Toyota: Balance Scorecard Analysis for Business Development

This report presents a comprehensive analysis of Toyota's Balance Scorecard, focusing on its internal processes from the perspective of business development, operational efficiency, and sustainable development. The analysis highlights Toyota's cost leadership strategy, emphasizing objectives, performance measures, and strategic initiatives. The report delves into key areas such as increasing R&D, entering new market segments, strengthening internal processes for quality improvement, and promoting lean manufacturing principles. It also examines Toyota's commitment to sustainable growth, including environmental performance and resource efficiency. The report evaluates how Toyota aims to meet customer expectations, enhance supplier satisfaction, and reduce waste generation. The study provides insights into how Toyota leverages its brand value, expands its dealer network, and adapts to changing government policies. It underscores the importance of innovation, technology adoption, and continuous improvement within the organization, supported by the company's guiding principles of respect for people and continuous improvement. The analysis also incorporates Toyota's commitment to environmental sustainability by reducing LPG usage and waste generation.

Running head: BALANCE SCORECARD
Toyota Internal Processes Perspective
Student’s name
Name of the Institute

BALANCE SCORECARD
Balance Scorecard for Toyota
Toyota follows cost leadership strategy
Categories Objectives Performance measures/
KPI
Targets Strategic Initiatives
Internal
Business
Process
Perspective
Business Development
 Increase R &D with
hibernate products.
 Enter into new line
segment
 Each team should
give 20 innovative
ideas in a year
across world
 Meet Customer
expectations
 Supplier
Satisfaction
 Ideas >20 per
team and
 Implementation
of new ideas =45
in year
 Number of
meetings with
stakeholders =45
 Increase dealer
network by 2%
 Increase the R&
D in hybrid car
segment.
 Enter into new
product line of
motor cycle.
 Increase
meeting with
dealers,
suppliers and
customers.
 Conduct mock
surveys for
customers,
dealers and
suppliers.

BALANCE SCORECARD
Operational Efficiency
 To strengthen the internal
process which aims at
quality improvement
 Lean Manufacturing
 Just in Time Production
 Continuous improvement
 Reduce fixing
problem by 20%
every year.
 Increase the units
manufactured by
20%.
 Increase the
supplier and dealer
compliance with
ISO standards
 Increase product
monitoring
 Investment in
new technology
increased by 5%
 Increasing
manufacturing
by 20%
 Reduce material
packaging
wastage by 8%
 Increase
compliance up to
85%
 Standardize the
tasks to
continuous
improvement
and employee
empowerment.
 Use thoroughly
tested
technology
which results in
quality
improvement.
 Challenge your
suppliers and
helping them
improve.
 Increase use of
new
technologies to

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Sustainable growth
 Environmental
performance
 Reduction in LPG
usage by 5-7%
 Reduction in waste
generation by 7%
 LPG usage
reduction by 5-
7%
 Waste generation
reduce by 7%
reduce energy
consumption
and increase
resource
efficiency.
 Reducing
dependence on
grid power and
install solar
power plant and
rain water
harvesting.
 Collaborate
with
government of
different
countries
Toyota has its origin in Japan in 1937. It has become a multinational corporation. It is
selling its product in 160+ countries. Toyota defines its path globally by: -“The Toyota Way”.

BALANCE SCORECARD
Respect for People and Continuous Improvement are two guiding principles that drive “The
Toyota Way”. These two principles follow the 5 aspects: Challenge, Kaizen (Continuous
Improvement), Genchi Genbutsu (go and see), Respect and Teamwork. Toyota’s generic strategy
is to minimize cost of production to attain cost leadership (Dennis, 2016). The company should
excel at following three business processes in order to satisfy shareholders and business
processes:
Business Development
Toyota should leverage its brand value by creating a new product line like motorcycles. It
would have competitors like Honda in this segment. Toyota in the past has built its image by
quality products and customer experiences. The objective is to increase more penetration. It is
necessary to maintain the promise of delivering excellent value to customers in terms of quality,
delivery time, pricing and post sales service. It should also focus on On-Time Delivery and
repair quality. Also, it should measure its success not only in terms of customer satisfaction but
also supplier and dealers satisfaction. Toyota has network of suppliers worldwide. The mock
survey which is already conducted in the company should be increased to large number of
dealers to understand their expectation and perception from Toyota product. The company
should work with business partners in such a way to achieve long-term, stable growth and mutual
benefits. However the company should not stop tapping new partnerships. To tackle competitors
it should enhance marketing and brand promotion strategies like VAS. It should try to expand its
sales in urban and semi-rural areas. This can be done by expansion of Toyota Dealer network. It
should enhance its profitability by expanding export operations. Toyota should grow itself by
entering into new market or selling to newer segments. It will support its cost leadership strategy.

BALANCE SCORECARD
It enables the company to maximize its sales volume. This ensures profits despite of relatively
low selling price.
Operational Efficiency
To mitigate the risk the company wants to strengthen the two core field’s quantity and
quality. Toyota should also look at human resource utilization and strengthen corporate
governance mechanism. Toyota should work in close collaboration with the government in order
to implement new developmental approaches. It is necessary that Toyota creates advanced
technologies and promote the new technology created products and services. It should improve
fuel efficiency of product by using new and faster technologies. Toyota should confirm with all
safety standards and enhance the quality of life for workers and customers. Toyota should
safeguard company assets. It should focus on capability enhancement i.e. production, sales and
others to strengthen its roots in the countries (Tregear, 2015). It should synergize quality and
quantity through its processes. Lean manufacturing focuses on overall organization strategy by
continuous review of processes (Chiarini & Vagnoni, 2016). It should bring material
optimization. It should also focus on increasing market prices of OEM products. It can do SWOT
analysis in this regard and form supplier exclusive network to provide OEM products at
affordable range (Hines, 2016). Toyota should also make itself flexible for changing government
policies and regulations. In order to reduce material wastage, it should reduce the packaging of
material by 8% by putting data tracking system in a process. Reuse and recycle the packaging
material. It should focus on continued innovation. With increasing expansion, it is necessary that
for continuous business improvement it should increase product monitoring.
Sustainable Development

BALANCE SCORECARD
Toyota should increase its efforts on promoting low carbon products in order to have low
carbon in future. It should increase Research and Development efforts in developing hybrid or
eco-friendly cars .It should be in in parallel with the usage of new technologies such as
alternative fuel vehicles. Toyota should also come up with incremental innovations like easy seat
for disabled people (Debnath, 2015). The company should also increase its dependence on solar
plants and rain water harvesting mechanisms (Chiarini, 2016). It should also promote judicious
use of natural resources in the supply chain (Solaimani & Latifi, 2016). It should reduce
consumption of electricity, LPG and water. It should invest in recycling.

BALANCE SCORECARD
References:
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alternative system to the balanced scorecard. The TQM Journal, 28(3), 360-376.
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Kanri with Balanced Scorecard. In Understanding the Lean Enterprise (pp. 221-236).
Springer, Cham.
Debnath, S. C. (2015). Environmental regulations become restriction or a cause for innovation–a
case study of Toyota Prius and Nissan Leaf. Procedia-Social and Behavioral
Sciences, 195, 324-333.
Dennis, P. (2016). Lean Production simplified: A plain-language guide to the world's most
powerful production system. Crc press.
Hines, P. (2016). Toyota supplier system in Japan and the UK. In Developments in Logistics and
Supply Chain Management (pp. 113-124). Palgrave Macmillan, London.
Solaimani, S., van der Veen, J. A., & Latifi, M. (2016). How Supply Chains Can Benefit from
Open Innovation: Inspiration from Toyota Production System. World Academy of
Science, Engineering and Technology, International Journal of Industrial and
Manufacturing Engineering, 3(10).
Tregear, R. (2015). Business process standardization. In Handbook on Business Process
Management 2 (pp. 421-441). Springer, Berlin, Heidelberg.