Analysis of Toyota's Risk Management and Operational Strategy

This report provides an analysis of Toyota Motor Corporation's risk management and operational strategies. It discusses various risk management strategies, including risk acceptance, transference, avoidance, and reduction, with a focus on how Toyota can implement these strategies to minimize potential shocks and improve overall business operations. The report also explains different operational strategies such as competitive, cost-driven, flexibility, customer-driven, and product/service development strategies, highlighting how Toyota can utilize these to enhance its market position and meet customer needs. Furthermore, it identifies tools and techniques for implementing operational strategies, aiming to provide a comprehensive overview of how Toyota can optimize its operations and manage risks effectively. Desklib provides access to this and other solved assignments for students.

INTRODUCTION TO
BUSINESS
OPERATIONS AND
SERVICES
Contents

INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
TASK 1............................................................................................................................................3
What is risk management strategies and how Toyota should implement risk management
strategy that can minimize or withstand such shock when it occurs again ?...............................3
TASK 2............................................................................................................................................7
Explain the operational strategy and the tools and techniques used by the company.................7
CONCLUSION..............................................................................................................................11
REFERENCES:.............................................................................................................................15
Books and Journals:...................................................................................................................15

INTRODUCTION
Risk management may be define as the process which not only help in understanding the
overall risk but also help in managing and optimise the risk so that an individual can minimise
their threat and maximise their outcomes. With the help of risk management an organisation can
identify, analyse and evaluate the risk which is associated with the different functions of the
management. Due to this they can minimise their losses and enjoy the different opportunities
(Kubala and et .al., 2020). The following report is based on the case study of the Toyota. The
Toyota motor corporation is a multinational automotive manufactures. The headquarter of the
company was located in the Aichi, Japan and the company was founded in august 28, 1937 by
Kiichoro Toyoda. This report is going to give the advice to the Toyota about the different risk
management strategics and how they can implement these strategies to minimise the risk. This
report also cover the different types of risk which are faced by the company. Furthermore, this
report covers the improvement in the risk management strategy to introduce the company all
across the globe with the different tools and techniques.
MAIN BODY
TASK 1
What is risk management strategies and how Toyota should implement risk management
strategy that can minimize or withstand such shock when it occurs again ?
Risk management strategy may be define as framework which provide an structure to
identify and manage the risk in the business functions. The risk occurred in the Toyota is baout
to winding up of the company (Malik, Mizuno and Bodek, 2020). By identifying the risk an
individual is able to face the uncertain events which came in future and make proper steps to
protect the company people and asset risk manage. The strategies has been discuss below:-
 Risk Acceptance:- this is also called as risk retention. In this approach an individual
acknowledged and identify the potential losses that can be happen from a risk. These risk
has not a great impact on the working and there is no need to spend the money to avoid it.
These approaches are commonly found in the investment field. In context to the Toyota,
the company must have to focus and their money in these small risk, so that in future
these risk can't be turned into the big risk which cannot be handle by the company.

 Risk Transference:- risk transference may be define as the process of controlling the
risk by making the agreement between the two parties (Nagy and et. al., 2018) This
simply involve the shifting of pure risk from the one part to another party. This doesn't
means that the risk is not exists. Risk is exists but only the responsibility of the risk is
transfer from one organisation. In context to the Toyota, they must have to focus on
transferring the risk from them this not only help them managing the different business
functions but also help them in expanding their business all over the globe.
 Risk Avoidance:- this approach may be define as the process of completely eliminating
the possibility of happing the risk. This is also called as eliminating the risk. With the
help of risk avoidance an organisation can eliminate the any risk which posses a potential
loss in future. This approach not only deal in eliminating the losses but also help an
organisation in eliminating the threat from the workplace. In relation to the Toyota, if
company focus on follow this approach to manage the risk then they have to face a big
consequences. If the company always avoid or eliminate the risk which they face while
performing their different business function then they don't be able to take the advantage
of the opportunities attach with the different risks (Rosen and et .al., 2018 ) .
 Risk reduction:- Risk reduction is the most common strategy which are followed by
different types of organisation for the treatment of risk. This is also knows as lowering
the risk. By choosing this approach by an organisation, they have to work on different
measures and take out some actions. These measures and action not only help an
organisation in managing the risk but also help them in reducing the effect of risk on the
different business functions. In context to the Toyota, the company can use this strategy
to reduce the effect of risk. By analysing the risk with different measure and actions, this
help the firm not only in enjoying the advantage of the opportunities attached with the
risk but also help them in mitigate the risk.
In response to Toyota company the risk can be minimized with the help of risk reduction
strategy. As Toyota is multinational brand in the automotive industry and the deals in the
manufacturing of the cars. So there is a risk which generally face by the company and that is the
production of good with the incorrect specifications. By using the risk reduction strategies in
their production line, they can reduces the chance of happing this again and by doing this they
can reduces the risk.

Importance of the Risk reduction strategy:-
Risk reduction is very important to reduce the effect of risk. This stops the small issue
from converting them into big issue that directly effect the different business functions. This help
the Toyota motor corporation in performing their activities in an very effective manner.
For reducing the effect of risk, the employees of the Toyota motor corporation first have
to identify the risk and then make a plan for reducing the particular risk. By doing this, this
improves the productivity of the employees within the organisation. With the help of risk
measure and risk control the impact of the risk can be reduce by the company.
With the help of risk reduction, the company have a overall control on the task related to
the company. So because of this the Toyota Motor Corporation have to put less efforts to take
control and complete the task in a well effective manner.
Risk reduction is also very important for the stakeholder of the company. It is good for
both the internal stake holder and the external stake holder. Whit the help of this strategy they
feel assured that the projects of the Toyota motor corporation are completed in a very effective
manner. They though that all the projects of the company are going to be successful.
Risk reduction strategies help the company in enjoying the different opportunities which
are attached with the risk. By doing this they can easily grow in the market and attain a
successful position in the market.
The external stake holder of the company also care about the different business risk, if
they feel safe in investing their money in the company. This help the Toyota in improving the
image in the mind and heart of the company.
If the company reducing their different risk with the help of risk reduction strategy then
this not only increase the interest of the stake holder in the company but also help in improving
valuation and reputation of the company.

TASK 2
Explain the operational strategy and the tools and techniques used by the company.
Operational improvement strategy refers to the vision, objectives, and setting the steps that ables
company to attain a competing benefits. It includes the improvement of valuation in creation of
goods, helps in approaching the supply of goods more efficiently. It is concerned with long term
strategy for an organisation customer service and business plannings. It majorly focuses on goals
and objectives of company. A constant improving planning is any policy or steps in the working
environment that assist to keep focuses on improving the method activities are performed on a
regular basis. It is implemented in the concern in order to create a effective working environment
in the organisation. The Toyota company should implement these strategies to overcome the risk
factors and improve the situations in the workplace. These theories involve the stages or
techniques to improve the essential factors. The following operational strategy are listed below.
 Competitive strategies – This strategy is used to understand the strength of the
organisation and the rival company strength. This required in managing the workplace
environment and marketing strategy, working culture etc. The motive of the strategy is to
build good and services best that can create a competing power between the organisation
and the other company. In the relation of Toyota, the company uses this strategy to create
a competing advantages in the company in order to create a brand value in the market and
to understand the requirements of consumers (Kamble, Gunasekaran and Gawankar,
2020).
 Cost driven strategies - This strategy assist the organisation to implement the operational
strategy to compete based on cost. It is basic in the marketplace where the customer
prefer the low cost product of a products and quality product. To successfully adaption
this strategy, the organisation should produce cost effective products at a more
competitive cost than the rivals. In the context of Toyota the company should produce the
goods in affordable costing strategy so that it can utilise by the customers easily.

 Flexibility strategies – some organisation follows an operational strategy that permits the
institution to compete on the basis of flexibility of their product and services. In the terms
of Toyota, the company should have the ability of changing the product quickly on the a
basis of customer choice. It allows consumer to personalize their requirements or the
power of holding amount of assets based on the predicted demand scale.
 Customer driven operational strategy – A industry uses this operational strategies to meet
the requirements of their customers. It can be identified trends in consumer behaviour,
such as change in purchasing priorities based on taste, preferences and income. The
collected data can assist company to implement the rapid changes in the marketplace,
analyses of threat. It will improve the competences ability and market advantages. In
relation of Toyota, the organisation constantly works on the feedbacks and reviews that
are provided by the consumers in order to improve the brand value in the market
segments (Grover and et. al.2018).
.
 Product and service development strategy- The method help an organisation
improvement creativity and additional values in the product and the operations which is
performed in the industry in order to motivate the employees to improve their efficiency
of working and saving the time of them. This can be adopt to meet the requirements of
lower markets. It can be used to offer consumers the wide range of products. In relation
of Toyota, the company should constantly come up with the updated product so the
consumer can be with the brand and their products.
Thus, the organisation adapts a product and development strategy in operating business activities
in the company in order to improve the sales scale and create a healthy environment in the
industry that can be effective in attaining the goals of improving operational strategy and
overcome the risk and drawbacks that effect the business in reduction of values.
The tools and techniques used by the company to implement operational strategy.
Operational strategy plays a vital role in organisation in regards of making the business
effective and efficient. The objectives of operational strategic tools are adapted with the
objectives of achieving the organisational goals and objectives successfully. The tools and

techniques used by the company that used by the company are listed below (Bellisario Pavlov
and van der Steen, 2021).
Process baselining and process comparisons – the process of analyse and determine
how a performance relative to the other similar proceses. It creates a clear image of the practices
done in the organisations, and assist in explaining the present position in the markets. It assist in
understanding organisational baseline comparision of competing performance to a leading
performance. In case of Toyota, the identification of differences in actions and activities played
in the organisation or institution. This understanding can help a company to make an decisions so
that performance can be improved.
Flowcharting – It is the one of the best tools for documenting and understanding
different techniques that used in organisation. This techniques allows the institution to detail
breakdown of steps to activities and actions as well as the relationships. This assist in
understanding the work practices included in all their controls. In terms of Toyota, the company
can evaluate the organisational performance and the actions involved in the workplace. It involve
the process the process of encoding data in the system by using flow charts and details required
in recording data and direct the orders and directions of the workforces (Ahmed and Huma,
2021).
Value stream mapping - It provides the image of work flow and details flow in an
working environment. The member can evaluate a present position and purpose that reduce
organisational degardes such as transport, inventory and waiting etc. In terms of Toyota, the
company can utilise the strategy in the way of focusing in improving the baseline performance of
the organisation.
Cause and effect analysis – The problem can be resolve by first researching all the
solutions. The approach provides a structure for the assignment, which include the six areas or
reasons that can contribute to a classified response or effect. In context of Toyota the company
can evaluate the problem by using this strategy and the solutions that can reduce that causes.
Toyota company can insight the companies or in order to improve the baseline performance.

Hypothesis testing – It consist of null hypothesis and alternative hypothesis, it indicates
a equality between two process and alternative hypothesis indicates unequality through these
strategy. It is an important to choose the most appropriate test for each conditions. In the
position and understand the factors that can effect the business (Baptista and et. al., 2019)

Thus, the Toyota company uses the flowcharting method of analysing the competitive
benefits and the information that flows end to end process of organisation. It helps in recording
the data and informations regarding the transactions of business (Adams and Amerine, 2019)
CONCLUSION
From the above report it is concluded that ever type of organisation requires a proper operational
strategy to attain a companies objectives and in order to improve the performance of the
organisation. The risk occurred in the company due to various reasons can be overcome by using
the risk management strategies to manage the risk and barriers that comes in the operations og
business. After it explains the operational strategies that are followed strategy the companies to
improve their operations and in managing the organisation activities. Operational strategies play
a vital role in improving the effectiveness of the organisation and efficiency of the employees.
Operational improvement strategy refers to the vision, objectives, and setting the steps that ables
company to attain a competing benefits. It includes the improvement of valuation in creation of
goods, helps in approaching the supply of goods more efficiently. It is concerned with long term
strategy for an organisation customer service and business plannings. It majorly focuses on goals
and objectives of company. A constant improving planning is any policy or steps in the working
environment that assist to keep focuses on improving the method activities are performed on a
regular basis. It is implemented in the concern in order to create a effective working environment
in the organisation.