1

Staffordshire University

Critical Analysis Toyota

Module: Corporate Global Strategy BLB20063 Lecturer: Mr. GOBINATHAN A/L MANICKAM UCMF1208MBA TP: 028679 KAVEH GHOLIZADEGAN Expected Date & Time of submission: 26th JULY 2013

Executive summery

This article delves to analyse Toyotas strategies and finds their specific advantages over rivals, caused by strategies, during three different phases, derived from Ansoff (1958) Matrix, meanwhile, signifying selects internal and external contributed factors in time, 4Cs Framework (Ellis & Williams, 1995). In turn, using Porter 5Forces framework (Porter, 1990) to analyse their industrial strategies from beginning of phase I to current time, and finding how they proceed to become the industry leader. Relatively, article use Porter Generic Strategy (Sumpio, 2013) and Mintzberg Ps (Mintzberg, 1987) in order to asset Toyotas competitive advantages that privileged them in compare with rivals; also to cover corners that Mintzberd believed Porters models cannot investigate in depth enough. As final assessment, the article is inclined to analyse the impacts of Japans Government through Porter Diamond model (Porter, 1990) with considering its different factors during Toyotas evolution, during crisis like WW, yen fall and how they fertilized younglings with IT, since 1981 (Shwalb et.al, 1986).

Table of Contents
Executive summery ............................................................................................................................. 2 Phase I, (1947-1980) ........................................................................................................................... 4 Asnoff-Matrix and 4Cs implication ................................................................................................ 4 Phase II, (1981-2000).......................................................................................................................... 5 Asnoff-Matrix and 4Cs implication ................................................................................................ 5 Phase III, (2000-Current time) ............................................................................................................ 6 Asnoff-Matrix and 4Cs implication ................................................................................................ 6 Analysis of Toyotas strategies ........................................................................................................... 8 Application of Porter 5Forces ............................................................................................................. 8 Application of Porter Generic Strategy ............................................................................................... 9 Application of Mintzberg Framework .............................................................................................. 10 Application of Porter Diamond model .............................................................................................. 10 Japan Factor Condition ................................................................................................................. 10 Japan Demand Condition .............................................................................................................. 12 Related and Supported Industry .................................................................................................... 12 Firm strategy, structure, and rivalry .............................................................................................. 12 Conclusion ........................................................................................................................................ 13 References ......................................................................................................................................... 14 Appendix ........................................................................................................................................... 19 Appendix1. Overseas Manufacturing Companies (Activity by Region) ...................................... 19 Appendix.2 Toyota market shares in US before 2006 .................................................................. 23 Appendix.3 Toyota Global Sales of Passenger Cars, Trucks, and Buses ..................................... 24 Appendix.4 Vehicle Production, Sales, and Exports by Region (By Charts) ............................... 25 Appendix.5 Vehicle Production, Sales and Exports by Region .................................................... 28 Appendix.6 Toyota Chronology ( Activity sort by Years ) .......................................................... 29 Appendix.7 Toyota Sales of Passenger Cars, Trucks, and Buses in Japan ................................... 33

Phase I, (1947-1980)
Asnoff-Matrix and 4Cs implication
In Oct. 1947, Kiichiro Toyodas use small lot size with cheaper vehicles in order to cope with foreign rivals (Toyota Motor Europe, 2008, Wee & Wu, 2009) and Taiichi Ohno visionarys investigation, in 1957 in U.S. automobile market, and Pull System (Strozniak, 2004) and foreseen potential market in this industry; based Toyota mind set to just-in-time and efficiency strategy (Wee & Wu, 2009 & Strozniak, 2004). In other word, Market Driver (external-triggers); customer requirement he observed, lack of resources and suppliers Cost Drivers; continuous cuts of wastes, economy of scale they learnt from Henry Ford in 50s, (Toyota Motor Europe, 2008), and convenient transportation cost (Wee & Wu, 2009), in that time before energy crisis in 1973, Arab oil embargo, and Iranian revolution of 1979 (Shimizu, 2012 & Mouawad, 2008), all urged Toyota to step out of its traditional market. In this phase, Toyota tried to supply customer requirements homogeneously, providing same car for different regions (Toyota-global.com, 2013[b] & Liker, 2004); e.g., Crown which, was quite successful in Japan, failed in U.S market in 1961 as it was small in size for Americans.(Truett, 2007). However, they learnt fast, they started to hire Americans entrepreneurs (Levin, 1992) and extend their R&D facilities in Europe and U.S. (Appendix.1&6). G1-Truck in 1936 was first Toyota exported car (The Official of the Toyota, 2013), however, during WWII, the process hindered. In Oct. 1947, with establishment of first foreign production line in Taiwan, Toyota started its journey of globalization (Appendix.1&6). As Wee & Wu (2009) illustrated, Toyota continued their improvement gradually by their organised min-set (Liker, 2004). Due to internal and external characteristic of that time, Toyotas majority investment focused on finding suppliers in low cost countries in Asia, and mainly in sales and distributions in Europe, Mideast, and U.S. (Appendix.1). During this phase, Toyota had also domestic expansions, however more aligned with production line and manufacturing, nevertheless not as much as they demonstrated their sales and dealerships into other countries (The Official of the Toyota, 2013). Toyota production line did not reach the full maturity until 1975 (Strozniak, 2004). During phase one, Toyota constantly improved its old and nominated new models of cars (Toyota-global.com, 2013)[a]. In general by Ansoff (1958) measurements it assumed, in 40s and 50s,Toyota because of potential, profitable market in rest of the world, took more risk and Developed its Market (Strozniak, 2004 & Warrillow, 2011). After Market Development, in 60s and 70s, they were more inclined to Market Penetration strategy, by mainly distributing rather manufacturing overseas, because of that era environment characteristic (Shimizu, 2012 & Mouawad, 2008) concurrently with Product Development (Toyota-global.com, 2013)[a].

Phase II, (1981-2000)

Asnoff-Matrix and 4Cs implication
In this phase, things had changed and some of them were not in favour of Toyota globalization path, however, they turned the odds in their favour by more outsourcing and changes in their operation and supply chain (Shimizu, 2012 & Strozniak, 2004 & Wee & Wu, 2009). Although, Japans economy was depressing dramatically in this phase, Toyota by its Developing Market strategy and moving its manufactories in to America, Asia (other countries) and Europe (Toyota-global.com, 2012)[a] used the differentiation of yen with Dollar and European currencies as an competitive advantage (Ciferri, 2013). Some of important external factors, which pushed Toyota to next phase of globalization, can be considered as; Oil price reaching the highest trade of $39.50 a barrel (Mouawad, 2008) shipments of parts or completed units becoming highly expensive. Tariffs increment because of intensified trade friction on imported/nonmanufactured domestic units (Train & Winston, 2007). In consideration of Fall of yen and Japan troubled economy between 1984-2000 (Mouawad, 2008 & Ciferri, 2013), and existence of massive growing demands in other countries for low-fuel consumer cars (Train & Winston, 2007), Toyota decided to establish manufacturing lines in different segments, backing up with strategy of proposing specific model for each segment (Toyota-global.com, 2013[b] & Liker, 2004). Toyota had used Reagan attempt on GATT/WTO, Bush and Clinton signing of NAFTA in 1992-1993 (Millercenter.org, 2013) and GATT Uruguay Round (News.bbc.co.uk, 2012), in favour of reducing tariffs and barriers and spread of Free Trade Agreements; to turn North America, to its key market (Appendix.4 & 5) when lots of rivals backed up (will discuss in turn). Additionally they had broaden their cooperation with ASEAN, respectively cut huge amount of supplying parts in Japan after ASEAN currency crises (Toyota Annual Report, 2012). Train & Winston (2007) illustrated that between 1980-2000 Toyotas market shares had increased significantly (Appendix.2), in compare with 70s, when GM had almost 40% of U.S. market, Toyota only had close to 2% (Stewart & Rama, 2007). They even increased their market shares in emerging markets (like India, China and Brazil) by gathering the local needs through localization of product design and research and development, e.g. Qualis in India, Camry in Russia and Coaster in China, Diversification (Stewart & Rama, 2007 & Toyota-global.com, 2012[a]). It simply shows Toyota was Developing Market due to respective demands and preferences of the market (Toyota-global.com, 2012) [a] concurrently Changing/Developing same Products for different markets also (Toyota-global.com, 2013)[a]. Crown, case 1961 (Truett, 2007); lead Toyota to differentiate features of its models e.g. Yaris in two different markets of America and Europe (Toyota-global.com, 2012)[b].

Phase III, (2000-Current time)

Asnoff-Matrix and 4Cs implication
Toyota-global.com, (2012) [b], named this phase Developing phase. As of the end of Dec. 2012, Toyota conducts its business worldwide with 52 overseas manufacturing companies in 27 countries and regions; Toyota vehicles are sold in more than 160 countries and regions (Toyota-global.com, 2012)[a]; the Company have more than 507 subsidiaries and 212 associated companies (NewYork Times, 2013). Their distribution channels were also totally localized (Toyota-global.com, 2012) [b]. Toyota had increased its production capacity from 540,000 vehicles output in 2000 (Toyota Annual Report, 2012), to close to 10 million units in 2013 and became the leader in automobile industry (Muller, 2013). Their Cost Drivers; New Product Development, were significantly high (Table.1). As they were producing close to 10 million units (Muller, 2013), their cost and spending on R&D as percentage of sales, reduced by economic of scale (Economist.com, 2012). The company also reduced transportation cost by cutting shipping parts from Japan, and continued producing more in market countries (Toyota Annual Report, 2012).

Table.1:

Toyota

R&D

spending,

Economist.com,

(2012)

The

Economist

Oct

30th

2012,

17:22,

[Online]

Available

At:

http://www.economist.com/blogs/graphicdetail/2012/10/focus-7 Access At: 23/07/2013

Country Drivers; Trade policies domestically (Toyota Annual Report, 2012) and globally were in favour of Toyota since they had 3rd rank in production in U.S market, in 70s, they had only 2% of U.S. shares (Stewart & Rama, 2007), currently around 16% (Table.2). In addition, they significantly increased their investment in different parts of Europe and Asia in past decades (Toyota-global.com, 2012) [b]. Their considerable investment on R&D and close relationship with their suppliers, not only to produce the best car and bring innovation in automobile industry, but also to expand suppliers capacities (Schrage, 2013) and their cultural background in continuous step by step improvements etc. all enhanced them to remain sustainable in globalisation (Shimizu, 2012 &Stewart & Rama, 2007).

Table. 2 Top 10 Manufacturers in U.S: TheFlaneur, (2013) The Future is Now for Automakers The 2 Reasons Why Tesla is a Strong Outperform The Wallstreetflaneur March 5, 2013 [Online] Available At: http://wallstreetflaneur.com/the-future-is-now-for-automakers-the-2-reasons-why-teslais-a-strong-outperform/ last Access At 23/07/2013

Stewart & Rama, (2007) talked about Toyotas main mind-set, beside principles discussed before, as creating new productions in order to create new market segments. In summing up this phase it can be concluded that Toyota, beside Market Penetration for its old models like its hybrids cars (Tuttle, 2013), also Diversify (Ulrich, 2013 & Bremner, 2013) and Develop Productions, like producing previous favoured cars in each segments and proposing new cars due to new market needs (Toyota Annual Report, 2012).

Analysis of Toyotas strategies

Application of Porter 5Forces
Competitive Rivalry: Nissan established in 1933, and Honda in 1948 have been traditional competitors, however not close threat; by 1962, Toyota reached its 1 million domestic sale (The Official of the Toyota, 2013), total Hondas brand sale, reached 1.5 million units in September 2010, while total worldwide Sale reached 3.5 million-unit in 2010 (Honda-Annual Report, 2012). IN 1976, Toyota produced its 20,000,000th unit in Japan. During 70s, GM had 40% of the U.S. market shares, in compare with Toyotas close to 2% (Stewart & Rama, 2007). Toyota Production System (TPS) based on economic of scale (Toyota Motor Europe, 2008), continuous cutting waste costs, and producing cheaper vehicle (Wee & Wu, 2009) had been one significant-empirical competitive advantage that until now their rivals could not apply (Schrage, 2013). TPS during time became backbone/unique-culture of Toyota and even with change of operation strategy during each phase it remained sustainable and took them forward in all aspects (Strozniak, 2004 & Wee & Wu, 2009 & Schrage, 2013). Through constant TPS (Train & Winston, 2007) they increased their capacity to over 3 million units worldwide in (Appendix.3); as ranked No.31 (GM todays second manufacturer ranked No.70) in 2000, yet they had lot to gain (Muller, 2013). After 2000, they increased their production capacity, hence decreased cost, close to 10 million units per year (Muller, 2013); through different strategy for different regions (Appendix.1), and became industry leader (Domanska, 2013) over GM and VW with 9.2 and 9.1 million respectively (Muller, 2013). Buyer Power: Toyota, had taken different strategies due to diverse tendency of customers in different markets (Toyota Annual Report, 2012). First, localizing its production due to its customers tastes and preferences and second, diversification of its products by different brands/models; Toyota, Lexus, Scion, in order to target more portion of market (Toyota Annual Report, 2012). They signified their brand equity with focusing on providing localized models for each segment, after Crown failure in phase I (Truett, 2007). Furthermore, with establishment of Toyota Motor Sales Co. in 1950, in 1966, Toyota entered into renting car business in order to penetrate the market and increase brand equity (The Official of the Toyota, 2013). Between 1985-2000, Japan continuous crisis (Powell, 2002), global recession, and ASEAN currency crisis in 1997 (Toyota Annual Report, 2012), all had different impacts on Toyotas and industry, supplier and buyer power. Nonetheless, as discussed before, Toyota used simultaneousness of NAFTA in 1992-1993 (Millercenter.org, 2013) GATT/WTO, interest in decreasing tariffs in trades, and weak yen (Ciferri, 2013), to increase its different production-line in globe, especially North America (Apendix.1,4,5). Toyotas U.S. market share slowly, gradually, and steadily goes up to 3% in 1980, to 8% in 1990, and to 9% in 2000 , in 2006, when it rose to 13%, GMs fell to 26%, (Stewart & Rama, 2007) and in 2013 close to 16% with GM fall below 19% (Table.2) more than 2 million units sale (Appandix.4 & 5). New Market Entries: Tariffs and barriers mainly decreased in most developed countries and willingness to free agreements/interactions increased (Millercenter.org, 2013 & News.bbc.co.uk, 2012). However, with past decade merges (Shimizu, 2012 & The Money.CNN, 1998) within industry, and quite high expenses on R&D,

Toyota close to $10 billion, GM around $8 billion, VW less than $8 billion, and Honda more than $6 billion in 2011 (Table.1), threat of new entry is not significant.

Application of Porter Generic Strategy

Focus on Both Differentiation and Low Cost Strategy: Parnell, (2006) discussed about different approaches of value creation based on discrimination or Low Cost strategy in Generic Strategy. Toyota has been creating new market segments with differentiation in products (Stewart & Rama, 2007 & Toyota Annual Report, 2012). However, moving toward outsourcing for production line and suppliers into low cost countries (Strozniak, 2004 & Wee & Wu, 2009), and increasing economy of scale by Toyota during all three phases illustrates their consideration to Cost controlling strategy simultaneously (Shimizu, 2012) which is essential for current business environment (Bordean et.al, 2010). Like their rivals, Volkswagen MQB platform (Frost, et.al, 2013), Toyota is also about presenting some of its models, on new shared part platform TNGA in 2015 (Toyota New Global Architecture), align with both differentiation and cost controlling strategy (Bremner, 2013 & Kubota, 2013). Toyota gradual global market shares increment, (Appendix.2 & 3 & 4 & 5) demonstrate about their sustainability in creating and defending competitive values they have created (Yoo, et.al. 2006), even after 2011, recall, earthquake, and Tsunami (Madslien, 2011) they came back and took the lead in industry. Frost, et.al. (2013) believed VW with its MQB platform is already in lead of industry, nevertheless, Toyota announced, although they are coming late with TNGA however, effort to make more efficient and more attractive products are principles they are trusting in (Kubota, 2013). In fact, a glance at TPS and Toyota history will put Toyota more in favour of being true, but in the other side, it is Germans and VW with their devotions to car; if considering other rivals constant, which is not in line with automobile turbulence industry. However, there is slight difference between Toyota and VW platforms. Toyota is more diversifies in this matter because they are sharing identical parts for different brands and models, while VW is producing identical models in different dimensions. Deep understanding of market is another key advantages/value-creating factor for Toyota as Toyota Annual Report, (2012), illustrated how they have been producing different models for diverse markets and customer levels. In general, as Sumpio (2013) & Yoo, et.al. (2006) discussed from Porters point of view, Toyotas sustainability in both Low Cost and Differentiation policy, positioned them in favour of value creation, maintaining competitive advantages, hence it remained in lead or close to top industry competitors, additionally with more potential to progress and gaining market shares.

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Application of Mintzberg Framework

Toyota had started sale in new markets however, sale actions might not be the real intend of policymakers (Mintzberg, 1987). It can be considered that finding cheaper countries for manufacturing, Japan was in growth condition before its economy crisis in 1985-2000 (Mouawad, 2008), creating strategic windows /opportunities, understanding new markets characteristics/demands, especially after Crown failed in U.S in 1961 (Truett, 2007 & Toyota Annual Report, 2012), were important Toyotas Perspectives or/and Political strategies (Mintzberg, 1987). They have been aligning their plans with their patterns and in their case, it synergetic worked. TPS deliberate strategy, perspective and pattern and their plan for strategic windows bloomed in partly second phase. Their constant being in time, cutting costs, increasing quality, providing impressive customer service, their specific value adding chain (Toyota Annual Report, 2012 & Shimizu, 2012) promoted them from local car manufacturer in Japan, to global industry leader with $3.17 billion net profit in the quarter ended March 31 (The Autonews, 2013). When they cooperated with GM in 80s (appendix.6), it was Toyota and GM both who wanted to observe where market is going (Mintzberg, 1987). However, it was Toyota that pulled itself much far by contrasting in line with its sustainable Low Cost and Differentiation policy. Not to mention, probably fall of yen and decrease in tariffs were not planned by Japanese, nevertheless when they occurred, Toyota made proper actions in line with those opportunities, emergent strategy (Mintzberg, 1987) and Japan government did not try to push currency up with intervenient (porter, 1990). E.g., reaction to producing Hybrid cars after Oil and Energy crisis in 70s and 80s, (Shimizu, 2012 & Mouawad, 2008). The significant aspects of Toyota political strategy and/or strategy perspective (as discussed before) could be investigated in their interactions with customers/suppliers (Schrage, 2013) and Organisation Thinking shared by its members through their intention and actions (Mintzberg, 1987). Toyota had been developed its character throughout history, not quite tender one (Mouawad, 2008 & Madslien, 2011); it does inspire the idea that no matter what crisis or emergent comes in Toyotas way, they turn it to their advantages with Organisational Mind-set in Toyotas way.

Application of Porter Diamond model

Japan Factor Condition
OECD, (2009) PISA Results on Mathematics and Science level of 15-year-olds, indicated that Japan is among the top performing OECD Countries in reading (rank 5), mathematics (rank 4) and science (rank2). Additionally, they reported of increase in discipline, average of study and education importance for parents and government during past years, 9 years of education is compulsory and 45% of students go to university since 1972. More than 1 million teacher with 10% of government budget are improving foundation of

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industries (Shwalb et.al, 1986). Shwalb et.al, (1986) reported Japanese were investing on their younglings with TI from elementary Schools since 1981. OECD (2009) significantly pointed at close relation between high amounts of well-educated parents in Japan in compare with other countries, with amount of childrens tendency to higher/better-performed education. From these facts it can be concluded that education and improving knowledge in Japan had been well attended. Table.3 illustrates that currently Japan has one of the oldest population. However, it can be assumed that during Toyotas phases, Japan had quite convenient population age (main conductive forces), however future grey-age is not good news for countries/firms capabilities (Sibonney, 2012), as working-age population projected to fall by 40% by 2050 (OECD.org 2013).

Table.3

OECD,

(2013)

TOWARDS

NEW

DYNAMIC

GROWTH

JAPAN,

APRIL

2013,

[Online]

Available

at:

http://www.oecd.org/japan/2013.04_Japan_Brochure_EN.pdf Access at: 25/07/2013

Consistent but gradual improvement (Wee & Wu, 2009), and complete attention to people whom dealing with are some Japanese cultures and norms (Levin, 1992). Consequently, it becomes Japanese specific advantage over rivals (Bayley, 2004), were their correspondence to specific market details that only customers wanted, like their specifications about different market interests, Innova; big families in India, Indonesia and Taxi companies, and Fortuna in Middle East (Toyota Annual Report, 2012).

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Japan had been low on mineral resources and it could be considered as one of the reasons to invade Manchuria during WW (Istel, 1942); China and other countries are still their first choice of resources (Bradsher, 2010). This shortage of resources was one of the factors pushed Toyota toward outsourcing and taking first steps of globalization (Toyota Annual Report, 2012). Japanese with their tend to Technology in order to cut wastes and being efficient, solve the labour-market and lack of raw materials problem they had; and as Porter (1990) forecasted, move to U.S even (Appendix.1 & 6), place lots of firms stay away because of costs. In addition, Japan became 10th in Human Development ranking and producing high value goods such as cars (UNDP, 2009).

Japan Demand Condition

Although Toyota had traditional rivals in home, but constantly, they increased their domestic market (Appandix.7), and were able to decrease costs by economy of scale (Shimizu, 2012). Japan pre-war growing economy and large number of customers, were in favour of Toyota and provide a reliable strong footsteps (Shimizu, 2012), which Jin, & Moon 2006 & Porter (1990) considered as important national driving force for industries. Also having an eye for customer needs in other segments, could have been because of having sophisticated customers at home Porter, (1990 & Jin, & Moon 2006) Additionally, because of Japans condition, small houses and hot climate, in line with expensive electricity, developed the mind-set of efficiency through not only Toyota, but the whole country, thus, Light, Thin, Short, Small had been conceptualized way before West (other countries) get to their points (Porter, 1990)

Related and Supported Industry

Toyotas main suppliers are abroad, (except Denso Corp and likes, which are not supplying raw materials) in fact, lack of supplier was one of the driving factors of first phase outsourcing (Toyota Annual Report, 2012); they are dependent on china and other countries (Bradsher, 2010). Nevertheless, lack of resources is another reason for moving their product line offshore, and close to their resources to decrease the cost, and change nation disadvantage to their own competitive advantage (Porter, 19990).

Firm strategy, structure, and rivalry

Cultural structure of decision making in Japanese firms is in line with more research and building proper knowledge; called five why (Levin, 1992). Unlike some countries, that one person makes the last call, Japanese firm five why process questioning, will apply to all propositions and at last, decision will be made by the best answers (Levin, 1992). It can be the reason why firms like Toyota progressed slowly (research needs time), but sustainably constant. In line with Porter (1990) managerial system, efficiency, cutting wastes,

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quality and services enhanced with total focused on customer detail needs, provide Japanese firms unique competitive advantages (Bayley, 2004). With BOJ, policy about ensuring constant discount rates 0.1%, and zero interest rate (Fontes, 2013) Japanese government is encouraging people to invest in market, which lead to increase of cash flow in Japan mature industry and firms like Toyota; with close to $10 billion R&D (Table.1) have better opportunities in improving themselves (Porter, 1990 & Asmussen, et.al, 2009). Another important driver in Japan, is existence of variety of rivals in different industries (porter, 1990), each firm, in order to avoid losing market shares constantly needs improvements, and innovation, aligned with Japanese high tendency to education, nations potential, and quality and development rates will be increased.

Conclusion

During phase one, in line with Japanese culture, Toyota had learned how important customer needs can signify success of companies, after they started their engines to enter the Global-Highway by outsourcing labours and raw materials (Bradsher, 2010). In phase two, they used strategic emerged windows they were betting on, and extended their patrol area into markets no one dare to enter, because of costs, thanks to their competitive advantage built on their disadvantages on shortages, Technologies, Efficiency, Detail Focuses, and Just In Time (Shimizu, 2012). Phase III, despite all national crisis, have been their harvesting season. They use and develop their competitive advantages in time and sustainably. However, aging population is their national concern (Sibonney, 2012). Toyotas Organisational culture/thinking (TPS) have been seeped into individuals, and that is how they can return from dawn to high (like 2011 Japan and Toyota crisis). Integration, knowledge base, and constant improvements are other competitive advantages of this firm. Another significant point for Toyota, which is defer from rivals, is their angle of thinking about their suppliers and customers. The way they are creating value, for their products, mutually add value to their suppliers in turn, reduce customers costs, and fulfil their smallest needs, like animating badges and keys on their cars since second phase (Schrage, 2013). Toyota, powered with affluent culture, Technology, high R&D investment, and worldwide distributing channels, and well-earned acknowledgment about different segments and how to target each, they are ready to shift to next gears soon with injection of new platform to their engine. However, GM and specially VW are getting close with also some different strategies, each originated from their backgrounds.

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19

Appendix

Appendix1. Overseas Manufacturing Companies (Activity by Region)

Available At: http://www.toyota-global.com/company/profile/facilities/worldwide_operations.html

Region / Country North America Canada

Company Name

Start of Operations

Number of Employees

Main Products

Toyota Vehicle Production (1= 1,000units)

Canadian Autoparts Toyota Inc. (CAPTIN) Toyota Motor Manufacturing Canada Inc. (TMMC) Canadian Autoparts Toyota Inc. (CAPTIN) Toyota Motor Manufacturing Canada Inc. (TMMC) TABC, Inc. Toyota Motor Manufacturing, Kentucky, Inc. (TMMK)

Feb. 1985 Nov. 1988 Feb. 1985 Nov. 1988 Nov. 1972 May 1988

329 7,500 329 7,500 486 7,831

Aluminum wheels Corolla, Matrix, RX350, RAV4 Aluminum wheels Corolla, Matrix, RX350, RAV4 Catalytic converters, Steering columns, Stamped parts Camry, Camry Hybrid, Avalon,

519 519 462

U.S.A.

20

Bodine Aluminum, Inc Toyota Motor Manufacturing, West Virginia, Inc. (TMMWV) Toyota Motor Manufacturing, Indiana, Inc. (TMMI) Toyota Motor Manufacturing, Alabama, Inc. (TMMAL) Latin America Argentina Brazil Mexico Venezuela Europe Czech Republic France Toyota Peugeot Citroen Automobile Czech, s.r.o. (TPCA) Toyota Motor Manufacturing France S.A.S. (TMMF) Toyota Motor Manufacturing Poland SP.zo.o. (TMMP) Poland Toyota Motor Industries Poland SP.zo.o. (TMIP) Portugal Turkey U.K Toyota Caetano Portugal, S.A.(TCAP) Toyota Motor Manufacturing Turkey Inc. (TMMT) Toyota Motor Manufacturing (UK) Ltd. (TMUK) Limited Liability Company "TOYOTA MOTOR MANUFACTURING RUSSIA"(TMMR) Associated Vehicle Assemblers Ltd. (AVA) Toyota South Africa Motors (Pty) Ltd. (TSAM) Arab American Vehicle Co. (AAV) Tianjin Fengjin Auto Parts Co., Ltd. (TFAP) Tianjin FAW Toyota Engine Co., Ltd. (TFTE) Tianjin Toyota Forging Co., Ltd. (TTFC) Tianjin FAW Toyota Motor Co., Ltd. (TFTM) FAW Toyota (Changchun) Engine Co., Ltd. (FTCE) Toyota FAW (Tianjin) Dies Toyota (TASA) Argentina S.A.

Jan. 1993 Nov. 1998 Feb. 1999 April 2003

1,036 1,242 5,026 1,036

Venza Engines Aluminum castings Engines, Transmissions Sequoia, Sienna Engines Highlander,

297

March 1997 May 1959 Sept. 2004 Nov. 1981

4,232 5,264 702 1,771

Hilux, Fortuner Corolla Tacoma Truck beds Corolla, Fortuner, Hilux

93 83 56 12

Toyota do Brasil Ltda. (TDB) Toyota Motor Manufacturing de Baja California S .de R.L.de C.V. (TMMBC) Toyota de Venezuela Compania Anonima (TDV)

Feb. 2005 Jan. 2001 April 2002 March 2005 Aug. 1968 Sept. 1994 Aug. 1992

2,425 3,638 1,659 779 190 2,378 3,891

Aygo Yaris (Vitz) Engines, Transmissions Engines Dyna Verso, Auris Avensis, Auris, Auris Hybrid Engines Camry

74 201 77 109

Russia Africa Kenya South Africa Egypt Asia

Dec. 2007

1,652

Aug. 1977 June 1962 2012*

204 6,925 700

Land Cruiser Corolla, Hilux, Fortuner, Dyna Fortuner

150

May 1998 July 1998 Dec. 1998 Oct. 2002 Dec. 2004 Dec. 2004

975 2,080 357 12,749 842 212

Axles, CVJ Engines Forged parts, CVJ Vios, Corolla, Crown, Reiz, RAV4 Engines Stamping dies for

454

China

21

Co., Ltd. (TFTD) GAC Toyota Engine Co., Ltd. (GTE) Sichuan FAW Toyota Motor Co., Ltd. (SFTM) GAC Toyota Motor Co., Ltd. (GTMC)

vehicles Jan. 2005 1,533 Engines Coaster, Land Cruiser, Land Cruiser Prado, Prius Camry, Yaris, Highlander, Camry Hybrid Camry, Corolla, WISH, Vios, Yaris, Innova Engines, Stamped parts Corolla, Innova, Fortuner, Etios Axles, Propeller shafts, Transmissions Innova, Fortuner, Avanza Engines Avanza Dyna Noah Vios, Hilux, Innova, Fortuner, Hiace Engines Corolla, Hilux Innova, Vios Transmissions, Constant velocity joints Prius, Corolla, Camry, Camry Hybrid, Vios, Yaris, Hilux, Fortuner Engines, Propeller shafts Hiace Camry, Corolla, Vios, Innova, Hiace, Fortuner Camry, Camry Hybrid Engines Land Cruiser

Dec. 1999

6,305

44

May 2006

8,073

251 167 192 155 231 23 71 43

Kuozui Motors, Ltd. Taiwan Toyota Kirloskar Private Ltd.(TKM) India Motor

Jan. 1986

4,131

Dec. 1999 July 2002

9,670 1,364

Toyota Kirloskar Auto Parts Private Ltd.(TKAP) PT. Toyota Motor Manufacturing Indonesia (TMMIN) P.T. Astra Daihatsu Motor(ADM) PT. Hino Motors Manufacturing Indonesia(HMMI) PT. Sugity Creatives Assembly Services Sdn. Bhd. (ASSB) Indus Motor Company Ltd.(IMC) Toyota Motor Philippines Corp. (TMP) Toyota Autoparts Philippines Inc. (TAP) Toyota Motor Thailand Co., Ltd. (TMT)

May 1970 2003* 2009*

6,717 10,156 2,369 1,966

Indonesia

Malaysia Pakistan

Feb. 1968 March 1993 Feb. 1989 Sept. 1992 Feb. 1964 July 1989

3,013 2,305 1,817 1,468 17,344 3,225 313

Philippines

31
881 22

Thailand

Vietnam Oceania Australia Middle East Bangladesh

Siam Toyota Manufacturing Co., Ltd. (STM) Toyota Auto Works Co.,Ltd.(TAW) Toyota Motor Vietnam Co., Ltd.(TMV) Toyota Motor Corporation Australia Ltd. (TMCA)

Aug. 1996

1,670

April 1963

4,183

101 -

Aftab Automobiles Ltd.

June 1982

430

Number of distributors
Region North America Latin America Manufacturing Companies 11 4 Distributors 5 41

22

Europe Africa Asia (excluding Japan) Oceania Middle East Overseas total
As of May 2013

8 3 24 1 1 52

30 44 16 15 16 167

Regional Headquarters
Region/Country Name Toyota Motor North America, Inc. (TMA) Toyota Motor Engineering & Manufacturing North America, Inc. (TEMA) Toyota Motor Sales, U.S.A., Inc. (TMS) Toyota Motor Europe NV/SA (TME) Toyota Motor Asia Pacific Pte Ltd. (TMAP-MS) Toyota Motor Asia Pacific Engineering and Manufacturing Co., Ltd.* (TMAP-EM) Toyota Motor (China) Investment Co., Ltd. (TMCI) Establishment March 1996 April 2006 Oct. 1957 Oct. 2005 July 1990 Activities Liaison, public relations and survey activities throughout North America R&D and overall supervision manufacturing in North America of

North America

U.S.A.

Europe

Belgium Singapore

Asia

Thailand

Sep. 2003

China
Source: Toyota Motor Corporation

July 2001

Supervision of sales operation throughout North America Coordination of Toyota's European business Parts supply to all ASEAN countries and sales support for marketing in Asia Development and evaluation efforts for locally produced vehicles, as well as operational support for Toyota production affiliates in Asia, Oceania and the Middle East Liaison and public relations activities as well as sales of imported vehicles (Lexus) in China

Notes: Toyota vehicle production results are as of December 2012; only includes vehicles (excludes KD and OEM production) for which production exceed 1,000 units. * The first year of contract production.

23

Appendix.2 Toyota market shares in US before 2006

TRAIN, K.E. & WINSTON, C., (2007) VEHICLE CHOICE BEHAVIOR AND THE DECLINING MARKET SHARE OF U.S. AUTOMAKERS INTERNATIONAL ECONOMIC REVIEW, Vol. 48, No. 4, November 2007, pp. 1469 -1496
BIG THREE AND SELECTED FOREIGN AUTOMAKERS MARKET SHARE OF VEHICLE SALES IN THE

U.S.

Year 1970 1975 1980 1985 1990 1995 2000 2005 1970 1975 1980 1985 1990 1995 2000 2005 1970 1975 1980 1985 1990 1995 2000 2005

General Motors

Ford

Chrysler (Domestic) 16 11 9 11 9 9 8 9 9 15 11 14 14 16 15 18 15 12 9 12 11 12 12 14

Toyota 2 3 6 5 8 9 11 16 1 2 6 7 6 5 8 11 2 3 6 6 8 7 9 13

Market share of cars (%) 40 26 44 23 46 17 43 19 36 21 31 21 28 17 22 13 Market share of light trucks (%) 38 38 42 31 39 33 36 27 35 30 31 33 28 28 30 23 Market share of cars and light trucks (%) 40 28 43 25 45 20 41 21 35 24 31 26 28 23 26 19

Hond a 0 1 4 5 9 9 10 11 0 0 0 0 0 1 3 6 0 1 3 4 6 5 7 9

NOTES: Light trucks include SUVs, minivans, and pickups weighing over 6000 pounds. AMC/Jeep was acquired by Chrysler in 1987, but is not included in Chryslers share to maintain consistency over time. S: Automotive News Market Data Book (19802006).

24

Appendix.3 Toyota Global Sales of Passenger Cars, Trucks, and Buses

Toyota-global.com, (2013) [b] TOYOTA MOTOR CORPORATION GLOBAL WEBSITE | 75 Years of TOYOTA | Sales Volume | Sales Volume Overseas. [Online] Available at: http://www.toyotaglobal.com/company/history_of_toyota/75years/data/automotive_business/sales/sales_volume/overseas/index. html Accessed: 23 Jul 2013

Unit=one vehicle; Market share %

Year 1975 1976 1977 1978 1979 1980 1981 1982 1983 Sales overseas 900,808 1,071,980 1,399,581 1,375,054 1,449,313 1,845,955 1,848,778 1,823,241 1,822,852 Passenger cars 652,643 775,921 974,404 909,220 964,691 1,229,877 1,197,086 1,164,432 1,154,559 Trucks & buses 248,165 296,059 425,177 465,834 484,622 616,078 651,692 658,809 668,293 Passenger cars 72 72 70 66 67 67 65 64 63 Trucks & buses 38 45 52 48 47 55 55 54 53

25

1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

1,925,893 2,139,361 2,045,943 1,958,650 2,067,572 2,106,517 2,370,451 2,354,129 2,411,977 2,440,429 2,481,640 2,496,206 2,621,768 2,837,614 2,929,952 3,058,060 3,382,642 3,546,701 3,838,296 4,354,506 4,948,754 5,554,128 6,229,327 6,841,933 6,526,059 5,604,043 5,961,581 5,895,877

1,125,645 1,234,391 1,243,946 1,242,945 1,343,199 1,384,355 1,575,602 1,540,930 1,588,385 1,585,078 1,553,348 1,572,619 1,615,605 1,746,277 1,812,619 1,864,258 2,054,170 2,014,919 2,222,094 2,510,625 2,860,167 3,257,929 3,721,520 4,105,413 3,984,433 3,434,343 3,274,663 3,231,476

800,248 904,970 801,997 715,705 724,373 722,162 794,849 813,199 823,592 855,351 928,292 923,587 1,006,163 1,091,337 1,117,333 1,193,802 1,328,472 1,531,782 1,616,202 1,843,881 2,088,587 2,296,199 2,507,807 2,736,520 2,541,626 2,169,700 2,686,918 2,664,401

58 58 61 63 65 66 66 65 66 65 63 63 62 62 62 61 61 57 58 58 58 59 60 60 61 61 55 55

54 56 54 51 49 48 49 50 52 54 55 55 55 59 63 65 66 67 70 72 74 76 79 81 82 80 79 83

* Units include both Toyota and Lexus sales.

Appendix.4 Vehicle Production, Sales, and Exports by Region (By Charts)

North America

26

Latin America

Europe

Africa

27

Asia

28

Oceania

Appendix.5 Vehicle Production, Sales and Exports by Region

Source: Toyota Motor Corporation, Available at: http://www.toyotaglobal.com/company/profile/figures/vehicle_production_sales_and_exports_by_region.html

29

Appendix.6 Toyota Chronology ( Activity sort by Years )

30

31

32

33

Appendix.7 Toyota Sales of Passenger Cars, Trucks, and Buses in Japan

Available at:
http://www.toyota-global.com/company/history_of_toyota/75years/data/automotive_business/sales/sales_volume/japan/1950.html

Number of Registered Vehicles and Market Share

1950-1975
Unit=one vehicle; Market share %
Year 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963 Passenger cars 548 1,718 2,102 3,530 4,217 7,055 11,938 18,666 20,728 27,876 39,011 65,506 75,592 118,614 Trucks & buses 8,680 8,408 12,262 11,353 16,551 15,185 31,613 52,742 54,512 62,268 88,433 110,737 131,959 168,619 Total 9,228 10,126 14,364 14,883 20,768 22,240 43,551 71,408 75,240 90,144 127,444 176,243 207,551 287,233 Market share (excluding mini vehicles) 34.4 35.9 38.6 30.5 33.3 34.5 41.5 44.7 44.2 38.9 37.0 35.4 35.2 36.4

34

1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975

158,326 197,679 245,517 354,435 452,622 637,348 706,962 780,802 927,085 1,073,217 885,114 1,065,943

210,874 212,171 237,474 300,306 354,590 403,596 403,486 388,648 439,542 491,484 381,298 376,576

369,200 409,850 482,991 654,741 807,212 1,040,944 1,110,448 1,169,450 1,366,627 1,564,701 1,266,412 1,442,519

35.7 35.1 32.9 34.0 35.4 38.4 39.0 40.2 39.9 39.2 40.4 38.7

Source: "APPENDICES, TOYOTA A HISTORY OF THE FIRST 50 YEARS" (for the data before 1976)

1976-1990
Unit=one vehicle; Market share %
Year 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 Passenger cars 898,673 892,501 1,081,919 1,142,426 1,064,241 1,098,088 1,173,850 1,247,610 1,274,910 1,322,893 1,382,609 1,453,833 1,633,227 1,760,966 1,893,462 RVs 29,124 47,727 62,337 89,483 101,496 95,960 77,371 81,574 83,031 95,558 112,210 132,277 158,081 207,477 262,735 Total of all passenger Trucks & cars & RVs buses 927,797 378,060 940,228 363,071 1,144,256 368,768 1,231,909 379,358 1,165,737 328,733 1,194,048 298,756 1,251,221 272,565 1,329,184 269,454 1,357,941 266,068 1,418,451 265,043 1,494,819 259,165 1,586,110 289,601 1,791,308 328,965 1,968,443 340,420 2,156,197 348,094 Total 1,305,857 1,303,299 1,513,024 1,611,267 1,494,470 1,492,804 1,523,786 1,598,638 1,624,009 1,683,494 1,753,984 1,875,711 2,120,273 2,308,863 2,504,291 Market share Market share (excluding mini vehicles) (including mini vehicles) 37.6 31.8 37.0 31.1 38.2 32.3 37.5 31.3 37.3 29.8 38.3 29.1 38.8 29.0 40.2 29.7 40.8 29.9 41.8 30.3 42.8 30.7 43.2 31.2 42.7 31.5 41.5 31.8 41.9 32.2

1991-2011
Unit=one vehicle; Market share %
Year 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Passenger cars 1,728,403 1,576,484 1,473,053 1,426,385 1,403,594 1,346,166 1,245,681 1,062,224 1,077,447 1,160,469 1,091,858 1,028,887 899,333 968,085 942,717 922,705 906,092 841,427 799,974 972,620 709,245 RVs 285,212 348,466 324,242 351,008 373,572 503,591 501,232 450,522 403,227 425,127 443,916 493,546 629,813 609,836 575,832 569,060 503,753 475,932 466,100 475,852 370,443 Total of all passenger Trucks & cars & RVs buses 2,013,615 341,741 1,924,950 306,167 1,797,295 268,392 1,777,393 263,177 1,777,166 282,959 1,849,757 285,519 1,746,913 259,036 1,512,746 198,291 1,480,674 183,726 1,585,596 186,065 1,535,774 179,378 1,522,433 158,046 1,529,146 186,762 1,577,921 181,703 1,518,549 195,656 1,491,765 200,488 1,409,845 177,490 1,317,359 152,684 1,266,074 109,435 1,448,472 117,685 1,079,688 121,288 Total 2,355,356 2,231,117 2,065,687 2,040,570 2,060,125 2,135,276 2,005,949 1,711,037 1,664,400 1,771,661 1,715,152 1,680,479 1,715,908 1,759,624 1,714,205 1,692,253 1,587,335 1,470,043 1,375,509 1,566,157 1,200,976 Market share (excluding minivehicles) 41.0 41.8 42.3 41.5 40.0 39.7 39.2 39.4 41.7 43.2 42.2 42.4 42.6 44.4 43.6 45.5 46.2 45.7 47.1 48.5 44.4 Market share (including minivehicles) 31.3 32.1 31.9 31.3 30.0 30.2 29.8 29.1 28.4 29.7 29.0 29.0 29.4 30.1 29.3 29.5 29.6 28.9 29.8 31.6 28.5

*Units include both Toyota and Lexus sales.

35

*2011 includes sales of 6,308 mini vehicle units.