Case Study-Toyota Case Study-Toyota

Arunesh Chand MankotiaArunesh Chand Mankotia

February 13, 2006February 13, 2006

Introduction-Company ProfileIntroduction-Company Profile

Established in 1937 as a spin-off Established in 1937 as a spin-off from Toyoda Automatic Loom Worksfrom Toyoda Automatic Loom Works

Headed by Japan’s “King of Headed by Japan’s “King of Inventors” Sakichi ToyodaInventors” Sakichi Toyoda

Launched first car (SA Model) in 1947Launched first car (SA Model) in 1947One and only strike in 1950.One and only strike in 1950. It became Toyota Production System It became Toyota Production System

in 1970in 1970

Company ProfileCompany Profile

World’s Third Largest manufacturer World’s Third Largest manufacturer of automobiles in unit and net sales.of automobiles in unit and net sales.

It is by far the largest Japanese It is by far the largest Japanese automotive manufacturer, producing automotive manufacturer, producing more then 5.5 million vehicles per more then 5.5 million vehicles per year, equivalent to every 6 seconds.year, equivalent to every 6 seconds.

Market MixMarket Mix

The right combination of the 4 P’sThe right combination of the 4 P’sProductProductPrice Price PlacePlacePromotionPromotion

ProductProduct

H1 H1 H2H2H3H3H4H4H5 H5

PricePrice

H1: 10,71,972H1: 10,71,972H2: 11,75, 205 and 11,79,551H2: 11,75, 205 and 11,79,551H3: 12,39,120 and 12,43,467H3: 12,39,120 and 12,43,467H4: 13,07,232 and 13,11,578 H4: 13,07,232 and 13,11,578 H5: 12,43,574 and 12,47,911H5: 12,43,574 and 12,47,911

PlacePlace

12 Toyota Plants in and around Toyota City 12 Toyota Plants in and around Toyota City and Aichi Prefecture.and Aichi Prefecture.

Established 3 other domestic Established 3 other domestic manufacturing companies in-Kyushu, manufacturing companies in-Kyushu, Hokkaido & TohukoHokkaido & Tohuko

Duo Sales outlets, which sell VolkswahenDuo Sales outlets, which sell Volkswahen 295* Toyota dealers with different channels295* Toyota dealers with different channels

Toyota DealersToyota Dealers Toyopet DealersToyopet Dealers Toyota Corolla DealersToyota Corolla Dealers Netz DealersNetz Dealers

PlacePlace

PromotionPromotion

Across the world, Toyota participates Across the world, Toyota participates enthusiastically in community enthusiastically in community activities ranging from the activities ranging from the sponsorship of educational and sponsorship of educational and cultural programs to international cultural programs to international exchange and research.exchange and research.

Authorized dealers for their car Authorized dealers for their car segments.segments.

StrengthsStrengths

Devotion towards a community projectDevotion towards a community project Caters to all the segments of the Caters to all the segments of the

communitycommunity First priority are the customers and the First priority are the customers and the

environmentenvironment Provide a choice to the customers for Provide a choice to the customers for

customizing their own cars.customizing their own cars. Strong belief in fulfilling its corporate Strong belief in fulfilling its corporate

responsibility.responsibility.

StrengthsStrengths

Strong financial standingStrong financial standingCustomer loyalty Customer loyalty Supports various programs focused Supports various programs focused

on the improvement of the on the improvement of the communitycommunity

Policy of producing cars near its local Policy of producing cars near its local markets.markets.

Weakness Weakness

Needs to improve the designNeeds to improve the designNeeds to retain operational efficiencyNeeds to retain operational efficiencyExterior stylingExterior stylingHabit of committing mistakes twiceHabit of committing mistakes twiceNon-Committed dealersNon-Committed dealers

Threats Threats

Young buyers getting attracted to Young buyers getting attracted to Suzuki, HyundaiSuzuki, Hyundai

Exposed to fluctuations in economic Exposed to fluctuations in economic and political conditions in US, Japanand political conditions in US, Japan

General motors still being the world’s General motors still being the world’s largest carmaker.largest carmaker.

Demand in economies like U.S and Demand in economies like U.S and Europe has become static.Europe has become static.

Opportunities Opportunities

Needs to a marketing strategy that Needs to a marketing strategy that caters to the young generation.caters to the young generation.

Needs to come up with small Needs to come up with small segment cars.segment cars.

Needs top focus on fuel efficiency Needs top focus on fuel efficiency cars rather than producing thousands cars rather than producing thousands of hybrid cars.of hybrid cars.

Key Success FactorsKey Success Factors

Innovation.Innovation.Diversity.Diversity.Very well understanding the needs of Very well understanding the needs of

different countries.different countries.Manufacturing speed and flexibility.Manufacturing speed and flexibility.Caters to the requirements of all the Caters to the requirements of all the

age groups.age groups.Marketing strategy appeals to Marketing strategy appeals to

individuality and creativity. individuality and creativity.

RecommendationsRecommendations

Better Design : Give a heavier lookBetter Design : Give a heavier lookTires are not that goodTires are not that goodWorking out some good deals for Working out some good deals for

dealers or may be some contest to dealers or may be some contest to boost some salesboost some sales

Changing the target segmentChanging the target segmentWorking out some cheaper price to Working out some cheaper price to

attract the young crowdattract the young crowd

Conclusion…Conclusion…

In 2000, the first hybrid electronic In 2000, the first hybrid electronic gasoline car made Toyota a leader;gasoline car made Toyota a leader;

Toyota wants to be known for Toyota wants to be known for environmental friendly car;environmental friendly car;

Toyota offers wide range of cars: from Toyota offers wide range of cars: from family sedans, sport utility vehicles, family sedans, sport utility vehicles, trucks & minivans;trucks & minivans;

Toyota is more Customer focused;Toyota is more Customer focused;Marketing Strategies for different cars;Marketing Strategies for different cars;

Cont…Cont…

Reason for Toyota's Success: its Reason for Toyota's Success: its Manufacturing unit;Manufacturing unit;

Leads to increase in productivity & market Leads to increase in productivity & market responsiveness;responsiveness;

In 2003, Toyota’s sale rose to $140 billion In 2003, Toyota’s sale rose to $140 billion that it edged Ford Motors;that it edged Ford Motors;

It became the 2It became the 2ndnd largest car-maker; largest car-maker; Market cap of $110billion is more than GM & Market cap of $110billion is more than GM &

Daimler Chrysler (Combined);Daimler Chrysler (Combined); Toyota’s Goal: Surpass GM & be World Toyota’s Goal: Surpass GM & be World

leader in Automobile;leader in Automobile;

Reasons why Toyota was Reasons why Toyota was vulnerablevulnerable

Only luxury segment cars are launched in Only luxury segment cars are launched in India.India.

Sales satisfaction is a weakness due to the Sales satisfaction is a weakness due to the longer waiting time for new car delivery.longer waiting time for new car delivery.

Customers still lag in appreciating the global Customers still lag in appreciating the global warning. Thus the marketing strategies warning. Thus the marketing strategies should emphasis on the value of fuel should emphasis on the value of fuel efficiency.efficiency.

Cars like Lexus and Celica have niche market.Cars like Lexus and Celica have niche market.