Strategic Management Report: Business Model of Toyota Motors

This report provides a critical analysis of the business model employed by Toyota Motors, a globally recognized leader in the automotive industry. The study focuses on the Toyota Production System (TPS), highlighting key aspects such as Kaizen (continuous improvement), Lean Manufacturing, and Agile Operations. The report explains how Kaizen fosters innovation and long-term sustainability, while Lean Manufacturing and Agile Operations contribute to efficiency, waste reduction, and environmental sustainability. The analysis emphasizes the importance of an appropriate business model and its effective implementation in operational processes, contributing to Toyota's success in terms of increased turnover and environmental responsibility. The report also references key academic sources to support its findings.

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The sustainability of an organisation depends on the nature of activities that are
carried out by an organisation. Hence, the sustainability of the company depends on the
business model of the company. The nature of the business model to be adopted by
companies determine the effectiveness of the companies in terms of gaining favourable
nature of outcomes (Lorenzo, Christopher and Afuah 2017). Toyota Motors has been
recognized as a company that has been successful in the global automotive sectors as a result
of the approaches to management that the company has been able to adopt. The aim of the
paper is to critically analyse the business model of Toyota Motors.
Toyota Motors is a company that needs no second introduction. The company has
been recognised as a fortune 500 company (Wendy and Victor 2019). The company that has
its headquarters in Japan follows a business model that is knowns as the Toyota Production
System. Some of the key aspects of the Toyota Production System are Kaizen, Lean
Manufacturing and Agile Operations (Andrew 2019). Kaizen refers to continuous
improvement that helps companies in thriving for the absolute best (Andrew 2019). It is a
process that helps in ensuring that the company is able to improve with time and in
accordance with the motives associated with sustainability in both the short and the long run.
Kaizen or continuous improvement is an aspect that is bolstered with the help of innovation
(Andrew 2019). Thus, it can be interpreted that there is a high involvement of innovation in
the business model of Toyota Motors.
Lean and Agile Manufacturing are issues that are highlighted by Toyota in the TPS or
Toyota Production System. Lean manufacturing is a production process that is helps in
ensuring that there is minimisation in terms of generation of wastage (Andrew 2019). The
functions of both the operations and logistics division of the company are characterised by a
high degree of involvement of affiliation towards lean manufacturing. Just as Lean
manufacturing, Agile operations are aimed at the reduction of wastage from operational

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processes of the organisation. Agile operations at Toyota is characterised by taking orders
and assembling the vehicles after the order has been placed by the company (Vinaytosh,
Samuel and Sharma 2019). Agile operations help in minimising the amount of wastage;
however, it must be noted that in order to realise agile operations, one must be able to ensure
that the operational division of the organisation is competent enough. Both Lean
manufacturing and lean operations have been able to help Toyota in generation of favourable
nature of outcomes such as generation of increased turnover, efficiency in processes and
catering to the environmental sustainability needs, all by ensuring that the amount of wastage
is controlled.
It can thus, be said that innovation or innovative thinking has been one of the main
aspects that has contributed to the success of Toyota. The case of Toyota and the use of the
Toyota Production System business model help in understanding the importance of an
appropriate business model and implementing the same into operations.

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REFERENCES
Dillon, Andrew P. A study of the Toyota production system: From an Industrial Engineering
Viewpoint. Routledge, 2019.
Hii, Wendy SC, and Victor Shan Ko. "Are Companies Aiming to be More Regional or More
Global?." Journal of Management Policy and Practice 20.2 (2019).
Massa, Lorenzo, Christopher L. Tucci, and Allan Afuah. "A critical assessment of business
model research." Academy of Management Annals 11.1 (2017): 73-104.
Mishra, Vinaytosh, Cherian Samuel, and S. K. Sharma. "Lean, agile and leagile healthcare
management–A case of chronic care." International Journal of Healthcare Management 12.4
(2019): 314-321.