1. VALUE CHAIN
AND
COMPETITIVE ADVANTAGE OF TOYOTA
IKA INDAH UTARI
2244.12.143
ikaindahutari90@yahoo.com

2. Toyota
Toyota Motor Corporation (トヨタ自動車株式会社Toyota Jidōsha KK?
, IPA: [toꜜjota])
/tɔ ɪ ˈoʊ tə/, abbreviated TMC, is a Japanese multinationalautomaker headquartered in
Toyota, Aichi, Japan. In 2010, Toyota employed 325,905 people worldwide, and was the
third-largest automobile manufacturer in 2011 by production behind General Motors and
Volkswagen Group. Toyota is the eleventh-largest company in the world by revenue. In July
2012, the company reported it had manufactured its 200-millionth vehicle
The company was founded by Kiichiro Toyoda in 1937 as a spinoff from his father's
company Toyota Industries to create automobiles. Three years earlier, in 1934, while still a
department of Toyota Industries, it created its first product, the Type A engine, and, in 1936,
its first passenger car, the Toyota AA. Toyota Motor Corporation group companies are
Toyota (including the Scion brand), Lexus, Daihatsu, and Hino Motors, along with several
"nonautomotive" companies. TMC is part of the Toyota group, one of the largest
conglomerates in the world.
Corporate governance
Toyota is headquartered in Toyota City, Aichi. The main headquarters of Toyota is located in
a three story building in Toyota. As of 2006 the head office has the "Toyopet" Toyota logo
and the words "Toyota Motor". The Toyota Technical Center, a 14-story building, and the
Honsha plant, Toyota's second plant engaging in mass production and formerly named the
Koromo plant, are adjacent to one another in a location near the headquarters. Vinod Jacob
from The Hindu described the main headquarters building as "modest". In 2013 company
head Akio Toyoda reported that it had difficulties retaining foreign employees at the
headquarters due to the lack of amenities in Toyota.
Its Tokyo office is located in Bunkyo, Tokyo. Its Nagoya office is located in Nakamura-ku,
Nagoya. In addition to manufacturing automobiles, Toyota provides financial servicesthrough
its Toyota Financial Servicesdivision, and also builds robots.
Akio Toyoda, CEO of Toyota, at the annual results press conference, May 11, 2011

3. Toyota's global network:
Red - Japan
Green - Official dealership(s) present.
Blue - Localized manufacturing plant(s)
Light Blue - Regional headquarters (HQ)
Dark Blue - Regional headquarters (HQ) and localized manufacturing plants
Typical breakdown of sales by region
President of Toyota Motor Company:
Rizaburo Toyoda (1937–1941)
Kiichiro Toyoda (1941–1950)
Taizo Ishida (1950–1961)
Fukio Nakagawa (1961–1967)
Eiji Toyoda (1967–1981)
In 1981, Toyota Motor Co., Ltd. announced plans to merge with its sales entity Toyota Motor
Sales Co., Ltd. which existed as separate companies since 1950 as a prerequisite for
reconstruction in postwar Japan. Shoichiro Toyoda took the helm at Toyota Motor Sales in
preparation for the consummation of the merger which would occur in 1982 with Shoichiro
succeeding his uncle Eiji as the President of the combined organization, now known as
Toyota Motor Corporation.
President of Toyota Motor Corporation:
Eiji Toyoda (1981)
Shoichiro Toyoda (1982–1992)
CEO of Toyota Motor Corporation:
Dr. Tatsuro Toyoda (1992–1995)

4. Hiroshi Okuda (1995–1999)
Fujio Cho (1999–2005)
Katsuaki Watanabe (2005–2009)
Akio Toyoda (2009–present)
Chairman of Toyota Motor Corporation:
Shoichiro Toyoda (1992–1999)
Hiroshi Okuda (1999–2006)
Fujio Cho(2006–present)
History
Toyota was started in 1933 as a division of Toyoda Automatic Loom Works devoted to the
production of automobiles under the direction of the founder's son, Kiichiro Toyoda. Its first
vehicles were the passenger car and the in 1935. The Toyota Motor Co. was established as an
independent company in 1937. In 2008, Toyota's sales surpassed General Motors, making
Toyota number one in the world.
Mass production of Toyoda automated loom, displayed at the Toyota Museum in Nagakute-
cho, Aichi-gun, Aichi Pref. Japan
In 1924, Sakichi Toyoda invented the Toyoda Model G Automatic Loom. The principle of
Jidoka, which means the machine stops itself when a problem occurs, became later a part of
the Toyota Production System. Looms were built on a small production line. In 1929, the
patent for the automatic loom was sold to a British company, generating the starting capital
for the automobile development.
Toyoda Standard Sedan AA 1936

5. Vehicles were originally sold under the name "Toyoda" (トヨダ), from the family name of
the company's founder, Kiichirō Toyoda. In April 1936, Toyoda's first passenger car, the
Model AA, was completed. The sales price was 3,350 yen, 400 yen cheaper than Ford or GM
cars.
House of Toyota founder Kiichiro Toyoda, near Toyota City
In September 1936, the company ran a public competition to design a new logo. Of 27,000
entries, the winning entry was the three Japanese katakana letters for "Toyoda" in a circle.
But Risaburō Toyoda, who had married into the family and was not born with that name,
preferred "Toyota" (トヨタ) because it took eight brush strokes (a lucky number) to write in
Japanese, was visually simpler (leaving off the diacritic at the end) and with a
voicelessconsonant instead of a voiced one (voiced consonants are considered to have a
"murky" or "muddy" sound compared to voiceless consonants, which are "clear").
Inside the house of Toyota founder Kiichiro Toyoda, near Toyota City
Since "Toyoda" literally means "fertile rice paddies", changing the name also prevented the
company from being associated with old-fashioned farming. The newly formed word was
trademarked and the company was registered in August 1937 as the "Toyota Motor
Company".
First-generation Toyopet Crown Model RSD (1955/1 – 1958/10)

6. Toyota at the Rally Dakar, 1992
From September 1947, Toyota's small-sized vehicles were sold under the name "Toyopet"
(トヨペット). The first vehicle sold under this name was the Toyopet SA, but it also
included vehicles such as the Toyopet SB light truck, Toyopet Stout light truck, Toyopet
Crown, Toyopet Master, and the Toyopet Corona. The word "Toyopet (Japanese article)" was
a nickname given to the Toyota SA due to its small size, as the result of a naming contest the
Toyota Company organized in 1947. However, when Toyota eventually entered the
American market in 1957 with the Crown, the name was not well received due to
connotations of toys and pets.[28]
The name was soon dropped for the American market, but
continued in other markets until the mid-1960s.
By the early 1960s, the US had begun placing stiff import tariffs on certain vehicles. The
chicken tax of 1964 placed a 25% tax on imported light trucks.[29]
In response to the tariff,
Toyota, Nissan Motor Co. and Honda Motor Co. began building plants in the US by the early
1980s.[29]
With over 30 million sold, the Corolla is one of the most popular and best selling cars in the
world.
Toyota received its first Japanese Quality Control Award at the start of the 1980s and began
participating in a wide variety of motorsports. Due to the 1973 oil crisis, consumers in the
lucrative US market began turning to small cars with better fuel economy. American car
manufacturers had considered small economy cars to be an "entry level" product, and their
small vehicles employed a low level of quality to keep the price low.
In 1982, the Toyota Motor Company and Toyota Motor Sales merged into one company, the
Toyota Motor Corporation. Two years later, Toyota entered into a joint venture with General
Motors called the New United Motor Manufacturing, Inc, NUMMI, operating an automobile-
manufacturing plant in Fremont, California. The factory was an old General Motors plant that
had been closed for two years. Toyota then started to establish new brands at the end of the
1980s, with the launch of their luxury division Lexus in 1989.

7. In the 1990s, Toyota began to branch out from producing mostly compact cars by adding
many larger and more luxurious vehicles to its lineup, including a full-sized pickup, the T100
(and later the Tundra); several lines of SUVs; a sport version of the Camry, known as the
Camry Solara; and the Scion brand, a group of several affordable, yet sporty, automobiles
targeted specifically to young adults. Toyota also began production of the world's best-selling
hybrid car, the Prius, in 1997.
With a major presence in Europe, due to the success of Toyota Team Europe, the corporation
decided to set up Toyota Motor Europe Marketing and Engineering, TMME, to help market
vehicles in the continent. Two years later, Toyota set up a base in the United Kingdom,
TMUK, as the company's cars had become very popular among British drivers. Bases in
Indiana, Virginia, and Tianjin were also set up. In 1999, the company decided to list itself on
the New York and London Stock Exchanges.
In 2001, Toyota's Toyo Trust and Banking merged with two other banks to form UFJ Bank,
which was accused of corruption by Japan's government for making bad loans to alleged
Yakuza crime syndicates with executives accused of blocking Financial Service Agency
inspections.[30]
The UFJ was listed among Fortune Magazine's largest money-losing
corporations in the world, with Toyota's chairman serving as a director.[31]
At the time, the
UFJ was one of the largest shareholders of Toyota. As a result of Japan's banking crisis, UFJ
merged with the Bank of Tokyo-Mitsubishi to become the Mitsubishi UFJ Financial Group.
In 2002, Toyota managed to enter a Formula One works team and establish joint ventures
with French motoring companies Citroën and Peugeot a year after Toyota started producing
cars in France.
Toyota ranked eighth on Forbes 2000 list of the world's leading companies for the year
2005[32]
but slid to 55 for 2011.[33]
The company was number one in global automobile sales
for the first quarter of 2008.[34]
In 2007, Toyota released an update of its full-size truck, the Tundra, produced in two
American factories, one in Texas and one in Indiana. "Motor Trend" named the Tundra
"Truck of the Year," and the 2007 Toyota Camry "Car of the Year" for 2007. It also began
the construction of two new factories, one to build the RAV4 in Woodstock, Ontario, Canada,
and the other to build the Toyota Prius in Blue Springs, Mississippi, USA. This plant was
originally intended to build the Toyota Highlander, but Toyota decided to use the plant in
Princeton, Indiana, USA, instead. The company has also found recent success with its smaller
models—the Corolla and Yaris—as gasoline prices have risen rapidly in the last few years.
From November 2009 through 2010, Toyota recalled more than 9 million cars and trucks
worldwide in several recall campaigns, and briefly halted production and sales.[35]
. Toyota
initiated the recalls, the first two with the assistance of the U.S. National Highway Traffic
Safety Administration (NHTSA), after reports that several vehicles experienced unintended
acceleration.
Main article: 2009–2010 Toyota vehicle recalls
In 2011, Toyota, along with large parts of the Japanese automotive industry, suffered from a
series of natural disasters. The 2011 Tōhoku earthquake and tsunami led to a severe
disruption of the supplier base and a drop in production and exports. [36][37]
Severe flooding

8. during the 2011 monsoon season in Thailand affected Japanese automakers that had chosen
Thailand as a production base. Toyota estimated to have lost production of 150,000 units to
the tsunami and production of 240,000 units to the floods.
In October 2012, Toyota announced a recall of 7.43 million vehicles worldwide to fix
malfunctioning power window switches, the largest recall since that of Ford Motor Company
in 1996. The move came after a series of recalls between 2009 and 2011 in which it pulled
back around 10 million recalls amidst claims of faulty mechanics.[38]
Company strategy
Toyota's management philosophy has evolved from the company's origins and has been
reflected in the terms "Lean Manufacturing" and Just In Time Production, which it was
instrumental in developing.[48]
Toyota's managerial values and business methods are known
collectively as the Toyota Way.
In April 2001, Toyota adopted the "Toyota Way 2001", an expression of values and conduct
guidelines that all Toyota employees should embrace. Under the two headings of Respect for
People and Continuous Improvement, Toyota summarizes its values and conduct
guidelines with the following five principles:[49]
Challenge
Kaizen (improvement)
Genchi genbutsu (go and see)
Respect
Teamwork
According to external observers, the Toyota Way has four components:[50]
1. Long-term thinking as a basis for management decisions
2. A process for problem-solving
3. Adding value to the organization by developing its people
4. Recognizing that continuously solving root problems drives organizational learning
The Toyota Way incorporates the Toyota Production System.
COMPETIIVE ADVANTAGE
Cost Leadership
I am constantly coming up with situations where people just don’t understand the cost
leadership strategy. People tend to think of it as price competitiveness, which immediately
introduces the concept of price wars. Cost leadership can assist people to be price
competitive, but it has nothing to do with price competition. It has everything to do with
being able to produce a product of similar quality to that of a competitor at a lower cost.

9. The other day a guy told me how he had finally bought out a competitor that had been a
constant pain in the side to his business. When he bought it with the intention of integrating it
into his own business he discovered that the competitor was more profitable than his
company.
The reason was that it was able to produce the same or similar products more cheaply. It was
able to charge the same prices as its competitors, but the margins were better because of the
fact that the products cost less to produce.
So, this guy pays a premium for the competitor with the intention of integrating the business
into his own.
I suggested to this businessman that perhaps if he had understood the concept of cost
leadership and had focused his production around that concept, he might have been more
competitive with a greater market share with the result that he may not have had to buy one
of his competitors. It suddenly dawned on him that cost leadership was a powerful
managerial tool that enables you to get on top of your competitor. Not only do you become
more profitable but you are not at a competitive disadvantage.
Another aspect of cost leadership is its compounding effect. It is just like compound interest.
Every time you produce something at a cost lower than that of your competitor, it is money in
the bank and gradually the financial benefits accumulate – so that years of cost leadership end
up with giving you a serious bank account, which enhances your competitive ability.
However, you have to be aware of the pitfalls. Enter the bean counter who calculates the
benefits of cost cutting to meet short-term goals. The moment short-term cost cutters come on
the scene, a number of bad things happen. The first and most serious is that good people
leave and generally go to the opposition. The next thing is that attempts are made to lengthen
the productive life of equipment. Once again, this has short-term benefits but damages the
longer-term competitiveness of the business. Maintenance and product quality issues start to
come into play and more time is spent in addressing these issues than on simply getting the
product out the door.
Cost leadership involves the development of systemic processes that eliminate waste, involve
the passion of the worker in the enterprise and concentrates on constant improvement. Over
time, each little improvement compounds and all of the little improvements in process
aggregate to massive competitive advantages.

10. Cost leadership is built around understanding the value chain and constantly identifying
elements within that chain where improvements can be achieved. GE and Motorola went
heavily into Six Sigma. The Japanese put more emphasis on staff feedback (it is said by
Toyota in Japan that at their Nagoya factory, they receive 500,000 improvement suggestions
a year from their employees and act on most of them).
Toyota is a fantastic story of cost leadership. We are constantly hearing about how the
Chinese can produce manufactured goods cheaper than most people. Well, the Chinese car
manufacturer Denway Motors, which made the ranks of Forbes 2000 in 2004, has now fallen
out of that esteemed company. One of the main reasons is that it can’t compete with Toyota
because Toyota can produce good cars at a cost lower than its Chinese competitor.
So, there you go, just think about cost leadership and give yourself a mark as to how you are
going. It you aren’t travelling well, you might have to spend a lot of money to acquire your
competitor. Then, guess what! You might find that the combined entity still has the same cost
structure as your old uncompetitive model.
Toyota Differentiation Strategy
Toyota Motor Corp. was the largest automaker in the world as of 2011, and a key component
of the company's success was a product differentiation strategy that included introducing a
highly efficient manufacturing model to increase the performance of its vehicles and offer car
buyers increased value.
1. Background
o Toyota was able to achieve a leadership position in the North American auto
manufacturing market, surpassing General Motors and others, by focusing on
continuously finding ways to reduce production costs. The company also
optimized its processes to accelerate the various phases of production -- from
initial design to production -- so that it could introduce new models faster than
its competitors.
2. Toyota Production System
o The Toyota Production System, introduced in the 1960s, became a model for
vehicle manufacturing, though other automakers struggled to emulate the
system. Based on the concepts of just-in-time production, the TPS built
vehicles based on immediate market demands rather than in anticipation of
future possible demands. This was designed to cut costs and eliminate waste.
o
3. Considerations
o Another key part of Toyota's differentiation strategy is the fact that the
company was able to produce vehicles for many different market segments
and price ranges. In the sport utility vehicle class alone, Toyota developed the
Land Cruiser, 4Runner, Rav4 and Sequoia, each tailored to different price
ranges.

11. TOYOTA INNOVATION STRATEGY
Characteristics of Oil Alternative Fuels
Electricity, hydrogen, biodiesel and natural gas are good alternatives for fossil fuel, but each
source has their own disadvantages. The left figure shows compares the energy density of
each alternative
fuel.
Even with the latest lithium ion battery technology, only 1/50 of the energy required by
gasoline is used. Although powering a motor with electricity is much more efficient than an
internal combustion engine, liquid fuels such as gasoline are still advantageous because of
their high volume in energy density. The figure below shows the difference in energy density
between electricity and gasoline but does not
indicate correlation in cruising range.
The cost of batteries also poses a major challenge.
In an effort to attain the 2030 Innovative
Technology Plan issued by Japan's Ministry of Economy, Trade and Industry, we have barely
reached the status to be at a competitive level with gasoline powered vehicles.

12. Toyota takes measures in environmental issues
surrounding vehicles
For more improvements in efficiency, Toyota proactively manages powertrain efficiency,
reduces vehicle load, and controls energy management by integration of fuel-saving
technologies such as charge control, idling stop etc..
In Pursuit of the Ultimate Eco-car
Toyota has a long history of continuous improvement when it comes to conventional engines,
including lean-burn gasoline engines, direct injection gasoline engines and common rail
direct-injection diesel engines, as well as engines modified to use alternative fuels, such as
compressed natural gas (CNG) or electricity (for Electric Vehicle). In December 2002, we
launched limited sales of the Toyota FCHV, a Fuel Cell Vehicle that runs on high-pressure
hydrogen.
Engineers may disagree about which fuel or car propulsion system is best, but they do agree
that hybrid technology is the core for eco-car development. We develop these key
technologies in-house to reduce costs and rapidly commercialize their application.

14. Find out more about Toyota's eco-cars:
Hybrid Vehicle
Plug-in Hybrid Vehicle
Electric Vehicle
Fuel Cell Vehicle
Toyota Operational Effectiveness Is Not Strategy
For almost two decades, managers have been learning to play by a new set of rules.
Companies must be flexible to respond rapidly to competitive and market changes. They
must benchmark continuously to achieve best practice. They must outsource aggressively to
gain efficiencies. And they must nurture a few core competencies in race to stay ahead of
rivals.
Positioning—once the heart of strategy—is rejected as too static for today’s dynamic markets
and changing technologies. According to the new dogma, rivals can quickly copy any market
position, and competitive advantage is, at best, temporary.
But those beliefs are dangerous half-truths, and they are leading more and more companies
down the path of mutually destructive competition. True, some barriers to competition are
falling as regulation eases and markets become global. True, companies have properly
invested energy in becoming leaner and more nimble. In many industries, however, what
some call hypercompetition is a self-inflicted wound, not the inevitable outcome of a
changing paradigm of competition.
The root of the problem is the failure to distinguish between operational effectiveness and
strategy. The quest for productivity, quality, and speed has spawned a remarkable number of
management tools and techniques: total quality management, benchmarking, time-based
competition, outsourcing, partnering, reengineering, change management. Although the
resulting operational improvements have often been dramatic, many companies have been
frustrated by their inability to translate those gains into sustainable profitability. And bit by
bit, almost imperceptibly, management tools have taken the place of strategy. As managers
push to improve on all fronts, they move farther away from viable competitive positions.
Operational Effectiveness: Necessary but Not Sufficient
Operational effectiveness and strategy are both essential to superior performance, which,
after all, is the primary goal of any enterprise. But they work in very different ways.
A company can outperform rivals only if it can establish a difference that it can preserve. It
must deliver greater value to customers or create comparable value at a lower cost, or do
both. The arithmetic of superior profitability then follows: delivering greater value allows a
company to charge higher average unit prices; greater efficiency results in lower average unit
costs.
Ultimately, all differences between companies in cost or price derive from the hundreds of
activities required to create, produce, sell, and deliver their products or services, such as

15. calling on customers, assembling final products, and training employees. Cost is generated by
performing activities, and cost advantage arises from performing particular activities more
efficiently than competitors. Similarly, differentiation arises from both the choice of activities
and how they are performed. Activities, then are the basic units of competitive advantage.
Overall advantage or disadvantage results from all a company’s activities, not only a few.1
Operational effectiveness (OE) means performing similar activities better than rivals perform
them. Operational effectiveness includes but is not limited to efficiency. It refers to any
number of practices that allow a company to better utilize its inputs by, for example, reducing
defects in products or developing better products faster. In contrast, strategic positioning
means performing different activities from rivals’ or performing similar activities in different
ways.
Principle Of Toyota Management
There is a question of uptake of the principles now that Toyota has production operations in
many different countries around the world. As a New York Times article notes, while the
corporate culture may have been easily disseminated by word of mouth when Toyota
manufacturing was only in Japan, with worldwide production, many different cultures must
be taken into account. Concepts such as “mutual ownership of problems,” or “genchi
genbutsu,” (solving problems at the source instead of behind desks), and the “kaizen mind,”
(an unending sense of crisis behind the company’s constant drive to improve), may be
unfamiliar to North Americans and people of other cultures. A recent increase in vehicle
recalls may be due, in part, to "a failure by Toyota to spread its obsession for craftsmanship
among its growing ranks of overseas factory workers and managers." Toyota is attempting
to address these needs by establishing training institutes in the United States and in
Thailand.[6

16. COMPETITIVE ADVANTAGE MY SELF
Salah satu competitive advantage saya adalah membuat beraneka macam kue.
Sejak SMA saya sudah mendapat berbagai orderan berbagai macam kue khusunya kue ulang
tahun. Ke depannya saya akan mencoba memasarkannkya ke toko – toko kue.

17. REFERENCE
http://en.wikipedia.org/wiki/Competitive_advantage#Cost_Leadership_Strategy
http://www.smartcompany.com.au/the-growth-doctor/029209-cost-leadership.html
http://www.ehow.com/facts_7957025_toyota-differentiation-strategy.html
http://www.toyota-
global.com/innovation/environmental_technology/strategy_environmental_tech.html
http://hbr.org/1996/11/what-is-strategy