An Investigation of Toyota’s Characteristics (Dissertation Sample)

An investigation of Toyota’s characteristics
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Contents
Introduction 3

Characteristics of the Company  3

Toyota in Numbers 3

Customers 4

Supplier Relationship Management 5

Toyota’s Market Description6Competition 8

Toyota’s Strategy, Vision, Mission, Corporate Values & Objectives 11

Strategy and Objectives 11

Corporate Values 12

Mission 12

Vision 13

The Company's Main Initiatives and Good Practice 13

Leadership 14

Organizational Structure 15

Entrepreneurship at Toyota 17

Innovation 18

Final analysis 19

Toyota's future challenges 19

Strengths, Weaknesses, and Overall Performance 21

Recommendation: Strategy to pursue continual improvement 23

Conclusion 23

Reference List 25
1 Introduction
Toyota Motor Corporation is a Japan-based multinational automobile company specialising in designing, developing, manufacturing, and selling various automobile products and services. The company was founded in 1937 by Kichiro Toyoda, and it has managed to position itself as one of the leading car manufacturing companies in the world. Toyota operates through its financial services, automotive and All Other segments. The automotive segment is responsible for manufacturing, assembling, and selling various vehicles, including trucks, minivans, passenger vehicles, spare parts, and relevant accessories. The automotive segment is also involved in designing and developing intelligent transport systems. The purpose of the financial services segment is to offer lease and purchase financial services to Toyota's customers and car dealers (Forbes, 2021). Lastly, the All-Other Segment deals with the design, manufacture and sale of housing and telecommunications. The purpose of this report is to analyse the market position, segmentation, and profitability of the company and to describe the company's main characteristics, its mission, vision and initiatives towards leadership, entrepreneurship, and innovation. The report then assesses the challenges the company experiences in such a competitive environment and the alignment of its strategy to kaizen or continuous improvement. It concludes with a general overview of the company's performance.
2 Characteristics of the Company
1 Toyota in Numbers
Toyota has developed numerous vehicle brands, including internal combustion engine, hybrid, plug-in hybrid, fuel cell electric, battery electric and newly all electric cars. According to Madoh et al. (2019), it was the leading hybrid car seller in 2018 and in January 2020, ‘Toyota passed the milestone of more than 15 million hybrid electric vehicles (HEV) sales worldwide since the Prius was first launched in 1997’ (Toyota passes 15 million hybrid electric vehicles global sales, 2020). Nkomo (2019) posits that
Toyota Motor Corporation has over 1000 subsidiaries, including Lexus, Daihatsu, Subaru Corporation, Toyota Canada, Toyota Motor Sales, and Hino Motors. It has a presence in over 170 countries, with North America occupying the most significant market share. The company is among the top global car manufacturers based on sales, market share, and profitability. It currently has a market capitalisation of $219.2B and employs 366.283 people across its branches (Forbes, 2021). According to Carlier (2021), Toyota overtook Volkswagen in 2020 to become the leading automobile manufacturing company by sales and market share, with 9.53 million car sales globally and an 8.5% market share. The company’s total revenue amounted to 250 billion US dollars.
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Figure 1: Toyota’s global sales compared to other top-selling global automakers (in million vehicle sales)
2 Customers
Most of Toyota's customers are aged between 30-50 years and belong to the middle-income group. These customers tend to prefer vehicles that offer them value for their money. Thus, Toyota focuses on designing quality, durable, sustainable, reliable, and safe automotive products that satisfy customers' needs. Toyota Motor Corporation uses different strategies to segment its customers, based on the unique characteristics and designs cars to suit the needs of every segment. Hitosh (2018) mentioned that the company segments its customers based on geographic, demographic, psychographic, and shopping behaviour. This approach has enabled Toyota to establish itself as the
favourite automotive brand in the minds and hearts of its customers. After segmenting the customers, the company uses different targeting and positioning strategies to sell its products.
Demographically, Toyota has customers spread throughout the age brackets and financial abilities. For instance, based on age, Toyota designs Celica and Supra brands for customers aged 18-30 years and Alison and Premio brands for those aged above 30 years (Toyota Corporation, 2017). Toyota also designs car brands for different family sizes and needs. For instance, Voxy and Noah are meant for families with over six members, Yaris, and Corolla for families with three members, and Supra and Celica are meant for couples. Toyota's customers belong to the middle class, upper-middle-class, and the business superclass.
The company designs Corolla, Matrix, Prius, and Allion brands for people earning under 25000$ annually. For customers earning between 25000 and 35000$ annually, Toyota targets them with the RAV4, Avalon and Venza brands (Toyota Corporation, 2017). Other customers of the business superclass earn above 35000$, and Toyota prefers to target them with exotic brands, such as the Lexus series. Toyota customers are also spread across all occupations, from small to large scale farmers, employees, and business merchants. Crown and Mark II brands are meant for models branded as a business-people class. On the other side, Corolla and Yaris are meant for white-collar employees and employers, while Tacoma and Thundra pickup trucks are meant for white-collar employees (Toyota Corporation, 2017).
3 Supplier Relationship Management
Toyota is among the global companies with reputable supplier relationship management. Its key objective is to establish and maintain a positive relationship with its suppliers by developing long- term collaboration and partnerships. Furthermore, the organisation also embraces diversity and inclusion when dealing with supply chain management issues. For instance, half of its 250 suppliers in the European market are non-Japanese companies (Toyota Corporation, 2017). The organisation aims
to provide a solution where everyone benefits and profits from the contract. When developing relationships, this can be achieved using soft and hard key performance indicators. Toyota suppliers are part of the company's strategy. As the company endeavours to build quality cars and optimise shareholders' returns, they need to have a source of quality raw materials at the best possible prices.
Moreover, the organisation encourages its suppliers to become more innovative through research and development activities. However, the company draws a line between its strategic development partners and other suppliers. Suppliers are evaluated through regular company-to- company reviews and audits, where they demonstrate their technical skills to Toyota engineers.
4 Toyota’s Market Description
Toyota has a global market with a high concentration in Asia. Geographically, the market is segmented into Japan, Pacific Asia, Europe, North America, Latin America, the Middle East, and Africa (Li, 2018). North America is Toyota's largest market in size, followed by Japan and Asia.
Figure 2: Toyota's Market Share per Region (Cascade Team, 2021)
The company operates across all continents, considering each region's specific geographical automobile needs. Toyota Motor Corporation's products across its markets include vehicles, engines, car electronics, conditioners, stamping dies, and batteries for electric cars. Under the car segments, Toyota manufactures Toyota and Lexus automobile series for consumers with various financial abilities. The Toyota series is the standard and signature product, whereas Lexus is meant for a luxurious lifestyle. The Cabs series is designed for the elderly and people with disabilities (Thomas, 2021). Toyota maintains higher customer satisfaction levels by providing a wide variety of automobiles. For example, passenger vehicles are designed in small, medium, and large sizes to meet the required capacity. They include Corolla, Yaris Tarago, and Aurion. The SUV vehicles include the Landcruiser series, Prado, Rav4, and Kluger. Coasters and Hilux are designed for commercial purposes and pickups for farms and heavy duties (Nkomo, 2019). As a pioneer in hybrid technology, the firm offers most of the models mentioned above in a hybrid version.
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Figure 3: Toyota's operations worldwide (Toyota, 2021)
Toyota has established itself as a giant in the global automobile industry. The company has 71 manufacturing plants globally and 20 R&D centres for innovation and entrepreneurship (Toyota, 2021). The company is not only well-known for its vehicle brands, as it also sells boats and marine engines,
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