Toyota Motor Corporation

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  • Topic: Toyota, Automotive industry, Toyota Production System
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  • Published : December 14, 2012
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Toyota Motor Corporation

1. Brief description
Toyota Motor Corporationis the largest Japanese automobile manufacturer as well as one of the largest automobile companies in the world.  It was initially established in 1933 as a part of the Toyoda Automatic Loom Works, Ltd. Later in 1937, it was named as the Toyota Motor Co. Ltd. Toyota established many related companies or business units, some of which are Toyota Machines Work Ltd. and Toyota Auto Body Ltd. In 1982 such business units were incorporated and the company was known as Toyota Motor Corporation. Toyota has its headquarters in Toyota, Aichi, Japan. It has distributors and assembly plants in many foreign nations. The company’s vehicles are exported to more than 140 countries. Besides making automotive products, the company owns subsidiaries that produce products such as rubber and cork materials, steel, synthetic resins, automatic looms, cotton and woolen goods etc. It is also involves in the import and export of raw materials. F., 2 Besides being focused in the automotive industry, Toyota is also involved in certain non-automotive activities. These activities include aerospace, philanthropy, higher education, robotics and agricultural biotechnology. The corporation has some philosophies behind the way it runs. For example, it asks its employees to be loyal and committed in exchange for regular pay rises, good pension plans and a safe, well run environment in which to work in. Toyota calls its employees ‘team members’ which makes them feel like an important part of the company. It has one of the most technical training programs where workshops are provided so that the potential employees can show their technical and practical skills alongside their ability to work as a team which is essential for the success of the corporation.

2. a. Competitive advantage

The competitive advantage of Toyota is its production system. The system has enabled the organization to overpower US and German counterparts in terms of providing high quality vehicles which are at the same time cost effective, cheap, easy to maintain and more suited to customers’ needs. This is why cars produced by Toyota can be seen in most of the countries around the world. Toyota’s production system gives the organization competitive advantage by reducing overheads and costs related to waste. This particular system also reduces holding costs and costs associated with management of inventory. Toyota’s production system further ensures quality through continuous operations and improvements. The benefits of the system give the organization the advantage of producing more cars in less time and at reduced costs as compared to other automotive companies.

The overall production system of Toyota has independently managed stages of production process which gives the flexibility of adapting the final product to the requirements of the customers. This makes the organization more receptive to the needs of customers and gives the organization a competitive edge over its foreign counterparts. Connected with the production system, is Toyota’s philosophy of human resources. The highly efficient production system has allowed it to utilize human resources more efficiently. Even though there are other Asian automobile manufacturers who are making high quality cars, they are not able to supersede Toyota’s advantages in human resource management. Toyota’s philosophy of empowering its workers is at the heart of human resource management system. The organization develops innovation and creativity by encouraging employee participations and brings in high level of employee loyalty. 2. b. Porter’s five forces analysis of Toyota

1. Bargaining power of suppliers
The bargaining power of suppliers is low since there are many suppliers in the vehicle industry. Moreover Toyota has the ability to produce the components on their own. Thus the suppliers do not have the power to change the price. 2. Bargaining power of...
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