Operational Strategies for Ford and GM to Gain Market Share from Toyota

This report discusses the issues faced by Toyota and provides advice on operational strategies that Ford and GM can implement to gain market share from Toyota. The strategies include TQM, lean management, six-sigma, supply chain, and customer engagement.

Business Operations

Table of Contents
INTRODUCTION...........................................................................................................................2
Introduction of the company wide operations improvement strategy.............................................2
Competitor’s analysis of Toyota.................................................................................................3
Financial highlights.....................................................................................................................4
Issues facing by Toyota...............................................................................................................5
Company wide operations improvement strategy.......................................................................5
Advise on the operational strategies that Ford and GM can implement to gain market share from
Toyota..............................................................................................................................................8
Introduction about Ford...............................................................................................................8
Introduction about General Motors.............................................................................................8
Suggested operational strategies to gain market share from Toyota ..........................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11
1

INTRODUCTION
Every activity which is taking place in organisation to keep it moving and earning money
is defined as business operations. Business operations differ according to industry, size, business
type and more. In this, it is essential for organisations to have proper understanding of the
industrial sector in which they are operating their business operations in order to regularly
analyse their business performance (Hazen, Boone and Hill, 2018). This will significantly allow
them to identify deviations that are occurring and are having direct and indirect impact upon
organisation sustainability of entity. In this management unit in organisation is having most
important responsibility determine core information and understanding of their business
operations in respective industrial sector in order to further develop strategies for futuristic
success and growth. With effective evaluation of all these factors assist entity to undertake
preventive exercises in due course of time as to prevent themselves from any complex situations.
Successful determination of business operations assist entity to have effective map or plan for
organisational operations, through which management can delegate or assign roles and
responsibilities to specialists according to their skill. Present report has been conducted to have
information related issues that are being faced by Ford, GM and Toyota and the manner through
which they can assure more market share. Along with this, report also include improvement
strategies that will allow GM and Ford to take advantage of Toyota downshift. Both of these
entities are offering high-quality and luxury services ad products to customers but due to some
issues their business growth are experiencing down step in marketplace.
Introduction of the company wide operations improvement strategy
Overview or profile of Ford, GM and Toyota
Toyota engages in Automotive industrial sector and was founded in the year 1937. With
having its headquarters in Toyota City, Japan this entity is offering their services worldwide
(Toyota Motor Corp. 2020). Engines, luxury vehicles, auto-mobiles and commercial vehicles are
some of the products that entity is offering to their customers with high-class and quality.
Ford operate their business operations as an American multinational auto maker brand
and are operating their organisational activities in Automotive industrial sector. Company was
established in the year 1903 by Henry Ford and are serving their products and services
worldwide. Entity is offer high-quality products like commercial vehicles, auto mobiles, SUVs,
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automotive parts, luxury vehicle etc. to customers. With having more than 190,000 employees
(Ford Motor Co (F.N). 2020). It has been evaluated that Ford is Ford is the second-largest U.S.-
based auto maker (behind General Motors) and the fifth-largest in the world (behind Toyota, VW
and Hyundai-Kia ) based on 2015 vehicle production.
General Motors an American multinational organisation headquartered in Detroit,
Michigan, U.S. Entity was fouLiu, K. and Chen, Y., 2020nded in the year 1908 and dealing in
automotive industry while serving their business services worldwide. Main products of company
include Auto mobiles, Commercial vehicles and Auto-mobile parts. (Liu and Chen, 2020) It has
been evaluated that with having 164,000 employees organisation is offerings high-class services
to its customers. This entity also offer automotive financing services via General Motors
Financial and through General Motors Co they are engaging in designs, builds and sells cars,
trucks, crossover and automotive parts worldwide (General Motors Company. GM.N. 2020).
Competitor’s analysis of Toyota
Toyota an international organisation conducting their business services in automotive
sector undertakes advantage of approaches of innovation in their production and designing
process. Product portfolio of Toyota includes hybrids, SUVs, 4WDs and cars. Due to aggressive
competition in automotive industrial sector Toyota is facing tough competition from Mercedes-
Benz, BMW, Ford, Nissan, Honda, General Motors, Audi and more (Ivanov, Tsipoulanidis and
Schönberger, 2017). These are some of the competitors those who are offering stiff competition
to sales, profitability and market share of entity. It has been evaluated that Ford is one of the
main competitor of Toyota as this has been identified that this entity is leading innovator in auto
mobile industrial sector. Ford targets their customers satisfaction by offering then qualitative
services.
In addition to this, it has been determined that General Motors is also of of the main
competitor of Toyota as entity is offerings wide range of products and services to customers
while maintaining their image of more than one year old Multinational corporation.
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Financial highlights
This segment demonstrate organisation financial highlights in addition with the reason of
their yearly fluctuations in terms of amounts and end results. With the help of financial
highlights profitable as well as unprofitable aspect of organisation can be evaluated in addition to
changes that entity is measuring form past years (Abu Naser and Al Shobaki, 2016). Mentioned
below clear picture of Toyota financial aspects is being demonstrated in order to showcase the
manner of changes that company goes through from previous years.
Figure 1: Income Statement
Figure 2: Income Statement (€ Billion)
According to the evaluation of above mentioned figures and graph of income statement it
has been evaluated that decreasing trend associated to entity net income depicts continuous fall
in overall net income of company (Uhl and Gollenia, 2016). Due to the recall of almost 9 million
vehicles lead entity towards aggressive competition that they are facing from GM and Ford. In
order to overcome this competition and assure sustainable growth it is essential for Toyota to
undertake advantage of development strategies in order to bounce back and regain same leading
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positioning in automotive sector and to also make significant improvement in their financial
growth in next up coming years.
Issues facing by Toyota
Toyota has tragical automotive recall in which they recalled estimated 9 million vehicles
which was more than their entire units that they sold in past three years. This lead entity to face
many financial losses (Dincer, Hacioglu and Yüksel, 2018). In addition to this, it has been
evaluated that this recall also increase competition rate which made other leading competitors
like Ford and GM to take advantage of this opportunity for their growth. Thus, in order to
overcome this short term issue of quality problem Toyota is required to move quickly to revamp
by undertaking advantage of operations improvement strategies.
Company wide operations improvement strategy
It is analysed from the above data as well as financial highlights of Toyota that there is
requirement to decline the number of issues in order to gain growth and development as well. It
is determine that issues of company is directly impact on the net income of company as it is
continuously declined in three consecutive year that is from 2017 to 2019. For dealing with the
situation and to overcome with it, the higher authorities of Toyota is required to adopt and
execute operational strategies that help in making improvements (Choi, Chan and Yue, 2016) .
The strategies are supply chain, six-sigma, customer engagement, lean management and so on. It
is determine that all such strategies also assist company to increase their performance level and
provide quality service to customer that develop positive mind set towards brand. All this
strategies is given below in relation with the respective organisation:
TQM: Total quality management is defined as an operational technique that is adopt by
companies in order to make improvements in quality and provide best products as well as
services to customer. In addition to this, it is the process of dispensing with errors in order to
carrying out supply chain in a proper manner and to provide higher customer experience in an
effective manner. It is determine that this technique is mainly emphasis on the improvement of
business operations and activities as well. Along with this, it guarantees that the work or
activities which is performed is associated with the objectives of increase in quality of company
that assist in developing positive mind set of people towards brand. Implementing of these
technique not only help in improving quality but also aid in increasing productivity as well as
profitability of an organisation in an effective manner (Hong and et. al., 2016).
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It is important for managers of Toyota to adopt such operational strategy in order to make
improvements in the overall process of production in an appropriate manner. There are various
principles on which, total quality management tool is working and that is commitment from top
level management, employee empowerment, customer focus, continuous improvement and many
more. All such activities has direct influence on the improvement of quality of cars as it is
associated with initial activities to the completion activities in an effective manner. In addition to
this, it develop the core structure and herein everything exists in a qualitative way and is
customer focused also (Steel, 2016). Therefore, it is analysed that acquisition of such strategy by
Toyota will have high impact on the future business improvements in an appropriate manner.
Lean management: It is to process which is followed by organization to manage function
in there organisation so that maximum productivity in organization can be derived. Their process
include management of human resource and continuous important in organisation so that
function can be improve by maximization of productivity and profitably. This help firm in
identification of various other functioning where Toyota can use lean assembly line concept for
management of assembly line and running (Zhu, Zhao and Bush, 2020). Toyota follow this
concept to improve functioning and follow there process of continues improvement in
organisation. This will also help in achieving its objectives related to innovation and
development of various other function for future growth of organisation. This will help firm in
reduction of cost which can be useful for organisation in meeting current trends. The final benefit
of this ascertained in the way of competitive edge over other big players like BMW and Ferrari.
Six-sigma: It is the method which is use by firm to maintain economy in organisation and
improve its function related to damage products. This help firm controlling quality of its various
operations and will lead to success in operation . This will also help firm in achieving it business
objectives and will lead to successful operations there are various kind of function organisation
which will help firm in improving its operational strategy an will lead to identification of various
methods to remove negative production which is decrease performance of organization
(Sandaruwani and Gnanapala, 2016). Toyota can use this function in such way whee it can
reduce the time of consume in various activities related to production. This system will also
focus on Toyota cost reduction where company can get satisfy its customer through effective
production and minimum wastage of resource. If company is able to attain the proportion lowers
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wastage then it will help it in managing cost of various products and increase profitably by
minimising cost.
Supply chain: It can be define as that channel which firm use to identify its function and
perform different market operation related to sale and purchase of product offer by organisation
in target market. This can also discuss as function which is related to performance of
organisation in target market in relation to its products. It include various kind of function like
activities, entities, people, resources and information. This is important for organisation to
identify various issues related to supply chain in organizational will help firm in management of
operational strategies. This also help Toyota in strengthening its business operation. This will
also improve distribution network of organisation which also cover under supply change. By
strengthening it organisation will get various benefits which are directly related to function of
firm and will help in manageable its activity (Li and Coates, 2016). This will also allow
organisation to fulfil its obligation towards organisation. These benefits are improved statistical
distribution networks, distribution strategy, monitoring of cash flow, establishment of
information conduits, tracking of inventory etc. All above mentioned factors are considering
main advantages of supply chain that will help Toyota in change of state of its business
transaction and accomplishment of competitive goodness.
Customer engagement: It is defined as relation that is exist between the customer and a
brand. It is analysed that highly engaged customer has frequent purchasing of product and is
remain loyal with the company that has positive impact on the future sales as well as profits of an
organisation. Acquisition of this strategy by Toyota assist in raising number of loyal customer
along with this it also assist in spreading positive word of mouth at marketplace. It is important
for Toyota to provide quality and on time service to customer as it help in customer retention and
satisfaction as well. All this will help company to decline the cost of promotion, increase
customer base, improved operational strategy, decline level of crisis, enhance loyal customer
base and many more (Luo, Lin and Zheng, 2019). All this benefits gained by Toyota if it adopt
customer engagement strategy for their future improvements.
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Advise on the operational strategies that Ford and GM can implement to gain market
share from Toyota
Introduction about Ford
Ford is an American multinational auto mobile company that was established in the year
1903. The company was founded by Henry Ford and its head office is located at Michigan,
Unites States. The company offer products such as luxury vehicles, SUVs, automotive parts,
commercial vehicles, pickup trucks and so on. It also offer services such as vehicle leasing,
automotive finance, vehicle service and many more (Choi, Wallace and Wang, 2018). Ford is
stand on the eleventh ranked in overall American companies and it is consist in the list of
Fortune 500 companies. Ford has presence in more than 190 counties and has 77 plant location
and offices in all over the world. One of the reason of its success is its skilled and talented
1,90,000 employees who perform all the activities and implement operations in an effective
manner.
Introduction about General Motors
General Motors is an multinational corporation that is founded in the year 1908 by
William C. Durant. The head office of General Motors is situated at Michigan, U.S and is
performing in around 40 locations worldwide. The products and services offered by company is
commercial vehicles, auto-mobile parts, vehicles financing and many more. It is analysed that
General Motors trucks and cars is marketed by an network of 12,000 independent dealers,
distributors, outlets and so on (Qureshi, Ahsan and Azid, 2017). This high market presence help
company to gain higher profits and enhance its revenue level in an appropriate manner.
Suggested operational strategies to gain market share from Toyota
The rivals of market is requited to adopt various strategies by that they are enable to
attain market share of Toyota. It is determine that it has high significance in the present time
period as market share and situation of Toyota is decline as customers is easily finding
alternatives in market that provide the same deal in less price (Miletić, Bogdanović and
Milanović, 2016). The major players such as general motors and ford has an opportunity to make
alterations in its products as well as services in order to attract number of people and increase its
market presence and share in an effective manner. It is the responsibility of the top level
management to emphasis on the applications of developing effective strategies so that it can
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attain competitive advantage or fight with its rivals in an effective manner. In context to this,
Ansoff strategy is suitable that consist of four major strategies. In addition to this, selecting one
suitable strategy from this four determinants as per the present situation assist in grabbing large
market share. This four determinants of Ansoff matrix is given below:
Market penetration: This strategy involves improvement within the marketing activities of
company by which sales as well as profitability of present goods ans services is improved and
increased as well. It is analysed that this strategy consist of less risk and is beneficial in order to
increase market share.
Market development: This strategy associated with the entry in new market by the existing
goods and services as well. It involve risk but help an entity to improve the current performance
and increase its customer base level in an effective manner (Wallace and Webber, 2017).
Product development: This strategy is associated with providing of new products within
the existing market that attract customers and help company to retain them for longer time
period. It is analyse that such strategy involves high risk but is beneficial in order to develop
brand image.
Diversification: In this strategy, the companies are entering in new market by the new
products. It consist of high risk so it is essential for an organisation to gain an insight about
market conditions and customer requirements of market in which they enter.
From the above strategy, it is stated that one of the suitable and best strategy for ford and
General motors is product development (Bilicki and Roeder, 2016). They can emphasis on
providing electric vehicles in market that attract large number of people and help company to
attain competitive advantages at marketplace.
CONCLUSION
From the above study, it has been analysed that it is important for an organisation to
continuously analyse the performance of operations and operations so that improvements can
take place on time period. In addition to this, it is significant to gain an understanding about
internal as well as external factors which impact on the activities as it help in developing
effective strategies and decline the level of threats in an effective manner. Furthermore, there are
various operational strategies that assist companies to make improvements such as Total quality
management, six sigma, lean management and so on. Ansoff matrix consist of four strategies that
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assist companies to enhance its performance level and market share in an effective and
appropriate manner as well.
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REFERENCES
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Springer International Publishing.
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Miletić, S., Bogdanović, D. and Milanović, D., 2016. Advantages of implementation the process
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Qureshi, M.A., Ahsan, T. and Azid, T., 2017. Equity and debt financing strategies to fuel global
business operations during crisis. In Global financial crisis and its ramifications on
capital markets (pp. 297-319). Springer, Cham.
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business operations: a study on Sri Lankan tourist hotels. Procedia food science, 6,
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Steel, R.S., 2016. The underground rulification of the ordinary business operations
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operations: Process component and value creation mechanisms. International Journal of
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Online
Toyota Motor Corp. 2020. [Online]. Available
Through<https://money.cnn.com/quote/profile/profile.html?symb=TM>
Ford Motor Co (F.N). 2020. [Online]. Available
Through<https://in.reuters.com/finance/stocks/company-profile/F.N>
General Motors Company. GM.N. 2020. [Online]. Available
Through<https://www.reuters.com/companies/GM.N>
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