Good Example Of Toyota: A Detailed Overview Research Paper
Business Strategy & Supply Chain Strategy
The entire field of business management has strategies in it, and in the entire end, only those organizations can attain effectiveness which has the ability to the financial significance effectively. Strategies are located in the heart field of a company and it is mandatory for the enterprises to check and value their strategies for the maximization of their utility in an organized manner (Aaker, 1995).
Strategies are a major theme that associated with almost every department of an organization. Like, the strategies that associated with the financial well-being of an entity is known as Financial Strategies, while the strategies that found effective in terms of having marketing effectiveness than it will be having marketing based activities (Aaker, Kumar & Day, 1998).
The strategies that associated with the supply chain aspects are known as Supply Chain Strategies. Supply Chain and Business Strategies have a direct impact over the well being of an organization.
The main purpose of this piece of work relate to supply chain and business based strategies on a chosen organization (Hitt, Ireland & Hoskisson, 2007). It is likely to analyze in this assignment that how the supply chain and business strategy of the company support the respective company. The enterprise chosen for this is Toyota, and it is known as the most effective organization of the world.
Toyota Motor Corporation (TMC) is a Japanese based automotive manufacturing company with its headquartering located in Aichi, Japan. Toyota is the powerful and largest automotive organizations of the world; however it is referred as the 12th most volatile organization that has strong structure. In the financial year (FY) 2012, Toyota surpassed Volkswagen Group and General Motor Corporation (GMC) in terms of manufacturing the automotive units in a single year (Hitt, Ireland & Hoskisson, 2007).
Financially, it is a strong company of the world, and the largest company of Japan in terms of Market Capitalization. It was founded in the financial year 1937, and then the company never stops in terms of their effectiveness.
It has number of stakes in different automotive companies of the world like Daihatsu, Fuji Industries and Isuzu. Toyota Motors is one of the strongest subsidiaries of the Toyota Group which is a perfect and strongest group of the world.
In the economic year 2013, the total amount of revenue and net income that earned by the company are ¥22.064 trillion and ¥962.1 billion respectively, along with its more than 300,000 employee in the world. The supply chain and business strategies of Toyota are very strong and powerful, which are supporting the company with a positive mindset. In this particular analysis both of these angles will be analyzed simultaneously to keep examining the things effectively.
Business Strategies and its Support to Toyota
Enterprises have a single objective in their mind which is to attain long run attentiveness in their operation. Apart from that, every organization is in the act of increasing the shareholder’s equity in a well organized manner.
Business Strategies usually have four different aspects in it which are Product Strategy, Pricing Strategy, Place Strategy and Promotion Strategy (Hitt, Ireland & Hoskisson, 2007). Every mentioned strategy has a strong support with the management of the organization in an organized and perfect manner. All of these four business strategies will be examining on the behalf of Toyota in this particular scenario
Product Business Strategy
Product is the end things that associated with an organization. Organizations make products for their end users and customers are required to use the products of the company on a regular basis. Product strategy is the one that makes a real difference among two peer companies operating in the same line of business (Hitt, Ireland & Hoskisson, 2007).
Product Strategy is very important for the manufacturing organizations, and Toyota is a manufacturing organization which I trying to deliver fruitfulness to their end users through their remarkable and powerful products (Hitt, Ireland & Hoskisson, 2007).
The product strategy of Toyota is ANALYZER, in which the company is in the fact of analyzing the similar products in the market on a regular basis, and on the basis of this analysis, they would attain their core significance in the market. Toyota has a perfect Research & Development (R&D) center through which they analyze the structure and well-being of the similar products in a timely manner and manufacture the products according to its need and demand.
Toyota is one of those organizations that initiate customized solutions for their end users to divert the things in their manner. This particular business strategy certainly supports the company to increase their strategic and financial behavior in a perfect manner.
A perfect product strategy enables an organization to make and transform the products in the best possible manner of the company, and in the favor of having cost efficient and timely product’s manufacturing that will be essential for their long run economic significance.
Pricing Business Strategy
If someone asks about the most important strategy that used by the organizations in their long term functionality, then the answer should be Pricing Strategy. Pricing Strategy is known as the most efficient strategy that used by the organizations to set a definite price of their products and services. Pricing Strategy has the ability to attract the end users to increase their potential appropriately (Hitt, Ireland & Hoskisson, 2007).
The pricing strategy which TMC is now using is COMPETITIVE, wherein the companies are obliged to sell their products as the competing pricing factor in comparative to other competitive companies.
Competitive Pricing Strategy is an important strategy that used by different entities of the world to have significance in their market (Ireland, Hoskisson & Ireland, 2009). In the current economic scenario, customers are now focusing on the affordable products or the products that doesn’t cost them very high, and having competitive pricing is an indemnity that the competing power of the company is very high, and it is in the favor of providing cost efficient products to their consumers.
Place Business Strategy
Likewise pricing and product strategy, there is yet another important business strategy that specifically associated with the long run significance of an organization, which known as Place Strategy. Place Strategy is the strategy in which the organizations will try to value their product through a perfect selling point.
There are two different types of place strategies are there known as Offline Strategy and Online Strategy (Ireland, Hoskisson & Ireland, 2009). Offline Strategy is all about those strategies in which all the things are apparently available for the consumers, while online strategy is all about having buying and selling behavior over the internet or on the online options.
Manufacturing organizations usually have Offline Place Strategy in their core significance, and Toyota is also having its operations offline. However, the company’s official website has all the information of their recent brands that gives detailed information to the buyers. It is a perfect strategy for the company to execute their operations accordingly in the market by competing with their counterparts effectively.
This particular place business strategy is also making things in the favor and improvement for Toyota in terms of managing and improving their core operations. The company is recommended to use this particular strategy for the improvement of their business in a certain time period for future effectiveness.
Promotion Business Strategy
After the pricing strategy, the strategy that has its importance in the market is Promotional Strategies. Promotional Strategy is a part of strategy through which an organization promotes their products to the general public in a perfect manner.
Promotional Strategy usually associated with the advertisement and marketing tactics strategy as well through which an organization will promote their core products and services for their consumers in a best possible manner (John, Gillies & Cox, 1996). Regardless with the fact of the financial competitiveness of an organization, they always try to promote their products positively in the market, and it is equally applicable for Toyota as well.
The promotional strategy of Toyota is very strong, as the company always tries to retain their existing consumers and in regular endeavor to increase the amount of their potential customers. The company place lots of discount based promotional strategies through which they execute their research accordingly.
This particular strategy is doing an exceptional job in terms of supporting the entire value of their entity in a best possible manner. Toyota’s management is extremely pleased with the current business strategy of the company, as the strategy has been giving full support to them from number of years.
Supply Chain Strategy Analysis
Theoretically, Supply Chain Management (SCM) is basically the management of the flow of goods. It usually includes the movement and storage of the raw material. The supply chain process usually starts with the storage of raw material and ends with the finished goods. It is usually defined in the fact of designing, executing, controlling and monitoring of the entire process activities which are essential for the future consequences of the companies. Manufacturing companies are very much in the favor of having a perfect Supply Chain Management behavior within their productivity, as they are in the regular operation of having the raw material on time to transform their finished goods (Kourdi, 2003).
Toyota is a manufacturing company which is striving very hard to get their hands and roots to be strengthen in the automotive market for a certain time period. The Supply Chain Management Strategy of Toyota Motor Corporation relates with the First in First out (FIFO) inventory method that will be used by the companies to utilize their raw material which they received firstly. It is referred as a powerful strategic well-being to prevent their operations and their products from all sorts of wear and tear.
This particular supply chain strategy enables the company to have a determinant action in their product behavior, as the company is having ANALYZER product strategy wherein they lies in the process of continuously researching the market to launch new products all the time. Therefore, this particular FIFO strategy is supporting the behavior of product strategy of Toyota in a well organized manner.
Apart from that, Toyota is having an Activity Based Costing (ABC) approach which also known as Just in Time (JIT) process wherein the companies require the raw material only at the time they want it seriously. This method is known as a strong contender in terms of having supply chain strategies that used for decreasing the in line or operational cost of the companies.
Through this particular strategy implement and implication, it is evaluated that in terms of enjoying the high satisfaction level of their consumers as far as affordability of the products is concerned. This particular supply chain strategy of Toyota is backing their Competitive Pricing Strategy, wherein the company is proving quality products to their end users in competitive rates.
Apart from that, the company has lots of warehouses and logistic operative services through which they monitor all of their functions and operations in a great and powerful manner. This particular strategy would become extremely perfect as far as performing globally with an upper hand.
With the help of a perfect monitoring function over the operation, significant improvement and effectiveness always be found in an organization, and same aspect is applied over the Toyota Motor Corporation (TMC) as well. This particular supply chain strategy is backing the place and promotional strategy of the company and supports these strategies in an organized manner. Recommendation has been posted toward the management of the entity to make sure their operations will be running in the same direction, so that they can compete with their counterparts in the same way as they are doing currently.
Business Strategies are very important for the entities to divert their attentiveness for the significance of companies. Strategies associated with every departmental function of a company; however the objective of every strategy is different. Every organization in this world is in the favor of increasing their potential by complying with their strategies. Strategies which are made according to the behavior and satisfaction level of the consumers are essential and worthwhile strategies which don’t have the inclination of the consumers in it.
Apart from the business strategy, there is a name of Supply Chain Management strategy as well. The core analysis of this paper relates to the supply chain and business strategy of Toyota, and then analyzes how both of these strategies are supporting the company to attain its financial objective. The entire analysis reveals that the business and supply chain strategy of Toyota are perfect and in the favor of the company for executing such a large company. It is also found that the management is eager to further innovate their current in line operating strategy, and they will implement positively on this matter.
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