Professional Documents
Culture Documents
Toyota's Strategy and Initiatives in Europe: "The Launch of The Aygo"
Toyota's Strategy and Initiatives in Europe: "The Launch of The Aygo"
The Company
Toyota Industries Corporation was founded in 1926 by Sakichi Toyoda to manufacture and sell the automatic looms which he had invented and perfected Toyota Industries expanded its domain by including textile machinery, automobiles, materials handling equipment, electronics, and logistics solutions
Business overview
Automobile
Toyota Industries develops and manufactures automobiles and automobile-related products, such as vehicles, engines, car air-conditioning compressors, car electronics components and devices, and stamping dies
Logistics
Toyota Industries carries out the Logistics Solutions Business to help companies reduce their logistics costs They combine extensive business experience in lift trucks, automated storage and retrieval systems, and other materials handling equipment with their production and logistics know-how
Material Handling
They carry out development, manufacturing, and sales of logistics equipment and systems that include not only industrial vehicles, such as lift trucks, but also transportation, storage, and sorting Provide products to customers around the world using the Toyota, BT, and Raymond, Aichi brand names Aichi Corporation has the top share of Japan's aerial work platform market and is a leading manufacturer of special purpose vehicles
Textile machinery
Continuously solving root PROBLEMS Add value to the organization by developing your PEOPLE and PARTNERS
Principles 12-14
Principles 9-11
Principles 2-8
Principle 1
1. "Just-in-time" in which each process produces only what is needed by the next process in a continuous flow 2.Jidoka which means that when a problem occurs, the equipment stops immediately, preventing defective products from being produced
2005 - 9th consecutive year for record sales Sales grew by almost 50% from 2000 to 2005 Already established international market : North America Already established brands : Yaris, Prius and Lexus Sales hit 2 million in 2005 with Toyota holding 13.7% f US market, only 12 plants in NAFTA region
Toyota Prius
Yaris
Strategies by Toyota
Emotional positioning green issues (Prius hybrid model) First to offer D Cat diesel engines Strong focus of customer loyalty and satisfaction Expansion in Europe Localizing production in Europe opened first car and engine plant was in UK in 1992 Car plant in France in 2001 By 2005, 8 plants in 6 countries Toyotas largest markets Big 5 markets (UK, Italy, Spain, Germany and France)
AYGO
Manufacturer Production Assembly Class Engine Toyota Peugeot Citron Automobile Czech 2005-present Koln, Czech Republic City car 1.0 L 1KR-FE I3 1.4 L DV4 HDi diesel I4
Wheelbase
Length Width
Height
Curb weight
Features of Aygo
Emission rates were among the lowest 109 gms per km Full warranty for 3 yrs or 1,00,000 km Interest rates were calculated according to the age of the driver Customers could also opt for a package which included insurance and service contracts Better rates on insurance if they joined a one day driving training
Rivalry among Competing Sellers Strong TME was entering into this segment for the first time many rivals competing for market share most of them were experienced each competitor was trying their best to differentiate their car in terms of performance and value DaimlerChrysler, Volkswagen,Nissan,Honda, Ford, General Motors, Daewoo, Hyundai Fierce competition from already established brands Fiat Panda (built in Poland), VW Fox (Brazil), Hyundai Getz (South Korea), Renault Twingo and Nissan Micra
International strategy
Strategic Alliances learn local, act global- strategic way of global knowledge creation The untouched production system of Toyota with the excellent knowledge of the European market of PSA Toyota in charge of development and production, while PSA is responsible for procurement Two global carmakers combine their knowledge of product design, styling, production and supplier relationships, while learning from each others corporate cultures, technologies and processes
Aygo well-positioned in European minicar market Targeting the unexploited market segment (Generation Y) Toyota's image of high quality, durability and reliability of its cars can act as advantage Cars produced using this common platform have a three-fold advantage: they have prices lower than those in the current small-car segment, feature a high-level of standard safety performance and offer excellent environmental achievements
SWOT ANALYSIS
STRENGTHS
Strong brand equity Motivated and extremely productive work force Careful market research and short design so as to keep models closely aligned with market demand Custom order production and superior customer service (principles and beliefs based on Continuous Improvement and Respect for People) Long-term relationship with supplier Diversified product range, highly targeted marketing and a commitment to lean manufacturing and quality High penetration in key market - Japan, China and USA Toyota Motor Corporation is the part of Toyota Group; one of the biggest conglomerates in the globe best known for environmentally safe, quality, durability, reliability, and value for money and convenient Strong distribution and marketing efforts focused on the meeting diverse needs and high quality sales and services
WEAKNESS
Less market share as compare to General Motors and Ford Customers not segmented Customers are not being involved in the process Limited Research and Development done as compare to competitors Lack of a proper sales force Continuous stress on employees due to kaizen (Continuous improvement) huge investment in expensive fixed costs, as well as the high costs of training and retraining labour
OPPORTUNITIES
Quota imposed by US government is beneficial for Toyota in the sense that it enabled Toyota to charge a premium price and to replace its inexpensive one, which were loaded with many options Changing demographics e.g. decline of large families needing large family cars Toyota is to target the 'urban youth' market. The company has launched its new Aygo, which is targeted at the streetwise youth market and captures (or attempts to) the nature of dance and DJ culture in a very competitive segment. The vehicle itself is a unique convertible, with models extending at their rear! Growing demand for hybrid electric vehicles Emerging markets China & India
THREATS
Rising gasoline prices triggered by decisions of the OPEC oil cartel to hike crude oil prices substantially Declining economic growth on a global scale Continuing trade frictions due to trade imbalances between Japan and other countries and the lack of openness in the Japanese market to import Declining exports due to import restrictions in the United Sates and Europe and strict domestic content laws in other countries Credit Unavailability Stiff competition & a saturated/shrinking market Alternative forms of transport (e.g. cycling, public transport) encouraged by governments all around the world The recall of cars with sticky acceleration pedals and the media attack connected with this issue adverse impact of fluctuations in foreign currency conversion rates Increasing maintenance costs of vehicles, rising fuel price and changing customer preference are challenging threats
Question 7
The alliances were successful in creating synergies between PSA and its partners Sales increased Toyota was responsible for running the factory (according to TPS) PSA handled all purchasing and supplier relations TME chose this method of entering the mini-car segment for many reasons:
Toyotas main aim was to enter the mini-car segment as a new entrant but the economies of scale was enjoyed by already established big players in the sector By collaborating with PSA they could avail economies of scale through the factory costs and the purchasing of raw materials thus lowering their per unit production costs PSA already had a presence in Eastern Europe so PSAs experience with suppliers would work in their favour and lead to Toyota building their own relationships with these suppliers Start-up costs and difficulties which a company faces while entering into a new market could be reduced greatly
Question 8
Challenges in reaching the sales target of 100,000 Aygos annually direct competition with 200,000 mini-cars rolling off the same assembly line PSA are long established in the European market and already have a strong customer base there, so convincing customers to buy Toyota brand above PSA for a product containing 93% common parts will be a tough task
Question 9
TME has already been successful in youth segment Based on the same model it can re segment its market
THANK YOU