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Assessment of Toyota Company Operational Strategy (Term Paper Sample)


Statistical technique
Assessment of quality characteristics will require use of a qualitative statistical procedure.
Toyota company has been having quality issues characterised with high sales recalls.
Qualitative procedures that could be applicable include Delphi and customer survey/ market
Market survey becomes the most appropriate technique to gather first hand information,
opinion, and perceptions.
The method will help get information of market stagnation and slow customer cycles.
Opinion on customers expectations will be revealed.
Current facility location
Toyota is an American corporation
Current location chosen on bases of high technological development, resource endowments,
proximity to market and resources.
Population growth and high competition is putting pressure on economic resources.
Emerging economies are advancing fast on bases of technology.
Market pressure requires firms to enter new markets to sustain their competitive advantage.
3-step procedure to new location
For bases of capacity planning it is important to make location decisions with basis.
The 3 step procedure will include:
Dominant location factors- including proximity to market, proximity to suppliers and resources,
availability of labour, availability of power, and stability of climate and government policies.
Development of location alternatives- since Toyota parent company is based in US, China and
Middle east would be appropriate on bases of resource availability. Availability of manpower and
government policies would lead to Canada and African countries like South Africa.
Evaluation of alternatives- the alternative to be selected will be carrying most of the location
factors. From the table below, the new location would be China as it fits most of the dominant
location factors.


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Firms have widely made use of operating strategies as a guide on resource allocation and distribution. Therefore, making it a tool words achievement of both short-term and strategic firm objective (Arnold, 2016). Consequently, leading to development and achievement of a competitive edge. Toyota has an operational strategy that would be used to guide the assessment.
Analysis of the vision and mission statements
The firm vision has two major elements “respect” and “success”. This two elements have quality assurance to customers, expansion of the firms, profit generation, being a leaders and a build to the brand image (Liker, 2005).
The firm’s mission is directed towards customers who would be satisfied with the best quality. Therefore, the firms will be making customer oriented production to improve on satisfaction (Krijnen, 2007).
Toyota business operation strategy
Toyota is a world leading producer and seller of automotive. It has been enjoying a competitive advantage for a long period through its strong operations management approaches including use of just-in-time, lean management, and kaizen models. In addition, it has invested widely in R&D to be able to employ techniques that suite customers need thus in line with achievement of their mission (Andrews, 2011).
The operation strategy of the firm has been seen to revolve around five major areas. This includes; development of production systems that only apply to the firm thus unique developments, investment is business re-engineering, emphasis on quality assurance and high tech operations, employee’s welfare through motivation, and production of high valued vehicles. Theses facets have been used by the firm to drive its production and market participation (Arnold, 2016).
Supply chain
Toyota has for the past ensures low cost distribution without a compromise on customer’s service quality. Therefore, its chain has been cost driven. Consequently, the firm sis able to offer its products on a consumer friendly price package. The supply chain of the firm is however dependent on the production system of the firm thus forming a key element to the operational strategy (Barney & Hesterly, 2010). It relies on lean manufacturing which has helped it gain a competitive advantage. The supply chain has been strengthened by information sharing, joint improvements, interlocking structures, control systems, and mutual understanding.
Just-in-time philosophy
According to Andrews (2011) the firms has organised its information flow and with resources in a manner that they are able to enjoy to JIT benefits. The model has been applied for quality assurance, TQM, elimination of waste, continuous improvement, as well as improved cooperation. As a manufacturing philosophy, the model was adopted in 1970s. These was with an aim of controlling inventory as well as eliminating waste in the production system. This has been to achieve its mission on customer satisfaction with minimal waste. They have been able to ensure quality, improved transparency, and production complexities have been reduced (Marksberry, 2012).
Total quality management
The TQM tool for the firm has been on ensuring customers first, continuous improvement, and total participation. This has helped the firm engage all its stakeholders towards meaningful production. Consequently, assuring quality and improved customer satisfaction (Kindström, 2010).
Forecasting methods
The firm has made use of projections to ensure they are able to meet customers demand when they arise. To move sales effective management and sales are needed thus making forecasting a crucial tools. The firm is thus able to predict the anticipated sales and the profits that could be realised. Therefore, a tool that has been used to assess the market (Barney & Hesterly, 2010).
However, despite the wide success as well as expansion to most continents, the firms has also had big challenges like sales resale stipulated by quality, designs and production faults. This calls for extra costs of replacements, and time to fix the issues. A study by Connor (2010) on the company revealed that the operations model of the firm influence on the production cost which led to inflation of markets process. The firm’s huge recalls have been estimated to be high compared to the competitors which has an effect of the competitive balance of the firm.
Therefore, it is meant to support the firm’s objectives at minimum costs. In the resent past Toyota, has been straggling with effecting its operational strategy which has been hitched with ineffective in quality assurance. Consequently the firm has had a lot of returned cars. In addition, the firm has been battling with developments and product design. Most of their products have been termed as outdated with most consumers changing their preferences (Krijnen, 2007).
The firms has also been faced with marketing challenges, pricing problems, and stagnation of sales in the domestic markets. These key issues have affected the firm’s competitive advantage and thus need an improvement on the operational strategy which would guide the firm to move sales at best prices. As well as assure quality to reduce the number of recalls.
The current operational strategy has been based on just-in time production as well as technological innovation. Differentiation and forecasting have also been some of the tool used by the firm to remain in the market. However, the operation strategy has not been able to address the exorbitant prices resulting from the production operations, it has not been able to managing the rising sales recalls, also it has not been able to address the market challenges as well as the stagnated domestic market (Barney & Hesterly, 2010). Therefore, the current analysis will be geared towards development of a strategy that would help the firm address these key issues. Consequently, earn a competitive balance.
Having discussed the current operational strategy of the firm and the major issues that have not been addressed, there is a need to develop a more sophiscated operational strategy for the firm. Consequently, help the firm achieve its objectives as stated in the mission and vision statements.
Competitive priority

Operational strategy


One of the major challenges has been for the firm to maintain cost a minimum so that they are able to offer their products at favourable prices. The JIT production which emphasis on customers’ needs has led to increase cost. The firm will need to identify its product line with some being offered and standard production with room for customisation (Barney & Hesterly, 2010). This will help reduce the production cost and the consequently, market prices. Therefore, they will be able to deal with the pricing challenges as well and the marketing challenges they are currently facing.


The firm has widely made use of TOM as a tool for quality assurance, JIT has also helped minimise waste and optimise on quality. However, the firm has been straggling with sales recall form all over the region. This has an indication of quality hitches. For the firm to counter the problem, they will need to invest on design and product development and re-engineering of the current design and product development operations (Connor, 2010).


The firm has made use of JIT method of production. Thus on high peeks they are at time running short of production. The firm would make use of balanced score cards, mix production methods, standardisation of some product lines, and process production (Krijnen, 2007). The methods would complement the JIT production and offer their products when demand is high. Thus meet customer’s time needs.


Flexibility as measures by the ability of the firms to deal with the dynamics in the business environments as well as be able to address issues as they arise has been a major issue for the firm. This has been evident in its hitches when dealing with

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