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Strategic Technology management for TOYOTA

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Strategic Technology management for TOYOTA

  1. 1. Georgios Christoforidis Pulkit Vijayvargiya Gordon Bamford Carol Santos Pedro Miyake Alexander Clayton Strategic Technology Management Report For Toyota Motor 2013 12 December
  2. 2. Table of Contents 1. Introduction.............................................................................................................. 4 2. Company Background............................................................................................... 4 2.1. Historical Review & Goals.................................................................................. 4 2.2. Guiding Vision .................................................................................................... 6 3. Competitors Environment........................................................................................ 7 4. Toyota PESTLE Analysis........................................................................................... 10 4.1. Political............................................................................................................. 12 4.2. Economical....................................................................................................... 12 4.3. Social................................................................................................................ 12 4.4. Technological & Environmental....................................................................... 13 4.5. Legal................................................................................................................. 13 4.6. Pestel Analysis Conclusion............................................................................... 14 5. Toyota SWOT Analysis............................................................................................ 14 5.1. Value Proposition of Toyota ............................................................................ 14 5.2. SWOT analysis.................................................................................................. 15 5.2.1. Strengths................................................................................................... 15 5.2.2. Weaknesses.............................................................................................. 16 5.2.3. Opportunities............................................................................................ 16 5.2.4. Threats...................................................................................................... 17 6. Balanced Scorecard ................................................................................................ 17 7. Strategy Roadmap .................................................................................................. 20 7.1. Toyotas Strategy Roadmap.............................................................................. 20 8. Technology Roadmap............................................................................................. 22 8.1. Technology Road mapping .............................................................................. 23 8.2. Technology Roadmap analysis......................................................................... 24
  3. 3. 9. Recommendations.................................................................................................. 26 10. Conclusion ........................................................................................................... 28 References...................................................................................................................... 29 APPENDIX............................................................................Error! Bookmark not defined. Meeting minutes ........................................................................................................ 35 Table of Figures Figure 1. Top 10 car brands .............................................................................................. 7 Figure 2. Quality results.................................................................................................... 7 Figure 3. Value results ...................................................................................................... 8 Figure 4. Technology/Innovation results.......................................................................... 8 Figure 5. Global automobile market in 2013.................................................................... 9 Figure 6. Toyota, VW and ford net income comparison .................................................. 9 Figure 7. Pestel Analysis ................................................................................................. 10 Figure 8. Strategic Roadmap .......................................................................................... 21 Figure 9. Strategic planning roadmap ............................................................................ 23 Figure 10. Technology Roadmap for TOYOTA ................................................................ 24 Table of Tables Table 1. Political, Economical, Social, Technological, Legal and Environmental issues are considered. Afterwards, actions can be defined............................................................ 11 Table 2. Strengths, Weaknesses, Opportunities and Threats are considered in order SWOT analysis to be applied .......................................................................................... 15 Table 3. Balanced Scorecard........................................................................................... 18
  4. 4. Strategic Technology Management for Toyota 2013 4 University of Strathclyde 1. Introduction This project is about a strategic plan for Toyota Motor. In order to produce this project plan two basic methods are going to be used. The first one is Pestle analysis; it will be used to define the political, economical, sociological, technological, legal and environmental effects, and afterwards to lead for strategic decision-making. While the second one is SWOT analysis; it will be used to understand the strengths and weaknesses, as well as identify the opportunities and the threats that the company face or will face in the future. [11][12] Then a strategic and technologicalroadmap will be produce to present the path that the company requires to follow in order to achieve its goals; the main reason of this technique is to ensure that the company goes in the right direction. [11][12] 2. Company Background Toyota Motor Corporation is an automaker company from Japan, and its main headquarter is in a city named Toyota located in Aichi Prefecture of Japan. The establishment of the company was on 28th of August, 1937, by Kiichiro Toyoda. In 2012, Toyota is a multinational company consisted of 325,905 consolidated employees and 69,148 unconsolidated. [1] This year Toyota’s capital is considered as 397.05 billion Yen, while the net revenue, operating income and net income were 22,000, 1,320 and 962 billion Yen respectively. Also, it should be mentioned that Toyota Motor Corp has 507 consolidated subsidiaries and 57 affiliates. [1] 2.1. Historical Review& Goals In 1924, the Toyota founder’s father (Sakichi Toyoda) invented the Toyoda Model G Automatic Loom; an automatic high-speed loom featuring with the ability to change shuttles without stopping. In 1929, the patent rights were sold to a British company (Platt Brothers) and as a result, the capital gained due to start researching into a gasoline powered engine and develops an automobile production. [1]
  5. 5. Strategic Technology Management for Toyota 2013 5 University of Strathclyde In 1933, Toyota was a division of Toyoda Automatic Loom Works, specialized on the production of automobiles. A1 prototype passenger car and G1 truck were completed in 1935 and one year later the first passenger car, Model AA Sedan, produced, with sales price approximately 400 yen cheaper than the competitor’s cars (Ford, GM, etc.). Also, AB phaeton and GA truck produced the same period. One year later, 1937, the company became independent and then,almost 10 years of successful business development followed, where many facilities and plants were established, as well as new models were produced and new technologies were imported as well. [1] However, this development stopped by the beginning of the World War II. When the war ended Toyota had 3000 employees and no working facilities. But, 1947, the design of a new postwar automobile leaded to an increment of company’s income. Two years later, Japanese economy was continuing to suffer and raw materials were in short supply, as well as the government taking measures which affected negatively Toyota’s economy. The result was the company requested 1,600 voluntary retirements. However, the company was continuing not to meet its goals; the president of Toyota resigned and a greater number of employees than requested began leaving the company voluntarily; 2,146 voluntary retires.[5][6][7] In 1957, Toyota eventually entered in the American market and by the early 1980s began building plants in the US.While, in 1990 Toyota Europe Marketing & Engineering was established due to help vehicles market in the continent and two years later the first base was set up in the UK; Toyota Manufacturing UK. Some of the most important achievements are presented briefly below: o In 1999, Toyota decided to list itself on the New York and London Stock Exchanges. o In 2002, Toyota entered Formula 1 o In 2003, Toyota produced cars in France o In 2005, ranked 8th world’s leading companies
  6. 6. Strategic Technology Management for Toyota 2013 6 University of Strathclyde 2.2. Guiding Vision The Toyota way is five core values to express the beliefs and values of the company. These values are as follows: o Always be faithful to your duties, thereby contributing to the company and to the overall good. o Always be studious and creative, striving to stay ahead of the times. o Always be practical and avoid frivolousness. o Always strive to build a homelike atmosphere at work that is warm and friendly. o Always have respect for spiritual matters, and remember to be grateful at all times.[2] Toyota as global company has a system of ideas and ideals regarding economics, politics and management. It honors the language and the spirit of the laws of every nation that operates and supports open and fair business activities; as well as it respects the culture and customs and contributes to economic and social development. Also, it targets to produce clean and safe products due to enhance the quality of life. Its priority is to create and develop advanced technologies in order to produce outstanding products and services according to the customers’ needs around the world. Moreover, Toyota supports that the individual creativity, the value of teamwork, the mutual trust and the respect between labor and management are factors which have a key role in order for the company to be successful.[2]
  7. 7. Strategic Technology Management for Toyota 2013 7 University of Strathclyde 3. Competitors Environment According to the 2013 Car Brand Perception Survey, which is conducted by the Consumer Reports National Research Center, Toyota, Ford, Honda, Chevrolet, Mercedes-Benz, Volvo, Cadillac, BMW, Dodge, and Tesla are the best brands globally. The scores that were given by the consumers are presented below: [39] Figure 1. Top 10 car brands Regarding quality, road tests and reliability, Toyota was ranked 2nd : [39] Figure 2. Quality results
  8. 8. Strategic Technology Management for Toyota 2013 8 University of Strathclyde Concerning value, consumers are looking to get the most for their money. The survey shows that Toyota ranked 1st . [39] Figure 3.Value results While, when they were asked about technology/Innovation, their answers were shown below: [39] Figure 4. Technology/Innovation results
  9. 9. Strategic Technology Management for Toyota 2013 9 University of Strathclyde Other statistics, regarding the global market shares in 2013, shows that Toyota ranked 1st and it is considered as the best auto seller globally. [40] Figure 5. Global automobile market in 2013 Regarding the net income concerning Volkswagen, Toyota and Ford, Toyota has the highest for the years 2009, 2010 and 2012, while only on 2011 Ford is achieved a higher one than Toyota. [40] Figure 6. Toyota, VW and ford net income comparison
  10. 10. Strategic Technology Management for Toyota 2013 10 University of Strathclyde 4. Toyota PESTLE Analysis PESTLE is an acronym for Political, Economic, Social, Technological, Legal and Environmental, all factors to take in consideration when making external analyses [13]. This tool has been designed and improved especially for scanning markets and environments and can be used as input to the SWOT analysis. Figure 7. PESTLE Analysis The group understanding of the PESTLE Analysis tool leads to the conclusion that to obtain more consistent results it would be important to keep a broad horizon. Toyota as a whole company is present in many parts of the globe, which causes it exposure to several different contexts and different products, leading to superficial results. Therefore, the group decided to approach Toyota globally without exploring deeply specific topics, regions of the globe or restricted markets and to always keep the Toyota Prius perspective for the technology topic but without missing global scenario. To use the tool, the group organized a workshop, after individual reading, and trough a brainstorming, generated the following results:
  11. 11. Strategic Technology Management for Toyota 2013 11 University of Strathclyde Table 1. Political, Economical, Social, Technological, Legal and Environmental issues are considered. Afterwards, actions can be defined PESTLE ANALYSIS Issue Time Importance Action Political public transportation Short term Low Reduce car cost/more efficient car; less consumption of oil oil crisis Short term High more efficient car middle east unstable countries Long term medium understand the local market emission laws Short term high reduce emission Economical Energy rising cost Long term High more efficient car Global crises medium High Focus on another market competitive/volatile market Long term medium better advertising and improved products Import/Export Long term medium Import from low cost market and export to rising economy market Social Brand exposure (Recall2009- 2010&2012-2013) long term high Improve the quality of products New energy source improves life quality Long term medium hybrid technology targeting low emission Exploring social networks Short term low Improve the social presence by events and media Emerging markets medium medium Efficient strategic plan; consider all parameters deeply Low skilled society medium medium Provide educational assistance Individualization and women empowerment Short term high More customized products Technological Development of hybrid car Long term high Research/Education Focus on new energy sources Long term high Research/Education Focus on quality control techniques Short term medium Research/Education Innovation is crucial medium medium Research/Education Cost of R&D (Design) Short term medium Research/Education Legal Subject to different countries regulations Short term Low Efficient strategic plan; consider all parameters deeply Legal proceedings Short term Low Hire legal consultants Incentive to produce eco cars medium medium Further legal research Taxes high term high Develop Taxation consulting department Environmental Japan Earthquake Short term medium mechanism to recover quickly after environmental disasters Gas Emissions Long term High Improve technology to reduce gas emissions Battery disposal Long term High mechanism to recycle battery or limiting its impact to environment Oil crises Long High Hybrid and electric car technology
  12. 12. Strategic Technology Management for Toyota 2013 12 University of Strathclyde The analysis of the table is structured bellow. The Technology and the Environmental factors were put together due to its proximity in the Toyota strategy context. 4.1. Political In many countries, the public transportations networks are receiving a lot of investment, decreasing customer necessity of purchasing a personal vehicle. It is a global tendency even if it is still concentrated in developed and developing countries. This might demand more effort in advertising and price strategies. Oil increasing prices and political instability in the Middle East are some factors that can cause impact in the entire automotive sector. With another oil crisis, demand for cars powered by gasoline might decrease. A good strategy though, is the development of eco- cars and alternative energy sources. Toyota is already working on hybrid cars that need much less fuel and use nickel metal hydride batteries as their main power source [14]. 4.2. Economical Rising energy costs caused by long term investments to modernize energy production in Europe may impact both car production and attractiveness of electric and hybrid cars [22]. In a place still recovering from crisis and with a still crescent unemployment rate, high cost of production and, therefore, products, is a critical factor [15]. Markets are competitive and volatile and consumers are more aware and demanding. In order to survive in such a hostile environment is important to try mitigating those economic factors with cost reduction. 4.3. Social Toyota is in a delicate position regarding their image. There have been recalls in 2009-2010 in the US and, again, in 2012-2013 in Canada, Mexico and Saudi Arabia [16]. Those recalls showed decrease of reliability and low quality standards, factors that, in the past, were part of Toyota Production System foundations [17]. Nevertheless, Toyota’s research on alternative energy sources cause good social impact and media repercussion. Actions to improve life quality and reduce pollution are not just restricted to law obligations but also are a market trend and very consumer appealing [23].
  13. 13. Strategic Technology Management for Toyota 2013 13 University of Strathclyde To get even more connected to its consumers, Toyota started using social media data collection and analysis. They are monitoring social networks like Facebook and twitter to identify consumers’ needs and their thoughts about Toyota products *18]. By 2015 Toyota intends to have 50% of its vehicle sales in emergent markets. These markets, inserted in developing countries, benefit from it as it generates income job positions. Health and safety and employee satisfaction are part of Toyota’s values towards their employees [19]. 4.4. Technological&Environmental Toyota is one of the car companies that are heavily investing on sustainability and environmental performance improvement. The company focus is to develop new technologies for eco cars and automotive power sources *24+. Prius, Toyota’s hybrid car is part of this environmental initiative but note the whole program. Toyota also research electric and fuel cell vehicles. The electric car, the Toyota FT EV III is a small 100% fuelled vehicle and the fuel cell vehicle is said to be the “ultimate eco-car”, practically reducing the gas emissions to zero [20]. 4.5. Legal Due to its presence in several countries (Japan, Brazil, Mexico, United States, Belgium, France, Portugal, Poland, Australia, Czech Republic, United Kingdom, etc.), Toyota is subject to many governmental regulations [21]. Safety and environmental laws may change from one country to another and it increases difficulties in product development. It is important to adapt their cars to each market. Trade taxes can be an issue also, since it affects directly the decision process when it comes to entering new markets or installing new facilities. Another issue is the recent recalls that might lead to legal proceedings. As a multinational company, Toyota may be subject to law proceedings due to various causes, intellectual property and product liability for instance which could have considerable financial impact.
  14. 14. Strategic Technology Management for Toyota 2013 14 University of Strathclyde 4.6. PESTLE Analysis Conclusion Toyota has many opportunities and threats in all five topics analyzed. Most of Toyota’s concern should be around their failures, cause of several recalls. Actions regarding recovery of the brand’s liability might be fundamental to regain customers’ trust. The group found it difficult to utilize the tool considering data gathering and narrowing the object of analysis. It was fundamental to reduce the subject of analysis in order to produce a more accurate environment reading. It was also challenging to relate data regarding European countries political and economic situation and Toyota’s performance. 5. Toyota SWOT Analysis 5.1. Value Proposition of Toyota The value proposition is described as being the unique competitive offering that your company provides that allows you to stand out amongst your competitors. Within value proposition there are three main categories that companies fall under which are Product Leadership; Operational Excellence; and Customer Intimacy. Toyota comes under the category of Operational Excellence as they strive to produce quality products across numerous countries with varying economic climates. Due to this they have a high variety in their portfolio to accommodate the many different countries they provide for.
  15. 15. Strategic Technology Management for Toyota 2013 15 University of Strathclyde 5.2. SWOT analysis Table 2. Strengths, Weaknesses, Opportunities and Threats are considered in order SWOT analysis to be applied Strengths Weaknesses  Strong/Recognized Brand  Varied portfolio of products  Highly innovative  Leaders in the fields of manufacturing and production  Correct types of products for the markets they are involved in  Knowledgeable in the areas of hybrid technologies  State of the art research and development facilities  Market leader in environmentally friendly car development  Large scale recalls due to manufacturing defaults  Not capitalizing on emerging markets  Smaller share of the European automotive market compared to its other competitors  Heavily focused on Japanese and US markets therefore exposing the company to the fluctuating economic and political conditions of those countries.  Therefore Toyota have focussed on producing cars for US and Japanese consumers that are not as desirable in other markets Opportunities Threats  Increasing interest in green cars  Rises in fuel prices  New emerging markets (India and China)  Ahead of competitors in hybrid technology  Selling of hybrid technology to competitors  Increasing market share in European market (developing models that appeal to this market)  Fluctuating automotive market resulting in over or under capacity of manufactured vehicles  High levels of competition from equally successful automotive companies  Rising fuel prices  Government legislation changes to levels of emissions  Increase in raw material costs  Natural disasters 5.2.1. Strengths Toyotas main strengths are their brand, their position in the automotive industry and their manufacturing and production capabilities. The strong brand image they have created is due to their extensive portfolio that includes 70 different models that cater for the requirements of their numerous customers [27]. Providing this variety of vehicles not only allows Toyota to satisfy numerous consumer groups but also increases their brand awareness. Toyota has become a world class company for production and sales through adopting manufacturing and quality management processes before its competitors [24]. Through utilizing total
  16. 16. Strategic Technology Management for Toyota 2013 16 University of Strathclyde quality management processes Toyota are continuously researching new methods of improving the overall quality of their products and by doing so are maximizing their profits [27]. The benefits of using manufacturing and quality management processes saw Toyota become the top global car producer until 2011 when unforeseen damages were caused to their manufacturing facilities in Japan which allowed General Motors to reclaim the top spot. [30] 5.2.2. Weaknesses The most well know weakness that Toyota has is its record of vehicle recalls. In the period of 2009-2010 Toyota recalled 9 million vehicles while in 2012 that number was at 7.43 million (a slight decrease) [24]. In November of this year they have recalled nearly 900,000 vehicles with faulty air condition units that could compromise the deployment of the vehicles air bag system. In October they recalled 780,000 recalls were announced due to faulty suspension and in September another 615,000 were recalled due to faults with the parking system. A mass recall from a manufacturer can be manageable however Toyota has been consistently recall different models and with different faults which has severely compromised its image with its consumers [31]. Another weakness of Toyota is its level of attention towards the US and Japanese markets which has caused them to disregard emerging markets such as China and India. Due to this neglect they have allowed one of their largest competitors, General Motors, to claim a huge market share in these emerging economies. [27] 5.2.3. Opportunities Emerging economies such as China and India provide huge opportunities for Toyota to expand their market share. Along with China and India there is also a number of emerging African nations with high population that desire cheaper vehicles. The experience Toyota has in assessing what needs individual markets want and creating products that fit these descriptions (such as they have done in the US and Japanese market) give them a significant advantage over their rivals in establishing a majority market share in the new African markets. Another opportunity for Toyota is the increase in interest from consumers in the area of eco-friendly vehicles. Toyota is already one of the forerunners in eco-friendly cars which would mean this opportunity would be ideal for them to capitalize on. [27]
  17. 17. Strategic Technology Management for Toyota 2013 17 University of Strathclyde 5.2.4. Threats One of the main threats to Toyota is the area in which it conducts the majority of its manufacturing (Japan, China, Thailand and Indonesia). These areas are subjected to natural disasters which can disrupt Toyotas manufacturing processes [24]. Entire facilities could be rendered inoperable due to these natural disasters which, if there are any weaknesses in Toyotas supply chain, could halt manufacturing throughout the company. One example of this in recent years was the tsunami that hit Japan in 2011. A supplier of Toyota was destroyed during the tsunami which stalled Toyotas manufacturing as this supplier was the only company that produced this specific item. Toyota had to invest money to help the supplier rebuild its facility. After this Toyota and other companies in high risk natural disaster areas have had to improve their approach to supply chain risk [30]. 6. Balanced Scorecard Balanced Scorecard is a strategic planning tool in which the entity has clearly defined its goals and strategies. It is a technique that aims to measure business performance using the integration and balancing of all key performance indicators existing in a company, since financial and administrative to those relating to internal processes. [32]
  18. 18. Strategic Technology Management for Toyota 2013 18 University of Strathclyde Table 3. Balanced Scorecard Strategic Objectives Strategic Measurements Lag indicators Lead indicators Financial • Increase profitability; • Increase sales on emerging markets; • Sustainable financial growth. • Profit margin growth; • Participation on emerging markets; • Cash flow. • Mix revenue; • Marketing investment; Customer • Regain customers’ trust; • Establish a worldwide brand leader; • Improve communication channels and feedback; • Ethical approach towards customers. • Brand trustworthiness • Brand Recognition • Feedback answered x Car sold • Overall customer satisfaction • Marketing investment; Internal • To strengthen the establishment of internal systems aimed at quality improvement; • Improve product development processes; • Increase R&D results with sustainable products; • Innovative products. • New product revenue; • Customer satisfaction. • Time invested on employees training; • Time to get the product to the market. Learning • To improve the ability to respond quickly to market quality issues from the customer's perspective; • Empowerment; • Improve employee recognition; • Training programs to improve employee’s abilities. • Employee improvement; • Employees satisfaction; • Objectives to achieve; • Teamwork rewards. The method determines in a balanced mode connections of cause and effect relationship between the four indicators to evaluate the companies, which are: o Financial: create new performance indicators so that shareholders may have better return on its investments. o Customer: knowledge about customer satisfaction with the company.
  19. 19. Strategic Technology Management for Toyota 2013 19 University of Strathclyde o Internal processes: the company must identify if there are any products with problems, if they were delivered on time and focus on innovation of its products. o Learning and Growth: refers to the ability and motivation of employee, and a better information system in the company. [33] Two kinds of key indicators were used in the strategy map, lead and lag indicators. Lead indicators measure actions that lead or induce future results. Lag indicators are based on results' measures and are applicable to examine information regarding past actions, events that already happened. In this perspective, lead indicators measure cause while lag indicators measure effect. [34]
  20. 20. Strategic Technology Management for Toyota 2013 20 University of Strathclyde 7. Strategy Roadmap In order to pursue primary objective goals within a company, whether it is a financial, growth, processor customer goal, they need to be documented. This is done in the form of a strategy map. A strategy map will highlight the key areas that a company should focus on to achieve goals that are desired. An important aspect of the map is that goals are set through all aspects of the company and none are forgotten, failure to do this could result in an aspect of the company being forgotten about resulting in a drop in performance elsewhere. All goals in a company that are set generally benefit the company finically, making a larger volume of money and improving its market share. This measures the company’s success rate; therefore all goals should lead to this. Through using the Pestle and SWOT tools, key areas within the company that need to be focused on can be identified. 7.1. Toyotas Strategy Roadmap Toyota is a very innovational company, by striving ahead in ‘green’ technology. They are succeeding in boosting their brand image as well as creating a next generation niche that is expected to change the car industry. This is achieved through the use of hybrid, electric, and hydrogen fuel-cell engines. It is also achieved through ‘green’ manufacturing, being able to produce the car as efficiently and as kind to the environment as possible. In order to keep this image, focus must be set on maintaining and bettering this aspect. The next objective Toyota should be focusing on is marketing and internationalization. As stated in the SWOT analysis, Toyotas focus has been set on specific countries around the world, but as fail to capitalize on others, this has allowed other companies to stamp their mark and benefit. Toyota needs to focus attention on designing, marketing, and supplying cars all over the globe. By focusing on more countries will lead to a greater market and thus creating a larger number of customers, leading to higher sales, however by expanding this could lead to designs which don’t meet the user’s needs and could be damaging to the brand.
  21. 21. Strategic Technology Management for Toyota 2013 21 University of Strathclyde Lastly Toyota needs to look at quality issues. Toyota are very well set up to recall and repair vehicles, this is down to a good customer service division. However this service is very regularly required. Due to design and build quality issues Toyota have to regularly recall cars in order to keep customer satisfaction high. This has a toll and damaging effect on the brand image. To keep recalls at a minimum Toyota has to focus on quality. By improving quality it will also mean less money/resources will need to be put in mass car recalls. Shown in the diagram below is the strategy map and how each of these aspects fit into the overall strategy. Figure 8. Strategic Roadmap
  22. 22. Strategic Technology Management for Toyota 2013 22 University of Strathclyde 8. Technology Roadmap A Technology management methodology called as ‘Technology Roadmap’ is applied for defining the Toyota’s technology evolution in advance. Technology road map is a tool that provides a clear direction of action to a firm; it was first developed by Motorola in 1970s in order to achieve their goals by strategy and technology development [35]. According to Galvin *36+, “A roadmap is defined as an extensive look at the future of a selected field of research framed from collective imagination and knowledge of the most promising drivers of change in that field” *36+. Technology Roadmaps are adjustable “strategic lenses” through which evolution of complex systems can be viewed, affirming dialogue and communication. [37] Two of the main extremes of Technology road map are Market ‘pull’ and technology ‘push’. Market pull leads to the goals of a company and technology push provides the opportunity to be raised in order to meet the goals [36]. Technology Road map takes in to account the relationship between different technologies, services or products and target markets of a firm; thus the technology status of a firm can be developed or maintained. It is a demand/need forced technology planning method to help identify, develop and select technology options in order to achieve a set of product needs. It is an expert team work for future technology planning in order to take suitable technology investment decisions. Thus with the help of Technology roadmap a collaborative technology planning and coordination for TOYOTA as an industry is done in order to make better investment decisions [38]. There are many types of technology roadmaps but in order to deal with the strategies of TOYOTA strategic planning roadmap [36] is used by us. It evaluates different opportunities that business tendencies and markets can offer at strategic level. A standard format of a strategic planning road map is shown in the figure 9. [35]
  23. 23. Strategic Technology Management for Toyota 2013 23 University of Strathclyde Figure 9.Strategic planning roadmap [35] 8.1. Technology Road mapping For making the roadmap for Toyota a T-Plan approach is used [36]. It is divided in to four different stages. In first stage the external and internal drivers depending upon market and business are considered, second stage is the product oriented phase, third stage is focused on technology which is pushed as a result of force from market needs. And the fourth stage is mainly follow-up and bringing the first three stages together. [36][37] Toyota’s technology road map is based on the two extremes market pull and technology push as new technologies are forced to immerge as a result of market needs. The timeline represented by columns used for the road mapping is divided in to three phases, 1) Current situation (From now to 2016), 2) Plans and objectives (From 2016 to 2018) and 3) Vision (From 2018 to 2020). The time line in the roadmap represents the targets and decision point for Toyota. The horizontal rows represent the different stages of strategy planning. First row represents internal and external drivers depending upon market and business needs. The external drivers are demands from customers, market, competition and surroundings. On the other hand internal drivers are the business strategies dependent which includes budget, market share, skills and a unified vision. The second row representing products is the result of pull from the drivers. And the third row is technology which is either evolved or developed in order to full fill the market needs and achieve the company vision. The last row consists of other factors like skills, R & D facilities and overall customer experiences.
  24. 24. Strategic Technology Management for Toyota 2013 24 University of Strathclyde 8.2. Technology Roadmap analysis The final Technology road map for Toyota is shown in the figure 10. The external drivers are based on the PESTLE analysis performed by the team; they are mainly European and energy crises considering the current situation. Desire for personalization, sustainability and emission laws are the drivers which will effect in the future and threat from the European market will be one of the major influencing driver for long term. Internal drivers are mainly derived from the SWOT analysis performed by the team. They includes the problem of recall because of faulty parts, launch of new car models, increase in market share and a unified vision of being a global automotive leader. Aging population and desire for personalization creates the market pull for customized and fully automatic cars, which in turn will provides the scope for driverless and accident proof technology in the field of automobiles. Energy crises and the need for sustainable mobility generates the market pull for producing zero carbon footprint and zero emission products by providing the technology push of more efficient hybrid technology and forced to research in renewable fuel based technology areas. Figure 10.Technology Roadmap for TOYOTA Current Situation Plans Vision TechnologyOthers External Drivers Internal Drivers Marketand needs Products Now 2016 2018 2020 European Crises Legislations:EmmissionLaws, VAT Threat from european competitors EnergyCrises Aging PopulationSustainable Mobility Investment: Buy other companies LaunchNew Models Increase european market share Global Automotive leader Shortage of high skilledstaff Better Designed Cars New HybridModels HighQualityproducts (Toavoid recall) Customizded Cars 100% LocalizedProducts ZeroCarbon foot print products FullyAutomatic Cars ZeroEmmissionCars More efficient Hybrid Technology FullyAutomatedManufacturing Plants Customer feedback New R&D, Skills andknowledge centers Maintaining Brand image Social /online presence Maintainance andafter sales service Renewable fuel basedtechnology (eg. Biodiesel, Solarenergyetc.) Driver less technology Renewable/Sustainable material use Hydrogenfuel based technology Accidents proof technology Leader in innovation and R&D ZeroRecall Personalisation More Service centers and retail outlets Legislations:EmmissionLaws, VAT Threat from european competitors LaunchNew Models Global Automotive leader Maintaining Brand image Leader in innovation and R&D
  25. 25. Strategic Technology Management for Toyota 2013 25 University of Strathclyde European crises and future threats from other European competitors will force TOYOA to stay ahead in the market by launching new affordable car models, 100 % localization and establishment of new R&D and knowledge centers in order to launch new innovative products. Lack of skilled staff is also a driver which creates a market pull for fully automated manufacturing plants. Other factors like after sales service, maintenance and customer feedback also evolved as a result of external drivers. Maintaining brand image of Toyota and an active social and online presence will also act as an important factor in order to reach the final vision of Toyota.
  26. 26. Strategic Technology Management for Toyota 2013 26 University of Strathclyde 9. Recommendations Based on extensive research, (by PESTEL analysis, SWOT analysis, Strategy map and technology road map) recommendations for Toyota have been developed by the team. As shown in the opportunities and threats analysis there are many key issues on which Toyota must work out to get back on top as a global automotive leader. We divided the recommendations in to two main categories as Financial/Business level and Functional level. Financial/Business level recommendations:- Toyota can improve its competitive strength by using its core competencies in order to overcome the threats from European rivals. Various strategic actions recommended are: Focus on hybrid, efficient and sustainable vehicles as Toyota’s future specialization strategy: Toyota already has ground breaking achievements in the field of hybrid car technology. But considering the future energy crises and increasing demand of energy efficient products we recommend Toyota to improve and increase its hybrid cars production by launching new models. The best strategic option would be to separate its hybrid models in to a separate brand focusing on green technology. Considering the global financial crises, a new brand offering moderately cheap, eco-friendly and efficient cars would be comprehended very well. Focus on emerging markets and enhance global market share: As a major point emerged from the detailed analysis in the report, most of the Toyota market is based in Japan and US. But in order to be a global automotive leader Toyota should also target the most emerging markets of the world like India, China and Brazil as its focus. As these markets offer maximum opportunities for growth in the future and in turn help Toyota to get extra edge over its competitors. This can be achieved by developing research and manufacturing facilities in these regions and focus on segmentation of market as the customer requirements are different in these regions as compared to developed countries. Also the European market share can be improved by better localization of child parts and incorporating the strength of Toyota (like “The Toyota Way”) in Europe as did in Japan.
  27. 27. Strategic Technology Management for Toyota 2013 27 University of Strathclyde Functional level recommendations:- On the basis of strategic and technology road maps we came up with the point that Toyota should focus on the functional level in order to achieve more profit, more operational effectiveness and gain the competitive advantages. Following strategic recommendations are suggested. Operation strategy: - Focus on product quality control: Inadequate quality control which results in many recalls is emerged as one of the major weakness of Toyota. In our analysis we find that Toyota is deviated from its quality focused approach in the race of chasing the increased global market share and profit. We recommend Toyota to stick to its core values of maintaining quality by the implementation of Toyota way. Root cause analysis and continuous improvement by learning from the mistakes are the main quality controlling points Toyota must use. Marketing strategy: - Maintaining the brand image: No doubt Toyota is one of the most valuable automobile brands but due to recent circumstances like recalls, customers are now thinking twice before purchasing a Toyota car. Thus Toyota marketing strategy will play an important role in regaining its brand image. We suggest three main factors where Toyota’s marketing efforts must be focused. Firstly, by reinforcing Toyota’s brand association with quality. Secondly, by enhancing the brand loyalty with efficient customer service and rewarding the loyal customers. Thirdly by increase the brand awareness by continuing selling the reliable products to customers and creating a strong social presence.
  28. 28. Strategic Technology Management for Toyota 2013 28 University of Strathclyde 10. Conclusion To conclude, presently Toyota has a strong competitive position globally. But major recalls and certain quality issues, global financial crises and intense competition from global rivals have created many challenges for Toyota to maintain its position in the future. Thus strong actions are required to counter these challenges. Focus towards more emerging markets and sustainable mobility will act as the core strategy for their future success. The strategies designed and recommended by us will benefit Toyota to further heighten its competitive position and increase the market share, in turn enhance its position as a global automobile leader and achieve new heights in the future.
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  32. 32. Strategic Technology Management for Toyota 2013 32 University of Strathclyde [30] SCDigest's On-Target e-Magazine . (2011). Supply Chain News: Did Major Supply Chain Disruptions from Natural Disasters in 2011 Really Change Approach to Supply Chain Risk Management?. Available: http://www.scdigest.com/ONTARGET/12-01-19- 1_SUPPLY_CHAIN_RISK.PHP?cid=5401. Last accessed 06/12/2013. [31] BBC ©. (2013). Toyota to recall 885,000 vehicles. Available: http://www.bbc.co.uk/news/business-24576729. Last accessed 06/12/2013. [32]Balanced Scorecard Institute, a Strategy Management Group company. (2013). Balanced Scorecard Basics. Available: https://balancedscorecard.org/Resources/AbouttheBalancedScorecard/tabid/55/Default.as px. Last accessed 06/12/2013. [33]John Wiley & Sons, Inc. (2013). What Is the Balanced Scorecard?. Available: http://www.dummies.com/how-to/content/what-is-the-balanced-scorecard.html. Last accessed 06/12/2013. [34]R. Kaplan e D. Norton.(1996). Balanced Scorecard. Available: http://bscportugal.blogspot.co.uk/. Last accessed 06/12/2013. [35] 2 Phaal, R., Farrukh, C.J.P. and Probert, D.R. (2004), “Customizing roadmapping”, Research Technology Management, 47 (2), pp. 26-37. [36] Galvin, R. (1998), ‘Science roadmaps’, Science, 280 (5365), pp. 803. [37] Robert Phaal and David Probert, 2009 Technology roadmapping: facilitating collaborative research strategy [38] Fundamentals of TechnologRoadmapping Marie L. Garcia Olin H. Bray 1997 [39] Consumer Reports. (2013). 2013 Car Brand Perception Survey. Available: http://www.consumerreports.org/cro/2013/02/2013-car-brand-perception- survey/index.htm. Last accessed 10/12/2013. [40] A Ahmad, A Barato, J wang. (2013). Strategic Management Toyota Case Study. Available: http://www.slideshare.net/ArioArdianto/strategic-management-toyota-case- study-27410014. Last accessed 10/12/2013.
  33. 33. Strategic Technology Management for Toyota 2013 33 University of Strathclyde APPENDIX: (i) Work break down structure
  34. 34. Strategic Technology Management for Toyota 2013 34 University of Strathclyde (ii) Responsibility chart
  35. 35. Strategic Technology Management for Toyota 2013 35 University of Strathclyde Meeting minutes Meeting 1 Minutes: Strategic Technology Management Group 2 Meeting Held: Friday 11th October 2013 Venue: Group Discussion room 2 - Strathclyde Library Time: 6pm Present: PulkitVijayvargiya Gordon Bamford Carolina Santos Pedro Miyake Meeting Agenda: Discuss Brief Put forward suggestions of businesses for report Meeting Highlights: 1. GE - suggested by Giorgos (prior to meeting) 2. Saab - suggested by Gordon 3. Giffgaff - suggested by Carol 4. Toyota - suggested by Pulkit 5. Dell/ Lenovo/ Compaq - suggested by Pedro Set weekly meet: every wednesday 10 am - 11 am Action Items: Next Meeting: Date: Wednesday 16th October 2013 Time: 10am Place: Group Discussion Area - Strathclyde Library
  36. 36. Strategic Technology Management for Toyota 2013 36 University of Strathclyde Meeting 2 Minutes: Strategic Technology Management Group 2 Meeting Held: Wednesday 16th October 2013 Venue: Group Discussion Area - Strathclyde Library Time: 10am Present: PulkitVijayvargiya Gordon Bamford Carolina Santos Pedro Miyake Georgios Christofordis Alexander Clayton Meeting Agenda: Finalize Company Assign Areas to study Meeting Highlights: Decision: TOYOTA Weekly meeting on Wednesday 10 am Future attendance Weekly Plan to complete report Action Items: Pedro: Dropbox Pulkit, Giorgos: Study Boosh report Gordon: Organise Minutes Alex, Carol: Start Research on TOYOTA Next Meeting: Date: 23rd October 2013 Time: 10.00am Place: Group Discussion Area - Strathclyde Library
  37. 37. Strategic Technology Management for Toyota 2013 37 University of Strathclyde Meeting 3 Minutes: Strategic Technology Management Group 2 Meeting Held: Wednesday 23rd October 2013 Venue: Group Discussion Area - Strathclyde Library Time: 10am Present: PulkitVijayvargiya Gordon Bamford Carolina Santos Pedro Miyake Georgios Christofordis Alexander Clayton Meeting Agenda: Discuss Aspects of Toyota Assign sections of report Meeting Highlights: Pulkit, Gordon to work on Roadmaps Georgios to work on introduction and company background Carol and Pedro to work on PESTEL Alex to work on SWOT Action Items: Pedro: Update timetable Pulkit: review Bosch report Alex: Write up meeting minutes Gordon, Carol, Giorgos: continue research Next Meeting: Date: 30th October 2013 Time: 5pm Place: Group Discussion Area - Strathclyde Library
  38. 38. Strategic Technology Management for Toyota 2013 38 University of Strathclyde Meeting 4 Minutes: Strategic Technology Management Group 2 Meeting Held: Wednesday 30th October 2013 Venue: Group Discussion Area - Strathclyde Library Time: 5pm Present: PulkitVijayvargiya Gordon Bamford Carolina Santos Pedro Miyake Georgios Christofordis Meeting Agenda: 1) Check our responsibility chart and check idividual progress as per schedule. 2) To see if any one is facing any problem in the assigned job. 3) To discuss the issue raised by Pedro about selecting only hybrid car strategy. 4) Diciding next meeting agenda. Next Meeting: Date: 6th November 2013 Time: 10.00am Place: Group Discussion Area - Strathclyde Library Meeting 5 Minutes: Strategic Technology Management Group 2 Meeting Held: Wednesday 6th November 2013 Venue: Group Discussion Area - Strathclyde Library Time: 10 AM Present: PulkitVijayvargiya Gordon Bamford Carolina Santos Pedro Miyake Georgios Christofordis Meeting Agenda: 1) Check our responsibility chart and check individual progress as per schedule. 2) To discuss all the individual job finished till date 3) To decide our own strategy to catch up the target dates. 4) Further action required as per the schedule. 5) Decide next meeting agenda. Next Meeting: Date: 29th November 2013 Time: 10.00am Place: Group Discussion Area - Strathclyde Library
  39. 39. Strategic Technology Management for Toyota 2013 39 University of Strathclyde Meeting 6 Minutes: Strategic Technology Management Group 2 Meeting Held: 29th November 2013 Venue: Group Discussion Area - Strathclyde Library Time: 10 AM Present: PulkitVijayvargiya Gordon Bamford Carolina Santos Pedro Miyake Georgios Christofordis Meeting Agenda: Discuss report at this stage Start to produce slides for presentation Arrange next meeting to film sections of video Next Meeting: Date: 9th December 2013 Time: 6:00 PM Place: Group Discussion Area - Strathclyde Library Meeting 7 Minutes: Strategic Technology Management Group 2 Meeting Held: 9th December 2013 Venue: Group Discussion Area - Strathclyde Library Time: 6:00 PM Present: PulkitVijayvargiya Gordon Bamford Carolina Santos Pedro Miyake Georgios Christofordis Alexander Clayton Meeting Agenda: Finish compiling the report Film sections of video Decide who will present at presentation Compile slides Next Meeting: Date: 11th December 2013
  40. 40. Strategic Technology Management for Toyota 2013 40 University of Strathclyde Time: 5:30 PM Place: Group Discussion Area - Strathclyde Library Meeting 8 Minutes: Strategic Technology Management Group 2 Meeting Held: 11th December 2013 Venue: Group Discussion Area - Strathclyde Library Time: 5:30 PM Present: PulkitVijayvargiya Gordon Bamford Meeting Agenda: Compiling report Editing video Next Meeting: Date: 12th December 2013 Time: 10.00am Place: Group Discussion Area - Strathclyde Library Meeting 9 Minutes: Strategic Technology Management Group 2 Meeting Held: 12th December 2013 Venue: Group Discussion Area - Strathclyde Library Time: 10 AM Present: PulkitVijayvargiya Gordon Bamford Carolina Santos Pedro Miyake Georgios Christofordis Alexander Clayton Meeting Agenda: review slides Discuss peer review

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