Determine the impact of the company’s mission, vision, and primary stakeholders on its overall success
Mission and vision statements play important roles that impact on the success of the company. Firstly, these statements communicate the purpose and values to the primary stakeholders. Employees, investors, customers, suppliers, and the government are the key stakeholders in a company. Mission and vision statements are widely circulated by a company so as the stakeholders can understand, share, and internalize them. These enable employees understand them hence understanding company strategy and how it can be implemented (Bart, Bontis & Taggar, 2001).
Mission and vision statements inform the strategic development by a company. The company can visualize the statements collectively enabling funneling of the company strategy. The vision statement distills down the mission statement by providing inputs into the mission statement that finally guides the development of company strategy (Brown, 1998). At Toyota, the vision, “moving forward” requires the management at Toyota to seek more innovative and Eco-friendly ways of impressing their customers.
Finally, mission and vision provides the much needed high-level guide for a company through the strategy funneled. This acts as a mirror for showing success or failure of the strategy employed by the company. At Toyota, the mission and vision statements funneled strategy has created profitability goals and commitment to the customer and employee satisfaction. Furthermore, through its vision, mission, and strategy, it has been able to become socially and environmentally responsible which has been a major source of its success.
Stakeholders also form a key component that contributes to the success of a company. Stakeholders may affect or be affected by the activities of a company. They have a legitimate interest the company business hence has a great impact on the success of the company (Freeman, Harrison & Wicks, 2007). Primary stakeholders of the company may include employees, government, community, investors, suppliers, customers, and financial institutions. Stakeholder engagement by a company lead to developing and expanding marketing opportunities.
In its quest to guarantee stakeholder value, Toyota has designed products that integrate all stakeholders’ considerations. The company has focused on global growth strategy that is primarily driven by superior environmental and social performance products. This explains why Toyota is the world’s most profitable and second largest automotive company.
Analyze the five (5) forces of competition to determine how they impact the company
The Porter’s five forces model is based on competition within an industry. The model is based on the argument that there exist forces within an industry that significantly affects profitability of the companies (Ahlstrom & Bruton, 2010). It is believed that a company that understands these forces can develop a business strategy to take advantage of the forces or protected it from the forces. This makes the firm gain sustainable advantage hence consistent profitability. The five forces include the bargaining power of suppliers, buyer power, threat of new entrants, threat of substitute products, and rivalry among current competitors (Ahlstrom & Bruton, 2010).
The global automotive industry is capital intensive thereby a major hindrance to entry by new entrants. Automotive production requires a huge amount of capital investment in design, electronic functions, and safety issues. The industry has a strong brand loyalty that also serves as a barrier to new entrants. Toyota is one of the leading global automotive companies with strong brand loyalty hence it is under no threat to the profitability (Halliday, 2005).
Competition in the automotive industry is quite high. The closest and the strongest Toyota global rivals include General Motors, Nissan, Daimler, Ford, Honda, Renault, Volkswagen, Hyundai, and Chrysler among many others. Additionally, competition within the industry players is not only limited to the companies but also between the governments that establish protection laws to secure its own domestic automotive production.
The automotive industry is under great threat of substitute products. This is due to the availability of many substitute products in the industry. This is a threat since substitute will emerge with a slight increase in prices. Substitute products that are a threat to Toyota Company include buses, subways, bicycles, motorbikes, trains, and walking as a means of transport due to the economic and financial downturn.
The internet and easy access to information on automotive products have created a powerful bargaining power for buyers. The switching preferences of the customers are also an important pointer for their increasing bargaining power within the industry. Nevertheless, the cost cutting strategies executed by Toyota minimizes the buyer power and its products are more likely to sell than those of its competitors. On the other hand, the bargaining power of dealers seems to be moderate.
Create a SWOT analysis for the company to determine its major strengths, weaknesses, opportunities, and threats.
SWOT analysis is an important management tool that provides essential information and data for company management about company profile. This tool examines company business and strategic structure as well as its operations (Rao, Rao & Sivaramakrishna, 2009). It also provides an insight into company history, products, financial situation, and performance. This paper utilizes this tool to analyze the key strengths, weaknesses, opportunities, and threats of Toyota Company.
Toyota is one of the leading automotive manufacturers and marketer in the world, and this is its major strength. Additionally, the company has a highly diversified product portfolio with a strong brand awareness and market presence within the world market. This has enabled create strong Toyota brand loyalty serving as its major strength above its closest rivals. Furthermore, the company’s emphasis on social and environmental responsibility has continuously earned its strong reputation worldwide. Toyota’s world class research and development and engineering capabilities are unmatched. This is a strength to the company. The company has pioneered economically efficient vehicles, as well as a hybrid production technology benchmark that gives it a strategic strength.
Toyota major undoing is that it has a lesser grip in the European market as compared to its closest competitors. The large number of Toyota car recalled especially from the North American market is also another weakness for the company. The recent decrease in the Toyota market share during 2011 where it was toppled by GM and Volkswagen is a weakness of the company. The company is also facing immense competition from world class competitors, which is also a source of company weakness.
However, Toyota has immense opportunities at its disposal. Firstly, expanding automobile market at the global level offers an opportunity to the company for launching new products. Furthermore, the increasing demand in hybrid and economical cars provides an opportunity for Toyota to become a market leader in these segments. Toyota Company has an opportunity to use its worldwide distribution and servicing network to increase market distribution. Thus, it will increase its market share and sales volume. At the same time, Toyota faces a number of threats. Firstly, the intense competition in the automotive industry has led market saturation, which may stagnate sales. Additionally, competition in offering innovative features at lower prices is another threat to the company. Thirdly, escalation of fuel prices means that the demand for the vehicle will go down on a cost basis. Finally, rival companies catering to high ended customers present unprecedented threat to Toyota Company.
Based on the SWOT analysis, outline a strategy for the company to capitalize on its strengths and opportunities, and minimize its weaknesses and threats
The SWOT analysis is critical for the success of a company. In this case, the company can exploit the strength and opportunities identified. Moreover, strategies should put in place to correct organization’s weaknesses and buffer against threats. There are various strategies that are at the disposal of the Toyota Company to exploit its strengths and opportunities at the same time working on its weaknesses and threats.
Based on SWOT analysis, the company can pursue renewal strategies that can be designed to address the company’s weaknesses that are leading to performance declines at a global level. Restructuring of companies on a global level will enable the company to take advantage of its large scale distribution and servicing network. This will enable it to push up its sales to regain its market share lost to GM and Volkswagen in the year 2011.
Discuss the various levels and types of strategies the firm may use to maximize its competitiveness and profitability
There are various strategies, which a firm can use to enhance its competitiveness and profitability in the market. These strategies are three levels namely corporate level strategy, business level strategy, and functional level strategy. The strategy to be adopted by a firm comes after a strategy management process has been conducted. The company can pursue a single strategy at a time or a combination of strategies at the same time.
Growth strategy at the corporate level seeks to increase the firm’s operations by expanding the products offered, or the markets served by the firm. This strategy may be used by Toyota to increase its competitiveness, as well as profitability. Notably, competition in the automotive industry is intense. Thus, horizontal integration should be considered by the Toyota Company at the corporate level to remain competitive in the industry. This can be done through merging with other organizations in the industry.
Toyota Company can pursue business level strategy to better utilize its strength by taking advantage of opportunities from the external environment. Toyota’s ability to create direct distribution channels that are highly responsive to customer needs can be utilized to achieve this. Toyota needs to take advantage of its world class research and development, as well as engineering capabilities to pursue a cost leadership strategy. This will enable the company to eliminate the threat declining market share since it will be able to offer affordable products in the market. This will boost its market share and increase profitability.
Toyota can also take advantage of its pioneering of economically efficient vehicles, as well as hybrid production technology strength to undertake a differentiation strategy. This will enable the company to offer unique products that appeal to customers. Similarly, it will enable the company to overcome threat competition is offering innovative products.
Functional level strategies are important in supporting business level strategies. This strategic level will require the company to involve its key functional departments such as marketing, human resources, finance, manufacturing, and research and development. Each functional department has to play a role in ensuring that the company remains competitive and profitable. For instance, the finance department need to provide the necessary finances to all departments to ensure that they perform their duties without any hindrance. The human resources department should come up with a way of retaining key competent staff. All these will guarantee long term company profitability and competitiveness.
Outline a communications plan the company could use to make the strategies you recommend above known to all stakeholders
Stakeholder communication plan a public relations plan through which a company uses to communicate with its primary stakeholders. The plan may use wider communication tools such as advertising through the media or direct marketing to communicate the recommended strategies to the stakeholders. The recommended strategy communication will involve a series of steps. The first step is setting of communication objectives of the strategy. Secondly, key messages for the organization will be set up to remove any conflicting that may create confusion in the communication of the recommended strategy.
The third step in the communication plan is to define and prioritize key stakeholders. The ranking may run from highest priority to lowest priority. The next step will involve key messages will be developed. This will address concerns related to the strategy. This is meant to ensure the relevancy of the message and better understand of the strategy view point. This is then followed by developing communication tactics for each stakeholder group. Step six involves budgetary allocation and assigning of responsibilities for the communication plan. This is then followed by a quarterly communications calendar that gives a glance at the list of things that need to be achieved by the plan at given times. The last step is assessing the results and adapting the plan.
Select two (2) corporate governance mechanisms used by this corporation and evaluate how effective they are at controlling managerial actions
As a company with Japanese values, Toyota’s corporate governance is concerned with a broad group of stakeholders. They include employees, shareholders, suppliers and customers. Toyota is known to be very responsible and does not limit its focus to the interest of shareholders. At Toyota, the rights of the shareholders are theoretically greater than in most other companies (Demise, 2006). The shareholders are given powers to nominate and elect directors. The compensation given to the management has to be agreed upon by the company’s shareholders. Nevertheless, the shareholders do not have much influence on the decisions of the board of directors.
The work culture is another key corporate governance mechanism pursued by Toyota Company. Again, the company has Japanese roots, and the possibility of dismissal is usually high. Given that a dismissed employee or manager will have a hard task getting a job, it is difficult working at Toyota. This has led to a good organizational culture at Toyota and increased production, hence leading to the expansion of the company. Thus, it is prudent for the company to continue with the work culture that is mainly borrowed from its Japanese roots. However, it is recommendable that the company changes its corporate governance structure by balancing the Japanese values with modern corporate governance practices to suit the global company it has become (Brown, 1998).
The social and environmental responsibility is a key corporate governance mechanism that has played out well with the Toyota Company. The company places emphasis on practice fair play in the running of the company. This is manifested through company initiative make environmentally friendly cars and ensuring that the safety of the users is guaranteed. In addition, the company has put the welfare of its employees at the center through recognitions and awards for their hard work. All the corporate governance mechanisms are centered on ensuring value to company investors (James, 2011).
However, the company has not escaped criticism after the Revered Jesse Jackson issued threats in 2001 over what was seen as aspects of racism in a post card the company had issued. The management will later apologize for the incident. It is quite clear that the company has set high standards in terms of ethics and corporate responsibility. This bold effort has led to the acceptance of the company in all corners of the globe and earned the respect as a good employer and a responsible corporate.
Evaluate the effectiveness of leadership within this corporation and make at least one (1) recommendation for improvement.
Leadership is paramount for good management of any given company. Leadership has been and remains at the center of Toyota, and its success in the global market is attributed to the leadership foundations that have been laid for years. Over the years, Toyota Company has followed traditional Japanese management practices. Most managers have been picked from the management ranks within the company. This has received criticism, which compelled the company to change its leadership style. In recognition of this criticism, the company has shifted from what has been considered as parochial leadership that the does not reflect its global image to a new global oriented leadership. It is recommended that the leadership looks more beyond the confines of Japanese life but be reflective of the global marketplace that the company is a leader.
Assess efforts by this corporation to be a responsible (ethical) corporate citizen and determine the impact these efforts (or lack thereof) have on the company’s bottom line. Provide specific examples to support your response.
The social and environmental responsibility is a key corporate governance mechanism that has played out well with the Toyota Company. The company emphasizes on practice fair play in the running of the company. This is manifested through company initiative make environmentally friendly cars and ensuring that the safety of the users is guaranteed. Toyota values also take cognizance of the varied customs of its clients all across the world. Toyota has also played important in giving back to the society through various motor-sporting events across the world. Thus, the company has put the welfare of its employees at the center through recognitions and awards for their hard work. All the corporate governance mechanisms are centered on ensuring value to company investors (James, 2011).
However, the company has not escaped criticism after the Revered Jesse Jackson issued threats in 2001 over what was seen as aspects of racism in a post card the company had issued. The management will later apologize for the incident. It is quite clear that the company has set high standards in terms of ethics and corporate responsibility. This bold effort has led to the acceptance of the company in all corners of the globe and earned the respect as a good employer and a responsible corporate.
References
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Brown, M. (1998). Improving your organization’s vision. Journal for Quality & Participation, 1 (2), 18.
Demise, N. (2006). Corporate governance in Japan: From the viewpoints of management, accounting, and the market. Tokyo: Springer.
Freeman, R. E., Harrison, J. S., & Wicks, A. C. (2007). Managing for stakeholders: Survival, reputation, and success. New Haven: Yale University Press.
Halliday, J. (2005). Relentless Toyota thrives on crisis. Advertising Age, 76 (8), 33.
James, T. T. (2011). Reaping the reward of green confection. Engineering & Technology (17509637), 6 (9), 69-71.
Rao, A. C., Rao, B. P. & Sivaramakrishna, K. (2009). Strategic Management and Business Policy. New Delhi. Excel Books India.
