" Toyota will lead the way to the future of mobility, enriching lives around the world with the safest and most responsible ways of moving people "

1. AjitKumar
2013
StrategyAnalysis-Toyota
Toyota will lead the way to the future of
mobility, enriching lives around the world with
the safest and most responsible ways of moving
people.
K J Somaiya Institute of
management studies and
research
Mumbai

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Contents
HISTORY OF TOYOTA.....................................................................................................................................4
Toyota non – automotive activities are:.......................................................................................................6
Toyota Today ................................................................................................................................................7
SIGNIFICANT EVENTS ....................................................................................................................................9
Auto Car Industry (Industry Analysis) .........................................................................................................10
Industry Overview...................................................................................................................................10
Porter’s Five Forces Analysis...................................................................................................................10
Pestle Analysis.........................................................................................................................................11
Life cycle analysis:...................................................................................................................................14
Resource .................................................................................................................................................15
Capabilities..............................................................................................................................................15
Internal Analysis : ...................................................................................................................................16
Overview of Toyota Motor Corporation in the context of its industry ...............................................16
Toyota vision :.........................................................................................................................................16
SWOT : Toyota ........................................................................................................................................18
Toyota Resources & capabilities:............................................................................................................19
Support Activities....................................................................................................................................23
Assessing Company’s Resources and Capabilities’ .................................................................................26
Business Unit strategy :...............................................................................................................................27
Summary of Key Corporate business unit strategy actions:...................................................................28
Product strategy :....................................................................................................................................31
Corporate Social Responsibility Management (CSR) 2011 .........................................................................36
Summary of Business strategy :..................................................................................................................37

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Value chain : Competitive advantage .........................................................................................................37
14 Principles of the Toyota Way. ............................................................................................................40
Responding to Threats to Sustainability .....................................................................................................42

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HISTORY OF TOYOTA
Brief history of the establishment of Toyota. In April 1935, 75 years ago he laid the foundation
of Toyota, namely Sakichi Toyota.
Toyota is a multinational motor company. It ranks among the best automobile companies in the
world. Kiichiro Toyoda is responsible for the formation of the company in 1937. Toyota
Automobile was a division of the Toyoda Automatic Loom Works. The government supported
the production of domestic vehicles because there was money scarcity throughout the world
and also because of the war with China. The first Type A Engine was produced by the company
in 1934. This was used to build the first A1 car. Model AA car started to be produced from 1936.
1867 Birth of Sakichi Toyoda.
1924 Sakichi Toyoda invents Toyoda Model G Automatic Loom.
1929 Automatic-loom patent is sold to a British company.
1930 Kiichiro Toyoda begins research on small gasoline-powered engine.
1933
Automobile Department is established at Toyoda Automatic Loom
Works, Ltd.
1935 The Toyoda precepts are compiled.
1936 The AA Sedan is completed.
1937 Toyota Motor Co., Ltd. is established.
1938 Honsha Plant begins production
1950 Company faces a financial crisis; Toyota Motor Sales Co., Ltd. is established.
1951 Suggestion System begins.
1955 The Toyopet Crown, Toyopet Master and Crown Deluxe are launched.
1957 The first prototypes of the Crown are exported to the United States; Toyota Motor Sales U.S.A., Inc. is established.
1959 Motomachi Plant begins production.
1962 Joint Declaration of Labor and Management is signed.
1965 Toyota wins the Deming Application Prize for quality control.
1966 The Corolla is launched; business partnership with Hino Motors Ltd. begins.
1967 Business partnership with Daihatsu Motor Co., Ltd. begins.
1974 Toyota Foundation is established.

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1975 The prefabricated housing business begins.
1982 Toyota Motor Co., Ltd. and Toyota Motor Sales Co., Ltd. are merged into Toyota Motor Corporation.
1984 Joint venture with General Motors (New United Motor Manufacturing, Inc.) begins production in the USA.
1988 Toyota Motor Manufacturing, USA, Inc. (present TMMK) begins production.
1989 The Lexus brand is launched in the USA.
1992 Toyota Motor Manufacturing (United Kingdom) Ltd. begins production.
1997 The Prius is launched as the world's first mass-produced hybrid car.
1999 Cumulative domestic production reaches 100 million vehicles.
2000 Sichuan Toyota Motor Co., Ltd. begins production in China.
2001 Toyota Motor Manufacturing France S.A.S. begins production in France.
2002 Toyota enters Formula One World Championship; Tianjin Toyota Motor Co., Ltd. begins production in China.
2004 The Toyota Partner Robot is publicly unveiled.
2005 The Lexus brand is introduced in Japan.
2008 Worldwide Prius sales top 1 million mark.
2010 Worldwide Prius sales top 2 million mark; Toyota and Tesla Motors agree on joint EV development.
2011
Worldwide Hybrid Vehicle sales top 3 Million mark; Toyota Motor Manufacturing, Mississippi, Inc. begins production in the
USA.
Toyota’s factory for producing or assembling is spread all over the world. It factories are present
in countries like Japan, Canada, South Africa, Poland, turkey, India, Australia, Indonesia, United
Kingdom, France, Brazil, Portugal, Argentina, Pakistan, Mexico, Thailand, Czech Republic,
Malaysia, China, Venezuela, Russia and the Philippines. Toyota’s main passion is producing
vehicles with the latest technology. Names of few of the popular Toyota vehicles are Toyota
Prius, Camry, Lexus, Toyota Tundra, Toyota Tundra Double Cab and Corolla.

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Toyota non – automotive activities are:
Aerospace- It is the share holder of Mitsubishi Aircraft Corporation and invested money for its
latest venture.
Education- The company in1981 established the Toyota Technological Institute.
Finance- It provides financial help to Toyota customers through Toyota Financial Services
Corporation.
Agricultural biotechnology- It invests in many partnerships and small businesses in
biotechnology.
Robotics- The company is developing robots for older people and entertainment.
Today, Toyota is one of the best known car companies In terms of revenues, profits and net
worth Toyota is the world’s largest automobile maker.

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Toyota Today

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SIGNIFICANT EVENTS
Great East Japan Earth Quake
 March 11, 2011 a magnitude 9.0 earthquake occurred 40 miles east of the Oshika
Peninsula.
 The ensuing tsunami, the earth quake itself, and the accidents at the reactors at the
Fukushima power plant are referred to as the Great East Japan Earth Quake
 Toyota shutdown production at all domestic facilities. By April 18th the facilities were
functioning again.
 The damaged national infrastructure and nuclear power plant crisis severely affected
Toyota’s ability to acquire parts and transport the vehicles.
Thailand Floods
 Thailand has had severe flooding since late July, the monsoon season had three times
the typical rain fall.
 The flood waters destroyed many auto part production facilities and as a consequence
Japanese automakers are struggling to find enough parts to produce vehicles.
 Toyota and Honda withdrew earnings projections as part availability is too large of an
unknown to accurately predict future prospects.
 The three Toyota plants in Thailand were not damaged but have nonoperational since
October 10th, total production loss since the closure is approximately 150,000 units.
Recalls
 November 2009 Toyota recalled several models for floor mats that trapped accelerator
pedals.
 January 2010, more models were recalled for sticking accelerator pedals.
 February 2010, the ABS software in the Pruis was found to have defects and recalled.
 Approximately 200 class actions have been filed under damages caused by unintended
acceleration in Scion, Lexus, and Toyota vehicles. The allegation is that the software is
flawed and the actual cause of the problem. 20 class actions have been filed for failure
of the ABS to perform correctly.
 Tests have shown that the vehicle can be stopped with the emergency brake and foot
brake or be shifted into neutral and coast to stop. Some fatalities could have been
prevented with these measures, yet the diver did not choose to therefore the collisions
could be a combination of software and diver error.
 There is no definitive evidence as to the cause.

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Auto Car Industry (Industry Analysis)
This analysis focuses on the automotive industry, specifically, large-scale manufacturers of
automobiles.
The automotive industry is inherently interesting: it is massive, it is competitive, and it is
expected to undergo major restructuring in the near future due to globalization and decreasing
oil reserves.
Industry Overview
The evolution of the automotive industry has been influenced by various innovations in fuels,
vehicle components, societal infrastructure, and manufacturing practices, as well as changes in
markets, suppliers and business structures. Some historians cite examples as early as the year
1600 of sail-mounted carriages as the first vehicles to be propelled by something other than
animals or humans. However, it is believed by most historians that the key starting point for the
automobile was the development of the engine. The engine was developed as a result of
discovering new energy carrying mediums, such as steam in the 1700s, and new fuels, such as
gas and gasoline in the 1800s. Shortly after the invention of the 4-stroke internal combustion
gasoline-fueled engine in 1876, the development of the first motor vehicles and establishment of
first automotive firms in Europe and America occurred.
Porter’s Five Forces Analysis
Michael Porter identified five forces that influence an industry. These forces are:
(1) Degree of rivalry
(2) Threat of substitutes
(3) Barriers to entry
(4) Buyer power
(5) Supplier power.
Degree of Rivalry: High
Toyota remains a leader in the low cost manufacturing, while its production system caused other
car-manufacturers to change the way they operate.
Threat of Substitutes: High
The threat of substitutes to the automotive industry is fairly mild. Numerous other forms of
transportation are available.
With the ability to cut costs more efficiently than its competitors, Toyota has narrowed the price
gap between the used cars and its own automobiles. Therefore, compared to its peers, the
substitution with the used cars is less of a danger for Toyota.

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Buyer Power – Moderate
The cost cutting practices that Toyota implements in its operations lowers the buyer power and
puts its cars into a more advantageous position compared to its competitors.
Supplier Power – Low
One of the competitive advantages of Toyota Co. is its strong relationship with the suppliers. Its
efficient manner of monitoring supply chain places low bargaining power on the suppliers.
Threat of New Entrants – Low
The well-known brand, unshakable market presence in various segments, and large size gives
Toyota a competitive advantage over new entrants in the auto manufacturing industry.
Pestle Analysis
Political Factors
In the background of the financial crisis, each country’s government carried out the
relating remedy policy to protect or stimulate each important industry, including the
annotative industry. For example, in end of 2008, U.S. government gave $17.4 billion
short-term loans to General Motors and Chrysler to help them. In March, 2009, Toyota
has asked for $2 billion loan from the Japanese Government. These loan policies may
help the vehicles corporation survive in the difficult position caused by the financial
crisis.
In addition, the U.S. Federal Reserve Board took the quantitative easing policy, which
leads the global asset price inflation to protect U.S. trade. Therefore, these policies
would help each country to spur its own automotives industry and protect others
country automotives corporation to occupy the market share.
Economic Factors
The automotive industry shows the recovery evidence. The General Motors paid back
$8.1 billion in emergency government loans and Chrysler demonstrated that it started
to produce an operating profit. In the United States, the passenger vehicle sales rose

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12.3 million in 2010 compared with 11.3 million in 2009. It is the first time that the sales
exceed 10.0 million since the financial crisis, September 2008. In Canada, the revenue of
passenger vehicle was 1.61 million compared with 1.56 million last year, due to the new
growing point light trucks. The Asian automotive market was the bright point in the past
several years. For example, the Chinese new automotive reached 9.32 million in 2010,
while the Indian automotive reached to 1.82 million, which is shown in the Figure 1.
These positive data will increase the confidence of investors, and the rising of Asia
market will attract more automotive corporations.
Social Factors
Due to the increasing price of the oil, more and more people choose the small
displacement engines due to its high efficiency. For example, 140,000 Chevrolet Cruze
with small displacement engines were purchased in the first six months of 2010. This
tendency will lead the manufacturer to produce the small displacement engines. For
instance, GM and SAIC develop small displacement engines, and Toyota plans to launch
more such types of cars in China. In addition, with the rising power of the middle class in
China, they became the main purchasing power of automotive, which help China to
become the largest growing car market in the world. It is demonstrated that China’s
middle class occupies 23% of its total population.And the luxury cars also are preferred
in China. For example, Beijing includes 8,800 billionaires and 143,000 millionaires. Most
of wealthy own between a minimum of two to five luxury cars millionaires. This may
lead the changing of the production direction about the vehicles types.
Technology Factors
Regarding to the precious energy resource, the demand for vehicle drove by other types
of energy caused the interest of vehicle interest, so such types of vehicles were invented
by the vehicles manufactures. For example, Hybrid electric vehicle is such type vehicle
which comprises of a conventional engine propulsion system with an electric propulsion
system. The features of these cars are to achieve both the better fuel economy and a

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better performance. Toyota leading brand Prius, was sold in 80 countries for 2 million in
2010. General Motor was developing innovative battery technologies and hybrid
systems that will help hybrid and electric vehicles travel farther, which may be used in
the brand Cleveland. This tendency may cause the basic transformation in the
automotive industry, and attract more automobile manufactures concentrate on the
hybrid engine system.
1. Environmental Factors
The waste gas emitted by the vehicles became the hot point in the recent years. The
stringent emission standards for the passenger and light vehicles were adopted by the
European Union (EU) Commission and the EU Parliament since 2005. In the standards,
the automotive corporation must be responsible for the emission performance of these
vehicles. And another severe emission standard was adopted by EU in 2009. And the EU
Commission plans to carry on more severe standards. And different countries have the
different emission standard. For example, the national emission standard of Australia is
more stringent than several Asian countries. Thus, with the more stringent emission
standard, the additional costs should be spent by the automotive manufacturers to
meet it in the factors of product development, testing and manufacturing operations.
2. Legal Factors
Each country operated the legal policy to protect its own automobile corporation
benefit. The Asian countries changed their import duty for the automobiles. For
example, it is demonstrated by China government, the preferential taxes will be ended
on the small displacement cars, in order to reduce the pollution in the large cities. India
also reduced the import duty and excise duty on hybrid cars, and reduced the tax on the
auto component aimed at helping the Indian auto component manufacturers. In 2009,
U.S. government would restrict imports of Chinese commercial low cost tires, and
increased the additional tariffs. This caused that the U.S. automotive corporation cannot
chose the expensive European tires instead of Chinese tires, which increased the cost of

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the manufacturers. Thus, the manufactures should adjust their strategy according the
various ration legal policies.
Life cycle analysis:
The auto-manufacturing industry operates in a mature and highly concentrated
environment. The leading companies represent an oligopoly and the competition for the
market share and brand loyalty is quite high.

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Resource
Key Success Factors in Automobile industry
Capabilities

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Internal Analysis :
Overview of Toyota Motor Corporation in the context of its industry
The recession that started in the late 2007 had a profound impact on the automobile industry. By
early 2009, the global automobile industry was in a deep slump and sales were dropping
substantially. Retail gasoline prices of more than $4.00 per gallon combined with a powerful
recession put the brakes on new car sales. One result of the high gasoline costs has been the
strong demand for Toyota's Prius gasoline-electric hybrid car over recent years. Other carmakers
were greatly encouraged in their own efforts to bring more hybrids to the market, but however
consumers generally aren't as impressed with U.S. hybrid technology as they are with that of
Toyota models. (Plunkett Research Ltd., 2009)
The Toyota Motor Corporation is a multinational corporation and now the world's largest
automaker in terms of sales, net worth, revenue, and profit according to Fortune Global 500. It
was founded in 1926 as Toyoda Automatic Loom Works, Ltd. and has consistently been more
productive than its competitors. The company has been widely recognized for the quality of its
products and production systems. The company is already onto its third generation hybrid engine
- which is incredible given that many manufacturers have not even begun to develop their first.
(AUTOeBID)
Toyota vision :

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The “Toyota Global Vision” announced in March 2011, is an articulation of what kind of
company it wants to be — what kind of company they ought to be.
It clarifies value, “we want Toyota to be a company that customers choose and brings a smile
to every customer who chooses it.” The ‘Toyota Global Vision’ is a distillation of our resolve at
Toyota for the future.
Toyota’s business activities are based on the concept, ensure sustainable growth by fostering
the virtuous circle, Always better cars Enriching lives of communities Stable base of business.

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SWOT : Toyota

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Toyota Resources & capabilities:
Primary activities
Inbound logistics
Receiving, storing, and disseminating inputs. E.g., warehousing, inventory
 toyota in obtaining raw materials, they do not process their own, or create your own,
they use a third party, they handed the small parts, such as leather seats, steering
wheel, tire, to local companies, but to the nature of strategic importance, like a
machine, they import from Japan (center), it's all to maintain the quality standard that
was created toyota,
 Toyota put on the assembly system in the process, it has led to toyota raw material
supply for its assembly need a place to store supplies, or warehouse, to avoid piling up
too many assets, Toyota to forecast demand,

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Operations
 Transforming inputs into the final product form, in assembly and manufacturing (its
production) Toyoto use various systems to be efficient and effective, we could also call
it, TPS is the Toyota Production System, the following explanation,

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 The concept of Lean Thinking from Toyota Production System. So, if you want to apply
it, it must know what the Toyota Production System.
 As the picture above, the concept of the Toyota Production System can be described as
a complete building which consists of various components are integrated. The building
was also called a The House of Toyota.
 The roof is the result of the efforts below. The results were the best quality, lowest cost,
shortest time, by eliminating the things that are not value-added (waste) whether it be
time or activity.
 The left pole is Just in Time (JIT), which produces something that prompted a number of
necessary and when required by the consumer.
JIT supporting components:

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 Takt Time: The maximum time allowed customers to produce a single product in
order to meet customer demand.
 One piece flow: Producing and moving one item at a time (or a small and consistent)
through a series of process steps as far as possible uninterrupted, with every step of the
process only makes what is required by the process berikutny.
 Pull system: the work of raw material is pulled into the workplace only if needed.
Opponents of the system is push-pull system, which encourages the work of raw
materials to the workplace regardless of whether in the workplace are available
resources to do
Jidoka means “automation with a human touch”
 Jidoka, in the production context means not allowing defective parts to go from one
work station to the next. It specifically refers to machines or the production line itself
being able to stop automatically in abnormal conditions (for example, when a machine
breaks down or when defective parts are produced). This Automation allows machines
to run autonomously, as they will stop when a problem occurs.
 Jidoka is also used when individual people encounter a problem at their work station.
They are responsible for correcting the problem - if they cannot, they should stop the
line rather than let the defective part do.
- The base is the Operational Stability. Section on it will not function properly if the
bottom is not working. The base consists of:
 Heijunka: smoothing. Meaning: wherever possible evenly distributed workload made at
any time. Without this, Just in time can not be applied, because it will happen stacking
and queuing at peak load.
 Standard work: At each stage of the work there is a clear indication of the order and
how to do the job.
 Total Productive Maintenance (TPM): a comprehensive equipment maintenance process
so that the tools are always in good condition to wear to work.
 Value Chain: It is a series of value-added processes. There are continuous efforts to
reduce "non-value added waste" so that what remains is just something that has
added value in the production process. Discussion of "non-value added waste"
includes the activities of 5S

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Outbound Logistics
Collecting, storing and distributing the product to buyers
 output of the production process at the plant, is the finished product,, a car, the car is
directly sent to the toyota dealer,, it's for local, or a region (not crossing the sea in
distribusianya, if sending more distant or export,, its delivery using container.
Marketing and Sales
Providing a means and incentive which allow buyers to purchase the product
 Application of Indirect Channels Distrubusi TOYOTA CORPORATE
 In the application of the Toyota Company or its product distribution channels to use
indirect distribution networks which use the Company Toyota dealer or distributor.
Service
Providing service to enhance or maintain the value of the product
 Toyota managed to outperform its competitors from the automotive industry in
customer satisfaction. This is demonstrated by the results of a survey conducted by JD
Power Asia Pacific to its customers in Indonesia
 The Best Total Ownership Experience 'is a principle that is always carried by Toyota at
each line, starting from the central office to the Toyota dealership. Their concept is the
customer number one, so that makes them always trying to meet customer needs and
continuously improve services.
 Toyota recorded occupies the top position with 764 points, 757 points, followed by
Nissan, Honda and Hyundai as well as 755 points. Overall average score is 758, making
the Toyota as the only company that is above average.
Three main points
 The service is reliable, is one of the main factors
 Reliable Service Every car owner must want to stay fast and reliable service
 People Qualified workforce, is one of Toyota's superior
Support Activities
Firm infrastructure
 infrastructure owned by Toyota factory is very modern and sophisticated, is a robotic
system with humans as the operator,, all the production support until the sale is
available with either situation, the factory to the dealer,,

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HUMAN RESOURCE MANAGEMENT
 Toyota to this day has approximately 300,000 employees worldwide
 Human resource is important for Toyota way of working
 Growth of Leaders who live the Toyota Philosophy
 Respect, develop, and challenge People and Teams
TECHNOLOGY DEVELOPMENT OF TOYOTA
 Torrance (DP) - As one of the world's largest manufacturers, Toyota is very concerned
with the safety of its customers. That is why Toyota did not stop doing research and
development of safety technology.
 Currently, Toyota has several safety technologies being developed. In fact, Toyota, now,
focus on developing technologies that protect older drivers and pedestrians.
 It is responding to accident statistics in Japan, where more than half the deaths on the
road are people aged over 65 years and pedestrians.
 Build safer cars into the center of Toyota's global vision. Learning from data in the real
world, Toyota continues to improve testing, products and services, by establishing a
Collaborative Safety Research Center in the USA.
 Collaborative Safety Research Center in collaboration with a number of North American
universities, hospitals, and research organizations.
Procurement
At Toyota Industries Corporation our procurement activities are based on fair business
practices in order to realize amicable relationships and mutual benefit.
Toyota Industries Corporation is involved in a wide range of business fields and procures
the parts, materials, and equipment for these many different businesses from suppliers
all over the world. Along with requiring our suppliers to provide quality items at a low
price and in a timely manner, we cooperate with them to promote environmental
preservation and meet the other demands of society. In addition we take a long term
view toward our relationships with suppliers with an aim to realize an amicable
relationship of mutual benefit based on fair business practices.

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Assessing Company’s Resources and Capabilities’ Toyota

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Business Unit strategy :
Taylor’s Fortune Magazine article describes the story of a man named Akio Toyoda and his
vision for Toyota’s future. Akio has had a very difficult past few years: US market share fell from
18.3 percent from 2009 to 12.9 percent in 2011. Akio formally apologized before congress for
his company’s deathtraps that accelerated out of control. And, tsunamis ravaged Japan, which
killed over 15,000 and halted production at a number of factories while disrupting the supply of
500 parts.
Akio made the following four fundamental changes to reposition Toyota:
Focus on designing brands that excite US buyers: “To give Lexus a sportier image, he
championed the development of the $375,000 LFA, a carbon fiber super-car.
Be Fast and Move Quickly: Akio shrank the “board of directors by half and took out layers of
management.” Akio also meets with five top advisors ever week and makes decisions on the
spot without written agendas.
No more Executive Rotation: Previously, executives rotated positions. A product engineer, for
example, could work on manufacturing. No longer—executives stay at the position that they
are best at.
“Always make better cars” mentality: This Spring, Toyota will launch the plug-in Prius. It's a
$32,000 car that has a battery that can run for 15 miles without gasoline.
In this message he continuing to foster Toyota’s competitive advantage with its “lean
production system,” while, at the same time, demanding that the company innovate and
produce more exciting cars. Akio’s strategy to keep executives in one place should help improve
Toyota’s quality while avoiding another recall disaster. And finally, his “always make better
cars” mentality is not lip service. As the grandson of the company’s founder, Akio cares more
than anyone about continuing his family’s success. His ultimate goal is to restore honor to
Toyota’s name.

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Summary of Key Corporate business unit strategy actions:
 Collective wisdom to drive competitive edge
 Beyond value chain towards value network

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 Market making through localization

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 Design, research & development : an integrated perspective to deliver value

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Product strategy :
 Manufacturing Worldwide operations : capturing essence & Excel

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 Engagement of talent & passion of human resource
 New business Ventures :

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 Sustainable growth

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 Respect planet earth

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Corporate Social Responsibility Management (CSR) 2011
Since its foundation, Toyota has strived to contribute to the sustainable development of society
through leadership in the manufacturing and provision of innovative and quality products and
services.
In FY12, driven by Toyota’s renewed Global Vision and European Mission,
In FY11 the CSR assessment showed a high score on Compliance, Health & Safety, Quality,
Corporate Value and Customer First. The Employee satisfaction score decreased slightly in
comparison to the previous year, primarily due to an increase in employee turnover.

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Summary of Business strategy :
Value chain : Competitive advantage
Toyota has a key competitive advantage with its competitors on account of Toyota way in
following
1. Human resources
2. Product
The Toyota Way can be briefly summarized through two pillars that support it: “Continuous
Improvement” and “Respect for People”.

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Toyota Way: Principle of 4P
Management’s critical role is to motivate and engage large numbers of people to work
together toward a common goal.
“Defining and explaining what the goal is, sharing a path to achieving it, motivating the people
to take the journey with you, and assisting them by removing obstacles --- those are
management’s reason for being.”
Its success is derived from balancing the role of people in an organizational culture that expects
and values their continuous improvements, with a technical system focused on high-value-
added “flow”.
Continuous Improvement :

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

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 Management of human resources
Toyota is very concentrated in terms of human resources is demonstrated by the philosophy
Toyota way following his 14-point philosophy
The 14 Principles of the Toyota Way is a management philosophy used by the Toyota
Corporation That includes the Toyota Production System. The main ideas are to base
management decisions on a "Philosophical sense of purpose", to think long term, to have a
process for solving problems, to add value to the organization by developing its people, and to
Recognize That continuously solving root problems drives organizational learning.
14 Principles of the Toyota Way.
 Base management decisions on a long-term philosophy, even at the expense of
short-term financial goals
 Create a continuous process flow to bring problems to the surface.
 Use "pull" systems to avoid overproduction.
 Level out the workload (heijunka). Work like the tortoise, not the hare.
 Build a culture of stopping to fix problems, to get quality right the first time
 Standardized tasks and processes are the foundation for continuous improvement
and employee empowerment.
 Use visual control so no problems are hidden.
 Use only reliable, thoroughly tested technology That serves your people and
processes.
 Grow Leaders WHO Understand thoroughly the work, live the philosophy, and
teach it to others.
 Develop exceptional people and teams WHO follow your company's philosophy.
 Respect your extended network of partners and Suppliers by Challenging Them
and Helping Them Improve.
 Go and see for yourself to thoroughly Understand the situation (Genchi
Genbutsu).
 Make decisions SLOWLY by consensus, thoroughly considering all options;
implement decisions rapidly (nemawashi).
 Become a learning organization through Relentless Reflection (hansei) and
continuous improvement (kaizen).

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 Product
Toyota continues to prove its commitment in providing the Best Total Ownership
Experience to customers. Reflection of customer satisfaction to service Toyota this year
can be seen from the results of the survey JD Power category CSI (Customer Satisfaction
Index) and SSI (Sales Satisfaction Index), where Toyota was ranked first. In terms of
products, superior quality products back Toyota proved by JD Power Asia Pacific 2007
Indonesia Initial Quality Study (IQS), where the Toyota Yaris, Vios, and Rush was ranked
top in each segment.
3 products outperform Toyota 5 segments were taken into account in this survey.
Vehicles that are in the first position is recorded at least get a report on problems per
100 vehicles in the survey in their respective segments. Toyota Yaris is ranked top in the
segment of premium compact vehicles. Ranked second in this segment is followed by a
Suzuki SX4 and Honda Jazz. Meanwhile, Toyota Vios in the top position in the entry
midsize car segment / midsize, which won second place Honda Civic and Honda City in
the third position. Both the Toyota Yaris and the Vios was also in the same position the
previous year.
While Toyota's new product, the new Toyota Rush marketed since early 2009, managed
to outperform the Daihatsu and Isuzu Panther in the entry SUV segment.
Responding to these achievements, Johnny Darmawan said, "This is testament to the
quality of Toyota products are marketed in Indonesia. We are proud that these results
obtained from the consumer voice, which indicates the quality of Toyota's product is
above its competitors ", said President Director of PT Toyota-Astra Motor is.
J. D. Power Asia Pacific 2009 Indonesia Initial Quality Study (IQS), which this year enters
its fifth year, a survey conducted on the new car owners who make purchases in the
month of October 2006 - June 2007, on matters of quality vehicles. Results J.D. Power
Asia Pacific 2009 Indonesia Initial Quality Study (IQS) is obtained from a survey
conducted over 2796 new-vehicle owners, including 50 passenger and commercial
vehicles from 14 brands. Field survey itself is conducted in April - August 2009

42. Toyota motor co. 42
Competency Toyota products are also recognized by the media, as can be seen on the
list of winners Autobild Award 2009 in which the Toyota Vios, Toyota Avanza Toyota
Camry and was crowned as the best vehicle in the category Small Sedan, Big Sedan, and
People Carry.
Responding to Threats to Sustainability
Responses to Imitation
Building Barriers
• Economies of scale and scope
• Learning/private information
• Contracts and relationships
•Time lags
• Fit
• Upgrading Added Value
Appropriated
Value
Responses to
Substitution
• Fighting
• Switching-Hybrid
Responses to
Holdup
• Contracting
• Integrating
• Building bargaining
power
• Bargaining hard
• Reducing asset-
specificity
• Building relationships
• Developing trust
Responses to Slack
• Gathering information
• Monitoring behavior
•Shaping norms
• Bonding resources-Restructuring
• Changing governance
• Mobilizing for change
Responding to
Threats to Sustainability

43. Toyota motor co. 43