Stakeholder Analysis From a stakeholder analysis perspective, Toyota must also seek to take this foundational ethical and crisis communication values, and infuse them into every relationship they have within and outside the company as well. Often when crises occur, the trust in a company will suffer significant, often the worst internally where morale will often fall and the best employees leave (Smith, 17, 18)
Its sales has also dropped because people are unsure of its safety (Associated Press, 2010). This controversy coupled with the global meltdown forced the company to ask for a 200 billion yen loan from the Bank of Japan (Willacy, 2009)
All this had a huge impact on the confidence of stakeholders in the company and so, Toyota is taking additional steps to meet their expectations. Toyota's stakeholders includes its shareholders, customers, suppliers and distributors, employees and local communities and so, the strategies have to be multifaceted to meet the responsibilities of each of these varied groups (Friedman & Miles, 2006)
He said the company could not train enough personnel to keep up with its rapid growth. He acknowledged that a misguided strategic focus at the company warped the 'order of Toyota's traditional priorities' so that the stress on product safety and quality first, and sales volume and cost second, became inverted as Toyota began rapidly expanding a decade ago" (Cole, 2010, p
Toyota Total Quality Management. The CEO of Toyota Re: Quality control and improvement According to management guru Jim Collins, author of the book Good to Great, "before vision, before strategy, before tactics, before organizational structure, before technology" a great company is founded upon the idea of starting with the right people (Collins 2001: 45)
"Automakers that were once lauded for their quality have been afflicted by recalls in the past decade. Toyota has led the nation in recalls in 4 of the past 5 years" (Duffer 2014)
While in the short-term, quality auditing and retraining can be helpful, in the long-term Toyota must reevaluate its priorities as an organization and touch base with the TQM philosophy which states that the costs in the long-term of shirking quality are ultimately greater than any costs saved by cutting corners. "To disregard the rigorous standards, best practices, and checks and balances required of such software (and hardware) design? People are killed, reputations ruined, and billions of dollars are paid out" (Dunn 2014)
This is the most expensive category of quality costs. Examples include product returns, repairs, warranty claims, lost reputation, and lost business" (McCubbrey 2009: 169)
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Toyota is also founded upon a system of values, namely "ethics, integrity and trust. It fosters openness, fairness and sincerity and allows involvement by everyone" (Padhi 2010)
A new entrant requires huge initial capital outlay to set up its manufacturing plant, implement the most advanced technological equipments, and establish its presence in the industry. Moreover, it is highly difficult for the new entrants to break the brand loyalty and emotional attachment of the consumers with already established brands (Bearden, Ingram, & LaForge, 2007)
Political instability is one of the leading factors which impact the fuel prices, exchange rates, regulatory policies, and economic performance in a country. The government imposes heavy taxes, duties, and trade laws on the local and foreign automobile companies which they have to follow in order to operate in a legal and lawful way (Blythe & Megicks, 2010)
For example, rapid industry growth and economic stability in developed countries enable it to earn attractive returns on its investments. In contrast, the poor economic conditions of under-developed and developing countries decrease its profit margins and overall performance in the industry (Brassington & Pettitt, 2006)
2. Economic Conditions: The economic environment consists of inflation, industry growth rate, unemployment, exchange rate, interest rates, and other economic forces that impact the earning and spending patterns of individuals, businesses, and governmental entities (Frederic, Agnes, & John, 2011)
Therefore, they use strict evaluation criteria to make choice among different alternatives. Keeping in view the strength of customers' bargaining power, Toyota and other automakers are expending huge amounts on advertisements and promotional campaigns to create awareness about their brands and convince these customers to prefer them over all other brands (Jenny & Scammon, 2010)
High risk of exchange rate fluctuations. Economic downturn impacts the profitability of the company as well as the demographical patterns in the target markets (Kotler, 2008)
With the help of these core competencies and capabilities, Toyota is able to design and develop the most innovative, modern, fuel-efficient, and reliable automobiles (Young, 2013). Today, it is one of the most successful companies that have built their image through performance and efficiency (Motton, 2013)
Moreover, it can introduce innovative features in its vehicles which are not yet offered by its competitors. This strategic move is only possible through differentiation strategy at the business level (Mullins, Walker, & Boyd, 2008)
Weaknesses A well-recognized brand in the global automobile industry with a wide range of top-class vehicles. Enjoys strong brand loyalty and stakeholders' confidence which it has developed by giving superior operational and financial performance over the years (Pfeifer, 2013)
It was founded in 1937 by Kiichiro Toyoda. The mission of Toyota Motors Company is to produce the highest quality vehicles that can provide real value for the consumers' money in terms of performance, status, and satisfaction (Toyota Motor Corporation, 2013)