Research Topics: Toyota Case Studies

External and Industry Environments’ Analysis Report for Toyota

A Report for Toyota Motor Corporation TABLE OF CONTENTS             1 Executive Summary                                                        2             2 Introduction                                                                       2             3 Overview                                                                            3             4 Environmental Analysis and Commentary                 4             5 Organisational Analysis and Commentary                 5             6 Gap Analysis and Strategic Alternatives                      7             7 Strategic Options and Choice of Strategies                 8             8 Implementation Plan                                                       10             9 Evaluation Plan                                                                11             10 Recommendations                                                        12             12 Conclusions                                                                    13             13 Reference List                                                                14             Executive Summary             Toyota has become the leader in hybrid cars manufacturing. The Toyota Prius has long been credited as the car which started it all.             Toyota believed in hybrids because of the superiority of the technology to the internal combustion engine. Such technology allows all powertrain improvements in diesel, gas, electric or hydrogen to incorporate into car production. Thus, hybrid powertrain has the most ability to continuously improve (2005).             As an emerged technology, software bugs are not surprising the automotive sector and even in conventional vehicles, system glitches are becoming more common.             In lieu with this, this report aims at providing the Toyota Motor Corporation the strategic alternatives and options available in the market, the environmental and organisational analysis and proposed sample implementation and evaluation plans. Introduction             A typical passenger car has 70 or more tiny but powerful computers on board that control audio systems, air conditioning, brakes, air bags and scores of other tasks. The software for an average car can have more than 35 million lines of code. Hybrid cars need to control separate gas and electric power sources and doses require a 100 times or more the code needed (2005).             Hybrid cars use multiple computers significantly compared to conventional automobiles. The Toyota hybrid cars, which have been in the global automotive industry since 1997 in Japan and 2000 in the US, are using MULTI IDE and C/C++ compiler to develop engine and transmission control software (2005).             However, many analysts and auto executives are continuously questioning the hybrid technology. Yet, still, why does Toyota continue?             Toyota believed in hybrid cars as well as continuous improvement or the kaizen. Things have changed because of competition and Toyota must always seek to improve in order to get better and thus, compete (2005). Overview             Automakers spend billion to billion a year fixing software glitches (2005). In October 2005, Toyota recalled 75, 000 Priuses in the United States due to a number of reports that the cars were inexplicably stalling on the highway ( 2007). Thirty-two percent of auto warranty claims in the United States are because of software or electronic-related issues (2005).             The owners of the cars were asked to take their vehicles to their dealer in order to fix a potential software glitch. “If the gasoline engine stalls, the electric motor in the vehicles will have enough power to allow the driver to pull the vehicle over and away from the traffic”, according to Toyota.             A “programming error” was found in the computer systems of 23, 900 Prius cars sold. The Prius hybrid cars urge a software upgrade in order to fix a few lines of buggy code. Apparently, the computer system of the cars is needed to be reset. After the procedure, hybrid car drivers complained of the reduced mileage ( 2007).             The software update was provided free-of-charge. Such update is intended for 2004 and 2005 Prius models. The US National Highway Traffic safety Administration investigated the incident. There have been no injuries or accidents reported due to potential software problem. However, potential buyers for the Prius made leery of the car (2005).                Environmental Analysis and Commentary             The mission of Toyota is to attract customers for life. Their ambition – to become the most admired sales finance company for all stakeholders. The vision of the company is not to be no. 1 instead to become the most successful and respected car company in the world.             Externally, the Toyota belonged to the transportation equipment industry and its market is the public companies trading. There are a total of 26 competitors for Toyota. The top three are: Ford Motor, general Motors and Honda. These competitors are also offering a wide array of hybrid cars. By this, we can analyse the hybrid system and environment as below: Remote Environment (factors that originated beyond Toyota company’s operating situation) <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify"> Hybrids have complicated technology that is difficult or expensive to fix </li> </ul>      Every car today has packed with complicated electronics and computer chips. Working on a hybrid cars requires a specialized training for the mechanics. Dealership may only have one or two mechanics trained on hybrids      Expenses-wise, hybrid-specific components have extremely long warranties. <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify"> Hybrids have technical problems like stalling and sputtering </li> </ul>      Such concern stems from the case of the recalled Priuses. The gasoline would sometimes shut-off at the most unexpected times. The problem was pointed as faulty program logic ( 2007). Industry Environment (factors that affect Toyota company’s prospect) <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify"> Hybrids do not pay for themselves to justify their premium cost </li> </ul>      According to Consumer Reports, it would be difficult to justify the process of purchasing a hybrid car for economic reasons. As the report states, for a five-year ownership period, only the Honda Civic Hybrid and Toyota Prius could save the money.      The higher initial cost and fast depreciation were the reasons that hybrid cars don’t save owners money. However, some vehicles will save enough to pay for extra cost as indicated by the new tax incentives.      Through simply accelerating and braking more gently drivers can save more. <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify"> Hybrids do not offer the driving performance needed </li> </ul>      Compared to non-hybrid cars, hybrid powertrains are more fuel-efficient. Such efficiency could mean getting more power out of the same amount of fuel or using a same-sized engine more efficiently while also gaining extra power and quickness.      This can be provided by Honda Accord Hybrid and Toyota Highlander Hybrid only the latter offer more responsive acceleration.      In contrast, the Toyota Highlander Hybrid cannot save as much fuel as they could with smaller gasoline engines unlike Ford Escape Hybrid and Honda Civic Hybrid. These two models offer power that is more adequately for daily use. <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify"> Hybrids will not hold a resale value </li> </ul>      Toyota Priuses have high resale value but are not sold on near-new prices as stories claimed. The factors which affect the high value are the unique, hybrid-only vehicle with eye-catching design and Priuses are produced and sold in low volumes. As a used car, the Prius has more in common with the Mini Cooper than a Ford Escape Hybrid SUV in terms of holding such value ( 2007). Operating Environment (factors that influence Toyota company’s competitive situation) <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify"> Hybrids have limited battery pack life </li> </ul>      Hybrid batteries function without ever being fully charged or discharged. A regular gasoline-powered engine assisted by an electric motor run the hybrid vehicles. During braking and idling, the battery is charged by the gas engine.      Toyota and Ford claim fleet use of hybrid vehicles lasting over 100, 000 miles — Toyota claims over 200, 000 miles for a few vehicles.      Besides, hybrid components including batteries have extremely long warranties. Toyota guarantees 10 years or 100, 000 miles for all hybrid-specific components on their vehicles. Ford and Honda both guarantees hybrid user with 8 years with 800, 000 – 100, 000 miles. <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify"> Hybrids do not get the level of mileage promised </li> </ul>      All vehicles could have 15 % fewer miles per gallon than the EPA estimate. At any rate, calculating gas spending based on EPA estimates actually underestimating a wide margin ( 2007).   Organisational Analysis and Commentary             The Toyota company is a public company with 2, 864 million 2007 total sales and 299, 394 employees. Toyota is below industry average in both sales satisfaction and customer satisfaction.  There is a need to focus on plant quality and flexibility. This reflects the unusually high number of product recalls over the past couple of years.              Toyota Motor outsold General Motors in the first quarter of this year. Toyota sold almost eight million cars in the world. Toyota’s stock market value is roughly 30% of the value of all global carmakers combined (2007). The target of selling by 2010 is 10.3 million. The Japanese carmaker is currently expanding production throughout Asia, Europe and US (2006). The Toyota’s organisational ethos had helped in penetrating the #1 position:   Strengths <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify"> High level of research and development </li> <li class="MsoNormal" style="text-align: justify"> Firmly committed to hybrid powertrains </li> <li class="MsoNormal" style="text-align: justify"> Committed in launching new products and to lean manufacturing and quality </li> <li class="MsoNormal" style="text-align: justify"> Kaizen, jidoka, muda, munuzukuri and genchi genbutsu as key principles </li> <li class="MsoNormal" style="text-align: justify"> A culture of teamwork, respect, challenge and just-in-time </li> <li class="MsoNormal" style="text-align: justify"> Competitive service price-wise to dealers </li> <li class="MsoNormal" style="text-align: justify"> Very focused segmentation, targeting and positioning </li> <li class="MsoNormal" style="text-align: justify"> Diversified product range </li> <li class="MsoNormal" style="text-align: justify"> Consensus management style </li> <li class="MsoNormal" style="text-align: justify"> Constantly re-engineering and redesigning models (2006) </li> </ul>   Weaknesses <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify"> Retail operations </li> </ul> Ø  Selling approach <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify"> Dealerships ( 2006) </li> </ul> Ø  Poorly-designed showrooms ·         Expensive costs investments on car plants ·         High costs of training and retaining labour ·         Time to accommodate ·         Faulty front suspension systems ·         Software/programming glitches ·         Tend to not wanting to admit a problem publicly ·         Stretched management resources or training new hires to understand Toyota Production System (TSP) ·         Difficult defect-tracking procedures Opportunities <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify"> Emphasis on the importance of quality over cost-cutting or pure design </li> <li class="MsoNormal" style="text-align: justify"> Improve customers’ buying experience </li> <li class="MsoNormal" style="text-align: justify"> Utilize the Internet in making attractive offers </li> <li class="MsoNormal" style="text-align: justify"> Explore to be a one-stop shop for customers’ financial requirements </li> <li class="MsoNormal" style="text-align: justify"> Investment in hybrid R&D ( 2006) </li> <li class="MsoNormal" style="text-align: justify"> Revisit quality measures </li> </ul> Threats <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify"> Cars can be replicated by competitors almost immediately </li> <li class="MsoNormal" style="text-align: justify"> Heavy competitions from traditional banks </li> <li class="MsoNormal" style="text-align: justify"> Fluctuating economic and political conditions </li> <li class="MsoNormal" style="text-align: justify"> Exchange rates movements narrow margins </li> <li class="MsoNormal" style="text-align: justify"> Exposure to any movement of raw materials </li> <li class="MsoNormal" style="text-align: justify"> Product recalls </li> <li class="MsoNormal" style="text-align: justify"> Economic disturbances </li> </ul>                 Gap Analysis and Strategic Alternatives             The global automotive sector has a deepened, growing concern regarding the inadequacy of developing and implementing software models. It is necessary for every automaker to produce efficient softwares for hybrid vehicles’ mission-critical systems.  However, the industry has no solid means of blending the disciplines of car manufacturing and software development (2005).             The repetitive process of recalling Toyota hybrid cars with software glitches is an indication that there might be something wrong with the quality control of the products company-wide. Toyota did their own software development in-house and thus, having control over upgrades as a clear advantage ( 2005). Further, the prevailing business operation can be described:                               In lieu with the consistent recalls, the Toyota must: a) focus on software quality, b) have an in-house software assessment task force/department, c) facilitate a specialized training for hybrid cars mechanics, d) maximize control over upgrades, e) if necessary, conduct routinely quarter or mid-year software assessment of newly-installed softwares and f) initiate an industry-wide higher-level software standards.             Toyota hybrid vehicles recalls set a basis for building software standards and elevating software quality through the use of off-the-shell requirements and standardized software implementations as a commodity (2005).   Strategic Options and Choice of Strategies             Since the recalls are identified as software glitches, then the solution must focus on developing software programs that are powertrain-specific. The systems affected are engine control and transmission, body chassis and safety systems and infotainments.  For hybrid cars, applications include: 1) engine management software – to coordinate fuel, spark and other subsystems, to meet the legislative exhaust emissions regulations and to provide greater fuel economy; 2) electronic transmission control software – to monitor engine and car speed and to change engine ratios for an easier and smoother driving experience and 3) diagnostics software – to enable carmakers and engineers to test and correct engine management and transmission systems (2005).             The Toyota Motor Corporation, in order to cope up with the costs of recalls, instead of doing all the researches regarding software development in-house, the company could: <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> have an in-house automotive software developers, implementers and assessors,</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> came up with a driver-friendly do-it-yourself manual on automotive software upgrading, if possible,</li> </ul> <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> outsource/hire a company specializing in embedding automotive software and/or even</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> divert in a partnership with an automotive software developing companies that can: overcome severe memory limits, ensure fastest execution and build bug-free applications:</li> </ul> A)   Processors in powertrain application experienced severe memory constraints. The automakers, including Toyota, must avoid buying bigger and more expensive memory parts. The software must add more features with less memory, thus, gaining a competitive advantage in complying with heavy emission requirements. Such software must have small code sizes to allow advanced compilers to shrink an application’s code size. B)   To ensure a faster execution, the software developers must increase complex software algorithms which require more processor speed. The requirements include stringent emissions regulations, advanced cruise control, better fuel-efficiency and anti-knock algorithms among others. C)   Bug-free applications include run-time error detection, mature compilers, MISRA support and automated module testing ( 2005) Implementation Plan             Most Japanese automakers, including Toyota, do their own software development. Japanese always tended to do things on their own. Other automakers like BMW, Mercedes Benz and General Motors do some in-house software development and portion-out the rest of the work (2005).             In effect, the Toyota must admit that the company faces difficulty in addressing recalls. Car manufacturing is the company’s specialty and not software development. So, it is best to have an IT company to do development task and focus on quality of the cars produced.             This could mean an extra cost for the Toyota company since they have to pay rights to use the software ( 2005). More practically, the company would benefit if highly-developed, high-performance automotive softwares will be available. The partnership will be of mutual benefit because softwares can be tested and retested on the hybrid cars. Thus, avoiding the reoccurrence of car recalls due to software breakdowns and the capability of embedded automotive softwares could be maximized since the development is accompanied by actual testing on reliable cars.             Practically, the plan must include the history of partnership, composition and linkages, legal framework and working processes and the process of limited partnership will begin by sourcing and choosing potential business partners, securing partnership requirements/documents, complying with partnership regulations and laying financial concerns including taxes. The key indicators are risk management, output, funding and workforce for both companies. The actual process of development will culminate after the partnership materializes, to illustrate: TOYOTA MOTOR CORPORATION PARTNERSHIP WITH XXX EMBEDDED AUTOMOTIVE SOFTWARE COMPANY What Who When Adopting industry-wide standards Toyota and Company XXX Week 1 Model-based Software development -do- Weeks 2-8 Code-generation Tools and Techniques -do- Weeks 9-16 Automotive Software Architecturing -do- Weeks 16-20 Automotive Software Designing -do- Weeks 21-24 Automotive Software Engineering -do- Weeks 25-28 Quality Assurance, test Strategies, Verification and Compatibility -do- Weeks 29-35 Provisions for Re-testing -do- Following weeks   Evaluation Plan             We can practically say that there will be two evaluation plans: for the partnership and automotive software development. The partnership can be evaluated through needs, outcomes, processes and frameworks: Evaluation Indicator How the Indicator is met Assessment Score Needs (the basis of entering a partnership) ü  Identified gaps ü  Workforce initiatives/demand ü  Specific outcomes that can be delivered ü  The partner is the best placed organisation to deliver the service ü  Service level Agreement           Framework (for working in partnership) ü  A signed SLA ü  Clarity in expectation/outcomes, length of contract/agreed review schedule, where responsibility lies and monitoring requirement ü  A clear work plan ü  Outcomes of the work plan ü  Development of partnerships           Partnership Process (effective maintenance of partnership) ü  Clear demonstration through regular reviews ü  Clear guidance in place ü  Meeting the agreed outcomes and performance ü  Adequate financial management systems in place ü  Meeting the agreed requirements as expressed in code of practice on funding and procurement           Assessing the Internal and External Impact & Outcomes ü  The original partnership objectives are being met ü  Quality of service being delivered as evidence of effective partnership ü  Meeting the wider corporate priorities and community aspirations ü  The cost and resource does not outweigh the benefits ü  Outcomes are promoted and demonstrated to the local community           (Based on: The Partnership Evaluation Tool)               The program should be assessed based on the objectives of adopting industry-wide standards, coding techniques and tools, software architecture, design and engineer and quality control, testing and verifications. The automotive software development program can be evaluated through:                               Recommendations             The abovementioned alternatives, solutions and options are automotive software-specific. Company-wide, the Toyota must also develop clear customer service standards, sustainability strategies and policies-targeted at core products or services. In addition, the preparation of a target-based timeline where performance can be judged and held accountable must be a priority (.).             There should be a progress on external reporting. The company leadership must be vocal and committed. The Toyota can also purport on stakeholder consultations and publication of results. Stakeholders must participate to meet environmental and societal needs related to core business (rady, n.d.). Conclusions             As automobiles become more technologically-advanced, an issue of interest would be the tolerance for the new technology. The hybrid cars performance has been remarkable and predicted by analysts as ‘here to stay’. Currently, the hybrid system was dubbed as the technology of the millennium.             First, the Toyota has to admit that something went really wrong along the process. Software glitches are not a problem solely for the company. It is an industry-wide dilemma that is needed to address immediately. Somehow, it had open opportunities of exploiting the hybrid technology. , Chairman of Embedded Software Standards, believes glitches are of similar features and software quality must be ensured industry-wide (2005).             Second, the Toyota hybrid cars have a pre-existing reputation.  Its presence on the global automotive sector is building intangible brand value. The company has strategized in a long term focus and the Prius is making money for Toyota.             Third, the Toyota has an image that can be easily maintained. Technology can be replicated quickly. General Motors or DaimlerChrysler cal always attempt at counter launching a competing product. The Toyota knows have a counter-relaunch of a more advanced versions and sell more (2005).             Finally, the Toyota company acknowledges shortcomings and work on it privately as much as possible. Such shortcomings are identified and analysed quickly and then communicated with the customers on the basis of time quality.             Quite simply, the Toyota company fosters responsibility and accountability or sustainability aspects in a holistic and principled-approaches ( 2006). Credit:ivythesis.typepad.com

External and Industry Environments’ Analysis Report for Toyota

A Report for Toyota Motor Corporation TABLE OF CONTENTS 1 Executive Summary ...

TOYOTA International Marketing Management

Introduction             The spotlight is now on Toyota because of the recent recalls that has plagued the company and its customers. The failure of Toyota’s production system and supply chain is now a worldwide issue, causing a ripple effect of negative publicities and threats from various pressure groups. The company’s top executives have been called to be questioned by the American Congress. The company’s supply chain, a model, which many companies around the world emulate, is now in question.  The company’s president and CEO, Akio Toyoda, acknowledged that in its pursuit of growth, Toyota, stretched its lean philosophy close to breaking point and in so doing became confused about some of the principles that first made it great: its focus on putting customer satisfaction above all else, and its ability to stop, think and make improvements. Aims and Objectives             The aim of this paper is to investigate on the recent controversies that Toyota faces. Specifically this paper aims: 1. To determine the manufacturing principles and models employed by Toyota. 2. To examine the causes and effects of the current controversies that Toyota is facing. 3. To examine Toyota Production System (TPS) 3. To determine the impact of Toyota’s manufacturing and supply chain failures to the car manufacturing industry. 4. To examine the company’s supply chain system and its strengths and weaknesses. 5. To offer recommendations for the company.   Background             Reported accidents, deaths and driver concerns have shaken the car manufacturing industry. The object of these incidents is Toyota, one of the most successful car manufacturers in the world. Among the various complaints about the company’s cars are dangerous floor mats and sticky accelerator pedals. In the United States, Toyota’s vehicle faults are allegedly linked to the deaths of 50 people, and have forced a recall of 11 million vehicles worldwide. Akio Toyoda, the company’s president and founder’s grandson, has been called to Washington DC to stand in front of the American Congress to account for his company’s failure to act quickly and seriously enough to protect the safety of its customers in the face of the mounting evidence of defects and fatalities. Akio Toyoda has acknowledged that the cause of these problems may have been the company’s eagerness to expand globally which caused the company to lost sight of a long-established commitment to the spirit of customer first.             Toyota has grown from being a small Japanese carmaker in the 1960s to the biggest carmaker in 2007, outranking General Motors. The founding principles for this success were embodies by the “Toyota Way” – a respect for learning, truth, trust, team-work, challenge and continuous improvement. It gave birth in the 70s and 80s to the Toyota Production System (TPS), now imitated across manufacturing industry, better known as Lean Manufacturing. TPS or Lean is held up as the archetypal manufacturing system of modern times. It is a methodology based on the ideals of just-in-time, continuous improvement etc.    Definition of Concepts Toyota Production System (TPS) – The history of just-in-time and other Japanese manufacturing innovations can be traced to the Toyota Production System developed by Taiichi Ohno. There are two pillars of Toyota Production System. These are just-in-time and auto-activation (jidoka). The Toyota Production System lay in the simultaneous implementation of these two pillars, on condition that jidoka precedes just-in-time, the former being an indispensable precondition for the implementation of the latter. Jidoka (Auto-Activation) – aims to delegate responsibility to the workers for the quality of products form the elementary production tasks themselves. In practice this innovation means that line workers not only have the right, but are obliged to take the time which is necessary in order to carry out the tasks necessary to ensure the maintenance of the highest quality standards at each stage of production, even while production is taking place. Just-In-Time – is a method of production programming involves a series of innovation in the production and the preparation of the work more generally in the logistics of production and in the management of the flows and stocks of intermediate and semi-finished goods. These innovations take together constitute a system of production with very reduced stocks, made possible a system of information processing unique and unprecedented in the history of work organization. Supply Chain Management – Supply chain or value chain management is composed of the operational or tactical activities and can be defined as ‘managing the entire chain of raw material supply, manufacture, assembly and distribution to the end consumer (Jones 1989 cited in Lowson 20002). Christopher (1998) defines supply chain management as the management of upstream and downstream relationships with the suppliers and customers to deliver superior consumers value at less cost to the supply chain as a whole. Lean Manufacturing – the goal of lean manufacturing is to create a manufacturing environment that is driven by demand and that holds only a small amount of inventory and product at any given time (Bacheldor 2004 cited in Ndahi 2006).  Lean production uses less of everything – half the human effort in the facroty, half the manufacturing space, half the investment in tools, half the engineering hours to develop a new product in half the times. Also, it requires keeping far less than half the inventory on site, and results in many fewer defects, and produces a greater and ever growing variety of products. Proponents of lean manufacturing believed that the system eliminates waste, reduces inventory, and increases value throughout the supply chain (Kumar and Yin 2004 cited in Ndahi 2006).   Credit:ivythesis.typepad.com

TOYOTA International Marketing Management

Introduction The spotlight is now on Toyota because of the recent recalls that has plagued the company and its custom...

Critical Analysis: How the resource-based strategic approach can assist organizations to meet the needs and wants of their customers?

Critical Analysis: How the resource-based strategic approach can assist organizations to meet the needs and wants of their customers?   Executive Summary             Different organisation is trying to use various approaches and strategies to enable them to meet organisational objective and to ensure that they will be able to meet the needs and wants of their target market. One of the strategies that organisation used is the resource based strategic approach. It can be said that the resource-based strategic approach deals with two assumptions. First, resources are heterogeneously distributed on different firms and secondly, these resources cannot be transferred nor used by other firms without particular cost. According to Barney (1991), resources which continuously enhance an industry’s market effectiveness are called valuable resources. On one hand, resources are called rare if it is note widely dispersed but can generate competitive advantage, it is inimitable if such resources are simultaneously expensive to imitate by others and nonsubstitutable if it is costly to be substituted and provide sustainable competitive advantage. It has been noted that the value and rarity of the resources are very important before its nonsubstitutability and inimitability (Priem & Butler, 2001). Primarily, the goal of this paper is to assess how the resource-based strategic approach can assist organizations to meet the needs and wants of their customers. Specifically, this analysis will use the resource based view.               Overview of the Company Toyota Motor Corporation is a famous Japanese multinational corporation, and is considered the world’s second largest automaker of automobiles, trucks, buses, robots, and providing financial services (“Toyota”, 2008). Its founder is Kiichiro Toyoda, born in 1894, and the son of Sakichi Toyoda, who became popular as the inventor of the automatic loom. Kiichiro inherited the spirit of research and creation from his father, and devoted his entire life to the manufacture of cars. After many years of hard work, Kiichiro finally succeeded in his completion of the A1 prototype vehicle in 1935, which marked the beginning of the history of the Toyota Motor Corporation (“History of Toyota”, 2008).                         Resource Based Strategy by Toyota             Like any other firm, Toyota has been able to use resource-based strategic approach to ensure competitive advantage. Accordingly, the essence of this approach is that competitive advantage is generated when the company capabilities and resources which are owned exclusively by the firm are being practiced and applied to develop distinctive competencies (Porter, 1998) Toyota tries to preserve its competitive advantage by utilising their resources to ensure that they will be able to meet the needs and wants of their customers Indeed, it is a hard task for the company to preserve its locally conceptualized model while maintaining linkages with the global economy (Liker, 2003, 2004). However, because Toyota’s resources are established as key aspects needed by a company, this has become easier in dealing with the issue of globalization. The latest developments in the company proved that it is stronger than ever, emerging victorious from otherwise discouraging situations. Toyota has been able to initiate their unique capabilities and resource in through their Toyota Production System (Cho, 2004). It is noted that the company is establishing both tangible (referred to new learning facilities) and intangible (content of the course) structures relevant to the development of each team member which ensures a secure and stable flow of qualified and competent human resources to be part of the Toyota’s global and international operations which leads in enabling them to provide quality products with their respective clients. In order for the said system to work at Toyota’s advantage, the company follows their unique capabilities which are the so-called “14 Toyota Way Principles” (See Figure 1). This operating philosophy serves as a guide for its management. The first principle of Toyota based on their management decisions on a long-term philosophy, even at the expense of their short-term financial goals. Second, Toyota creates a continuous flow of processes to bring out any possible problems. Third, to be able to avoid overproduction problems, the management of Toyota use the pull systems. Fourth, level outing of workload is also important. As they say, work like a tortoise, not like the hare. Figure 1 Through this, it can be said that resource based view give emphasis on the internal capabilities of the company in formulating approach in achieving sustainable competitive advantage in the marketplace. The most admired production system of Toyota also ensures that they are able to manage their core competencies to meet the needs of the clients for innovative and new vehicles. This is the very core reason why Toyota, despite the competitors’ effort of imitation, continues to gain market share and huge profits continues on building new plants, retains a harmonious relation with its supplier and enthusiastic workforce, with its labour costs retained at a lower amount compared to others. They are also described as “the fastest runner in the race” in auto industry. Production efficiency helps them reach that point. Their record (most productive) of 27.9 hours per-vehicle time surpasses the record of their competitors like Ford and Chrysler. The tools of the TPS seem to work smoothly for them. These tools are lean, agile, TQM, TPM, re-engineering, just in time, cellular/continuous workflow, etc. TPS should not only be a cost-based strategy, it should also be a value-based one. The full potential of the TPS is as an operational solution ready to remake entire organizations – both at the process and management levels. Hence, through the resource based strategy of Toyota, the company has been able to makes sure that their clients and customers in all aspects will be satisfied for the quality cars and products they provide. Specifically, the company has focused their marketing approach on the demands and needs of the buyer for a quality and innovative cars and automotives source that satisfies the and heavily positioned their products in this segment.    The competitive aim of each industry is to provide what the buyers or consumers are looking and satisfy these needs to gain competitive advantage and outgrow rivals within the marketplace (Thompson & Strickland, 2003). Aside from its manufacturing system, Toyota’s resource based strategy is also attributed with their marketing strategy (Meek and Meek 2003). Toyota has been able to use their established brand which is inimitable. Accordingly, branding involves the building, maintenance, enhancement, and exploitation of brand equity, which has been defined as the “value a brand name adds to a product” (Broniarczyk & Alba, 1994, p. 214). The fundamental concept is that a recognizable brand will more easily attract and retain customers than an unrecognizable one. A strong brand of Toyota is said to enhance the value of a product beyond its functional value (Cobb-Walgren, Ruble, & Donthu, 1995,), and serve as a powerful heuristic cue for evaluation and choice decisions (Park, Jun, & Shocker, 1996. That value accrues both to existing products or services and to brand extensions, whereby a strong brand is leveraged to introduce new products. Herein, Toyota has been able to develop a strong brand value to ensure that they will be able to gain customer and satisfy their specific needs.   According to Kapferer (1992), the value of brands is something invisible, intangible and unwritten and, yet, brands are the real capital of business. Aaker (1991) elaborated on the corporate value of brands by arguing that for many businesses the brand name and what it represents is its most important asset — the basis of competitive advantage and of future earnings streams. He justifies this by discussing how the selling price of many firms is much more than ear would justify because of the value of the brand assets. In addition, another strategy used by the company is the enhancement of their brand image by adding up some other brands likes Lexus. According to Houk (2001), branding is more than advertising; it is a conglomeration of messages, images, and experiences that consumers associate with a product or service. The sum of those items allows the consumer to associate product expectations with a brand image. According to Kim and Weaver (2000), the administration and management of a particular business organization entails full utilization of the resources of the company in order to lead, direct, and control operations to meet the set objectives.  Based on the given case study, it can be said that Toyota has been able to use strategic approach to sustain their competitive advantage. One of the capabilities Toyota is how the leaders of the company do their business.  Guided by their vision and mission, the leader and management of the industry clearly illustrate integrity in all their actions.  The management has also strong commitment in promoting the company values and the value of diversity among the employees and staffs. In addition, the management of the company has been able to understand the priorities of the business and make every decision in line with the strategic direction by giving consideration to the effect on all aspects of the business and on other stakeholders.  Another sustainable capability of the company is its continuous focus on the importance of both internal and external customers to ensure that these customers remain loyal to them.  The company also makes it sure that they motivate, inspire, coach, guide and support their staffs to realise the mission of the Toyota. Furthermore, the company’s ability to identify and recognise contributors is another factor that sustains the company’s competitive advantages. The ability of the management to diversify and differentiate their business strategy to dominate the global market can also be considered as the major capabilities of the Toyota.               Conclusion  It can be said that resource based strategy is considered as an important aspect of the company to ensure that the company sustain their competitive advantage. Drawing on the identified resource based strategic approach present to Toyota; we are in a position to consolidate our findings with a view to arrive at recommendations which would take the company into the next decade. The manufacturing system or production system of Toyota has been considered to implement their resource based strategic approach by enhancing the capabilities of their human resources. Car industry is Toyota’s stronghold where it continues to yield strong sales revenue by leveraging off its excellent shop locations, strong brand name and excellent reputation among customers.   Since, there are many competing automobile companies in, firms like Toyota are said to implement strategy in which the employees and management are the only ones who have enough and skilful knowledge. The company is focused on meeting the needs of the customers since its establishment; this objective will then be integrated into its international business activities. In summary, the resource based strategic approaches of Toyota cited in this discussion had been selected based on the company’s strategies, business analyses and objectives. Generally, these strategic moves can be of benefit to Toyota not only in gaining profit and market growth but also in providing the needs and demands of the customers. Most importantly, these possible strategic moves support Toyota’s view to integrate customer satisfaction and profitability in its future strategies.   Recommendation It can be said that automobile industry has a strong competition; hence, it is recommended that companies like Toyota should be able to gain competitive advantage and position in the global market. In doing so, the company must be able to adhere to the needs of their customers for them to remain loyal to avail the services and products offered by the company.  It is recommended that Toyota must be able to apply prioritized quality in customer services. The assurance of quality service and products may yield to customer satisfaction, loyalty, employee satisfaction and more importantly profit growth. In order to cope with the challenges of the market environment today and for the next ten years businesses like coffee industries must be able to implement different strategies which will enhance their competitive advantage and customer services.   Reference Barney, J 1991. Firm resources and sustained competitive advantage. Journal of management, 17(1), 99-120.     Cho, F 2004, ‘Toyota Motor Corporation: Information meeting in New York’, Toyota, Available at [www.irwebcasting.com]. Accessed on July 11, 2008.   Porter, M 1998, Competitive Strategy: Techniques for Analysing Industries and Competitors. Free Press.   Priem, RL and Butler, JE 2001. Is the resource-based view a useful perspective for strategic management research? Academy of Management, review, 26(1)   Thompson, AA Strickland AJ & Gamble J 2005, “Toyota in 2004:  Driving for Global Dominance”. Crafting and Executing Strategy (Fourteenth Edition), McGraw-Hill, New York, pp. C2-C32.   Toyota (2008), Toyota in the World Databook. Available at [www.toyota.co.jp/en/pdf/toyota_world/2005/chap5.pdf]. Accessed on July 11,2008.   Williams, J.R. (1992). How Sustainable Is Your Competitive Advantage? California Management Review, Spring, pp. 29-51.   Credit:ivythesis.typepad.com

Critical Analysis: How the resource-based strategic approach can assist organizations to meet the needs and wants of their customers?

Critical Analysis: How the resource-based strategic approach can assist organizations to meet the needs and wants of their customers? ...