2. 2 | P a g e
I - EXECUTIVE SUMMARY:
This report looks at the strategies employed by Toyota to become the successful automobile
manufacturer it has become, especially with the demise of giants such as Ford and General
Motors.
The report examines the various external and internal factors that affect Toyota. Moreover,
based on these factors, evaluations and recommendations for the future have been made.
The report finds that Toyota is an innovating company with several new products in the
pipeline. It enjoys tremendous reputation despite it being forced to recall cars in the recent
past. Although the competitive environment in the car industry remains strong, Toyota is the
market leader in most segments of automobiles. This has certainly helped Toyota in inventing
new models and types of cars such as the hybrid Prius and experimenting with electric
prototype cars. Toyota may have a centralized approach when it comes to decision making.
However with its unique production systems such as the Kanban, Kaizen and Just in Time
Inventory, it has managed to achieve success like no other car manufacturer.
The future at Toyota is bright and it looks like it will take some catching up for its nearest
rivals.
3. 3 | P a g e
CONTENTS
I - Executive Summary:...........................................................................................................................................................2
II - CURRENT SITUATION .................................................................................................................................................5
Business lines ........................................................................................................................................................................5
Business products.................................................................................................................................................................5
Customers ..............................................................................................................................................................................7
Value chain analysis.............................................................................................................................................................9
JIT (Just in Time)...........................................................................................................................................................10
5 Whys Quality Control................................................................................................................................................10
SMED (Single Minute Exchange of Dies) ................................................................................................................10
Pull SystemManufacturing..........................................................................................................................................11
Diversification.....................................................................................................................................................................11
Mission statement analysis ...............................................................................................................................................12
IV - EXTERNAL ENVIRONMENT: OPPORTUNITIES AND THREATS..............................................................12
Societal environment .........................................................................................................................................................12
PEST Analysis: ..............................................................................................................................................................12
Task environment ...............................................................................................................................................................15
Porter’s Theory of Five Forces:...................................................................................................................................15
EFAS analysis .....................................................................................................................................................................16
V - INTERNAL ENVIRONMENT: STRENGTHS AND WEAKNESSES................................................................17
Corporate structure.............................................................................................................................................................17
Competencies ......................................................................................................................................................................20
Core Competency:.........................................................................................................................................................20
Competitive advantages ....................................................................................................................................................21
Financial analysis ...............................................................................................................................................................21
Cash Flow Statement: ...................................................................................................................................................25
Common-size statements...................................................................................................................................................26
Financial ratio analysis ......................................................................................................................................................27
IFAS analysis ......................................................................................................................................................................28
VI - ANALYSIS OF STRATEGIC FACTORS (SWOT) ...............................................................................................28
4. 4 | P a g e
SFAS analysis .....................................................................................................................................................................28
SWOT Analysis:............................................................................................................................................................28
VII - STRATEGIC ALTERNATIVES AND RECOMMENDED STRATEGY (TOWS) .......................................31
TOWS analysis ...................................................................................................................................................................31
Recommended strategies...................................................................................................................................................32
VIII - IMPLEMENTATION OF RECOMMENDED STRATEGY ................................................................................33
Programs needed.................................................................................................................................................................33
Financial feasibility............................................................................................................................................................34
Operating procedures needed...........................................................................................................................................34
IX – CONCLUSIONS ...........................................................................................................................................................35
References:...............................................................................................................................................................................36
Appendices:.............................................................................................................................................................................37
Appendix‘a’........................................................................................................................................................................37
Appendix B: ........................................................................................................................................................................38
Appendix C: ........................................................................................................................................................................39
Appendix D: ........................................................................................................................................................................40
Appendix E:.........................................................................................................................................................................41
5. 5 | P a g e
II - CURRENT SITUATION
Toyota Motor Corporation, or as it is popularly referred to Toyota is a Japanese Automobile
company, which operates on a global level. (Toyota (a), 2015)
BUSINESS LINES
Toyota mainly operates in the automobile sector worldwide, with a majority of its income
dependent on its motor sales. Toyota produces a large number of vehicles, from SUVs to
Sedans and Hybrid vehicles to Commercial Vehicles as well. It is in the process of
introducing electric run cars as well. However, Toyota is involved in other businesses as well,
such as:
Joining expertise and engineering from the Toyota Group, Toyota Home offers three
structures to meet diverse client needs. (Toyota (b), 2015)
Toyota Financial Services gives budgetary administrations principally to vehicle buys
and renting in more than 30 nations and areas around the world. (Toyota (b), 2015)
With electronic vehicle data systems, installed terminals and telemetric, e-TOYOTA
is discovering approaches to coordinate IT frameworks and vehicles. (Toyota (b),
2015)
From area to ocean, Toyota is venturing into the marine business with eco-
accommodating joy art and marine motors. (Toyota (b), 2015)
From a developing blossom business to going green of housetops and forestation,
Toyota is stretching out into biotechnology. (Toyota (b), 2015)
In the 21st Century, Toyota will keep on extending its non-auto organizations
including marine, biotechnology, lodging and aviation. (Toyota (b), 2015)
BUSINESS PRODUCTS
6. 6 | P a g e
Toyota delivers and offers traveler autos, minivans and business vehicles, for example,
trucks. Toyota's auxiliary, Daihatsu Motor Co., Ltd. (Daihatsu), creates and offers scaled
down vehicles and minimal autos. Hino Motors, Ltd. (Hino), additionally a backup of Toyota,
creates and offers business vehicles, for example, trucks and transports. Toyota likewise
produces car parts, segments and extras for its own particular utilization and available to be
purchased to others. Toyota's vehicles can be grouped into two classes: traditional motor
vehicles and mixture vehicles. Toyota's product offering up incorporates subcompact and
conservative autos, small scale vehicles, moderate size, extravagance, games and claim to
fame autos, recreational and sport-utility vehicles, pickup trucks, minivans, trucks and
transports. The Company's subcompact and smaller autos incorporate the four-entryway
Corolla vehicle. The Yaris, showcased as the Vitz in Japan, is a subcompact auto. Toyota
presented the micro premium auto iq in October 2008.
Scaled down vehicles are produced and sold by Daihatsu. Daihatsu produces small scale
vehicles, traveler vehicles, business vehicles and vehicle parts. Smaller than normal vehicles
are traveler autos, vans or trucks with motor removals of 660 cubic centimeters or less.
Daihatsu sold roughly 601 thousand little vehicles and 182 thousand cars on a solidified
premise amid monetary 2009. Toyota's moderate size models incorporate the Camry. Camry
models incorporate the Camry Solara sport car.
In North America, Europe and Japan, Toyota's extravagance line-up comprises basically of
vehicles sold under the Lexus brand name. Lexus models likewise incorporate extravagance
sport-utility vehicles sold in the United States, for example, the GX, the RX, the LX, and the
SC and the IS F. As of May 31, 2009, the Lexus brand line-up in Japan incorporates the LS,
GS, IS, RX, SC and IS F. Toyota brand's full-estimate extravagance auto, the Crown, was
7. 7 | P a g e
redesigned in February 2008, and the Crown Majesta was renovated in March 2009. Toyota
additionally offers the Century limousine in Japan. In Japan and different markets, Toyota
offers the Lexus SC two-entryway sports car, and in the United States the Scion tc, a game
auto model focused to adolescent drivers.
Toyota offers a mixture of game utility vehicles and pickup trucks. Toyota sport-utility
vehicles accessible in North America incorporate the Sequoia, the 4runner, the Rav4, the
Highlander, the FJ Cruiser and the Land Cruiser, and pickup trucks accessible are the Tacoma
and Tundra. The Tacoma, the Tundra and the Sequoia are fabricated in the United States.
Toyota's product offering up incorporates trucks (counting vans) up to a terrible vehicle
weight of five tons and micro-transports, which are sold in Japan and in abroad markets.
Trucks and transports are additionally fabricated and sold by Hino, an auxiliary of Toyota.
Hino's product offering up incorporates huge trucks with a horrible vehicle weight of in
excess of 11 tons, medium trucks with a terrible vehicle weight of somewhere around five
and 11 tons, and little trucks with a terrible vehicle weight of up to five tons. (Reuters, 2014)
CUSTOMERS
Region 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
North
Americ
a
2,031
.30
2,230
.30
2,436
.10
2,738
.30
2,822
.20
2,441
.80
1,975
.40
1,935
.50
1,806
.90
2,274
.60
Latin
Americ
a
162.1 214.9 270.5 339.4 379.4 370.2 293.6 342.1 333.5 406.6
Europe 851.5 946.9 995.2 1,124
.10
1,238
.60
1,119
.50
886 785.8 801.9 817.7
Africa 160.6 206.7 227.2 265.7 313.5 288.1 201.4 197.6 211.9 243
Asia 682.4 846.3 1,062
.90
1,106
.70
1,329
.60
1,438
.60
1,533
.90
1,895
.90
1,998
.20
2,340
.50
Oceani
a
215.1 232.8 236.9 250.3 275.9 277.7 231.2 249.6 215.9 258.8
8. 8 | P a g e
Middle
East
251.4 270.9 325.3 404.8 482.7 590.1 482.5 554.6 527.5 683.9
Overse
as
total
4,354
.50
4,948
.80
5,554
.10
6,229
.30
6,841
.90
6,526
.10
5,604
.00
5,961
.10
5,895
.90
7,025
.10
Japan 1,715
.90
1,758
.80
1,713
.10
1,692
.30
1,587
.30
1,470
.00
1,375
.50
1,566
.10
1,201
.00
1,692
.20
World
wide
total
6,070
.40
6,707
.60
7,267
.30
7,921
.60
8,429
.30
7,996
.10
6,979
.60
7,527
.30
7,096
.90
8,717
.30
[From : http://www.toyota-global.com/company/profile/figures/vehicle_production_sales_and_exports_by_region.html]
Note: Above figures are in 1000s.
North America is the biggest market for Toyota, followed by its home Japan, and then
Europe, Asia and the Middle East. The Oceanic regions of Australia and New Zealand
account for its least valuable market. Toyota’s majority sales happen overseas (approximately
80%).
Their objective is to transform consumer loyalty into 'Complete Customer Satisfaction'. We
strive to assemble items that surpass clients' needs, that reflect their qualities as people and
parts of society and, that remain a dependable and safe method for transportation. (Toyota
(c), 2015) Furthermore they generally attempt to assemble associations with their clients
focused around shared trust and steadfastness. Thusly, they can guarantee that managers feel
positive about their vehicle at each one phase of their client experience – from the first
purpose of contact, to the end of their vehicle's valuable life. (Toyota (c), 2015)
At the heart of their endeavors is an uncompromising duty to quality and wellbeing. Here as
well, the guideline of Kaizen (or persistent change) motivates a progressing commute for
magnificence that permits clients to feel sure about both the nature of their administration
offering, and also their vehicle. (Toyota (c), 2015)
Complete Customer Satisfaction (CCS) is followed at all phases of the client experience,
from purchasing to owning an auto. This incorporates the way clients are welcomed at the
9. 9 | P a g e
retailer, whether they feel their wishes and remarks have been listened, and whether moves
have been made that surpass their desires. (Toyota (c), 2015)
At the retailer level, advancement is followed utilizing an uniquely created complete
consumer loyalty device. This framework is supplemented by committed Customer Relations
groups at each of their National Marketing and Sales Companies, who communicate
extensive to guarantee that issues are raised fittingly and followed up on. (Toyota (c), 2015)
Each of these frameworks are outlined, in their own specific manner, to impart the genuine
'voice of the client' so the organization can react quickly and adequately. In the genuine soul
of the Toyota Way, best practices are then institutionalized over the business. (Toyota (c),
2015)
VALUE CHAIN ANALYSIS
Toyota is famous for quality vehicles, created the world over. Nonetheless, what Toyota has
done astoundingly well, is actualize an assembling framework so effective it has impacted not
recently auto making, yet producing guidelines crosswise over numerous different items
everywhere throughout the world. Through the Toyota Production System (TPS) Toyota has
figured out how to cut expenses, diminish time to market, and drastically enhance quality.
This permits Toyota to be one of the few organizations ready to contend at the same time as a
premium and as a minimal effort maker. There are a few imperative perspectives to TPS.
These identify with either cost lessening, or quality change, or both. The fundamental logic of
TPS is a tenacious yearning to persistently discover and evacuate waste – squandered time,
squandered cash, squandered material. This disposition brings about consistent change of
value and productivity. A percentage of the systems for this change are recorded underneath:
10. 10 | P a g e
JIT (JUST IN TIME)
Just in time stock control decreases the measure of stock in a framework to its absolute
minimum. Material is just given when required. This is contradicted to having a lot of stock
being heaped up holding up to be handled (WIP – work in advancement). JIT has numerous
preferences over customary frameworks. Wiping out WIP inventories brings about lessened
holding expenses. JIT likewise enhances quality as it takes into consideration speedy
discovery of value issues. Since units are just created on an "as required" base, there won't be
the circumstances in which a lot of absconding WIP needs to be revamped. JIT likewise
tightens the relationship between the maker and supplier, taking into account better
connecting of designing, item advancement and quality control as it gets to be in the
supplier's best enthusiasm to diminish variability in their generation line.
5 WHYS QUALITY CONTROL
For absence of a superior name, this is a case of the reasoning in the Toyota plants. Blunders
are not vehicles for fault. Rather, they are manifestations of main drivers which must be
examined. In this manner, if a lapse is distinguished, two things will happen. The primary is
that the generation line will be ceased to guarantee the lapse is altered and won't happen on
consequent vehicles. Second, an examination is propelled to distinguish the main driver of
the blunder (alleged the 5 Whys in light of the fact that the inquiry "why?" is asked five times
to shaft to the wellspring of the mistake).
SMED (SINGLE MINUTE EXCHANGE OF DIES)
A pass on is the formed surface of a metal stamping press which decides the last state of the
created part. The passes on of an assembling press need to be adjusted to greatly tight
resistances to stay away from harm to the supplies. Because of the protracted procedure of
11. 11 | P a g e
trading bites the dust and the high cost of ceasing the creation line, numerous assembling
organizations would deliver a large number of comparative parts before evolving passes on.
This prompted high clump amounts and extensive inventories. JIT obliged the adaptability to
have the capacity to lessen setup time for kicks the bucket to a matter of minutes. This took
into consideration individual parts to be made on an as-required premise, lessening extensive
inventories, enhancing quality, and adjusting throughput.
PULL SYSTEM MANUFACTURING
Fundamental to the thought of lean assembling and JIT stock controls is a "draw"
arrangement of assembling. This is differentiated from the other assembling framework,
which is a "push" framework. There are circumstances when either circumstance is ideal;
nonetheless, Toyota has made extraordinary advance by utilizing a transcendently "draw"
approach. A "push" framework is one wherein interest for the client is estimate and after that
the obliged number of units is delivered. These units are sold available. Stockouts bring about
lost income and overabundance generation must be profoundly marked down to be sold. A
"force" framework however is one where no item is made until it is asked. In this manner, as
parts are required for creation, and not in the recent past, they are delivered and coordinated
into the gathering. Utilization of a "kanban", or marker, card, or tag, is carried out to show
that more parts are required and ought to be delivered. This constrains the measure of stock in
the framework and lessens the production line's powerlessness to fluctuating
DIVERSIFICATION
Toyota duty to differing qualities is incorporated with each territory of their business. (Toyota
(e), 2014) Everything what they have done was established into two essential standards
Admiration for individuals and nonstop change. This conviction has been upheld by work
12. 12 | P a g e
from the United Nations, (Toyota (e), 2014) which clarifies differing qualities endeavors in
the working environment encourage the trading of new viewpoints, enhance critical thinking
by welcoming diverse thoughts and make an aware, tolerating workplace, all of which bode
well (Toyota (e), 2014)
MISSION STATEMENT ANALYSIS
Toyota has clearly outlined various vision statements, with regards to different areas under its
overall business practices.
Toyota's extraordinary administration rationalities, values, and strategies that it has
grasped following its establishment. [Appendix A]
The fundamental personality set wanted of individuals working at Toyota,
concentrating on particular standards for representatives to shoulder as a top priority.
[Appendix B]
They have outlined the blueprints of the sort of organization that they need to be They
have recognized the values that they need to appreciate. [Appendix C]
A comprehensive generation framework is at the very heart of Toyota's corporate
logic and is described by profoundly effective ideas. [Appendix D]
The idea of "Made by Toyota". [Appendix E]
IV - EXTERNAL ENVIRONMENT: OPPORTUNITIES AND THREATS
SOCIETAL ENVIRONMENT
PEST ANALYSIS:
POLITICAL:
Toyota operates by manufacturing or selling in a wide range of countries. It must adhere to
the local laws of each country it operates in. For example, The opening up of European
13. 13 | P a g e
market in 1992 made a lot of people speculate the choice of Toyota to set up assembling
operations in United Kingdom, as all the amounts and levies ensuring the local auto makers
were canceled and the entire European business sector was made as a solitary element, giving
a solitary huge business to play in for Toyota and turn into an European Car maker. By
setting up plants in UK it viably evaded the taxes, utilized the nearby pool of gifts which
were less expensive and taught, the foundation was produced which gave an added focal
point to operations of Toyota.
Furthermore, the European Union gave the most steady political conditions where all the
nations fused their economies to make a vast business sector where development of
merchandise and work was uninhibitedly conceivable without any bother.
ECONOMICAL:
Toyota may be at risk to market in several economies, especially underdeveloped or
developed economies such as India and Thailand. Several issues in such countries, for
example trade union regulations may hinder the operations at Toyota. Moreover, a
consumer’s decision to buy a car depends on several factors. This incorporates investment
rates, assessment charges, for example, the street tax, insurance charge, financial growth,
inflation and duty impetus. At the end of the day, the expenses need to pay more for auto
clients.
SOCIAL:
The social elements that moved Toyota into hybrid vehicle generation will be examined.
Because of the environmental change turn into a genuine subject these days, so Toyota ought
to deliver a vehicle which it won't bring contamination to the environment. Moreover, fossil
fuel is a non renewable vitality which it will deplete at one day, so to defeat this issue, Toyota
need to create a vehicle which it won't just rely on upon fossil fuel. After hybrid auto
14. 14 | P a g e
innovation has been imagined, appeal from those nation which are not creating fossil on the
grounds that they don't have to rely on upon the nation which delivering the fossil fuel.
Conventional autos are altogether less expensive than the cross breed autos because of the
high engineering utilized on the mixture autos. This thinks about the new advances created
amid the right on time of the 21st century. Notwithstanding, the cost of the hybrid auto ought
to decrease in like manner after the mixture auto's engineering gotten to be more well known.
TECHNOLOGICAL:
The engineering utilized as a part of Plug-In Hybrid Electric Vehicles (PHEV) is the ticket of
utilizing the battery fueled auto. The energizing time is 1.5 hours for240v AC or 3 hours for
120v AC and the most extreme of the electric vehicle cruising extent is roughly 15 miles at a
velocity of up to 62 miles every hour. Past that, the module will change to half and half
mode, giving an expected 49 miles every gallon. Toyota Prius utilizing a 1.8 Liter relocation
motor which ready to create higher yield and torque. Another playing point of Toyota Prius is
the disposal of the drive cinch alongside utilizing an electric commute water pump to
diminish the supplemental of motor burden. Besides, the motor additionally has a Cool EGR
system which ready to recalculate debilitate temperature and recirculation framework that
reuses hotness to help the Prius warm up faster. Besides that, the Toyota Prius likewise
utilizing the progressed of the study of air to diminish drag. At the point when driving on the
expressway, the majority of the work of the Prius motor does goes into pushing the auto
through the air. For the Toyota Prius, low-moving safety tires were utilized. The tires on
autos are upgrading to give a smooth ride with the base clamor furthermore give great footing
in mixture of condition. The half and half auto utilizes the uncommon tires that are both
stiffer and swelled to a higher weight than customary tires
15. 15 | P a g e
TASK ENVIRONMENT
PORTER’S THEORY OF FIVE FORCES:
THREAT OF NEW ENTRY – LOW
Substantial measure of capital needed
High striking back conceivable from existing organizations, if new participants would
bring imaginative items and thoughts to the business
Few legitimate hindrances shield existing organizations from new participants
All auto organizations have created brand picture and notoriety
Products are fundamentally separated by configuration and designing quality
New contestant could without much of a stretch access suppliers and wholesalers
It is difficult to attain to economies of scale for little organizations
Governments frequently secure their home markets by presenting high
BARGAINING POWER OF SUPPLIER’S – LOW
Large number of suppliers
A few suppliers are big yet the a large portion of them are really little
Materials generally open
Suppliers don't represent any risk of forward combination
BARGAINING POWER OF CUSTOMERS – MEDIUM
There are numerous purchasers
The greater part of the purchasers are people that purchase one auto, yet corporates or
governments typically purchase substantial fleets and can foresee lower costs
It doesn't cost much for purchasers to change to an alternate brand of vehicle or to
begin utilizing other sort of transportation
16. 16 | P a g e
Purchasers can without much of a stretch pick elective auto brand
Purchasers are value touchy and their choice is frequently focused around the amount
of does a vehicle cost
Purchasers don't debilitate regressive reconciliation
THREAT OF SUBSTITUTES – LOW
There are numerous option sorts of transportation, for example, bikes, buses or planes
however, substitutes can infrequently offer the same comfort
Other sorts of transportation quite often cost less and once in a while are more
environment well disposed
COMPETITIVE RIVALRY WITHIN THE INDUSTRY – HIGH
Moderate number of competitors
In the event that a firm would choose to leave an industry it would cause gigantic
misfortunes, so more often than not it either bankrupts or stays in car industry for the
lifetime
Industry is substantial however developed
Size of contending association's shift yet they typically vie for distinctive shopper
sections Customers are devoted to their image
There is moderate danger of being gained by a competitor.
EFAS ANALYSIS
The main external factor that may prove to be a hurdle for Toyota in the future would be
competition. While Toyota is ahead of the game at the moment, the likes of Honda and
Volkswagen are catching up on them. In order to remain successful, Toyota must look to
keep innovating with new technologies and forge partnerships with other auto makers, like it
17. 17 | P a g e
has recently done with BMW. Acquiring the likes of Honda or Volkswagen will be difficult,
however, given the massive financial and other resources at their disposal, it may not be
impossible for Toyota to achieve this feat.
V - INTERNAL ENVIRONMENT: STRENGTHS AND WEAKNESSES
CORPORATE STRUCTURE
Chairmanofthe Board
Takeshi Uchiyamada
President,Memberofthe Board
Akio Toyoda
Executive Vice President, Member ofthe Board
Satoshi Ozawa
Nobuyori Kodaira
MitsuhisaKato
Masamoto Maekawa
Yasumori Ihara
Seiichi Sudo
Directors
Koei Saga
Tokuo Fukuichi
Shigeki Terashi
YoshimasaIshii
Ikuo Uno
Haruhiko Kato
18. 18 | P a g e
Mark T. Hogan
Audit & SupervisoryBoard Members
YoichiroIchimaru
Masaki Nakatsugawa
Masahiro Kato
KunihiroMatsuo
Yoko Wake
Teisuke Kitayama
SeniorManaging Officers
Hirofumi Muta
ShigeruHayakawa
Hisayuki Inoue
DidierLeroy
Keiji Masui
Hiroji Onishi
Koei Saga*
Hiroyuki Yokoyama
Tokuo Fukuichi*
Kiyotaka Ise
James E. Lentz
SoichiroOkudaira
Shigeki Terashi*
Satoru Mouri
19. 19 | P a g e
Moritaka Yoshida
Managing Officers
Kazuhiro Miyauchi
Osamu Nagata
Takuo Sasaki
Steve St. Angelo
Johan van Zyl
HiroyoshiYoshiki
Kazuhiro Kobayashi
Kazuo Ohara
Satoshi Takae
Shigeki Tomoyama
Riki Inuzuka
Shinji Kitada
Masahisa Nagata
Takeshi Numa
Satoshi Ogiso
Hayato Shibakawa
Kazuhiro Sato
Karl Schlicht
Kyoichi Tanada
Hiroyuki Fukui
Toshiro Hidaka
21. 21 | P a g e
center ability of value can be ascribed to its imaginative creation rehearses. The quality part
of Toyota's items have changed the cars in the past and just about all the vehicles
organizations needed to attempt and better the nature of their items. It is a foundation of the
expense administration system that the organization seeks after.
COMPETITIVE ADVANTAGES
Toyota's unique skill is its generation framework known as the "Toyota Production System"
or TPS. TPS is focused around the Lean Manufacturing idea. This idea likewise incorporates
imaginative practices like Just in Time, Six Sigma and Kaizen etc. (Toyota (f), 2014) Toyota
has worked resolutely throughout the years to make this unique ability. No other auto maker
can do it and also Toyota does. This different capability has prompted an upper hand that has
given Toyota a feasible brand name and a business sector pioneer position. (Toyota (f), 2014)
FINANCIAL ANALYSIS
INCOME STATEMENT:
Period Ending Mar 31, 2014 Mar 31, 2013 Mar 31, 2012
Total Revenue 249,472,000 234,289,000 225,818,000
Cost of Revenue 201,982,000 197,940,000 199,144,000
GrossProfit 47,490,000 36,349,000 26,673,000
OperatingExpenses
Research
Development
- - -
SellingGeneral
and
Administrative
25,233,000 22,323,000 22,352,000
NonRecurring - - -
Others - - -
Total Operating
Expenses
- - -
22. 22 | P a g e
OperatingIncome or Loss 22,257,000 14,026,000 4,321,000
Income fromContinuingOperations
Total Other
Income/Expenses
Net
1,637,000 1,123,000 1,218,000
EarningsBefore
InterestAnd
Taxes
23,894,000 15,149,000 5,539,000
InterestExpense 191,000 244,000 279,000
Income Before
Tax
23,703,000 14,905,000 5,260,000
7,456,000 5,858,000 3,187,000
MinorityInterest -16,36,000 -12,88,000 -10,30,000
NetIncome From
ContinuingOps
17,703,000 10,217,000 3,446,000
Non-recurringEvents
Discontinued
Operations
- - -
Extraordinary
Items
- - -
EffectOf
Accounting
Changes
- - -
OtherItems - - -
NetIncome 17,703,000 10,217,000 3,446,000
PreferredStock And Other
Adjustments
- - -
NetIncome Applicable To
Common Shares
17,703,000 10,217,000 3,446,000
Toyota’s Net Income has steadily increased (at a rapid pace) in the last three years. This is a testament to its
unique corporate culture and operations.
23. 23 | P a g e
BALANCE SHEET:
Period Ending Mar 31, 2014 Mar 31, 2013 Mar 31, 2012
Assets
Current Assets
Cash And
Cash
Equivalents
19820000 18246000 20405000
Short Term
Investments
21625000 16484000 15327000
Net
Receivables
86253000 87831000 88000000
Inventory 18398000 18219000 19713000
Other
Current
Assets
6525000 5596000 6275000
Total Current
Assets
152621000 146375000 149720000
Long Term
Investments
168,395,000 151,605,000 141,364,000
Property Plant
and Equipment
74,198,000 72,750,000 75,769,000
Goodwill - - -
Intangible
Assets
- - -
Accumulated
Amortization
- - -
Other Assets 7,150,000 6,051,000 5,600,000
24. 24 | P a g e
DeferredLong
Term Asset
Charges
- - -
Total Assets 402364000 376781000 372452000
Liabilities
Current Liabilities
Accounts
Payable
49,728,000 47,311,000 51,096,000
Short/Current
Long Term
Debt
83,759,000 79,799,000 80,106,000
Other
Current
Liabilities
9,065,000 10,002,000 11,961,000
Total Current
Liabilities
142552000 137112000 143163000
Long Term Debt 82,992,000 77,917,000 73,422,000
Other Liabilities 11,449,000 11,406,000 10,350,000
DeferredLong
Term Liability
Charges
17,593,000 14,717,000 11,044,000
Minority
Interest
7,281,000 6,635,000 6,273,000
Negative
Goodwill
- - -
Total Liabilities 254,585,000 241,152,000 237,979,000
Stockholders' Equity
Misc Stocks
Options
Warrants
- - -
Redeemable
PreferredStock
- - -
PreferredStock - - -
Common Stock 3,855,000 4,216,000 4,825,000
Retained
Earnings
137,071,000 134,741,000 144,809,000
Treasury Stock -
109,11,000.00
-
120,32,000.00
-
138,00,000.00
25. 25 | P a g e
Capital Surplus 5,353,000 5,851,000 6,691,000
Other
Stockholder
Equity
5,129,000 -37,82,000.00 -
143,24,000.00
Total
Stockholder
Equity
140,498,000 128,994,000 128,201,000
NetTangible
Assets
140,498,000 128,994,000 128,201,000
CASH FLOW STATEMENT:
OperatingActivities,Cash FlowsProvidedBy or UsedIn
Depreciation 12,146,000 11,735,000 12,976,000
Adjustments
To Net
Income
-26,16,000 -3,22,000 -9,43,000
ChangesIn
Accounts
Receivables
-11,84,000 -17,87,000 -71,14,000
ChangesIn
Liabilities
7,588,000 987,000 13,290,000
ChangesIn
Inventories
-10,76,000 536,000 -41,91,000
ChangesIn
Other
Operating
Activities
1,207,000 3,375,000 -8,44,000
Total Cash
FlowFrom
Operating
Activities
35,404,000 26,029,000 17,649,000
InvestingActivities,CashFlows ProvidedBy or UsedIn
Capital
Expenditures
-94,19,000 -90,74,000 -87,92,000
Investments -330,67,000 -234,88,000 -91,84,000
Other Cash
flowsfrom
Investing
Activities
381,000 416,000 445,000
Total Cash
FlowsFrom
Investing
-421,06,000 -321,46,000 -175,30,000
26. 26 | P a g e
COMMON-SIZE STATEMENTS
March 31,
2014
Common
Size
Total Revenue 249472000 100.00%
Cost of Revenue 201,982,000 80.96%
GrossProfit 47490000 19.04%
Operating Expenses
Research Development - -
Selling General and
Administrative
25233000 10.11%
Non Recurring -
Others -
Total Operating Expenses -
Activities
FinancingActivities,Cash FlowsProvidedBy or UsedIn
Dividends
Paid
-44,58,000 -25,02,000 -23,59,000
Sale
Purchase of
Stock
89,000 27,000 -1,000
Net
Borrowings
13,297,000 7,543,000 -19,58,000
Other Cash
Flowsfrom
Financing
Activities
- - -
Total Cash
FlowsFrom
Financing
Activities
8,928,000 5,068,000 -43,18,000
EffectOf
Exchange
Rate
Changes
909,000 1,464,000 -6,80,000
Change In
Cash and
Cash
Equivalents
3,135,000 415,000 -48,79,000
27. 27 | P a g e
OperatingIncome or Loss 22257000 8.92%
IncomefromContinuing
Operations
Total OtherIncome/Expenses
Net
1637000 0.66%
EarningsBeforeInterestAnd
Taxes
23894000 9.58%
InterestExpense 191000 0.08%
IncomeBeforeTax 23703000 9.50%
IncomeTax Expense 7456000 2.99%
Minority Interest -1636000 -0.66%
0.00%
Net IncomeFromContinuing
Ops
17703000 7.10%
Non-recurring Events
Discontinued Operations -
Extraordinary Items -
EffectOf Accounting Changes -
OtherItems -
NetIncome 17703000 7.10%
PreferredStock And Other
Adjustments
-
NetIncome Applicable To Common
Shares
17703000 7.10%
[Source: http://finance.yahoo.com/q/is?s=TM+Income+Statement&annual]
FINANCIAL RATIO ANALYSIS
Mar 31,
2014
Mar 31,
2013
Mar 31,
2012
Current Ratio 1.070634 1.067558 1.045801
Quick Ratio 0.941572 0.934681 0.908105
Debt to Equity Ratio 1.863849 1.920919 1.835025
28. 28 | P a g e
Debt to Asset Ratio 0.650821 0.657642 0.63163
GrossMargin 0.190362
OperatingMargin 0.089216
NetMargin 0.070962
Return on Assets 0.043997
Return on Equity 0.126002
AssetTurnover 0.620016
InventoryTurnover 10.97848
IFAS ANALYSIS
VI - ANALYSIS OF STRATEGIC FACTORS (SWOT)
SFAS ANALYSIS
SWOT ANALYSIS:
Strengths:
Inventive culture of business.
Brand equity esteemed at $30 billion
Industry pioneer in car manufacturing and
sales
Solid brand portfolio
The pioneer in "green" autos
improvement
Weaknesses:
Several cars have been recalled in the near
past.
Feeble vicinity in the developing markets
Opportunities:
Inspirational disposition towards "green"
vehicles
Expanding fuel costs
Changing client needs
Development through acquisitions
Threats:
Fluctuating fuel costs
New outflow models
Climbing crude material costs
Extreme rivalry
Acknowledging yen conversion scale
STRENGHTS:
Toyota is a standout amongst the most inventive auto organizations and has a solid culture
that is centered around consistent advancement. The organization was the first to present
Kaizen, Kanban and Total quality Management frameworks generally in their association.
The organization was the first to mass-deliver and offer hybrid vehicles as well.
29. 29 | P a g e
Toyota's image is the most esteemed car mark on the planet. The business is known for its
ecologically well disposed, protected and solid autos that are sold in more than 170 nations.
Toyota was the first organization to present lean assembling and aggregate quality
administration hones in assembling procedure. For quite a while, the organization was the
main professional of these practices and had the most reduced assembling and creation costs
around the world. Albeit numerous producers had the capacity repeat Toyota's lean
assembling framework, the organization is still a standout amongst the most beneficial
makers on the planet.
Toyota as of now offers around 70 separate models of autos under its namesake image. This
does increment brands mindfulness as well as fulfills almost every shopper gathering needs.
Toyota's lead models are Corolla and Prius.
Toyota comprehends that natural inviting autos are the need these days. Buyers are more
particular as far as Co2 outflows and fuel-productivity of the autos they purchase and
Toyota's initial move towards offering mixture and proficient autos is the quality few
contenders can match.
WEAKNESSES:
Toyota had very much a couple of vast scale vehicle reviews over the recent years. The
business reviewed 9 million vehicles in 2009-2010 and 7.43 million autos in 2012. Such
reviews does harm the firm monetarily as well as fundamentally harms association's image.
Toyota's primary markets are Japan, US and Europe, while such developing economies as
China or India make just a little rate of all Toyota's deals. Because of poor vicinity in the
30. 30 | P a g e
biggest vehicles market (China), Toyota will think that it hard to contend with GM that has
enormous piece of the overall industry there.
OPPORTUNITIES:
Today customers are more mindful of the negative impacts (air contamination) created via
autos. Extensive amounts of Co2 emanations strengthen nursery impact and adversely affect
the life on earth. Consequently, buyers are more inclined to purchase new cross breed and
electric autos that transmit less Co2.
By presenting new auto models, Toyota could fulfill shifting buyers' tastes and needs and
access more extensive client bunch.
Toyota has effectively obtained other auto organizations in the past and ought to keep doing
so to develop, increase new aptitudes, resources and access to new markets.
THREATS:
There is high probability that future fuel costs will drop, as more shale gas will be separated.
Thus, fuel-productive cross breed and electric autos will get to be less alluring to cost
cognizant shoppers that are the fundamental client bunch for Toyota's Prius model.
New discharge principles presented by the legislature would require more ventures into
creating cleaner motors. More speculations mean less benefit for Toyota.
Climbing crude material costs are particularly essential to cars makers. Higher costs mean
higher expenses and fewer benefits for Toyota as the crude metals are the primary parts in
auto producing.
31. 31 | P a g e
Toyota confronts more extraordinary rivalry from other car makers like never before.
Volkswagen gathering is emphatically developing and GM steps up after its redesign to end
up more focused than at any time in the past.
The greater part of Toyota's income originates from outside nations. The benefits earned
abroad must be sent again to Japan and changed over to yen. Acknowledging yen swapping
scale against different monetary forms means lower benefits for Toyota.
VII - STRATEGIC ALTERNATIVES AND RECOMMENDED STRATEGY (TOWS)
TOWS ANALYSIS
Toyota must use its unique corporate culture, which is one of its biggest strengths to
foray into emerging markets. It has already achieved great success in countries such
as India, China, Thailand and Brazil, which are the best developing nations in the
world. It should continue to expand in other emerging markets.
Moreover, Toyota has great brand equity; the recall fiasco should not hurt their brand
image too much. On the contrary, it should be positioned in a way that it strengthens it
brand image.
With the great opportunity of reinventing fuel consumption through its green cars or
completely eradicating the need for fossil fuel through its plug in electric cars, Toyota
can change the demand for fossil fuels, which may prove to be a threat in the future.
While the competitive rivalry for Toyota is on the rise, there is also a chance for
Toyota to use its vast financial resources and acquire some of its competitors or forge
partnerships with them, like they have done with BMW recently.
32. 32 | P a g e
RECOMMENDED STRATEGIES
We recommend a three pronged strategy for Toyota. These three systems would incorporate
an open statement of regret, offering a prepaid support plan, and the usage of another crisis
convention.
Simply a brief time back Toyota was a symbol of unwavering quality. They were the main
auto organization that had gone such a considerable measure of time without a setback.
However because of late circumstances, customers are reconsidering before buying another
or utilized Toyota. After much research we had the capacity reason that there has never been
a pubic expression of remorse for losing the certainty and trust of Toyota holders. There have
been expressions of remorse for needing to review the vehicle, or for any disservice they
created the purchaser, however we accept that shoppers need to realize that Toyota thinks
about their dedication and trust and are eager to do whatever it takes to get it back.
In each of the new ads and promotions Toyota has put out as of late, which they didn't even
air amid Super Bowl Sunday, there have just been the characteristics of the manufacturing
plant works, ensuring you that the nature of their autos will again keep up its position of
value, however never do you see the CEO's, president, or different administrators of Toyota.
In a survey on aolnews.com out of 221 voters, 52% said that the new advertisements didn't
recover their trust, and for 48% it did. Each exertion ought to be made to turn these insights
around and pull the overall population over on Toyota's side.
We are suggesting that Toyota run this conciliatory sentiment business on four separate
stations amid prime time hours. The expense for a 30 second business on each of the four
stations would be: FOX $658,333, NBC $479,250, CBS $374,231 and ABC $323,000
(Baker, 2009). Each of these advertisements would air once a day, consistently, for 1 month.
To oblige the advertisements it would likewise be a decent thought to have a feature
33. 33 | P a g e
streaming on Toyota.com. This eventual a 10 second conciliatory sentiment from the
president of the organization expressing, "We at Toyota are to a great degree self-reproachful
for losing your certainty as a client. We are presently doing all that we can to recapture that
trust and admire your proceeded with reliability and understanding." This footage would pop
up on a side bar each one time somebody was to log on to the organization's site. There
would likewise be subtitles in the case that the site viewer didn't have sound, or were not able
to listen.
The second proposal is that Toyota offer prepaid upkeep plans for their vehicles for a certain
time of time. When all the autos that were reviewed are restored to their managers, those
driving these autos will be a minimum a bit apprehensive about something event. As
indicated by Cnnmoney.com there have been 5.3 million autos reviewed. With a prepaid
adjusting arrangement Toyota holders can take their auto to pretty much any auto shop and
have it repaired, avoiding a drawback to the auto managers.
Our last proposal would to be executing another crisis convention. Since Toyota has never
experience such an expansive review, there was no situated strategy set up. In the first
example of an issue Toyota would accumulate that auto and examine what the issue. They
would then advise clients that there is an issue through letter or telephone calls, giving them a
chance to realize that they would keep them upgraded.
VIII - IMPLEMENTATION OF RECOMMENDED STRATEGY
PROGRAMS NEEDED
In the event that the issue transformed into something much bigger they would then
encourage Toyota clients to accumulate their vehicle to be checked, and give a shuttle to and
from work, or wherever they happened to be to evade burden. From that point they would
submit a news discharge to prompt the general population that they are mindful of the issue
34. 34 | P a g e
and everything is being taken care of appropriately. In actualizing this arrangement it will
help to keep from having mass confusion in a period of emergency.
On top of the advertisements and web streaming, Toyota could likewise create an impression
for themselves when they support the NBA Finals in the not so distant future. On top of
airing their plugs in house, amid breaks, they could likewise convey 25 thousand shirts to the
actively present people of the first round of the finals. For each one shirt it would cost around
four dollars totaling to 100 thousand dollars. The shirts could have the name of both groups
contending in the finals, with Toyota's logo on the back. Thusly every actively present person
has something to run home with that helps them to remember Toyota. Despite the fact that
the expense of these three media suggestions appear to be high, it is vital that Toyota do
whatever they can to recapture the trust of their present and future clients.
FINANCIAL FEASIBILITY
The expense of their 4- year arrangement is $1,355 (toyotafinancial.com), which is clearly
swelled to permit a return of income for Toyota, persuading that it is substantially less costly
for Toyota themselves. Be that as it may, since the plane will now be a 1- year arrange the
expense would just be $340 every auto. With 5.3 million autos as of now in review this
would cost Toyota 1.8 billion dollars. 1.8 billion is a vast whole of cash, however it is better
that Toyota administration and repairs the issues before it turns into a national review, on top
of the way that it will help to restore the trust of present and potential clients.
OPERATING PROCEDURES NEEDED
Normally Toyota offers a 55,000 mile or 4-year project to be bought by its clients, yet
because of the monetary imperative Toyota is under and the way that the majority of the
arrangements would be paid for by Toyota, it would be helpful to slender this down to an one
year, 14,000 mile program. At present Toyota assembly line laborers are researching why
35. 35 | P a g e
their pedals are breaking down. When they find themselves able to make sense of what the
issue is, alter the issue, and redistribute all the autos, in addition to 14,000 miles, specialists
will have had a significant measure of time behavior dependable examination. Prepaid
upkeep arrangements go in value and administration choices. Presently Toyota has an
arrangement set up that takes into account administration at foreordained interims, 24-Hour
roadside support, prepaid upkeep booklet, timed administration updates, automated
administration history, to which they ought to include month to month break check and
overhauling.
IX – CONCLUSIONS
Tested by world-class contenders, producing organizations in the United States have
experienced a renaissance in the most recent decade. The renaissance began on the shop floor
with an accentuation on inherent quality, the disposal of waste, and speedier throughputs. At
the same time consideration immediately turned upstream to item advancement, where
Japanese organizations were beating U.s. contenders on almost every measure: velocity to
market, plan quality, item outline manufacturability, expense, and gainfulness. Eyewitnesses
inferred that the way to Japanese achievement, and U.S. industry's shortcoming, was
combination both between item plan and assembling procedure outline, and with advertising,
acquiring, fund, and different business capacities.
An incredible numerous organizations assaulted the issue head on. Run of the mill
arrangements were such item advancement apparatuses as quality capacity sending and
Taguchi routines. Organizations likewise presented hierarchical arrangements; those
arrangements ran from keeping the essential useful association in place and allotting
individuals to impermanent undertaking groups to disbanding the practical association inside
and out for arranging around items, as Chrysler did in the early 1990s.
36. 36 | P a g e
REFERENCES:
Reuters. (2014). Toyota . Retrieved January 29, 2015, from Reuters:
http://www.reuters.com/finance/stocks/companyProfile?symbol=TM
Toyota (a). (2015). About Us. Retrieved January 29, 2015, from Toyota Motor Corp.: http://www.toyota-
global.com/company/history_of_toyota/index.html
Toyota (b). (2015). Non-automotive Business.Retrieved January 29, 2015, from Toyota Motor Corp.:
http://www.toyota-global.com/company/profile/non_automotive_business/
Toyota (c). (2015). Our customers . Retrieved January 29, 2015, from Toyota EU:
http://www.toyota.eu/society/Pages/customers.aspx
Toyota (e). (2014). Diversity. Retrieved January 29, 2015, from Toyota Motor Corp.:
http://www.toyota.com/about/diversity/21stcenturyplan.pdf
Toyota (f). (2014). Toyota Production System. Retrieved January 29, 2015, from Toyota MotorCorp.:
http://www.toyota-global.com/company/vision_philosophy/toyota_production_system/
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