Business Operations Analysis: Toyota's Strategies for Improvement

This report provides a detailed analysis of Toyota's business operations, focusing on strategies for improvement and gaining a competitive advantage in the automotive industry. It explores various operational attributes, including Just in Time inventory management, supply chain management, product design, and total quality management. The report also examines cost leadership strategies and the importance of setting organizational objectives related to quality, speed, flexibility, and cost. By implementing these strategies, Toyota can enhance its operational performance, minimize waste, and increase its market share within the global automotive market. The report also discusses the importance of objectives such as quality, speed, flexibility, and cost for Toyota's overall operational success.

INTRODUCTION TO
BUSINESS
OPERATIONS AND
SERVICES

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Introducing Company-wide Operations Improvement Strategies...............................................3
Operational Strategies That GM and Ford can Implement Towards Gaining Toyota’s Market
Share............................................................................................................................................8
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
All the business functions and processes that occur within a business organisation and
contribute towards its smooth and effective operations which also allow for the business
organisation to earn money and financial profits within the operational industries constitute as
business operations. The business operations vary accordingly from one business organisation to
another but generally have come to include the common operational processes, location, staffing
and technology used by the business organisation to operate successfully within the operational
industries (Hazen and et.al., 2018). This report analyses the business operations and services of
Toyota, which is a Japanese international automobile manufacturing business organisation that
was founded in 1937, 82 years ago and currently operates from its headquarters in Toyota city,
Japan. As of late 2019, Toyota has been able to become the world’s tenth largest business
organisation on the basis of total revenues generated by the automobile business organisation.
Toyota is also the world’s first automobile manufacturing business organisation to
manufacture more than 10 million automobile vehicles in a single fiscal year. In order to
effectively conducts its varied operations, Toyota employs around 364,445 employees at various
organisational positions within its hierarchical organisational structure.
MAIN BODY
Introducing Company-wide Operations Improvement Strategies
There are several ways through which Toyota can effectively introduce and implement
organisation wide operations improvement strategies with the intention to enhance their
operational performance and efficiency, while also improving their financial performance within
the global automotive industry. In order to effectively be able to improve upon the business
operations of Toyota its operational strategies are recommended to place focus on the following
operational attributes through which Toyota can make effective use of their organisational
resources, minimise wastage and improve their operational performance:
Just in Time:

Just in Time relates to an innovative and effective inventory system that can be used by
Toyota with the intention to effectively manage their stored manufactured automobile vehicles in
warehouses and inventories. Through Just in time strategy, Toyota would be able to effectively
keep track of their orders of raw materials and align them to the need form its manufacturing
department, allowing for the automobile manufacturing business organisation to operate with
maximum efficiency. Through the Just in Time strategy, Toyota can effectively mitigate and
decrease the operational wastages that are part of their manufacturing process, as all the raw
materials that are required for its manufacturing operations are procured based on the needs and
requirements of its manufacturing department (Choi, Chan and Yue, 2016). Just in time is a
minimalist operational strategy and enhances the operational efficiency of Toyota as through this
approach, Toyota does not buy or procure any excess amounts of raw materials from its suppliers
and only receives raw materials that its production operations need and require. Using Just in
Time strategy requires Toyota to effectively forecast and predict how much raw materials their
manufacturing operations require and demand from their suppliers and is a viable strategy for
Toyota to make use of with regards to mitigating their operational losses in the short term.
Effective use of their organisational resources and raw materials allows for Toyota to decrease
their operational and manufacturing costs, allowing for the automobile manufacturing business
organisation to effectively decrease the costs of their final automobile vehicles or increase their
overall financial profitability within the automotive industries of the world. Use of the Just in
Time strategy also allows for Toyota to gain a sustained competitive advantage against their
industry competitors such as Ford and GM and allows for Toyota to increase its overall market
share, operational and financial productivity in an effective and efficient manner.
Supply Chain:
Toyota can also introduce and implement operational strategies that make use of supply
chain management in order to effectively improve the performance and efficiency of its business
operations and functions. Supply chain management strategy can allow for Toyota to manage the
flow of their manufactured goods and services to the consumers in a positive and effective
manner. This strategy includes transformation or conversion of the raw materials procured by
Toyota from their suppliers into manufactured automobile vehicles that can be sold to the
consumers within automotive industries to effectively satisfy their needs and demands. Effective

management of the entire supply chain of Toyota can help the business streamline its operations
towards optimum standards of operational performance and efficiency, while also granting to the
business organisation a sustained competitive edge against its competitors within the global
automotive industry (Akhtar and et.al., 2018). Effective management of the supply chain of
Toyota can help the business organisation to create and incorporate a supply chain that is both
economically feasible for the business organisation and also enhances its operational
performance and efficiency. Supply chain management covers various different operational
processes and department within Toyota such as product designing, procuring raw materials
from suppliers, manufacturing, storing, distribution etc. Effective management of their entire
supply chain operations can allow for Toyota to reduce or eliminate its excess in costs cut and
increases the overall value that the automobile vehicles manufactured by Toyota provide to their
customers and clients. Thus through supply chain management strategy, Toyota can effectively
introduce organisation wide operations improvement strategy.
Product Design:
Within operations management operations of Toyota, product design constitutes as an
immensely crucial, important and significant stage in the entire product development operations
of the business organisation. Placing importance, emphasis and focus on the product designing
operations conducted by Toyota can effectively allow for the business organisation to create
automobile vehicles that satisfy the needs, requirements, demands and preferences of their
customers in an effective and efficient manner, through which they can also gain their
customer’s long term loyalty which contributes effectively towards the operational and financial
success of Toyota within the automotive industries and allows for the business to gain a
sustained competitive advantage against the competitor business organisations such as Ford,
Hyundai and GM. The product design strategy comprises of two essential phases:
 Functional design: Toyota is required to place emphasis and focus on their operational
designs for the automobile vehicles to be functional above all else (Luo, Lin and Zheng,
2019). Though Toyota is required to make operational decision of their product design
based on the dimensions of the automobile vehicle, raw materials that are used in the
vehicle and other design attributes, it must focus on the design of their automobile
vehicles to be functional enough to provide value to the customers of Toyota.

 Production Design: At this phase, Toyota is required to consider modications to the
product design relating to simplification of its manufacturing process, modular design
which can add value to the customers and standardisation of the automobile design that is
created by Toyota.
Total Quality Management:
In order to effectively be able to improve upon and enhance their business operations, Toyota
can also make use of the total quality management, which is a continuous process through which
Toyota can effectively monitor, detect and eliminate the errors that occurs during their
manufacturing, streamlining and distribution operations. Total quality management allows for
Toyota to effectively be able to improve upon the overall experience that the business provides
to its customers and also ensure that all the organisational employees and workforce of Toyota
are sufficiently trained and skilled enough, allowing for the business organisation to be able to
operate towards optimum standards of operational efficiency and performance. Through the use
of the total quality management strategy, Toyota can effectively standardise the quality that their
manufactured automobile vehicles are required to adhere to. Total quality management strategy
allows for Toyota to effectively streamline and standardise its manufacturing, product design and
distribution operations through which Toyota is capable of effectively reducing and eliminating
operational errors and increasing its operational efficiency with which organisational resources
are used by Toyota (KorauÅ and et.al., 2019). This standardised quality allows for Toyota to
provide similar levels of value to all of their diverse customers, allowing for them to be able to
effectively satisfy the demands, needs, requirements and expectations of their customers related
to automobile vehicles manufactured by Toyota. In addition, total quality management strategy
also allows for Toyota to increase their brand value and reputation within the automotive
industry, as through this strategy they are able to satisfy the needs and expectations of most of
their customers and provide value to them.
Cost Leadership:
Another strategy that Toyota can make use of towards improving its overall operations and
operating successfully within the automotive markets of the world is by choosing to implement
the cost leadership strategy. With the global prices of steel consistently increasing, this force

presents as a threat to all business organisations operating within the automotive industry.
Through the cost leadership strategy, Toyota can take advantage of its large scale operations and
make use of the principle of economies in relation to manufacturing increased number of
automobile vehicles in an effective and efficient manner, which allows for the automobile
manufacturing business organisation to effectively reduce the prices of its manufactured
automobile vehicles in the consumer markets and also allows for Toyota to decrease its
operational costs as well (Ajmal, Helo and Kassem, 2017). This can allow for Toyota to become
market leaders in terms of costs of their manufactured automobile vehicles, which invites
increased number of customers within the automotive industry to interact and engage with
Toyota and buy their products which are available to the customers at significantly reduced
prices when compared to the automobile vehicles that are manufactured by the competing
businesses of Toyota within the global automotive industry.
Objectives:
In order for Toyota to introduce and implement organisation wide operations improvement
strategies, the organisational objectives created by the leadership and senior management of
Toyota also needs to focus on the following four attributes- quality, speed, cost and flexibility of
the business organisation. Achievement of these objectives would effectively allow for the
business operations of Toyota to be improved. The objectives and goals of Toyota are
recommended to focus on following attributes:
 Quality: Quality of the manufactured automobile vehicles of Toyota are amongst the
most important aspect of its overall operations and maintaining this standardised quality
across the various different types of automobile vehicles that are manufactured by Toyota
is immensely essential towards the business organisation being able to effectively satisfy
the needs, requirements, demands, expectations and preferences of their customers within
the global automotive industry (Tarafdar, Beath and Ross, 2019). Placing emphasis on
the quality of manufactured automobile vehicles allows for Toyota to reduce the costs of
call backs, corrections and improvements in the future, something which has been a big
issue and challenge for Toyota. This focus on quality of their manufacture vehicles
allows for Toyota to mitigate or reduce the losses occurred to the business through errors
and mistakes also allows for Toyota to make best use of their manufacturing time.

 Speed: Toyota is also recommended to incorporate organisational objectives that place
emphasis on the speed at which the various different operational processes and
departments of Toyota conduct their individual functions. Optimising the speed of the
various operational departments and processes of Toyota allows for the business
organisation to work towards achieving optimum levels of performance and efficiency
organisation wide. This emphasis also increases the customer experience and satisfaction
levels of the customers of Toyota as this effectively decreases the time it takes for a
customer to place their order and receive the final manufactured automobile vehicle from
Toyota. Flexibility: Placing emphasis on the organisational flexibility of the business
organisations part of its objectives allows for Toyota to effectively incorporate the new
and innovative technological inventions and innovations from the external markets into
their manufactured automobile vehicles, without the resulting organisational change
having any kind of significant impact on the operational performance and efficiency with
which the employees and workforce of Toyota generally operates. Cost: Placing focus on the price of the manufactured goods and services of Toyota is also
immensely essential for the objectives of the business organisation as this makes the
manufactured automobile vehicles of Toyota easily accessible and affordable to increased
number of potential customers within a given population (Zhu, Zhao and Bush, 2020).
This focus on price also allows for Toyota to effectively gain a competitive advantage
against their competitors within the global automotive industry and works towards the
business organisation being able to operate in consumer markets towards achieving
optimum levels of financial success.
Operational Strategies That GM and Ford can Implement Towards Gaining Toyota’s Market
Share
There are present various operational strategies available to both Ford and GM
implementation of which can allow for both businesses to gain the market share that has already
been captured by Toyota within the global automotive industry. The most effective and
significant operational strategies that leadership and senior management of Ford and GM can
implement towards gaining market share from Toyota are as follows:

Product Design: Ford and GM can also place focus on the product design business operation in
their operational strategies used towards gaining the market share from Toyota. Both Ford and
GM are required to thoroughly analyse the business environment in which the business
organisations operate in within the global automotive industry and to identify the needs,
demands, requirements and preferences of the customers within the automotive industry
(Henderson, Goldring and Simeon-Dubach, 2019). Having identified the customer demands,
needs and preferences of their targeted customers, Ford and GM are recommended to align these
preferences and demands to their product designing operations, which would allow for both
business organisations to design and manufacture automobile vehicles that are able to satisfy the
needs, demands and preferences of the customers within the automotive industry in a much
better way than the manufactured automobile vehicles of Toyota can, granting to both Ford and
GM a sustained competitive advantage against Toyota, through which GM and Ford can
effectively gain some of the market share back from Toyota within the global automotive
industries.
Innovation: Both Ford and GM can focus their operational strategies towards the innovation of
new and innovative operational processes within the automobile manufacturing business
organisations and towards the development of new and innovative technological solutions that
can enhance the overall value of their manufactured automobile vehicles through which both
Ford and GM would be increasingly able to satisfy the needs, demands, requirements and
preferences of their customers within the global automotive industry. Innovative technological
solutions and operational processes will effectively increase the operational performance and
efficiency with which both Ford and GM conduct their business operations and also have a
significantly positive impact on the operational and financial productivity of the business
organisations (Butner and Ho, 2019). Innovation of the operational processes of both Ford and
GM and innovation of their manufactured products and technological solutions used will also
allow for the business organisation to gain a sustained competitive advantage against Toyota,
which would effectively contribute towards allowing for the business organising to gain the
market share of Toyota within the global automotive industry. Such focus on the innovation of
new innovative technology and operational processes can contribute significantly towards both
Ford and GM being able to gain the market share that is possessed by Toyota within global
automotive markets.

Marketing: Both Ford and GM automobile manufacturing business organisations can also try to
gain back the market share possessed by Toyota by placing focus on their marketing operations
as part of their operational strategies. GM and Ford can place increased emphasis on their
marketing operations and make use of both traditional and digital marketing tools in addition to
digital software that can allow for the marketers of Ford and GM to increase the performance and
success rates of their marketing operations. Ford and GM can use traditional marketing tools
such as newspapers, magazines, TV and radio commercials, billboards etc., in order to
effectively promote and advertise the manufactured vehicles to a very large base of global
audience allowing for them to effectively gain market share back from Toyota. Ford and GM can
also make use of digital marketing tools such as social media platforms, online websites and
emails etc., in order to effectively market and promote their manufactured automobile vehicles to
a large global audience through the use of the internet, while also incurring significantly less
costs compared to traditional marketing tools (Steel, 2016). Further the marketers of both Ford
and GM can make use of digital software such as Google Analytics and Hootsuite in order to
effectively monitor and measure the success and performance of their digital marketing
strategies, analysis of the data provided by these software allowing for the marketers of both
businesses to effectively improve and enhance their digital marketing strategies. This can
effectively contribute towards Ford and GM gaining back the market share form Toyota within
the global automotive industry.
Customer Service: Further both Ford and GM can also place increased importance and focus on
their customer service business operations as part of their operational strategies towards gaining
back the market share possessed by Toyota within the global automotive industry. Placing
greater emphasis on the customer services provided to the customers of both Ford and GM can
allow for the automobile manufacturing businesses to effectively be able to satisfy all the needs,
requirements, demands and preferences of their customers both prior to the sale of automobile
vehicle and after its sale to the customers (Hong and et.al., 2016). This effective customer
service provided to the customers of Ford and GM can allow for the business organisations to
retain greater number of customers for their future operations and also gain their long term
loyalty. This can effectively contribute towards both Ford and GM gaining back the market share
that is currently possessed by Toyota within the global automotive industry.

CONCLUSION
Based on the findings of the report, it can effectively be concluded that optimum
operations improvement strategies have the potential to effectively improve the various business
operations of Toyota within the global automotive industries. This report analyses the how
effective operations improvement strategies can be implemented organisation wide to the
operations of Toyota towards enhancing them. Further the report also evaluates the operational
strategies that competitors of Toyota such as Ford and GM can embrace and implement into their
business organisation towards gaining the market share from Toyota within the global
automotive industries.

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