Indentification Of Toyota Ford

Motors Marketing Essay

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Toyota Motors Company is primarily engaged in automobile and financial services.
Ford Motors is seemed to be the competitor of Toyota Motors. Toyota Motors
Company is making its best strive to achieve geographical dispersion and while Ford
Motors stress upon the differentiation. However if financial analysis is to be made it
come to know that Toyota Motors Company has its revenue more than Ford Motors
but this higher revenue leaves the Toyota Motors Company with slight margins.
Corporate and governance ethics are also considered .Toyota Motors is using long
term plans and enforcing to maintain long term relationships with stakeholders and
customers. Toyota Motors is well conscious for customer perceptions and customer
satisfaction. Toyota Motors Brand is suitable for each level of class. Ford Motors
enforce on luxury brands. Now if we consider the ethics and environmental social
responsibility we come to know that both Toyota Motors and Ford Motors are well
conscious about ethics and social and environmental responsibility.

INDENTIFICATION OF TOYOTA & FORD

MOTORS:
Toyota Motors Corporation is mainly engaged in the automobile and financial
services. Toyota has deep roots in the Japan that is registered on stock exchange of
New York. There are three main business sections in which it has divided its
business. The first one is manufacturing, trading of cars, and trucks and minivans.
The business segment of automobile comprises the complete design engineering
technologies along with that of wide rang of related accessories. Financial business
operations of industry are conducted through various modes like bank loan and
leasing services. The other sections are designing and construction of real estate
services as well as various information and communications services. (New York
Stock Exchange, 2011).

Toyota management mission is to exploit the whole aspect and related business
industries related to automobile industry in order to enhance its market
sustainability. Diversified industries involvement is producing the Toyota group
economic and non-economic benefit that is why company selects to conduct business
in more than only automobile.
On the other hand Ford Motors more than hundred years old company, that has
about 0.2 million employees, 90 manufacturing plants working across six continents
founded by Henry Ford (Ford Motors, 2009), Ford Motors manufactures and
delivers automobile and financial services. Ford achieved its major objectives like
cost reduction actions over the previous four years to substantially rebuild its
business. This includes personnel levels, the solution for the settlement of the United
Auto Workers retiree health care Voluntary Employee Beneficiary Association
Contact. Ford also obtained capital and liquidity ahead in the financial market crises,
which helped the Ford to maintain its investments in new products during a difficult
economic period.

MARKET POSITIONING
Craven et al (2009) discuss that it is necessary that companies should consider the
customer's needs and wants from customer's point of view rather to apply its own
perception on customers. (Cravens & Piercy, 2009). Toyota successful market
strategy takes into account the customer perceptions in the local geographical
sections and provide services them accordingly. Toyota consider the income group,
business customer and consumers while emulating its campaigns. Company provides
differentiation strategy in its innovative models to satisfy customers. Company is
continuously plan and implement that how to reduce the prices to make its product
affordable to customers (Toyota Automobile Corporations, 2010).

Substitutes of Toyota
Toyota is careful for the threats of substitute products due to continuously increase
in fuel costs. Manufacturers of electric cars discuss that electric cars would serve the
same level of engine power as is executing by the diesel cars. Therefore, Toyota is
making its struggle to manufacture the hybrid cars that will switch from petrol or
diesel to electric power in 2015 (Business Car magazine , 2010)

Implications of Strategic Space Theory

TOYOTA
FORDGeographical Dispersion
Differentiation Strategy
Automakers size is determined on geographical dispersion and its differentiation
strategy at global level. BMW competes based on luxury models whereas Toyota
competes by considering both strategies having enlarged rectangle on both side. On
the other hand Ford struggle mainly on differentiation and less on cost whereas
Honda competes on smaller proportion of both. Ford stress on the development and
wide availability of vehicle that provide the buyers the best opportunity to choose the
brand that is fuel economy in each market.
In North America, Ford has gained immense market share because of the following
specification:
Light-vehicle
High quality
Fuel -efficient cars
Convenience and safety
Ford model like Ford Fusion, Fusion Hybrid, Lincoln MKZ, Mercury Milan and
Milan Hybrid that are introduced in 2009 attracted the great market . The only
reason was that fuel economy, 1-4 and v-6 engines compared to other previous
models.
In Europe and Asia, Ford's new global small car, Fiesta brought latest Power Shiftspeed automatic transmission using two internal clutches and six suitable-spaced
gears to remain the 1.6 liter 1-4 engine in its most excellent operating range. In
Europe, Ford marketed high performance Focus RS. This was new to C-Max and
Grand C-Max family vehicles. On the other side Figs was revealed in India to bring a
new class of buyers into the Ford brand. By considering the Ford brand it has
maximum sales chart for middle class society.

FINANCIAL STRATEGY

By following table it is easy to understand that that Toyota has its revenues more
than Ford Motors Co. Financial strategy of Toyota Motors Corp. is to Total quality
management event it has to face little gross margin. On the other hand Ford Motors
has inverse situation.

Direct Competitor Comparison 2010

Market Cap
Revenue
Gross Margin
EBITDA
Net Income
General Motors Company
47.87B
135.59B
12.79%
12.42B
4.67B
Toyota Motor Corp.
121.92B
237.78B
13.03%
21.38B
6.00B

Ford Motor Co.

58.10B
128.95B
16.11%
14.48B
6.56B

CORPORATE GOVERNANCE AND ETHICS

Toyota corporate governance is as follows:
Fundamental Policy of Toyota Motors
TMC has established the stable long range progress of corporate values like top
priority issues of management. TMC is achieving long-term and stable progress
through establishing good relationships with all shareholder, including customers,
business partners, local community, employees and to supply the goods that will
satisfy its customers. This policy is considered as " Guiding Principles at Toyota ",
TMC has also considered the CSR policy that is Contribution towards Sustainable
Development. Toyota management is working to increase corporate governance
through a number of measures designed to further boost up competitiveness like a
company that is indentified as global. (Toyota Motors Company, 2011)
Fundamental Policy of Ford Motors
Ford Motors has established the stable and valuable long range progress of corporate
values like top priority issues of management. Ford Motors is going to achieve longterm and excellent success through establishing prime relationships with all
shareholder, including customers, business partners, local community, employees
and to supply the goods that will benefit its customers. This policy is deemed to be as
" Guiding Principles at Ford Motors. Ford Motors has also established the CSR policy
that is Contribution towards Sustainable Development. Ford Motors management is
working actively to increase corporate governance through a number of measures
designed to further increase competitiveness like a company that is indentified as
global.

ETHICS ISSUES OF TOYOTA MOTORS AND

FORD MOTORS
Ford Motors Company's aim is to enjoy leading role in the world of automotive
industry, it mission to forecast needs of customers and use them accordingly. Ford
intends to maximize shareholder value by taking into account the environmental
regulatory compliance, and health of consumers (ManonaMission, 2011). The team
of company is encouraged by its goals, plans, mission and vision, cultural values,
financial strength and growth. Ford management is making efforts towards
spreading its customers base through with innovative and fuel efficient cars. Ford
Motors head quartered in US; major operations are situated in US, Canada, Brazil,
and Mexico. Its overall operations are performed in six continents, that have about
0.2 million employees, ninety plants, potential brands include Volvo, Mercury, Ford,
Lincoln (Ford Motors, 2009)
Henry Ford had given birth to Ford motors with his great view, and with help of
eleven shareholders' contribution amounting to $28000 in 1903 (The Great Idea,
2004).
Ford has stressed the idea of "Assembly Line manufacturing" in which workers
operated routine operations at same place, which proved impressively efficient. Then
Ford's expansion period started, it acquired Lincoln motor company to stimulate
luxury cars, and invented Mercury brand for moderately priced cars. Ford motors
continued to develop operations towards local and international markets by
delivering Henry's heritage of development innovated and improved products.
However after First World War, Ford faced financial stringency; major banks
introduced interest to help it but were refused. Meanwhile, Ford earned more than
twenty million through automobile dealership. Further, it purchased Detroit, Ironton
railroad to assist supplies transportation (Funding, 2011).
T-Model brand is a competitive edge for company over a long period, which
weakened by Chevrolet brand of General Motors. Ford was the pioneer of giving
facilities to employees limiting working days to five in week, eight hours shift, and
raising wage rate to $5 per day, which improved overall productivity. Henry Ford
revolutionized the growth by establishing British Ford, German Ford, and
approached to Soviet Union markets.
Economic crisis of 1929 severely stroked to company growth and profitability, its
wise management sharply addressed the situation by reducing work force and

business operations but guaranteed its survival. Afterwards, Ford had to face heavy
losses gave rise by banking industry crisis.
Ford strongly condemned the American participation in World War II; he declined
its support to government agencies but changed it view in the influence of public
opinion. During war, company's main objective was to construct 'Willow Run Aircraft
Plant', which proved the largest manufacturing capacity in world. Death of Edsel
Ford, deprived the company from great leadership, Henry II meted the deficiency of
his predecessor and brought back the company towards the path of success through
his commitment, enthusiasm, and innovative ideas, Ford faced tough challenges in
past which strengthened the base to encounter the future tests of modern era
(Funding, 2011).

The Challenges and highly Competencies

Continuous challenge in the automobile industry is to capture the design engineering
with changing needs of environment and accommodating it appropriately in the new
model,Quality System 9000 is developed by Chrysler, General Motor, and Ford in
order to eliminate redundancies in manufacturing processes; improving quality,
reliability, and management accountability (Happian-Smith, 2001). It is argued that
automakers do not consider the customers' needs and expectations rather they
mountain sales campaign through discounts and complex promotion patterns which
yield only short term results and affect profits as well . In original equipment
manufacturing, the prime concern is the customer relationship management
GLOBLIZGAION OF GREEN LIFE STYLE
There is need in adoption of green life style, energy preservation that not only leads
to green operations but also to cost saving. Specific literature dimensions should
throw light on ways to produce green brands, motivators for companies to make
green brands, stimulus for customers to demand green brands. Innovative literature
spectrum lines should set standards for green operations along with the
establishment of internationalization of green operations. Internationalization
intends to global marketing of greening, this further includes the global level
regulatory body with fund management in order to execute its mission. Such body
should strive to beware the consumers of third world countries in fulfilling their
duties regarding resource preservation and environmental protection. Globalization

of greening can be boosted by eco-friendly advertisements as done by European

countries and other advanced countries. Eco-friendly ad campaign should be
mounted in the developing countries to beware customer of those countries in order
to establish channels of green filed operations. Actually, greening campaign is being
conducted in the developed countries that are harming not only environments of
developing countries but to disturb overall globe balance. Therefore, developed
economies.
PENALITIES AND TAXES MATTERS
Environmental friendly practices and ecological modernization can attract the
foreign direct investment that in turn leads to economic development and growth.
Government regulations can act as price mechanism to regulate the green field
operations. It can exhibit as opportunities as well as threats for the companies and
can act positively or negatively towards the foreign direct investment. Government
regulatory policies can stimulate the greening (Welford et al., 2006); it can impose
additional taxes and penalties for non-green brands and can give tax incentives for
green brands. Government can initiate inter or intra nations agreements to produce
the supportive infrastructure along with technology tools to enhance the greening.
Other government related consist upon the training and development opportunities
in the field and academic educational activities

The Importance of Green Operations in Modern

Corporate Environment
Companies are using the environmental protective policies in their overall strategy in
order to widen their competitive edge in the global arena. Customer awareness is
acting as potential driver for companies to use the eco-friendly practices in their
business strategy. A potential group of customer is considering analysis of overall
supply-chain management of companies with the view to investigate whether it is
eco-friendly or not. Environmental consciousness of customers is increasing;
therefore they are laying emphasis on green brands. Such class of customer is
considering the quality rather quantity while making buying patterns. Some
organizations are ethics observers to consider the corporate social responsibility
whereas some consider the greening in order to attract the audience attention being
the green brand.
Companies intend to accommodate the corporate social responsibility in the overall
corporate environmentalism. Successful companies are considering the adoption of

proactive approach by anticipating the future corporate social responsibility

demands to enhance their competitive edge by building up brand loyalty.
Companies are forecasting to market their brand in terms of environmental
marketing; it is growing challenge for them how they exploit this aspect of corporate
social responsibility for marketing their brand. Researchers are trying to analyze the
consequences of environmental marketing by changing cultural backgrounds
(Ozanne & LeCren, 2011)

AUTOMOBILE INDUSTRY ANALYSIS

GOVERNMENTAL ISSUES
US Government Fiscal Policy has a far-reaching effect on public spending;
government can encourage the consumption of certain products by reducing tax on
it, vice versa, government can deter the sale of certain harmful item or luxury
expensive brand of car by raising tax on it. Similarly, it has direct impact on
corporate spending profitability.
Automakers focus is attracted or diverted by industrial policy, grants, or business
ancillary policies.
Ford operating countries governments' Monetary Policy has influential impact on its
ability of funds management and debt servicing.
Exchange rate and international trade have dramatic effect on importer and
decision-making.
Automobile industry regulation and deregulation have increased consequences on
automakers. Competitive factors give rise to merger, acquisition, and takeovers.
Local ethical culture prevailing in business environment in which Ford operates.
People attitude towards academic education, training, and development would affect
on Ford's management ability to hire and train qualified people.
Environmental Regulations have direct impact on automakers. Crucial challenge for
automakers is to comply with the environment regulations. Consumers are expecting
active support of automakers in environment-friendly policies.

THE ECONOMIC POWERS

Economic Cycle has direct repercussion on consumer spending; likewise, recession

adversely affects people income level and spending in luxuries and even in
necessities of life as well; as happened in 2008 global recession. Now automakers are
targeting the coming boom and consequently the opportunities thereto.
Level of Employment is severely disturbed by recession, it gives rise to low demand
product and cheap labor force.
Inflation Rate has positive aspect of boosting demand of goods and services,
employment level as well; vice versa, it eats away profits when product price is low as
compared to input costs of product.
Real estate and stock exchange markets influence consumer confidence level and
consequently spending level.
Economic Development proportionately influenced by supportive infrastructure of
country in which Ford operates. Demand varies from emerging economies and
matured economies accordingly.

SOCIAL ISSUES & RESPONSIBILITY

Population growth rate is more in developing
countries than in developed countries. This
factor is contributory to automakers' decision
making, which implies that Ford has many
opportunities in Asian and American developing
markets.
Age composition is entirely different in East and
West. Western countries are facing the trouble
of increased average rate of aged population,
whereas underdeveloped countries have
majority of younger population. Age structure of
population has implication such as saving and
investment proportions, working and nonworking class among population.

Migration trend are also indicator of people's

attitude. People usually migrate from rural to
urban areas locally and internationally. Labour
market is highly mobile in matured European
markets. Marketing strategy of automakers
accounts for population density in urban areas.
Miscellaneous Social and Cultural variables.
People's level of investing in new ventures vary
from region to region, few class of people feel
enthusiasm by taking risky decision making
while others have vice versa attitude. People
working and leisure habits influence labour
market. Women proportion in work force is low
in some Asian countries.
INROMATION TECHNOLOGY AND RELATED
ISSUES
Competitors' spending in latest technological
equipment should be checked by Ford. As if Ford
lacks in some technology, it can lose competitive
strength.
New technology gives rise to the new avenues of
global markets.
Manufacturing Process. Ford can only sustain
its competitive advantage by continuous
improvement in new and improved means of
production.
Solar Cars Technology. Through innovation of
solar-electric cars, Ford can boost its market
penetrations.

USING BROADBAND DATA

Rapid access to internet broad banding (high-speed connectivity) has changed the
life style of people. During strategy formulation, automakers should visualize the
future of broadband and data access. Analysis of Ford

Objective and Goals

Now we are going to conduct the analysis of Ford motor, which helps in maximizing
the efficiency and allocation of resources to gain sustainable competitive advantage
over competitors. Components are as follows.

Overall view based on Resource

It includes analysis of resources to gain competitive advantage to Ford over
customers. It implies that, what Ford motors can do the others cannot do. The
techniques including are VRIO analysis, core competencies analysis (as described
above).
It implies the optimum allocation of resources towards competitive edge which is
based on value chain add chain analysis, value system analysis.
This approach is more useful and relevant to Ford. It covers financial and human
resources.

Resource Based View:

Strategic planning process seeks to enforce policies that maximize the profitability,
competitive strength, and sustainability. Businesses strive to invent unique resources
to enhance their market share. Following techniques are used invent resources to
ensure competitiveness.

VRIO Analysis:
VRIO analysis is a systematic approach to analyze that whether Organization is
exploring its resources for competitive strength that are valuable, rare, and imitable.

Valuable:

The Ford's resources including its cost management policy, which enables it lowering
down the costs, F-series differentiation products, allow it to charge prices higher
than competitors, its human empower it towards market penetration are the valuable
ones.

Rare Matters
Differentiation policy of Ford is rare that competitor cannot produce or replicate. It
is valuable resource that is unavailable to competitor thus is rare.

Copy Matters
Ford competitive factors should be long lasting that competitor cannot copy. Robust
brand perception establishment and expensive resources required to sustain imitable
competitive edge.

Organization:
This implies that Ford should be able to exploit its Valuable, Rare, and Imitable to
sustain competitive edge, which may require reorganization of business operations.

Configuration of Resources:
Uniqueness of resources is not the ultimatum but configuration of resources also
does matter. The configuration and utilization of resources amounts to competitive
strengths as described below.

Values add Analysis:

Value addition described as earning before interest and tax (EBIT); it is related to
profitability. Values add analysis would help the Ford in improving weak area of
business, which require little addition to improve. If Ford is suffering losses in some
business segments for example product delivery, design engineering, tyres, computer
technology etc it can be outsourced that operation on profitable terms.

The Value Chain:

It allows business to gain sustainable competitive advantage by performing overall
operations at low cost than competitors and charge premium prices form customers
by delivering goods and services in unique ways. Value chain analysis consist of five

primary and four support activities , primary activities are explained with respect to
Ford as below.
Inbound Logistics is the Ford's raw material acquisition for automobile parts, other
related services from suppliers and delivering to operations centre.
Operations are the finished cars manufacturing, producing services; production may
consist of series of steps, it also includes make or buy decisions of automobile parts.
Inbound Logistics covers order execution, finished car warehousing; delivering cars
to customers, delivery may be self-served or outsourced.
Marketing accommodates market analysis, market research, and development,
pricing plans.
Services is the after sale services.
Following are support activities, which assist the primary activities.
Ford's Infrastructure includes general administration, accounting department,
planning and control, and other facilities.
Human Resource Department of Ford includes recruitment, labour union relation,
development and training, and pay rates.
Technology development is the primary activity among Ford's operations like design
engineering technology, manufacturing processes technology, innovative models of
F-series.
Procurement functions also include in primary activities. These include raw material
and parts purchasing functions, office equipment and others.

VALUE CHAIN ANALYSIS APPLICATION

Foremost advantage of value chain analysis is to trace inconsistencies among
strategy. If Ford is competing on low cost basis then every step of chain analysis
should lead to low cost strategy. For example, online procurement system of cars has
reduced the cost of commission agents. Customers make selection of model and place
an order through website of Ford.

Value chain analysis of Ford supports the just in time manufacturing to reduce the
inventory cost and update itself according to changing needs.
It helps in deciding whether to buy or make a part of automobiles, which one is
better.
Resource audit is conducted in connection with value chain analysis. To sustain
competitive advantage, Ford has to make effective utilization of operational, human,
financial and organizational resources. Resource audit is made of following Ford's
resources:
Investment level
Utilization of resources
Effectiveness and efficiency of operations
Raw material, finished goods inventory level
Cost minimization
Quality of services
Market research and development
Technology updating

CONCLUSION
In fiscal year 2010, Toyota has to face very tuff business conditions like that company
initially forecast operating losses. But Toyota achieved profitability on a consolidated
basis. Toyota is making very hard struggle to quickly achieve their trusts on
customers. Toyota is ensuring a system that will boost up awareness and facilities to
the customers. Toyota Motors emphasize on Geographical dispersion .
Ford Motors expects 70 percent growth in the following next 10 years to introduce
itself in Asia Pacific and Africa region. These regions includes markets on three
continents that includes Australia , China, South Africa, India and Thailand. The
volume of sales in the region increased from 24.5 million units in the year 2009 and
further 30.7 million units in 2010. In India and in the rest of the world Ford Motors
is simplifying the way the work with suppliers by minimizing complexity and

widening parts easily available. In 2014 the minimum 80 percent of the vehicles sold
under the Ford Brand internationally. Ford is expecting 70 percent of its growth in
the next 10 years to come from its Asian regions.