Analysis of a Transnational Company in Asia

International companies are importers and exporters, they have no investment outside of their home country. Multinational companies have investment in other countries, but do not have coordinated product offerings in each country. More focused on adapting their products and service to each individual local market. Global companies have invested and are present in many countries. They market their products through the use of the same coordinated image/brand in all markets. Generally one corporate office that is responsible for global strategy. Emphasis on volume, cost management and efficiency. Transnational companies are much more complex organizations. They have invested in foreign operations, have a central corporate facility but give decision-making, R&D and marketing powers to each individual foreign market.

In 1937 Toyota Motor Co Ltd was established in Japan.

Toyota has

317716 consolidated employees 69125 non-consolidated employees

Main business activities are motor vehicle production and sales. Revenue of 18993 billion in 2011.

1938 Toyota Honsha Plant begins production. 1957 Toyota Motor Sales U.S.A., Inc. is established. 1966 The Corolla is launched; business partnership with Hino Motors Ltd. begins. 1967 Business partnership with Daihatsu Motor Co., Ltd. begins. 1984 Joint venture with General Motors begins production in the USA. 1997Toyota entered India through JV with Kirloskar group. 2000 Sichuan Toyota Motor Co., Ltd. begins production in China. 2001 Toyota Motor Manufacturing France S.A.S. begins production in France.

Inbound logistic
TKM procure raw material from Toyota Kirloskar Auto Parts Pvt(TKAP). TKAP is a joint venture among Toyota Motor Corporation, Japan, Toyota Industries Corporation, Japan and Kirloskar Systems Limited, Bangalore. Operation Toyota use various systems to be efficient and effective. JUST IN TIME Making only what is needed, only when it is needed and only in amount that is needed. JIDOKA Building quality into production process. Defective items should not proceed to next stage.

Outbound logistic

These product are delivered to distributors which in turn sell the car to the end consumer It has more than 150 dealerships in 96 cities across 22 states and 3 union territories of India

Toyota Corolla (Launched 2003) Toyota Innova (Launched 2005) Toyota Etios (Launched 2010) Toyota Etios Liva (Launched 2010) Toyota Fortuner (Launched 2009) Toyota Camry (Launched 2002) Toyota Land Cruiser Prado (Launched 2004) Toyota Land Cruiser (Launched 2009) Toyota Prius (Launched 2010)

Marketing & Sales

Toyota position itself in upper car segment. It customizes its product according to customers need. In India Toyota has A.R Rehman as brand ambassador. Toyota Kirloskar motor sold 140000 units in 2011.

Service

Toyota quick network reach. Service is provided through extensive network of dealers. Quick onsite support

Dealership is extended free of cost under 24x7 Road Assistance.

No of units sold
9000
8000 7000 6000 5000 4000 3000 2000 1000 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

No of units sold

Supporting Activities
Firm Infrastructure Infrastructure owned by Toyota factory is very modern and sophisticated, is robotic system with humans as the operator. Human resource management

TKM has around 5000 employee.

Technician are recruited under Toyota technical education program initiatives. Technician are groomed through Toyota Global Training System.

Technology development Toyota is a world leader in the research and development of advanced automobile technology. Creating intelligent solutions for today's mobility challenges and taking responsibility for future generations Procurement Along with requiring suppliers to provide quality items at a low price and in a timely manner, Toyota cooperate with them to promote environmental preservation and meet the other demands of society. In addition Toyota take a long term view toward our relationships with suppliers with an aim to realize an amicable relationship of mutual prosperity based on fair business practices.

Strengths Global organization, with a strong international position in 170 countries worldwide. Strong brand image based on quality, environmental friendly (greener), customized range. Industry leader in manufacturing and production. Maximizes profit through efficient lean manufacturing approaches (e.g. Total Quality Management) and JIT (Just in Time) manufacturing and first mover in car research and development Excellent penetration in key markets (US, China, EMEA) and now the second largest car manufacturer in the world, surpassing Ford

Weaknesses Japanese car manufacturer - seen as a foreign importer. Production capacity. Toyota produces most of its cars in US and Japan whereas

competitors may be more strategically located worldwide to take advantage of global efficiency gains. Some criticism has been made due to large-scale re-call made in 2005,2011 quality issues.

Opportunities
Innovation -first to develop commercial mass-produced hybrid gas-electric

vehicles (gas and electric), e.g. Prius model. Based on advanced technologies and R&D activity. With oil prices at an all time high - this investment and widening of product portfolio fits consumers looking to alternative sources of fuels away from gas guzzling cars To expand more aggressively into new segments of the market. The launch of Aygo model by Toyota is intended to take market share in youth market. To produce cars which are more fuel efficient, have greater performance and less impact on the environment. To develop new cars which respond to social and institutional needs and wants. The development of electric cars, hybrid fuels, and components reduces the impact on the environment. Toyota's Eco-Vehicle Assessment System (Eco-VAS) has helped in production, usage, and disposal Continued global expansion - especially in the emerging markets e.g. China and India, Russia, where population and demand is accelerating.

Threats
Saturation and increased competition, intense marketing campaigns

increasing competitive pressures Shifts in the exchange rates affecting profits and cost of raw materials. Predictions of a downturn in the economy e.g. recession, will affect car purchases (especially new cars). As household budgets tighten - this could lead a decline in new car sales and possible rationalization of dealerships. Changing demographics e.g. number of large families is declining. Undermining the demand for large family cars Changing usage - families using the car less for taking children to schools. Home deliveries. Businesses - restricting business travel (tele-conferencing). Governments encouraging alternative forms of transport - cycling and incentives to use public transport across Europe. Rising oil prices (fuel costs) and the costs of maintaining cars. Increase in families who have chosen not to own a car, or decided to use their car less.

Political Factors

Exchange rates, oil prices & free trade flows which influence the consumer to invest on the vehicles. Foreign ownership regulations and technological cooperations between countries helping the Toyota in raising the funds and building the advanced models which can cope with the current scenario. Introduction of new business laws Impacts the Toyota to change its rules and regulations which are necessary to producing a quality vehicle. Forced Groups (Labour unions) who plays a major role in the production of a vehicle in Toyota manufacturing organization. The labour unions should work according to the rules and regulations amended by the business laws. Investors climate- In most of the companys investors had a premier role to play in the growth and development of the company

Economic factors

Increased access to credit and lower interest loans. Investment in Infrastructure spending can boost the commercial vehicles segment. Growing working population (441 million people in 2015/16) Upward migration of household income levels (600 million people have annual income of more than $10,200) Middle class expanding by 30 - 40 million every year The availability of car loans, affordable rates of interest, smooth repayment facilities and the deductions offered to the customers by the retailers

Social Factors

Rapid Urbanization of semi urban regions Rising aspirational levels. Improvement in living standards of middle class Increased spending on Fashion & lifestyle comforts. Seeking Value for money- consumer behavior Increasing customer emphasis on aesthetics and comfort. A perfect marriage of rise in disposable income and demographic dividend (From US$ 556 per annum US$ 1150 by 2015)

Technological Factors Supply chain collaboration

It is the Initial and crucial factor in Toyota, because the consumers of car are more concerned about the ordering and when the company is going to deliver the car. The Toyota Company is having strong supply chain collaboration which is in around Seventy countries.

Operations Capability
Toyota Operation are more capable to provide the better service to consumers. It implements techniques like Jidoka and JIT, which makes the operation efficient

Research and Development

Toyota Motors invests heavily in research and development specially in assessing the product according to the local needs

Legal Factors:
The legislation covers areas such as competition law, intellectual property law, consumer protection and taxation, and emissions (air quality and fuels). When the auto parts industry reached full development, accelerated technological efforts were made to create a web of local suppliers that would make it possible to meet the growing legal requirements for the national integration of production.

Environmental factors

Other than the vehicles themselves, and the roads and fuel needed to run them the business is intricately tied to the manufacture of a wide range of components and the extraction of precious raw materials. Toyota motors, India has also setup the special R&D centres to make environment friendly cars which meets the fuel emission laws as per Indian legal system

1.Threat of new Entrants

In most markets, the capital and expertise needed to setup an auto or parts manufacturing facility, would be a great enough barrier to entry to prevent many new entrants from setting up. However, given India's incredible growth forecasts, infrastructure progress (especially new and better roads), and ever-expanding financing options to rural residents, the market is attractive. As such, we expect the threat of new entrants to be high.

2. The bargaining power of buyers/customers

Buyers in India have a wide variety of choice. There are more than 20 foreign manufacturers selling in India (including ultra high-end such as Rolls-Royce and Lamborghini). Of course there are also a plethora of incredibly choices

3. The threat of substitute products

India is famous for its two-wheelers (bikes and mopeds) and three-wheelers. These are very real and obvious threats to auto manufacturers. Public Transport is widely used in India for travelling

4. The amount of bargaining power suppliers have It is likely that the suppliers to the manufacturers have bargaining power. They are not held ransom by one single manufacturer as they can market their products to any of the others in India.
5. The amount of rivalry among competitors High. The industry is not yet in its shake-out phase and is still struggling to find the up-and-coming stars and possibly topple the leaders.

Huge investment on sustainable mobility with aim of Right car at Right place at Right time.

Hybrid Cars.
Plug In Hybrid Car (PHV) shorter range EV + longer range petrol hybrid Fuel Cell Hybrid Vehicle(FCHV) future benefits, once remaining technology challenges are solved

Electric Vehicle(EV)

- suitable for shorter journeys.

- limited by infrastructure, cost and range.

Thank you Any Questions ?