MBA301 Business Policy & Strategy: A Case Study of Toyota

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MBA301 Business Policy & Strategy
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Table of Contents
Introduction: Background, Scope and Method of Investigation................................................3
Critical Discussion: Analysis using theories and models studied in class, and use of facts,
figures, graphs and visual material.............................................................................................4
Conclusion................................................................................................................................10
Bibliography: You should use the Harvard Referencing System.............................................11
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Introduction: Background, Scope and Method of Investigation
Business policy can be termed as the investigation of responsibilities as well as role of top
levels of management of an organisation. The issues or the problems that affects the success
of an organisation along with the decisions that affects the organisation over a long period of
time are termed as business policies. The spheres or the scopes in which the decisions are
taken by the members of the organisation are termed as the business policy. It is necessary as
it aids the lower management levels in order to deal with the issues themselves without taking
suggestions from top management levels every time.
Strategic management can be defined as the process of focusing on identifying the ways or
means by which organisations can have competitive advantage over other organisations in the
market or industry. It aids to generate ideas and execute them such that an organisation can
emerge successful. In this assignment, the organisation Toyota has been considered with
respect to its strategic issues, the issues have been explained and its resources have been
compared with respect to its competitors. The strengths and weaknesses of the organisation
Toyota has been discussed with respect to its position in the market.
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Critical Discussion: Analysis using theories and models studied in class, and use of facts,
figures, graphs and visual material
Discuss of the key strategic Issues
Toyota Motor Corporation is multinational organisation based in Japan. The organisation has
its headquarters in Aichi, Japan. The organisation has 364445 employees all over the world.
In terms of revenue the organisation ranks sixth all over the world. The organisation Toyota
is having stagnation in terms of its sales in Japan. The organisation lags behind General
Motor in China and any kind of movement of the value of currency of Japan (Yen) with
respect to US dollar and Euro affects the competitive advantage of the organisation. The
increase in concerns of people with respect to environmental degradation will affect the
growth opportunities of the organisation in case it fails to manufacture eco-friendly motor
vehicles.
The competitors of Toyota Motors are Ford, Volkswagen, Audi, BMW, Hyundai, General
Motors and others. The organisation is facing tough competition from its competitors with
respect to the manufacture of eco-friendly vehicles to the customers as the degradation of
environment has lead to the emergence of concern in order to prevent environment. Any kind
of delay with respect to the delivery of eco-friendly vehicles has affected the opportunities of
growth of the organization. The organisation Toyota Motors is not able to have grip in the
market of China because the government of China does not consider the vehicles that it offers
as energy vehicles (Asia.nikkei.com, 2019).
SWOT analysis has been used in order to determine the internal strategic issues of Toyota
Motors.
Strengths Weaknesses
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 The organisation Toyota has a brand
name.
 The supply chain management of the
organisation is very efficient worldwide.
 The organisation has laid emphasis on
innovation that is driving the organisation
towards success.
 The organizational structure of Toyota is
hierarchical that has made its structure
very complex.
 The product recalls that the organisation
has made as it has consumed its capacity
of business.
Opportunities Threats
 The market of the organisation is growing
in the developing countries.
 The demands of vehicles that are fuel-
efficient have increased.
 The organisation is facing tough
competitors from its competitors as they
have focused on innovation as well.
 Several competitors of the organisation
are offering vehicles at lower cost as
compared to Toyota.
PEST analysis has been used in order to determine the external strategic issues of Toyota
Motors.
 Political Factors: The political stability of a country where the organisation wants to
expand affects its operations as well as production and profitability. For instance, the
organisation has been affected by the status of relationship between China and Japan.
 Economic Factors: The rate of inflation along with macro-economic environment of a
nation and exchange rate of currencies, rate of tax, labor cost affects the revenue
generated by Toyota (Research-methodology.net, 2016).
 Social Factors: The awareness that the customers have along with the concern they have
for environment affects the operations as well as strategies of the organisation, Toyota.
 Technological Factors: The continuous developments in the field of technology have
influenced the organisation Toyota to adopt the changes and make their products and
services available to the customers as per their technical requirements.
Discuss the firm’s key resources
Value chain analysis can be defined as the activities that are performed by an organisation in
a particular industry such that valuable products or services can be delivered to the customers
(Businessjargons.com, 2017). The value chain activities of an organisation can be divided
into two kinds like primary activities and support activities. The primary activities include
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inbound and outbound logistics, operations, service, marketing and sales. The support
activities of value chain analysis include procurement, technology development,
infrastructure and human resource management. The value chain analysis of primary
activities of Toyota has been described below:
 Inbound logistics: The organisation Toyota has a large scale of supply chain management
and is efficient in handling its inbound logistics.
 Outbound logistics: The organisation Toyota has large network to which it supplies its
parts. The organisation is efficient in its management of outbound logistics.
 Operations: The organisation Toyota Motors has its research and development centers in
several parts of the world and has a large chain of network.
 Service: The organisation makes sure that it is able to provide valuable services to its
customers. The organisation makes sure that in case its customers face any problem with
the products it delivers then it is able to provide adequate services to its customers.
 Marketing and sales: The organisation Toyota faces a tough competition from its
competitors thus the organisation focuses on the its marketing strategies such that it can
have increased sales that in turn can increase its profitability.
The value chain analysis of support activities of Toyota has been described below:
 Procurement: The organisation uses the raw materials for its manufacturing process from
the local suppliers such that it can contribute to local economy. The organisation has set a
number of policies that its procurement staffs need to follow.
 Technology development: The organisation has increased its investment on innovation
and technological developments such that the quality of its vehicles and services can be
enhanced.
 Infrastructure: The organisation Toyota Motors has huge infrastructures at several places
all around the world (Ineak.com, 2019).
 Human resource management: The organisation has its focus on the development and
growth of its human resources as the organisation it believes that its human capital is the
most important factor that makes it have a competitive advantage in the market.
The organisation is successful because it has emerged to be successful in its management of
resources such that it can make its position strong in the market.
The strengths and weaknesses of the organisation have been discussed below:
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Strengths:
 The organisation Toyota has a brand name.
 The supply chain management of the organisation is very efficient worldwide.
 The organisation has laid emphasis on innovation that is driving the organisation towards
success.
Weaknesses:
 The organizational structure of Toyota is hierarchical that has made its structure very
complex.
 The product recalls that the organisation has made as it has consumed its capacity of
business.
The resources of an organisation play the most important role in terms of determining its
success. The resources that the organisation Toyota Motor has that affect its operations are its
financial resources that are its tangible resources (Toyota.com, 2019). The raw materials that
the organisations use have declined as the population is growing and their demands are
increasing. The organisation is operating in order to conserve natural resources, eliminate
disposal of waste and create awareness regarding environmental degradation. The human
resources department of the organisation is responsible for supplying manpower to the
organisation such that it carry out its operations efficiently. The organisation is successful
because it has emerged to be successful in its management of resources such that it can make
its position strong in the market.
Analyze the Corporate-Level strategy of the firm using the ANSOFF matrix
Existing Products New Products
Existing Markets Toyota can reduce the cost of
its vehicles in order to
penetrate the market with its
existing vehicles.
The organisation must focus
on innovation in order to
enhance the quality of its
vehicles.
New Markets The organisation can increase
its number of stores in to
order to have market
development.
The organization must
increase its range of vehicles
by diversifying it like bikes,
scooters, etc.
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The organisation Toyota is the leading manufacturer of automobiles. It also manufactures
parts and equipments of vehicles along with housing services, communication, financial,
biotechnology and marine services (Global.toyota, 2019). The organization has focused on its
marketing strategy in order to create more value of the combination of its services.
In order to enter market, Toyota has focused on its marketing strategies along with the
investigation of legal factors of the areas wherever it wanted its entry. The organisation has
invested on market research such that the organisation can figure out the demands of the
customers of the areas it wanted to enter such that the needs and requirements of customers
can be met and the organisation can have sales (Toyota-global.com, 2019). This has
positively affected the organisation as it has emerged successful in its endeavors due to the
strategies adopted.
Discuss how each division/function in the value chain operated to implement the
business strategy.
The divisions that the organisation Toyota operates as per a specific strategy however the
function of each department of the organisation is liable for devising apt strategies with
respect to the overall operation of the organisation. Depending upon the performance of each
division of Toyota like inbound and outbound logistics, operations, service, marketing and
sales, procurement, technology development, infrastructure and human resource management
affects the strategies of the organisation for future. Any flaw in the functions of any
department of stimulates the organisation to devise strategies in order to overcome the
drawbacks.
The vision statement of the organisation Toyota is “To be the most respected and successful
enterprise, delight customers with a wide range of products and solutions in the automobile
industry with the best people and the best technology.” while the organisation’s mission
statement is to become the number one organisation in the automobile industry (Toyota-
indus.com, 2019). Each department of the organisation exercises its functions as per the
organisation’s mission and vision statement. Each department of the organisation function
such that it can offer best and world class services and vehicles to the customers.
Toyota works in order to make sure that its customers or consumers can be provided the best
experience that is reflected in the financial position of the organisation as well since in the
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financial year of 2018 to 2019 the total revenue of the organisation is 7750130 Yen. Its profit
is 1300670 Yen (Reuters.com, 2019). Thus it can be observed that the organisation is earning
profit with respect to the operational activities that it is undertaking and the way it is
performing.
Recommendations to the key issues stated in the first section. Your recommendations
must be specific and actionable
It is necessary that the organisation Toyota Motors looks into the matter as it is not able to
grab the market in China as its government states the vehicles of Toyota Motors are not
energy efficient. The organisation must focus on the production of energy efficient
automobiles so that it can increase its sales.
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Conclusion
The organisation Toyota is performing well in the market and the organisation are customer-
centric as it emphasizes on the experience that the customers derive from the vehicles and
services that the organization offers. However, the external environmental factors affect the
profitability of the organisation and it is necessary that the organisation devises apt strategies
in order to conquer the weaknesses and the threats that it possesses.
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Bibliography: You should use the Harvard Referencing System.
Asia.nikkei.com. (2019). Toyota takes wraps off first electric vehicle in China. [online]
Available at: https://asia.nikkei.com/Spotlight/Electric-cars-in-China/Toyota-takes-wraps-off-
first-electric-vehicle-in-China2 [Accessed 28 May 2019].
Businessjargons.com (2017). What is Value Chain Analysis? definition and classification -
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analysis.html [Accessed 28 May 2019].
Dawes, J., 2018. The Ansoff Matrix: A Legendary Tool, But with Two Logical Problems. But
with Two Logical Problems (February 27, 2018).
Global.toyota (2019). Non-automotive Business | Profile | Company | Toyota Motor
Corporation Official Global Website. [online] Toyota Motor Corporation Official Global
Website. Available at: https://global.toyota/en/company/profile/non-automotive-business/
[Accessed 28 May 2019].
Ineak.com. (2019). Toyota Logistics Operation - Toyota Management System. [online]
Available at: https://www.ineak.com/toyota-logistics-operation/ [Accessed 28 May 2019].
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Reuters.com (2019). ${Instrument_CompanyName} ${Instrument_Ric} Financial Statement |
Reuters.com. [online] U.S. Available at: https://www.reuters.com/finance/stocks/income-
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Smallbusiness.chron.com. (2019). Strategic Management & Business Policy. [online]
Available at: https://smallbusiness.chron.com/strategic-management-business-policy-
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Toyota.com. (2019). Materials. [online] Available at:
https://www.toyota.com/usa/environmentreport/materials.html [Accessed 28 May 2019].
Toyota-global.com. (2019). TOYOTA MOTOR CORPORATION GLOBAL WEBSITE | 75
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U.S.A. and Crown exports. [online] Available at:
https://www.toyota-global.com/company/history_of_toyota/75years/text/
taking_on_the_automotive_business/chapter2/section9/item5.html [Accessed 28 May 2019].
Toyota-indus.com (2019). Vision, Mission & Core Values. [online] Available at:
http://www.toyota-indus.com/corporate/vision-mission/ [Accessed 29 May 2019].
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