market. Toyota needs to
choose an established Chinese domestic partner to introduce
Toyotas products to the mass market. China is the most growing
market nowadays. Also, Millennial are so into social media. So, the
proposed strategy of investing on the online shopping and
advanced technology will be a big opportunity for the company.
Additionally, Japanese technology is more sophisticated than
Chinese and therefore would require training and upgrading
employees skills and knowledge as well as introduction of
technologies and training on its usage.
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
$19,050,0 $19,820,0 $18,246,0 $20,405,0

00
00
00
00
Short-Term Investments
$24,444,0 $21,625,0 $16,484,0 $15,327,0

00
00
00
00
Net Receivables
$81,530,0 $86,253,0 $87,831,0 $88,000,0

00
00
00
00
Inventory
$17,825,0 $18,398,0 $18,219,0 $19,713,0

00
00
00
00
Other Current Assets
$6,716,00 $6,525,00 $5,596,00 $6,275,00

0
0
0
0
Total Current Assets
$149,563, $152,621, $146,375, $149,720,

000
000
000
000
Long-Term Assets
Period Ending:
Tre
3/31/20153/31/20143/31/20133/31/2012
nd
Long-Term Investments
$163,197, $168,395, $151,605, $141,364,

000
000
000
000
Fixed Assets
$77,513,0 $74,198,0 $72,750,0 $75,769,0

00
00
00
00
Goodwill
$0
$0
$0
$0
Intangible Assets
$0
$0
$0
$0
Other Assets
Deferred Asset Charges
Total Assets
$7,725,00 $7,150,00 $6,051,00 $5,600,00

0
0
0
0
$0
$0
$0
$0
$397,997, $402,364, $376,781, $372,452,

000
000
000
000
Current Liabilities
Accounts Payable
Short-Term Debt /
Current Portion of LongTerm Debt
$45,262,0 $49,728,0 $47,311,0 $51,096,0

00
00
00
00
$82,356,0 $83,759,0 $79,799,0 $80,106,0
00
00
00
00
Period Ending:
Tre
3/31/20153/31/20143/31/20133/31/2012
nd
Other Current Liabilities
$9,397,00 $9,065,00 $10,002,0 $11,961,0

0
0
00
00
Total Current Liabilities
$137,015, $142,552, $137,112, $143,163,

000
000
000
000
Long-Term Debt
$83,505,0 $82,992,0 $77,917,0 $73,422,0

00
00
00
00
Other Liabilities
$11,158,0 $11,449,0 $11,406,0 $10,350,0

00
00
00
00
Deferred Liability
Charges
$19,166,0 $17,593,0 $14,717,0 $11,044,0

00
00
00
00
Misc. Stocks
$0
$0
$0
$0
Minority Interest
$7,164,00 $7,281,00 $6,635,00 $6,273,00

0
0
0
0
Total Liabilities
$258,008, $261,866, $241,152, $237,979,

000
000
000
000
Stock Holders Equity
Period Ending:
Tre
3/31/20153/31/20143/31/20133/31/2012
nd
Common Stocks
$3,311,00 $3,855,00 $4,216,00 $4,825,00

0
0
0
0
Capital Surplus
$4,562,00 $5,353,00 $5,851,00 $6,691,00

0
0
0
0
Retained Earnings
$130,014, $137,071, $134,741, $144,809,

000
000
000
000
Treasury Stock
($10,219,0 ($10,911,0 ($12,032,0 ($13,800,0

00)
00)
00)
00)
Other Equity
$12,321,0 $5,129,00 ($3,782,00 ($14,324,0

00
0
0)
00)
Total Equity
$139,989, $140,498, $128,994, $128,201,

000
000
000
000
Total Liabilities & Equity
$397,997, $402,364, $370,146, $366,180,

000
000
000
000
b. Income Statements
Exchange: NYSE
Period Ending:
Total Revenue
Cost of Revenue
Gross Profit
Tre
3/31/201 3/31/201 3/31/201 3/31/201
nd
$227,096, $249,472, $234,289, $225,818,

000
000
000
000
$182,128, $201,982, $197,940, $199,144,

000
000
000
000
$44,968, $47,490, $36,349, $26,673,

000
000
000
000
$0
$0
$0
$0
Operating Expenses
Research and
Development
Sales, General and
$22,033,0 $25,233,0 $22,323,0 $22,352,0
Admin.
00
00
00
00
Non-Recurring Items
$0
$0
$0
$0
Other Operating Items
$0
$0
$0
$0
Operating Income
$22,936, $22,257, $14,026, $4,321,0
Period Ending:
Tre
3/31/201 3/31/201 3/31/201 3/31/201
nd
5
000
Add'l income/expense
items
Earnings Before Interest

and Tax
Interest Expense
Earnings Before Tax
Income Tax
Minority Interest
Equity Earnings/Loss
Unconsolidated
Subsidiary
Net Income-Cont.
Operations
4
000
3
000
2
00
$1,377,00 $1,637,00 $1,123,00 $1,218,00

0
$24,313,0 $23,894,0 $15,149,0 $5,539,00

00
00
00
$191,000 $191,000 $244,000 $279,000
$24,122,0 $23,703,0 $14,905,0 $5,260,00

00
00
00
$7,450,00 $7,456,00 $5,858,00 $3,187,00

0
($1,122,00 ($1,636,00 ($1,288,00 ($1,030,00

0)
0)
0)
0)
$2,573,00 $3,091,00 $2,458,00 $2,402,00

0
$18,122,0 $17,703,0 $10,217,0 $3,446,00

00
00
00
Tre
Period Ending:
3/31/201 3/31/201 3/31/201 3/31/201
nd
$18,122, $17,703, $10,217, $3,446,0
Net Income
000
Net Income Applicable to

Common Shareholders
000
000
00
$18,122, $17,703, $10,217, $3,446,0

000
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
Cash Flows-Operating Activities
Depreciation
$11,750,00 $12,146,00 $11,735,00 $12,976,00

0
0
0
0
Net Income
Adjustments
($1,880,000($2,616,000
($322,000) ($943,000)
)
)
Changes in Operating Activities

Accounts Receivable
($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
Net Cash FlowOperating
($1,426,000($1,076,000
$536,000
)
)
$303,000
)
($4,191,000
)
$1,207,000 $3,375,000 ($844,000)
$3,321,000 $7,588,000 $987,000
$13,290,00
0
$30,734,0 $35,404,0 $26,029,0 $17,649,0

00
00
00
00
Cash Flows-Investing Activities

Capital Expenditures
($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
Net Cash FlowsInvesting
($31,799,0 ($42,106,0 ($32,146,0 ($17,530,0

00)
00)
00)
00)
Cash Flows-Financing Activities
$381,000
$416,000
$445,000
Tren
3/31/2015 3/31/2014 3/31/2013 3/31/2012
d
Period Ending:
Sale and Purchase of

Stock
($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
Net Cash FlowsFinancing
$2,552,00 $8,928,00 $5,068,00 ($4,318,00

0
0
0
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)
Net Cash Flow
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
Operating Income and Net Income increased at the last quarter of

2015 its a best indicator on earning power of a company, this
positive outcome can sustain Toyotas growth in the industry.
Generally, net revenues in operations got increased in all Toyotas
worldwide market in the last quarter of 2015 and have a result of
well in good financial statement,
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=
TAKE HOME QUIZ

Beloy, Leah Joy P.
BSBA-Management
A competitive advantage is an advantage over competitors gained by
offering consumers greater value, either by means of lower prices or by
providing greater benefits and service that justifies higher prices.
Porter suggested four "generic" business strategies that could be adopted in
order to gain competitive advantage. The strategies relate to the extent to
which the scope of a business' activities are narrow versus broad and the
extent to which a business seeks to differentiate its products.
The four strategies are summarised in the figure below:
The differentiation and cost leadership strategies seek

advantage in a broad range of market or industry segments.
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:
High levels of productivity
High capacity utilisation
Use of bargaining power to negotiate the lowest prices for production

inputs
Lean production methods (e.g. JIT)
Effective use of technology in the production process
Access to the most effective distribution channels
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:
Superior product quality (features, benefits, durability, reliability)
Branding (strong customer recognition & desire; brand loyalty)
Industry-wide distribution across all major channels (i.e. the product or

brand is an essential item to be stocked by retailers)
Consistent promotional support often dominated by advertising,

sponsorship etc.
Great examples of a differentiation leadership include global brands like Nike

and Mercedes. These brands achieve significant economies of scale, but they
do not rely on a cost leadership strategy to compete. Their business and
brands are built on persuading customers to become brand loyal and paying
a premium for their products.
http://www.tutor2u.net/business/reference/competitive-advantage
EXAMPLE
STARBUCKS
Product differentiation is the core of Starbucks strategy to gain a sustained

competitive advantage. Starbucks offers such differentiation through an
excellent customer experience and quality coffee The Starbucks
Experience is achieved through its well-designed stores with good ambiance
and well trained staff. According to a study conducted by Daily Mail,
Starbucks stores provided a more welcoming dcor with friendlier baristas
compared to independent coffee houses.
The differentiation strategy of being a premium and unique coffee drinking
provider has allowed Starbucks to achieve a sustained competitive
advantage.
http://hubpages.com/business/Sustained-Competitive-Advantage-ofStarbucks
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/
DELA CRUZ, MARY JOY M.
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:
Walmart uses the cost advantage strategy by providing a very large

selection and low prices via its retailer strength and size.
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/
Isidro, Ma. Leomily D.

BSBA - Management
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
Judy Ann Rodriguez

BSBA-Management
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.
(Investopedia http://www.investopedia.com/terms/c/competitive_advantage.
asp#ixzz3yaTks66v)
EXAMPLES OF COMPETITIVE ADVANTAGE

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.
4. Strategic assets
Holding strategic assets such as patents is a strong source of sustained
competitive advantage and General Electric has stood the test of time
because of the several patents held. Mind you that possession of these
strategic assets has made General Electric one of the most powerful
companies in the world.
5. High volume production
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.
6. Access to working Capital
Generally, public liability companies (quoted companies) have a sustained
competitive advantage over private companies because of their infinite
capacity to raise capital from the public. Take a look at how Oracle acquired
57 companies in a space of five years and Reliance Industries investing a
billion dollars in a single swoop to open a chain of retail stores.

Strategic Management For Toyota

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Strategic Management For Toyota

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MANILA BUSINESS COLLEGE

MBC Bldg., 1671 Alvarez St., Sta. Cruz, Manila, Philippines

A Strategic Management Paper of Toyota Manufacturing

In Partial fulfillment with the requirements in Strategic Management

January 28, 2016

manufacturing company incorporated on August 3, 1988. TMP is a joint

dominance is prevalent. Continuously increasing competition is fueled by the

term contracts accompanied by strict standards or quality on for the

technology, ecological, infrastructural, political environment, and legislations

August 3, 1988. TMP is a joint venture of GT Capital

The company has a good vision

statement except for the

goal to be the no.1 automotive company. I think this is a

maintaining safe working conditions.

harmony through open communication.

Growth, and Profitability

productivity and growth by

collective gain of the Toyota

methods and environmentfriendly

being, and by establishing

responsibility, and harmony

b. Products of the Company

External Environment Analysis

vehicles, passenger cars, truck, vans and delivery vehicles.

only 7,313 units from 7,820 units in the same period in

performance to the markets positive outlook.

automotive industry has companies

been enjoying a period of industry. It will be hard

prerecession entrants. (Nkomo)

companies 5 = Strong threat of

and new entrant

quality innovation always

attract buyers that will development to sustain

are can do it too.

discovered that improve

the 1 = Weak threat of new

industry are well-known New

to provide good quality easily

products at reasonable brand identity because

that, new entrants will companies

have to take more time industry.

identity in the industry.

performance, value, fuel

products or services for High

they may tend to buy in customers

buyers their expectations

new normally purchase.

entrants, which will offer

industry 1 = Weak threat of new

incurs high capital cost.

There is an extremely New

high amount of capital planning to enter in the

physical capital cannot compete

plants, in the industry.

raw materials, as well as,

great amount of capital,

but also to keep up with

the 3 = Moderate threat of

industry could have an new entrants

their products but it will possibly have an access

have their own method suppliers.

company in the industry

because space within a