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Business project

In the 1934, the Toyota stills an Important department of Toyota Industries. And in this year, Toyota produced its first Type A engine. The Toyota produced the first practical passenger car— the Toyota AAA after two years. In 1937, Chicory Toyota founded Toyota, And the Toyota as a subordinate company from Chicory Toyota father’s enterprise. The Toast’s main work Is produce automobiles. In 2010, there are over 300,734 people employed by Toyota. In 2011, Toyota was the third-largest automaker in the world, and the ranking Just behind GM and ranking refers to revenue). In 2012, the Toyota had produced over 200-millionth cars.

Toyota Motor Corporation group has some famous subordinate brands— Lexus, Dadaists, and Hint Motors. (Toyota, 2012) Toyota mission is provide high quality vehicle products and superior services to customers, and return society, partners and environment. There are four core values in Toyota, Customer first, Respect for people, International focus and Continuous improvement and innovation. (Toyota, 2012) Toyota leads the automobile industry in environmental technologies with the success of the hybrid technology in the Pries and Campy Hybrid. Fuel cell vehicles are also in development. Toyota Australia official websites, 2012) There are three chapters in this report, the threes chapters

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use different module to analysis. The first chapter will use the Michael Porter’s Five Forces to analysis the Toyota competitive position in markets. The second chapter will use the Hypotheses culture dimensions to analysis the Toyota cross-cultural issues and explain how the Toyota deals with different culture. The third chapter will use the triple bottom line and Mandela’s matrix to analysis the relationship and balance of social responsibility and profitability. 2. 0 Toast’s Competitive position

Toyota is not only a successful company in the Japan but also is a famous automobile company in the world. Toyota will face some competitions in the different market. This chapter will use the Michael Porter’s Five Forces model to analysis the Toast’s competitive position in various markets. 2. 1 The Michael porter’s five forces Model ‘The Porter’s Five Forces tool is a simple but powerful tool for understanding where power lies in a business situation. This is useful, because it helps you understand both the strength of your current competitive position, and the strength of a position Figure 1 (Hefted, 1991)

Conventionally, the tool is used to identify whether new products, services or businesses have the potential to be profitable. However it can be very illuminating when used to understand the balance of power in other situations. ‘ (Carlson, et al. , 2013) 2. 2 Bargaining Power of Suppliers ITEM CONTENTS Number of suppliers over 200 Distribution of Suppliers Domestic Toyota area -119 Tokyo area Osaka area -25 Main Overseas U. S, Canada, U. K Through the table showing that the Toyota has over 200 suppliers, the large number of suppliers in Japan, focus on the Toyota, Tokyo and Osaka.

The other suppliers focus on U. S. A, Canada and some Asian countries. There are more than 10 suppliers in U. S. A and these suppliers produce high quality and inexpensive components. Some main suppliers also help Toyota delivery products. Toyota offer production opportunity for these suppliers, and they meet some basic production considerations (high quality and inexpensive) for help them to survive. There are about 25% major components in-house was produce by Toyota and rest components are produced by suppliers. Through some data and analysis, the bargaining power of suppliers is low.

Because there are many parts used to produce a vehicle. Therefore, a large number of suppliers in the automotive industry, there have some types in the different system, such as electrical system, security system and fuel supply system. And the system suppliers distribute around the global. Len the world, the most automotive industry have their own suppliers, but the suppliers is not non-substitutable. The automotive do not have power to change the price. 2. 3 Bargaining Power of buyers According to some data, the bargaining power of buyers is high for the Toyota.

Toyota is a famous automotive industry in the world. Although Toyota has a strong client ease and a multitude of vehicle types, the buyers or customers also have a lot of information channel to understand the other brands, such as the advertisement in TV channel or brochure. The buyer could search some information of vehicles on some website, the buyer could easily to find proper car for them. They can choose other type or the cheaper one, although the automobile Company increases one type. The buyers could easily to find the substitutes, like walking, and bus.

In American market, the Toyota main competitors are some local automotive industry, like GM or Ford motor. These firms provide some similar types of vehicle and services. The buyers can switch to other companies with easily and low switching costs. In China, the Toyota has same questions. The main competitors are another Japanese brand, such as Honda or SUZUKI. In different market, Toyota all needs to provide a high quality service at a good price. 2. 4 Threat of new entrants The new entrants cannot enter to the automotive industry easily.

The first reason is the new entrants need cutting-edge technology if they want entry auto industry. The EX. Regulations obliged Carmakers to improve reduction of carbon dioxide (CO) emissions to 140 grams per kilometer by the year 2008. (European Commission, 008)Based on this point, Toyota has the high manufacturer technology and advanced engine technology for help them control the carbon dioxide (CO) emissions. So, this technology make him remove the market barrier entrance. The Second reason is automotive industry is a special products.

If you want entry this industry, the company need a huge amount of money is ploughed into design, safety and production issues. To have a cutting-edge technology about the new car or automobile accessories parts needs a lot of money to build the lab. The company needs set up a new production line after the technology research and development. The small companies cannot easily enter. Third, because of the new vehicle development require a huge investment and large cost of management, purchase and sales, so the new entry needs depend on mass productions to access market.

And the last important issue is the brand loyalty in the automotive market. The automotive industry always increase the brand value and decrease the consumer’s price sensitivity. 2. 5 Rivalry among competitors As the table shows, the main automobile brands in I-J are belonged to Ford, BMW, Ionians and Toyota. The automotive industry is considered to be an oligopoly, based n this point will helps to minimize the effects of price in this industry. The UK automobile market is almost an oligopolies market that Ford, BMW, Ionians and Toyota. In the table, it is clearly to find the Ford is the strongest company in I-J.

However, from the 2009 to 2011, the Toast’s sales increase over 50% is the highest increases compare other brands. The I-J automobile market is a consummation and mature market but the fierce competition among the different brands. In the US, domestic motor manufacturing industry is the Toast’s biggest competitor, such as “The Big three”. “The Big three”are GM,Ford and Chrysler, and the three impasses are all achieve profitability in this time. Between September 2010 to September 2011, General Motors experienced an increase in total sales of 19%, while Chrysler saw a 27. % increase, and Ford had an increase of 2011). At the same time, the three companies also increase their global market share. GM increased the global market share from 18% to 20%, Ford increased the share from 16. 6% to 16. 8% and Chrysler increased the share from 10. 4% to 10. 6%. Figure 3: market share for automobile manufacture The chart shows the different brands market share in US. Even the turnover of Toyota s much higher than Chrysler Group and slightly lower than General Motors and Ford Motors, but the pressure from the competitor is very high. 2. Competition from Substitutes The switching cost for the substitutes depends on the fund user, for example personal used can easily change, however company change the brand is more difficult. The Toyota through the high-quality product and quality services to improve customers loyalty. Toyota create an emotional connection with customers, the bonds would prevent customers change choose. The threat of the substitutes is high. In the automobile industry, there have a lot of bustiest. The main threat from some famous global automobile industry, such as MM, Ford or Honda.

On the other hand, when the car prices rise, there will be have some substitutes in the market. The substitutes includes some traditional the company and cross-cultural In this word, more and more company pay attention to the oversea market. The number of companies’ international order is growing constantly. Some famous company has built a branch office overseas. Toyota is one of the representative enterprises. For over fifty years, Toyota vehicles have found their way to over 170 countries and regions throughout the world. At the same time, there are over 50 bases in 26 different countries and regions.

Toyota is a Japanese company, there are a lot of different between Japan and America, and the Toyota will meet big difficult when they entry the America market. Culture difference is an obstacle and also affects the company conduct business in the other country. Culture could influence the company expand business in the other country and the influence in the different ways. In the beginning, language problems and pricing difficulty are very common. In the different country, the company must be able to handle these difficulties in a way hat is satisfying also for the other part.

Mistakes can be difficult to correct and disrespect for the foreign culture can destroy the entire operation. 3. 1 Different production model in various market Through the Hypotheses theory to analysis, Japan is a standard collective socialist country. Certainly Japanese society shows many of the characteristics of a collectivist society: such as putting harmony of group above the expression of individual opinions and people has a strong sense of shame for losing face. In collectivist societies, group allegiances are strong, cohesive and promoted from birth. Protection is expected in exchange for loyalty to the group – I. . One’s employer. The country’s cultural characteristics will affect the company and then affect the products or services. Toyota has a strong reputation for providing high quality and durable products. In Japan, a lot of Toyota produces industry use Toyota Production System (TIPS), in the other word lean production. The Toyota has a production control system and this system improve continually every year. The main objective of this system is making the car ordered by customers in quickest and efficient, in order to deliver qualified ar to customer as quickly as possible..

According to the Japan cultural, collective socialist is very important for the Toyota Production System. Team has great significance in lean production system. In Toyota assembly workers work as a self managed team who look after each others work. This was possible because of Japan’s high value on collectivism. Compare with America, America is a standard highly individualistic country. In this country, the most people are loyal to them families and themselves, rather than depend on their employers or society.

This translates into a loosely-knit society in which the expectation is that people look after themselves and their immediate families. America works pay more attention to the work environment, work time, wages and welfare. Some American auto worker built the United Auto Workers (I-JAW) to protect them interest. “Since its founding in 1935, the JAW has consistently wages and benefits for its members. ” In the America, the production model is relative ease in auto industry. The Toyota uses the improved Toyota Production System, more focus on workers. 3. Different product sales in various market To cater to the American market, Toyota has some improved and change in the product. Such as use the hybrid, new vehicle appearance and low price. The Toyota Pries is a clear example. As a new technology, the Pries use the hybrid to attracts people attention, hybrid technology is getting mature and trying to arouse America’s curiosity. In order to the better promotion, Toyota also used Mandarins systems. This system replace traditional printed brochures, and use a new interactive multimedia–brochures. This was very successful for help Pries promotion.

According to statistics, it’s about 46% of the people that viewed the brochure clicked through to the Pries site and 36% requested additional information (Seller, 2000). Use this way to meet the America cultural characteristics, the American people like use the internet to understand the new product. From the 2007, Toyota Pries is biggest selling compare with other hybrids car. The biggest reason for the increase of sales is drive a hybrid become a fashion, especially drive a Pries is very “cool”. Compare with other hybrids, the Pries was easily recognizable.

Because the Pries has unique body design and distinct identity. When Pries buyers were surveyed in 2007 regarding why they bought a Pries, more than half said it was because it made a statement about them. (Maynard, 007). Compare with three years previously, only one-third had cited that reason. This special personality of Pries make more and more people like the car, even many Celebrity and stars has embraced the Pries According to the American culture, Pries use the new marketing methods and new design product help Toyota occupy an important position in hybrid market. . 3 Toast’s global consider One big challenge for the Toyota is cultural barriers. Face this cultural sensitivities, Toyota take effective management, this management is very tightly and closely. The main manages are product and employee in Toyota. Accord to the different market, Toyota has been a very strong marketing analysis and draw up a plan carefully. The plan include the product designed and promotion. For instance, the America models can not copy in the I-J market. Every market is unique in the world.

The most American like and appreciates more SUB and Trucks than family car. In the I-J, the market is more of sedans and luxury car. In some Southeast Asia market, the hybrid power is first choice. This shows means the Toyota has already consider the societal and cultural will effect product category in the target market, and make change in efferent market. Toyota has got a much defined organizational structure. Any country they operate in, a good opportunity is given to the local workforce to come and work. This benefits them to have a local presence and better control in managing 4. Corporate social responsibility and profitability Some company believe fulfill them responsibilities will help company built the positive corporate image and increase popularity, thus earn more profits. Len the general condition, the corporate social responsibility (CARS) could help company increase profits. In the world, the most famous company uses this theory. In the company, the most executives believe the CARS can help company increase profit. They are understood that if the company pays attention to the social responsibility could help company win respect in the market.

In the same time, this way will help company earn more profit, enhance employee loyalty and attract talents to company. Also, the CARS focusing on sustainability issues may control costs and improve efficiencies. According to the needs of society , Toyota design and manufacture the different kind of automobiles for crowds. There are two models will be use in this chapter, triple bottom line and Figure 4 4. 1 Triple Bottom Line Analysis As a company, a important mission is true sustainability, any company need understanding of what is ‘sustainability’ entails.

An approach to measurement of sustainability is by using triple bottom- line accounting. (Lexington, 1997) The Triple Bottom Line theory Noon Lexington, 1997) is an approach that tries to weigh economic, social and environmental performance. The up’s -People, Planet, and Profit are often used when referring to TAB. It goes beyond the traditional, financial aspects and reveals the company”s impact on the world around it. The tripe bottom line used in the Toyota to explain the business and public activities. After the Toyota created, the company continuous to focus on the sustainable development of society.

Toyota through the continuous innovation and manufacture the high quality products to leads the fashion. The Toyota understand the social responsibility seriously, and Toyota also need explain the economic and cultural sustainability plan to their stakeholder and participants, they are from a range of company and institutions. Toyota also strengthen communication and coordination with external experts in CARS. The Toyota writing the sustainability report very year and release the report in the official website. Everyone could download the report from website if they want to know information about Toyota sustainability.

As the plant in the triple bottom line standpoint, it means the Toyota needs contribution in the environmental side. Toyota believe that in order to ensure the sound future development of a mobility society that relies on automobiles as a means of transportation, it is necessary to minimize their impact on the environment while significantly reducing traffic accidents, traffic congestion, and other negative aspects. Toyota, 2012) The Toyota believe the spread of CEO-car is their responsibility and contributing to society, Toyota is focus on the developing and promoting CEO-car and they believe CEO-car will reduce the carbon emission.

In order to achieve the corporate philosophy, Toyota had developed and manufacture the Pries. The Pries went on sale in 1997 as the world’s first mass- produced HP. Other Hives have since been introduced and are currently sold in approximately 80 countries and regions around the world. In April 2012, cumulative sales of Hives exceeded four million units, with a CO emissions reduction of roughly 26 million tons. In the two chart, it clearly to show the Pries how the reduce the carbon dioxide emissions. Figure 5 Figure 6 Toyota focuses on the education and traffic safety to contribute the value.

Toyota has spent about 14. 4 billion yen on the social activities in the 2011 fiscal year. It’s about 20000 employees as the volunteer to Join the social activities every year. Toyota engages in activities to foster human resources based on the fundamental policy that Toyota will maximize the benefits of its social contribution activities by working with partners. (Toyota, 2012) Through using the Toyota resources effectively to solve the racial social problems and offer the real social needs, including fostering human resources. The Toyota believes that foster the artistic is necessary. Toyota, 2012) Toyota Children Meet Artists is a next-generation education program run by Toyota in cooperation with the NIP, Children Meet Artists in each region. (Toyota, 2012) Since the 2004, Toyota make a plan in the Japan. This plan is designed to nurture the children’s dreams and help children build self-confidence, this plan will develop the children’s interest through communicate and interaction with the artists. On the there hand, the Toyota has pay high attention to traffic safety education activities, this education set whole society as the target, especially children and elderly. N the 2011, Toyota hold the Traffic Safety Campaign in Japan. Toyota distributed about 2. 44 million copies of traffic safety picture books and 43,000 copies of picture-story show cards to distribute new students in kindergartens and schools. There are over 419 Toyota dealers and companies to cooperation and advertise the Traffic Safety Campaign in Japan. From with this activity begin, the cumulative number of picture kooks and picture story show cards distributed amounts to about 126 million copies line of the impact. As the Profit in the triple bottom line point, it means that the profit could empower and sustain the community as a whole.

In the 2012, Toyota continuous to improve the power of profit, the Toyota aim to become a strong and secure company to consolidated operating income. The revenue target is 1 trillion yen through the competitive product and hard working to increase. The Toyota and all suppliers through the unified criterion to control and reduce the costs. Figure 7 4. 2 The stakeholder mapping analysis Mendel (1991) described the theory that extent to which stakeholders affect the activities of an organization depends on the relationship between the stakeholder and the organization.

Mandela’s matrix provides a way of mapping stakeholders based on the power to affect the organization and their interest in doing so. It identifies the responses which management needs to make to the stakeholders in the different quadrants. Figure 8 (Mendel,1991) According to this theory to analysis, the strategy is high power and low interest. The customer should keep the satisfied to become high interest and high power. This way will help the company progress and developing better. Toyota, which lists the phrase “Customer First” among its mottos.

No matter what activities in the Toyota sector, from development design to procurement, production and service will compliance the Toast’s promise. The customers will know the promise through the Toyota introduce and true representation in business. In Japan, the Toyota publish the safety guide book to introduce the traffic regulations and safe driving. The book’s content based on the customer’s inquiries from the Customer Assistance Center. The feet guide book also distributed to new car customers, some information will help customer safe vehicle use.

The employee of the company is high interest of the strategy and low power in the organization. In the Toyota, the human resources development based on the company philosophy and put the Toyota way into practice. Through develop human resources to seizing a chance to study, planning strengthen and enhance education programs based on the Toast’s core ideology, and the on the Job training is also important for the company development. As a global company in the world, the Toyota has lot of branch office in the different entry.

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