It would help the organisation to become agile, maintains dependability, and saves time. Slack et al , p 47 At Toyota is one of the performance objectives. Automobile industry is characterised by the stiff price wars, and here cost reduction would help the company to achieve low price. Toyota is one of the pioneers in competing in price with various models.
It improves efficiency. But, here one point to consider the imitability of capabilities — other companies such as KIA poises stiff competition to Toyota with flexibility and price. Finally, as we focus on analysing the performance objectives of Toyota, we find the following; Quality Cost Speed Flexibility This is illustrated by way of a polar diagram here; It is critically important, that the companies examine the market to determine the needs and minimum requirements of customers; we can also refer to as order winning and qualifying factors.
For Toyota Corporation the order winning factors include;? Dependability Satisfying factors? Range flexibility Fig 4. Task 2 Terry Hill Order wining factors, qualifying factors, less important factors. Here we can easily come to a conclusion that for different customers, these factors would vary.
For example the take case of Lexus vehicles from Toyota, here the order winning factors would certainly be the style, design, high quality, performance, and qualifying factors will be price or any other. The case would be other way around when we consider the Innova model. According to Slack et al The Top — down perspective consists of three levels of strategy; Corporate level Business level Functional level It is further related to matters such as; What type of business the organisations to be in?
Cash flow management Management of SBUs strategic business units At Toyota the corporate level strategy directs the organisation to long term objectives. At this level, the particular function for example manufacturing; has to follow the objectives set forth by the business, in the case of Toyota; Quality Innovation Cost Flexibility Dependability You will find the TQM, Kanban, JIT techniques used by Toyota as a result of this emphasis.
The bottom — up perspective, of strategic operations provides flexibility to Toyota Corporation. Here, day —to-day experience from the bottom line is taken into consideration while formulating the strategy. When we analyse the Toyota Corporation, it is easy to understand the customer focus is a result of this perspective.
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It will definitely be useful to regard the Top down perspective Slack et al , while analysing the operations strategy at Toyota. At Toyota, the corporate level strategy directs the organisation to long term objectives. Continuous Resource development focus Long term Supplier relations e.
It is equally important to manage the second — tier and first —tier suppliers as Toyota expands globally. Here, main advantage comes from the closer relationship with the suppliers Slack et al Introduction stage At introduction stage a company offers something new in design or performance, and here the competitors will be few in the market. Here it is important to develop flexibility to adapt to the changes in the market Slack et al At the introduction stage the customer for Toyota would always be innovators, who are keen to try to new design, models and features.
At introduction stage the order winning factors will definitely be design, and the qualifying factors will be quality, range or flexibility. Here Toyota focuses on flexibility, quality and design. It will be useful to make an analysis with the latest Hybrid vehicles from Toyota. At the introduction stage this model was innovative and met with few competitors.
Here, it is important to consider the other products such as Toyota finance service, biotechnology, communication, technology segment, engineering etc. Growth stage The second stage is characterised by the increasing volume of sales, increasing number of competitors Slack et al The key focus at this stage will always be keeping up with the demand expectations and ensuring the quality slack et al When it comes to Toyota products and services, this stage is going to be faced with competitors, and here Toyota should emphasis the quality and demand.
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Toyota customers at this stage would be the ones who likes to copy the new style and quality, and the competitors will start to increase. At this stage the order winning factors will be dependability ability to deliver according to the demand , and the satisfying factors will be the price, and flexibility. Let us take the case of Pirus model as the model came into the market, we have seen the competitors chipping into the market such as GM, Mercedes etc. But, the quality and the ability to support the demand was the key for Toyota.
Again, Toyota was clever enough to offer range of vehicles attracting different market segments. Maturity stage Leveling of the demand is a noticeable factor at this stage. Here you would find that some of the competitors would withdraw from the competition due to the stiff competition. And here only the bigger players would remain in the market. And the focus for companies will be in reduction of cost and reducing the price and allowing the profits.
So, the operations will have to face with cost, production, supply issues Slack et al In the case of Toyota you can see the products such as Sedan entered into this stage.
Here the company customers will be primarily mass market, and competitors almost established in the market. It is obvious that the order winning factors will be low price and dependability of supply. Various models in Sedan range is an attempt to make flexibility happen in the market. Flexibility or availability of different models , and quality will be qualifying factors. Here Toyota focuses on cost reduction, and dependability, expansion of market to increase the profitability. Decline stage Decline stage has got few characteristics as follows;?
Sales decline Withdrawal of more competitors Price competition Cost focus Slack et al Here, customers will be late adapters people who follow new style quite late. For Toyota, the number of competitors will be less at this stage. Here, price war start to happen and the low price will be the order winning factors, and qualifying factors will be dependability of supply. Of course at this stage, Toyota would focus on cost objective. Further Toyota was mindful about the main competitors such as; GM Ford Honda Let us take the case of Bus models from Toyota; we can find it clear that the company emphasizes on range as the product enters into the maturity stage.
As for Toyota Camry it is in the growth stage, by making volume, and market share. It is also important to have a look at the Toyota Qualis model which had gone to the decline stage, and it was replaced by the Innova, but the competitor Chevrolet came up with Tavera.
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Again the notable thing is the introduction of Hybrid vehicles from Toyota, this move is in its introduction stage, and we also find the competitors slowly entering into the same arena, however Toyota emphasizes quality and design to exceed the expectations. For example the financial segment of Toyota is in the introduction stage and so do the biotechnology and communication businesses.
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Here Toyota must emphasis the quality and dependability features to lead the market. As we get closer we can find that the Toyota engineering segment is entered into the growth segment, where the focus is paid to quality, R to survive the competition.
It is also important to look at the competition in the automobile industry. Many models from Toyota facing stiff competition from players such as Chevrolet, KIA, Hyundai who compete in price and quality. While analysing the product life cycle of Toyota we would come across with the areas that they have to concern about. For example the Quality objective of Toyota got into real trouble with the engine problems identified in Sedan models, which eventually led to the recalling of thousands of cars.
Here, Toyota must focus more about avoiding such big mistakes, it is not just the matter of re-work, but it affects the market leadership.
Again the other area to think about is the competitiveness of Toyota in terms of innovation, Toyota was a leader in innovation from the beginning, however the recent growth of ompetitors making Toyota a follower at times, instead of a leader. Again, another factor that Toyota can think about the market oriented product development, for example the growing markets in China, India and Brazil requires particular attention, here low price, quality, flexibility matters.
So, Toyota has to think about adjusting supplier networks or think about vertical integration strategies getting control over the supply chain by taking the control of suppliers. For example countries like China, India has got great potential, but both of them having indigenous cars in the market, here Toyota should think about alliances or partnerships to enter the market. And it would help the company to focus on low price.
It is also important and possible to look at from the efficient frontier view Slack et al , Frontier approach would help Toyota to position the main performance objectives in such a way to achieve the effectiveness in operation. When we take the case of Toyota, the variety factor is a concern for the organisation. Here due to the high variety the cost becomes higher, and the only way to tackle these problems is to concentrate on limiting variety, by innovation of sustainable products, increasing product life in the life cycle period of a product, positioning of product at various stages in the life cycle etc.