Case Study on Challenges Faced by Toyota

Running head - CASE STUDY ON CHALLENGES FACED BY TOYOTA
Case Study on challenges faced by Toyota
Name of the student
Name of the university
Author’s note

1CASE STUDY ON CHALLENGES FACED BY TOYOTA
Introduction
Toyota Motor Corporation is one the leading organisation in the global market. Despite
its huge success, the company has faced many issues. The recent challenges the company faces
have risen severe question about brand loyalty. The following case study discusses the
difficulties caused by the recent development of digitalisation, advertisement and brand
recognition through social media and recall problems.
Discussion
Evaluating product-harm crisis and how it has affected Toyota
Product harm crisis can be classified as a crisis that occurs when a product is found
defective or harmful for the consumers and is causes a publicised event. The critical effect of the
crisis targets a subset of that particular category or the entire product category. It has an impact
on the sales of the product and also the cost of the product associated with the product recalls. In
the long run, it takes a toll on the reputation of the company. The company must regain the trust
of the consumers during this crisis (Ma et al. 2014).
In the automobile industry, product harm crisis is nothing new. There have been many
incidents where companies had seen problems related to their products. Toyota’s has a reputation
for manufacturing quality automobiles. However, in 2010, the company had to recall 2.3 million
of its product worldwide. The product issue they face was a defect in their accelerator pedal,
which automatically speeds up the car without the pilot being able to take control of the vehicle.
In essence, it got the attention of media, spreading the news of the loss the company faced via
Facebook, Twitter, which was a massive blow to the reputation of the company (Rajasekera,
2013). The figure-1 below shows a chart that was reported by The National Highway Traffic
Safety Administration showing the record number of vehicles that has been recalled in the US by
2014.

2CASE STUDY ON CHALLENGES FACED BY TOYOTA
Fig 1 – Vehicle recalls in the U.S.A. by 2014 due to NHTSA
Source- (http://fortune.com, 2014).
Identifying the problems needed to be solved by Toyota leaders
The biggest problem which the leaders of Toyota should be concerned with is regaining
the trust of the customers. The sticking accelerator pedal in eight models of Toyota has led in the
closing of many manufacturing factories temporarily. Deaths have occurred due to these issues.
In the US, piles of lawyers are waiting eagerly to life lawsuits to sue Toyota for the loss of the
families that are the victims of the malfunctioning models of car that have been recalled (Jim, &
Shinde, 2015).
The company should look through the rapid spread of the negative impact that has led the
company to suffer in loss of sales and also losing the trust of customers. Facebook and the
internet is in full capacity, and the brand image has been destroyed Toyota has build over China,
Europe, and also in Japan which happens to be their home market