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Business management and market efficiency of Toyota

Introduction

In the recent era of globalisation, the multinational corporations are operating across the international countries and it becomes very difficult to operate profitably. Due to high competitive business environment, it is necessary to enhance market efficacy in the organisation for better management and successful brand expansion. The study focuses on identifying the business related issues in Toyota as well as acknowledge market efficacy in the emerging stock market, where Toyota would be able to run their business globally by managing their shareholders and investors. The study is effective to demonstrate the activities and challenges in the emerging stock market where the case of Toyota will be evaluated further. The organisational background and performance of Toyota will be discussed further which is effective to understand the ability of Toyota to run their business in the automotive industry across the globe. The business problems of Toyota will also be discussed for exploring more alternative strategic planning of Toyota, through which the company can expand their operations to gain high competitive advantage.

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Organisational background

Toyota is a Japanese multinational automotive manufacturer, producing quality automotive products and providing efficient services to the customers. The major products of the company are automobile, luxury vehicles, commercial vehicles, robots and engines. Toyota also provides services including leasing, banking and finance. The organisation is efficient to serve the customers worldwide (Toyota, 2021) The organisation Toyota is efficient to serve the customers with high quality products and services. There are availability of the luxury cars and also commercial cars. The company is also efficient to manufacture the robots and engines for the benefits of the customers. Lexus Hybrid Drive is the latest innovation of Toyota to serve the customers with electric cars which also contributes in green environmental footprint. Vans include the Innova, Alphard/Vellfire, Sienna, and others and also there are subcompact Toyota Yaris, compact Corolla, to mid-size Camry and full-size Avalon (Toyota, 2021).

Performance of Toyota

According to the Fortune Global 500, Toyota is the fifth largest company in the world. The production volume of the company and sales are increasing over the period of time. The output is 2019 was 10,725,214 and production output in FY2020 decreased to 10,398,182 due to recent COVID pandemic situation. Net income of the company in FY2020 was ¥2,142,329 million and total asset was ¥52,680,436 million. Total equity of the company was ¥20,737,682 million (Toyota, 2021). As per the performance overview, Toyota is efficient to manage their position in the market where the organization focuses on manufacturing quality automotive products to meet the expectations of the customers around the globe. In the recent anemic era, the company is experiencing low sales volume and for which the production units are also deteriorated over the time. The organization has the capability to overcome the situation and enhance their sales volume in future (Toyota, 2021). The production sites and technologies are advanced and the staff members are also efficient to run their operations and deliver quality and latest designed automotive products to the customers across the globe. Hence, the organization is efficient to manage their operations and run the business successfully.

Organisational values

The company tries to expand their business through stock market activities in the emerging economies and developed nations too. Toyota is efficient to create the organisational values through five principles which are, Mitigating challenges Kaizen improvement Go and see strategy Teamwork Resect The value of equity of the company was ¥20,737,682 million in the previous year. The organization Toyota is efficient to manage their operations and maximize equity so that the leader would be able to provide high return on the investment of the shareholders. Toyota is a successful operator in the global automotive industry, where the organizational activities are managed well (Ito, 2019). The global operational system and production tactics are also beneficial for Toyota to create values for the stakeholders and retain them for long run. The value creation activities such as trust and respect, providing high return, managing stakeholders, mitigating existing business issues and Kaizen improvement are effective for Toyota to fulfill brand values and it also provides a scope to fulfill the customers demand in the market.

Continued

Toyota production system is strong, where the shareholders and investors try to invest for better return on their investment in long run. The stock market performance of Toyota is also effective. Global automotive market share of Toyota was 10.24% in 2019. Value sales in the selected segment of the make Toyota is expected to reach US$169,138m in 2021. With revenue of US $ 46,647 million, United States is expected to be the most important market for Toyota in 2021. The organisational values of Toyota are effective where the brand is successful to create values for the customers and in this regard, equity shares are also increasing over the period of time. Market share of Toyota was 10.24% in 2019 which is also effective where the company is efficient to deliver quality cars with latest technology. The US sales volume is large and it is increasing over the years (Li, 2018). Toyota has big share in the USA and it is expected to reach more through high production and sales volume. The organizational activities are also efficient in the emerging economies where it focuses on creating values for the stakeholders including the shareholders, investors, government, customers and employees.

Business problems of Toyota

In order to run the organisational activities internationally, there are several issues, faced by the company. The major business problems are, Lack of knowledge about market requirements and recent trend Poor market communication Lack of operational efficacy Poor brand performance The major business problems of Toyota are such as Lack of knowledge about market requirements and recent trend for which it sometimes faced the issue of customer retention. Poor market communication is also another issue of international business, and for overcoming this challenge, Toyota must focus on marketing strategic planning to enhance market communication and engage the customers in the business for service efficiency. Poor brand performance is also another problem related to the international business, where the organisation is facing problems to manage their performance and productivity across the international markets. Additionally, inefficacy of the staff members is one of the major issues, for which performance has been hampered and for this Toyota must arrange training programs, and lead the employees successful with effective guidance and support, so that they would be able to perform better and deliver quality cars to the customers.

Business problems of Toyota

In order to run the organisational activities internationally, there are several issues, faced by the company. The major business problems are, Lack of knowledge about market requirements and recent trend Poor market communication Lack of operational efficacy Poor brand performance The major business problems of Toyota are such as Lack of knowledge about market requirements and recent trend for which it sometimes faced the issue of customer retention. Poor market communication is also another issue of international business, and for overcoming this challenge, Toyota must focus on marketing strategic planning to enhance market communication and engage the customers in the business for service efficiency. Poor brand performance is also another problem related to the international business, where the organisation is facing problems to manage their performance and productivity across the international markets. Additionally, inefficacy of the staff members is one of the major issues, for which performance has been hampered and for this Toyota must arrange training programs, and lead the employees successful with effective guidance and support, so that they would be able to perform better and deliver quality cars to the customers.

Continued

Toyota has been faced the issue of sudden unintended acceleration (SUA) Over 9 million vehicles have been recalled due to its unintended acceleration Issue of job lost arose Financial problem has also been raised Deterioration in sales volume and profitability of the company Car recalling due to inefficient operations The other issues related to business operations at Toyota are such as financial problems, slowdown in profitability and sales volume due to issue of sudden unintended acceleration (SUA) where over 9 million vehicles have been recalled for its unintended acceleration. Car recalling for such inefficient operations is another issue, where Toyota was unable to improve their Kaizen operational strategy for better management. Product developmental phase is being hampered due to such operational inefficacy, where the employees fail to perform better for manufacturing quality cars and engines. Job loss is also another major problem, for which the company fails to retain the experienced staff members in the organization and it further deteriorates the organizational productivity and efficacy to support the customers with quality cars and efficient automotive services (Barraza, González and Dávila, 2018).

Continued

Slow service delivery from the representative of the company Lack of corporate social responsibility in the market Poor performance in stock market due to car manufacturing issues Intense competition Lack of efficacy in resolving customer complaint The above mentioned problems are also there for which the organisation face difficulties to run their international operations (Barraza, González and Dávila, 2018). Toyota is an efficient organisation for manufacturing quality automotive outputs to satisfy the customers with latest design and advanced technology. However, due to poor performance, it faced the issue of lack of corporate social responsibility and there is slow service delivery for which the customers required to wait for getting the efficient services from Toyota (Soliman, 2020). Additionally, the company also faced the problem related to poor performance in stock market due to car manufacturing issues and it further hampers the stakeholders where the organisation failed to provide high return on their investment.

Market efficiency in emerging stock market

Stock market efficiency is mandatory for the multinational corporations to maintain their position and retain more investors and shareholders for long run. The major market efficacy are such as, Market integration trade volume Lack of risk factors Sustainable return on investment Financial performance of the organisation Trading process Trading volume Best pricing The market efficiency in the stock market is possible to be determined through best pricing and lack of risk factors existed in the stock market. If there is sustainable return on the investment, the organisational leader is able to provide high return on the investment of the shareholders and investors on an agreed price and date. Emerging market is also efficient with attractive foreign investment. However, there are also risk factors for which the multinational companies like Toyota face difficulties to maximize their performance in the market and provide high return on investment (Soliman, 2020). Toyota tries to grab the market share by retaining the customers and maximising their sales volume. In this regard, Toyota also tries to satisfy the shareholders and investors by offering high return where through performance maximisation and increasing sales volume, Toyota would be able to gain competitive advantage and market share in long run.

Organisational strategy for successful operations

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Toyota tries to develop their strategic planning by managing human resources, where there are strong employee base for managing the operations. Toyota has effective infrastructure at the workplace as well as the production sites are also developed with latest technology. Creativity in designing the cars, launching new electric cars and engines in the market further boost the organisational performance in long run. Toyota has the capability to manage their production sites by hiring technical staff and team member to manufacture the latest designed and technologically upgraded products for the customers. Through production and maintenance of the high quality products, the organisation would be able to run their international operations ethically. The existing business issues can be resolved by strategic planning, where supply of raw materials, production site management and utilising attest technology are effective for creating creative designed across to satisfy the customers across the globe (Simão and Lisboa, 2017). Toyota also has the capability of investing on production sites for managing their product availability and satisfying the consumers by delivering innovative cars, electric vehicles and others.

Continued

Toyota focuses on Kaizen operational framework for continuous improvement. Kaizen is the never ending improvement process for Toyota where the company focuses on investing on reduction sites and technology for improving the quality of the cars. Quality improvement is possible as well as the company maintains global supply chain and operational network for distributing the final products successfully. Toyota also tries to satisfy the customers and engage them with the organisational operations, in order to create customers values and strengthen their consumer base in long run. Through these activities, it is possible for Toyota to manage their operations and maximise their financial performance in long run. The organisation is efficient to manage their operations through Kaizen, where customer’s retention, profit maximisation and operational efficiency can be possible by Toyota. The company is able to retain the consumers in long run through manufacturing the electric cars and other products such as engine and robots, which further helps the firm to improve their performance in emerging stock market and achieve stock market efficacy for satisfying the shareholders (Fazri, Imam and Lestari, 2018).

Conclusion

Toyota has faced several business problems due to the recent pandemic situation as well as for the issue of unintentional acceleration issue. Toyota has the capability to grab the market share and improve their position in stock market by maximising their financial performance. Over the years, Toyota focuses on Kaizen for continuous improvement of production and operations of the electric cars, engines and sustainable cars which further provides a scope to Toyota to run their international operations ethically and gain high competitive advantage.

Reference List

  • Barraza, M.F.S., González, F.G.R. and Dávila, J.A.M., 2018. Introduction to the Special Issue on Kaizen: An ancient operation innovation strategy for organizations of the XXI century. The TQM Journal.
  • Fazri, E., Imam, H. and Lestari, T., 2018. Business Strategy, Culture Control and Organizational Performance. In International Conference on Issues in Social and Education Research (ICISER 2017) (pp. 1-5). Atlantis Press.
  • Ito, H., 2019. Analyzing Toyota City’s eco-policy through strategic marketing tools. Asian Social Science, 15(4), pp.23-36.
  • Li, Z., 2018. Business Network Positioning Analysis of Toyota. American Journal of Industrial and Business Management, 8(07), p.1693.
  • Simão, L. and Lisboa, A., 2017. Green marketing and green brand–The Toyota Case. Procedia manufacturing, 12, pp.183-194.
  • Soliman, M., 2020. Gemba Walks the Toyota Way: The Place to Teach and Learn Management. Soliman, MHA, pp.979-8697492970.
  • Lewis, R.E. and Heckman, R.J., 2006. Talent management: A critical review. Human resource management review, 16(2), pp.139-154.
  • Soliman, M.H.A., 2020. The Toyota Way to Effective Strategy Deployment: How Organizations Can Focus Energy on Key Priorities Through Hoshin Kanri to Achieve the Business Goals. Journal of Operations and Strategic Planning, 3(2), pp.132-158.
  • Toyota, 2021. Vision and philosophy. [online] Available at: https://global.toyota/en/company/vision-and-philosophy/?padid=ag478_from_header_menu [Accessed on 8 February 2021].
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