Toyota: Innovation And Strategies For Business, Marketing, And Operations Essay.

Toyota's History of Innovation in the Automobile Industry

Due to the advancement of various businesses the competition among the companies increases as a result they have adopted different business strategies so that they can compete in the market. The businesses have been shifted towards the adoption of innovations for enhancing their marketing and operations which not only help them to have greater performance and productivity but also provide a competitive advantage to them. A company named Toyota which is an automotive manufacturer company located in Toyota City, Japan has also adopted different strategies for their business marketing and operation. Because of their innovative advancement, the company becomes the world’s largest automobile manufacturing company.

Toyota as we all know is one of the largest automobile manufacturers in the world was founded by the Kiichiro Toyota and incorporated in the year 1937, and produces over 10 million vehicles every year. The company first developed their product which was the Type A engine in the year 1934 that become the first passenger car in the year 1936 known as Toyota AA (Morgan and Liker 2020). In the year the 1960s, Toyota took the advantage of the continuously growing economy of Japan in order to sell their cars to the growing middle-class which led to the development of their new vehicle Toyota Corolla. The thriving economy had funded an international expansion which allow Toyota in order to grow into one of the biggest automakers in the world, the ninth-biggest company in the world in terms of revenue, and the biggest company in Japan (Barron, Pereda, and Stacey 2017). Toyota sells around 40 hybrid vehicle models all around the world, and now they are focused on the development of hydrogen fuel cell vehicles such as the Toyota Mirai. In the field which ranges from vehicle assembly to engines, car electronics, and car air-conditioning compressors the company continues to meet the trust and expectations of its customers. The company has a huge growth in the market of North America and China which helped them to increase their sales (Toma and Naruo 2017).

Toyota becomes the biggest manufacturer of automobiles in the world for the first time in the year 2008 by surpassing General Motors. Many of the subsidiary companies of Toyota which are around 1000 and affiliates are involved in industrial and commercial vehicles, Automobile Parts, And Automobile Productions. The company has been developing industrial robots since the year the 1970s as well as introducing them to their manufacturing systems in order to reduce the costs and improve the quality. In Toyota, the robots are generally used in their painting, assembly, and welding processes (Hatani 2020). The company focuses to combine the technologies of industrial robots with the technologies of automobile control and the IT technologies of state-of-the-art. The technological advancement of their engine and transmission not just makes Toyota more comfortable to drive but also increases the efficiency of the fuel and improves reliability. All the engines of Toyota utilize the DOHC (Double Overhead Cam) cylinder-head design that has four valves in every cylinder. In this way, the efficiency and power of the engine get improved (Htun, Maw, and Khaing 2019). Due to such technological advancement, Toyota has many competitors among them Mercedes Benz and BMW are the main competitors.

Toyota's Current Position as the World's Largest Automobile Manufacturer

The company of Toyota has been driving for innovation for years, rolling out the Prius, and the Hybrid Synergy Drives which helped them to set the possible standards for their hybrid cars and has proceeded to innovate every since. In their initiative, the company Toyota combined the mission-driven campaign with their product innovation in order to showcase both the social impact and technological capabilities. As they partnered with the IOC (International Olympic Committee), and IPC (International Paralympic Committee) the “Mobility for All” campaign of Toyota has been focused on “providing all humankind with the freedom to live”. In that campaign, the company released a prototype concept that provided both the advanced paraplegic’s ability in order to shift in the world and contribute to the mobility progress overall (Lu 2018). Toyota has adopted the technique of incremental innovation and got some of the innovative breakthroughs from the manufacturing cars perspective. Prius has been manufactured as a result of this which proved to be very healthy and energy-efficient for the environment. In this way, the company has adopted the Holistic Innovation perspective where they are able to innovate their business in various ways so that every function can provide unique solutions to the problem they face. According to the author (Yun and Yigitcanlar 2017), the company Toyota focuses on developing and creating opportunities as the company treats the employees as their company’s important assets. Toyota behaves as an entrepreneurial organization where the Holistic innovation perspective is properly fitted as they always innovate the existing company’s business model by making modifications.

The company Toyota has gained the top position in the industry of automobiles which was not glamorous or quick but was efficient. And because of that, the company is proud of its achievements and principles that are reflected in its marketing and operation strategy. Toyota generally operates its business internationally so it requires to adopt different tactics for its operation and marketing in order to succeed in various locations and under any environmental factors. The innovation need of the business of Toyota has been identified and addressed by the marketing through micro and macro environment (Simão and Lisboa 2017). For the microenvironment, the company focuses on the customers to use their personal selling with the help of dealership sales personnel who promote the products to the potential buyers. Based on this the company target their customer and based on the demographic factors they advertise on various media like websites, newspaper, and TV. The price of Toyota depends on the product type or product line or model. Based on this the company decides what price to set for their products. For their pricing strategy, they use market-oriented and value-based pricing. Toyota follows the principle of lean manufacturing in its scheduling. The goal of the company for this strategic decision area of its operation management is generally to reduce operating costs (Itsuki 2021). Toyota minimizes its cost with the help of resource scheduling and HR that changes based on the market conditions.

The company Toyota has been faced many issues with its product and because of that, the company needs to recall their car to faulty brake. The company has been forced by the government of the United State in order to recall their entire cars. As per the product review, it has been found that the car which has been recalled is 2004-2009 Prius, 2007-2010 Tundra, 2007-2010 ES 350, 2007-2010 Camry, 2006-2010 IS 250, 2005-2010 Avalon, and 2005-2010 Tacoma (Wada 2020). Due to this market sales of Toyota goes down by 9%. So, the approach they have adopted is that they provided discounts for the top-selling models such as the Camry inclusive of 0 financing for 5 years. By doing this the company had won the mind of their valuable customers. Toyota has then planned a marketing plan by using the SWOT matrix evaluation which help them to increase the market sales in United State. The value it provides to the company is that their sales have been increased and more customers have been attracted towards them (Ohno and Bodek 2019). The company then earns more profit than earlier, and more sales of the car have increased.

Toyota's Use of Robots in the Manufacturing Process

The company Toyota has been implemented a production system referred to as the Just-in-Time system and lean manufacturing system. This production system was generally established by continuous improvements and with the goal of making the ordered vehicle by the customers efficiently and most quickly so that the brake fail issue can be avoided. The production system of Toyota was established depending upon the two concepts such as “Just-in-Time”, and “jidoka” concepts. Where the first concept state that every process produces what is required for the next process in the rapid flow, and the second concept state that whenever a problem occurs the equipment stop working, preventing the defective product during the time it is produced (Nkomo 2019). The benefits of this approach are that it reduces the manufacturing cost, and the demand of the customers is fulfilled. Such efficient production also ensures customer safety and belief in their product.

By the implementation of the new production system the company Toyota has been gained a competitive advantage in the market and able to satisfy their customer and fulfill their need. But due to the outbreak of COVID 19, the company has faced several problems as the number of sales gets decreased rapidly. According to the author (Margherita and Heikkilä 2021), it has been found that the operating profit of Toyota has been plunged by 98% to 131.73 million dollars. The Toyota Motor Corporation eked out its quarterly profit in 9 years as the COVID halved the sales of their car and wiped out their bottom line. The manufacturing of the cars also gets affected as very little care has been sold so, instead of the implemented new production system their sales have not been affected.

Conclusion

Toyota is one of the leading manufacturing companies in the world and because of that marketing and operation which are the two main business functions need to be considered properly. In the above statement, the overview of the business f Toyota has been discussed including how they have been competing with their competitor in the market. The answers have been discussed based on the information and theories provided in the course. So, I conclude that all the above statements are true and would be used for further research on the company.

References

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Hatani, F., 2020. Artificial Intelligence in Japan: Policy, prospects, and obstacles in the automotive industry. In Transforming Japanese Business (pp. 211-226). Springer, Singapore.

Htun, A.R.K.A.R., Maw, T.T. and Khaing, C., 2019. Lean manufacturing, just in time and Kanban of Toyota production system (TPS). Just time Kanban Toyota production system.

Itsuki, H., 2021. Evaluation on Changes of Strategy and Strategic Direction in Toyota Motor Company, Japan. Journal of Strategic Management, 5(1), pp.20-29.

Lu, J., 2018. DNA Lean Philosophy to Develop. Innovate and Overcome, Creating Value and Benefits. Innovate and Overcome, Creating Value and Benefits (March 1, 2018).

Margherita, A. and Heikkilä, M., 2021. Business continuity in the COVID-19 emergency: A framework of actions undertaken by world-leading companies. Business horizons, 64(5), pp.683-695.

Morgan, J.M. and Liker, J.K., 2020. The Toyota product development system: integrating people, process, and technology. Productivity press.

Nkomo, T., 2019. Analysis of Toyota Motor Corporation.

Ohno, T. and Bodek, N., 2019. Toyota production system: beyond large-scale production. Productivity press.

Simão, L. and Lisboa, A., 2017. Green marketing and green brand–The Toyota Case. Procedia manufacturing, 12, pp.183-194.

Toma, S.G. and Naruo, S., 2017. Total quality management and business excellence: the best practices at Toyota Motor Corporation. Amfiteatru Economic Journal, 19(45), pp.566-580.

Wada, K., 2020. The Evolution of the Toyota Production System. Berlin, Heidelberg, Germany: Springer.

Yun, J.J. and Yigitcanlar, T., 2017. Open innovation in value chain for sustainability of firms. Sustainability, 9(5), p.811.