Toyota

1. As Doug Friesen, what would you do to address the seat problem? Where would you focus your attention and solution efforts? Why? The two major causes of seat defects originate with KFS, relating to material flaws and missing parts. The seat bolster issue is a distant third. As KFS is the responsible party the situation needs to be addressed at their site. Using the traditional TMC first principle of ‘let’s go see it’ and then converge on the Five Why’s, Doug should visit KFS and inspect the manufacturing and QC process.

By focusing on uncovering issues at the source of the seats, it is likely there will be fewer problems at the TMM plant. The focus on QC at KFS could potentially eliminate 113 of the 138 problems reported between 14-30 April, 1992. In the short term, address the immediate issue of the backlog by reconciling orders with KFS to ensure the backlog is cleared. This would require little resource and be a quick win. 2. What options exist? What would you recommend? Why?

Simplifying the seats could reduce the problem since product proliferation appears to added complexity to KFS manufacturing process, though it’s unlikely that the designers will take this feedback as welcome given similar issues are not faced at the Japanese plant. Redesigning the seat or replacing easily broken parts could reduce breakage and installation issues, while training the staff to be more careful with installation, or the KFS staff with assembly, may also be an option.

Replacing the supplier would be a high-risk option that would only be explored if the issues at KFS were so irreversible that TMM had no other choice. While all of these options may potentially address part of the issue, improving the QC process and then working backwards from there into the assembly and manufacture at KFS will ultimately have the greatest single impact on production efficiency. 3. Where, if at all, does the current routine for handling defective seats deviate from the principles of the Toyota Production System?

One of the major underlying principles of TPS was building in quality on the line. The reporting of defects at the seat assembly point did not appear to be consistent and was only uncovered by interviewing team leaders on the factory floor. In addition, cars were reported as defective yet continued down the assembly line until completion, where they were taken off-line to wait for a replacement seat. Nowhere else on the line were cars removed due to defect: team leaders or production managers were responsible for resolving issues while still in the assembly line.

The reasons for doing so appeared rational, since the car could be finished with a defective seat, seats needed to be ordered from KFS and stopping the line for such a lengthy period would have decreased productivity. One flaw in the process was that there were flaws that could be rectified in the Code 1 clinic. These flaws could have been dealt with while on the assembly line and thus reduced the burden in the clinic, while raising awareness of common defects and their source earlier in the process.

The clinic did not appear to have the same reporting responsibilities as the assembly line since management were not aware of the main causes of the defects. 4. What is the real problem facing Doug Friesen? Process and feedback management problems at TMM and quality control management issues at KFS were the underlying reasons for the seat problems. Moreover, the ‘jidoka’ process had been bypassed in the seat installation process, exposing a potential weakness in the production line.

Doug should implement an in-line attempt at fixing seat problems prior to the referral to the Code 1 Clinic. Regular feedback from the clinic as well as the assembly line would improve information transparency and identify the source of defects for management at the earliest point in the process. Finally, the same processes should be adopted at KFS and QC strengthened considerably to avoid the delivery of defective seats as much as possible. Since this is a critical path to seat delivery, no seats should pass to TMM without a thorough QC test at KFS.

The Japanese automobile company’s second most successful car manufacturer was Nissan, after Toyota (market leader), but dropped to third after Honda. Nissan Motor Manufacturing (UK) Limited is the largest car manufacturing plant in the UK; having manufactured over 2 million cars since 1986 of which 1.4 million have been exported to 58 markets around the world. It is located on the 750-acre site just outside Sunderland. Nissan Is a massive company, well known around the world due to its achieved aims to expand overseas.

Introduction to South African Shop ‘Kruger’ Kruger is specialist retail all over the U.K. providing South African products via the internet or alternatively customers can visit their stores. Kruger started in 1997. In 2000 they joined another company, SAJE International Ltd. Who supported their business by advertising, creating a website. They developed their company by providing a professional delivery service on their website www.southafricanshop.co.uk

Kruger started off with two people who were asked by South African retailers in the U.K. to find a way of importing food from South Africa. General Theory on Aims An aim is a target that people work towards that result in the company developing. Businesses can have more than one aim that it’s working towards. Businesses aims should be appropriate to the size of the business. It would be inappropriate for a small business earning 50,000 per year to rival the profits with a company earning millions more such as Nissan. An example of an aim for a large business could be to expand overseas.

General Theory on Objectives Objectives are small steps businesses take to reach an aim. There are normally more than 1 or 2 objectives to reach an aim. Objectives take much shorter time than an aim does. An example of an objective for a large business could be to provide high quality goods which could help it on its way to achieving an aim to have a popular business with a god reputation.

Nissan’s Aims and Objectives Aim: To have a respected, familiar business and brand. They achieve this aim by their Objective: To satisfy customers by making a good, lasting product. Another Aim is: To make continuous profits, they achieve this by the Objective: To provide reliable products that self propels further profits. A second Objective would be: To spend little money on high valued materials, equipment and parts, by eliminating equipment that is not used Nissan will save money. By using as little as possible of their workers’ time they will gain their employers happiness and willingness to work.

Another Aim is: To become market leader Objective 1: To produce and sell more cars (through their dealers) than its rivals e.g. Toyota or Ford Objective 2: To use high quality car parts and make the car Another Aim: for Nissan is to be environmentally friendly they aim to do this because of the threats of global warming Objective: by applying for planning permission to build a wind farm in Sunderland, outside their large plants, they can cut carbon emissions by more than 10,000 tons per year, thus achieving their aim.

Kruger’s Aims and objectives First aim: Their first aim was to find a way of importing high quality consumer products from Southern Africa at low profits. This was a good aim because by buying the products directly off primary producers and by spending little on importation the can sell their products at a low price still making a profit. So finding a way of importing was its first objective and buying cheep good quality goods was their second.

Their aims once their business was set up, and they began making money, was to firstly survive as a business. To survive they would need to make a profit to be able to support their employers and keep stock coming in.Nissan buys car parts (produced raw goods) and produces some of its own car parts and sell other car parts such as breaks, windscreen wipers ect. Through their dealers, which can be purchased by clients Nissan make cars (Manufactures goods). They provide a service by fixing and replacing car parts as part of their included service.

Kruger’s Activities Kruger sells goods and provides a delivery service via its website. Recently Kruger raised the prices of all its customer products for example lollypops that use to be 10p is now 30p. They did this because as their business becomes more successful they can increase the price slightly, without loosing customers, therefore making a larger profit for themselves. How Nissan’s aims are achieved through its business activities Nissan’s aims are achieved through its business activities by manufacturing high quality goods (cars) they can achieve their aims to make a continuous profit.

Nissan Activities such as reliable services can draw in more customers as can sales and discounts. How Kruger’s aims are achieved through its business activities One of Kruger’s most important aims is to expand their business making it better known. They can do this by selling enough of their product to make a profit that will enable them to join more companies and become more advertised and recognised.

Toyota’s management system, more formally known as the Toyota production system (TPS) is one of the most bench-marked business improvement strategies in modern industry. While many companies try to emulate Toyota’s success using a variety of different approaches, most practitioners are not aware how Toyota replicates TPS at suppliers. The purpose of this paper is to investigate the in?house capabilities that are transferred from Toyota to suppliers as a way to more deeply understand how TPS has evolved.

Introduction

Current globalization of world economy creates new economic realities and intensifies competition. Increase in speed of technological advance, uncertainty caused by global economic crisis forces businesses to change quickly. Transformation enables them to be able to cope with the new economic, social and environmental challenges and / or gain competitive advantage by raising efficiency and improving performance. “Toyota is one of the industry’s leaders when it comes to lean logistics; a strategy driven by the need to remove inventory, time, and costs from the automotive supply chain” (Coia, 2007, p.76).

The global automotive manufacturer Toyota, is one of the founders of the Toyota Production System (TPS), which was an early version of the Just In Time (JIT) inventory system, which allows Toyota to have the exact number of components needed at any time in order to continue with its operations, avoiding the waste that commonly results when components get inventoried and stored.

Just-in-time (JIT) inventory management, also know as lean manufacturing and sometimes referred to as the Toyota production system (TPS), is an inventory strategy that manufacturers use to increase efficiency. The process involves ordering and receiving inventory for production and customer sales only as it is needed to produce goods, and not before.

The Just-in-Time (JIT) principle basically means to produce the necessary units in the necessary quantities at the necessary time. It is vital for such system to work on a zero defect basis. Prerequisite of JIT delivery is hejunka principle, which ensures a leveled capacity and personnel utilization, excluding both peak loads and downtime due to thorough planning, continuous visual control.

This type of inventory management provides many benefits, but is not without its downsides, and relies heavily on factors such as a strong, fast and efficient network of suppliers.

Supplier selection process that could be implemented at Toyota manufacturing company.
Since JIT requires manufacturers to be very accurate in forecasts for the demand of their products; the Toyota motor company has developed some basic principles that guides its supplier selection process with a view to optimize its purchases and to manage its car manufacturing operations on five different continents:

Fair competition based on an open door policy, Toyota is open to any potential supplier regardless of nationality, size or whether the company is a first time supplier or not. Toyota’s corporate with suppliers is solely based on business critical parameters i.e quality,cost,technology capabilities and reliability regarding the on-time delivery and ability to implement Kaizen strategy.

In a JIT supply chain, reliable suppliers will reduce supply uncertainty and make the supply chain more effective, therefore supplier selection is crucial because Toyota’s purchasing contract stipulates that suppliers must abide by all changes in delivery schedules or incur direct temporary suspension of scheduled shipments.

Hence, JIT environment requires a slightly different mindset for selecting suppliers who can survive in JIT supply chain long term. Stevenson suggest that the selection and evaluation of supplier’s ability to deliver in JIT supply chain should be based upon the following JIT quantitative & qualitative supplier selection factors:

Delivery of a quality product, delivery on-time, frequent deliveries, delivery in small quantities, delivery of exact quantities, supplier’s management policy and philosophy, willingness and openness to share data and information, attitude towards partnership, willingness to undertake continuous improvement, desire to develop new products and ease of communication at all levels.

Keeping in mind that the ultimate goal is a win-win situation for the supplier and manufacturer; open and transparent communication is extremely important in selecting the right suppliers and the following supplier selection process could be used to help meet the consumer demand.

Step 1 – Supplier Selection Scorecard

The first step in the supplier selection process is to create a supplier selection scorecard. The supplier selection scorecard contains all the important elements you require in a supplier. Your scorecard should be quantifiable and include: Supplier characteristics, the important strategic alignment factors you value, applicable business policies, any constraints management directives, government regulations, contracts already in place, and other commitments

At this step, make sure you are prioritizing your needs. A key criterion in selecting the right supplier is value. Cost should not be the lone driver; you should instead look at the total cost of ownership, which looks at the supplier’s:

• Customer service
• Delivery commitments
• Reliability and responsiveness
• Resource savings (hard and soft)

Step 2 – Identify Suitable Suppliers

Once you have the selection criteria in place, you must create the pool from which you will select a supplier. Next, gather information from the identified suitable suppliers, do the scorecard ranking, perhaps in the form of a Request for quote (RFQ) or Request for proposal (RFP). Tabulate the information you collect and use the scorecard to rank the potential suppliers. Depending upon the complexity and/or criticality of the product or service.

Step 3. Measuring Supply Performance

Another important step of the supplier management process is developing an audit and assessment program. Best-in-class supplier programs conduct audits throughout multiple stages of the manufacturer/supplier relationship. You should always conduct an audit before the contract is signed to confirm that the supplier does not have any significant compliance or quality system failures that could affect your ability to produce top-quality products. Another reason to conduct the audit beforehand is to understand the supplier’s strengths and weaknesses before the relationship becomes official.

Even after the contract is signed, you should continue auditing, basing the frequency of the audits on the criticality of the supplier. To determine the frequency, all suppliers should be categorized into a level of risk or importance. This prioritization will help you be smarter and more effective with your resources and place a higher focus on your important, high-risk suppliers, while continuing to monitor second-tier suppliers. Beyond an established audit program, you should continuously monitor and assess each supplier’s performance. You can track positive or sustained strong performances, as well as negative trends.

Step 4 – Negotiate

After you have narrowed the list to a manageable number of best options, possibly just one, let the negotiations begin! Depending on the criticality of the good or service, you may negotiate with just the top supplier on your scorecard, even if others remain on the list of potentials.

These others, of course, are not told they are not #1 until after you have completed negotiations and agreements are completed.
Based upon the complexity of the situation, lawyers may be involved.

Step 5 – Create Contract

Once an agreement is reached, a contract is created and signed. Creating the purchase order will include activating your procurement system. This should be a standard operating procedure and include getting your accounts payable process ready to process the supplier invoice.

Step 6 – Achieving Certification

As your supplier relationship grows stronger, and both parties feel they are receiving positive performances, the supplier may be able to achieve a certified status. This occurs when you establish a set of selected criteria to be met by your suppliers. Certification must be obtained with sustained successful performance and can be lost with poor performance or a negative compliance outcome from an audit.
As the relationship continues to grow, the supplier also will become more integrated into your manufacturing process.

Evolution of Toyota supplier relationship management.

A competitive advantage exists for companies that are engaged in successful long-term buyer-seller relationships (Anderson and Narus, 1990).This makes it important for companies to understand what factors influence their relationships with other firms.

The factors that influence relationships are reputation, performance satisfaction, trust, social bonds and comparison level of the trust, mutual goals, power/interdependence, cooperation and commitment. An identification of the relative influence of these factors has been used to focus Toyota’s efforts on the areas that are most important, improving the sustainable competitive advantage derived from that relationship (John, and Nevin, 1996).

Toyota started using JIT inventory controls in the 1970s but because of its relationship with suppliers it took more than 15 years to perfect its process. The JIT inventory system represents a shift away from the older “just-in-case” strategy, in which producers carried much larger inventories of stock and raw goods, in case they needed to produce more units because of higher demand. “Just in case” inventory management paid no much attention to suppliers because inventory was always in bulk.

The Toyota Production System (TPS) is not only a technology of comprehensive production management, but a legendary sylphlike philosophical concept of lean production developed to improve productivity and quality (Kotani, 2007). Its basic idea is to maintain ceaseless flow of products agile to changes in demand.

Toyota this time sends off orders to purchase production parts only when it receives new orders from customers.
Trust is a fundamental relationship model building block and as such is included in most relationship models. In a JIT system trust becomes paramount as delivery schedules and quality of incoming material holds the key for the success of the system.

Toyota realised that mutual goal is a degree to which partners share goals that can only be accomplished through joint action and the maintenance of the relationship. These mutual goals provide a strong reason for relationship continuance. (Soni and O’Keeffe, 1994) suggest that mutual goals influence performance satisfaction which, in turn, influences the level of commitment to the relationship.

Shared values are similar but broader concept. (Morgan and Hunt 1994) define shared values as, “the extent to which partners have beliefs in common about what behaviors, goals and policies are important, unimportant, appropriate or inappropriate, and right or wrong.” Most likely mutual goals encourage mutuality of interest and it then becomes possible for both parties to achieve those goals. Goals can be better measured as compared to values and norms.

Engaging in long-term relationships with suppliers includes a wide range of benefits. Ellram (1991) identified potential advantages of forming partnerships based on some of the early literature and observations of company experiences, namely management advantages, technology advantages and financial advantages.

Partnering with suppliers or developing close relationships can enhance planning and information sharing, improved resource savings and stabilize cost through long term commitments and contracts that Toyota has now. Close ties with suppliers can also lessen risk associated with changing markets and volatile business conditions. One of the primary advantages of building relationships with suppliers is that suppliers are more willing to share technology and offer their support, knowledge and experience.

Mutual benefit based on mutual trust; Toyota believes in developing mutually beneficial long term relationships with suppliers based on trust and confidence.

As a basic rule Toyota expects its suppliers to excel in quality , cost delivery, technology and management. However, just-in-time (JIT) is more than an inventory system. JIT manufacturing is a philosophy by which an organization seeks continually to improve its products and processes by eliminating waste (Ptak, 1997). Organizations wanting to use the JIT approach to manufacturing must have several building blocks in place. These building blocks were first established in the early 1950s by T. Ohno, former Executive Vice President of Toyota Motor Company (Ansari and Modarress, 1990).

Toyota and JIT manufacturing will succeed as long as the company maintains a steady production rate, with high-quality workmanship and no machine breakdowns at the plant that could stall production. Additionally, it needs reliable suppliers that can always deliver parts quickly, and the ability to efficiently assemble machines that put together its vehicles.

Conclusion

Considering that Toyota targets processes, rather than whole systems, in assisting suppliers to be more effective at JIT management. Findings also show that Toyota’s approval process doesn’t necessarily support major kaizen at suppliers yet does encourage minor day?to?day kaizen. Selecting the suppliers who can meet your consumers’ demand for higher-quality materials may bring some initial costs, but it will pay off over time through consistent, high-grade products.

Developing a supplier relationship management program can be a complex and upfront investment. However, once you choose to build strong relationships with reliable suppliers, you will have peace of mind, knowing you’re delivering high quality to your consumer. The benefits are realized when your supplier quality team is focused on issues other than material quality, and your satisfied end-users have confidence in the products you provide.

Finally, this work reports that the Toyota Way for suppliers does not have to be adopted by suppliers, but does represent “A Way” to interact with suppliers to drive both culture and productivity simultaneously.

According to Toyota (2010) the business came into existence in 1935 by Kiichiro Toyoda. Mr. Kiichiro made intensive efforts to develop a gasoline powered engine and traveled in Europe and United States to understand the key business operations. Through his great efforts he finally developed a prototype of A1 passenger car and G1 truck. Toyota logo was designed in 1936 and finally in 1937 the business was established as Toyota Motor Corporation Limited. In 1947 the company further expanded into the manufacturing of BM, SB trucks and SA passenger cars.

In 1957 the firm expanded in USA and established its first manufacturing facility in 1972 in USA. In 1989 the business introduced Lexus and just after 10 years it got listed in NYSE. Later on Scion, Hybrid cars, Tundra and Highlander were also introduced. Today the business performs in four different dimensions comprising of Cars, Trucks, SUVs & Van and Hybrids. Some of its world class brands include Corolla, Camry, Prius, Land Cruiser, Tundra, Highlander and many more. Other than this, the business portfolio comprises of Biotechnology, Robotics and Financial Services. The head office is located in Toyota City, Aichi, Japan.

Currently more than 308, 000 employees are working for Toyota Worldwide. The revenue for the year 2010 accounts for JPY 18, 950, 973 million. Strategic analysis of Toyota Motor Corporation: Target Market: According to Bruner et al. , (2008) the corporation operates across the globe. Four major markets include Europe, the America, Africa and Asia and Oceania. According to one of the research, its different brands are sold in 170 different countries of the world. Currently there are 52 different manufacturing facilities in 27 countries. Moreover the design and R&D (research and development) facility exists in 7 overseas facility.

Majority of the potential customers are located in North America (USA), Belgium (Europe), Thailand and Singapore (Southeast Asia). These regions are considered as most quickly developing economies and the purchasing power of parity also seems sustainable. Prior to this USA and Europe were the most potential markets for automobiles however the recent demand from Southeast Asia has shown an increasing trend. More importantly one of the facts reveals that the head office is located in Japan and the business understands the needs and wants of Asian customers profoundly and continuously performs to satisfy the value requirements.

According to the advertising team, the target market of ‘Scion’ is considered as urban population. The research team extensively conducted research with Generation ‘Y’ and studied the minds, hearts and desires of potential customers. The findings reveal that the specific segment reflects individualism with more preference towards diversity which cannot be seen in any other generation. Therefore the business came up with personalized option. Generation ‘Y’ accounts for 25% of the light vehicle target market of Toyota and it is assumed that it will increase to 40% till 2020.

In a broader scope the target market of Scion is considered as youth between 18-30 years of age having average income in between $30,000-$50,000. Another well known brands ‘Lexus’ has repositioned itself in the luxurious market segment and the customer satisfaction accounts for more than 85%. It is a male dominated brand. In 2005 the research team interviewed few individuals having assets of the worth of $5 million minimum and considered them as potential market for the brand. The target market mainly comprises of customers with age factor of 35 years and more and income starts from $65,000.

The target market of Toyota car starts from 25 years of age and the income starts from $40,000. Core competencies: The company owns assortments of core competencies which can be used to gain competitive edge over major competitors. Recently the corporation has outshined GM (General Motors) and gained the market leadership position in the automobile industry. Some of the key factors are as follows: •    Most important competency is brand management where the corporate name is easily recognized even in those areas where cars are not considered the mode of transportation.

•    It has streamlined the supply chain. The business owns in-house production system while establishing its plants all over the world in order to attain economies of scales. Toyota has build alliance with key suppliers of plastic, glass and others prominent suppliers of raw material. It continuously focuses on building long-term relationship with its customers. The entire logistic is outsourced which results into outclass inventory management, time management, project management and wastage has reduced. •    The entire assembly line provides flexibility and customization options.

Toyota mass production system saves time and cost. •    The business has installed its own product-information management program which facilitates in product development programs. •    Sustainable development is always considered as important part in attaining corporate goals and periodic objectives. The business considers both social cost and financial cost as important parts. •    It has further strengthened the performance by focusing on key strategy of localization and globalization. It has expanded very quickly across different parts of the world.

•    Recently the business introduced the concept of CCC21 (construction of cost competitiveness for the 21st century) which is consistently performing to reduce cost by 30% while providing the superior quality and customer service. It has implemented a global business which specifically differentiates its business operations from those of competitors. Sage Publications (2009) instigated that Toyota has clearly established the brand image that provides quality service which last for longer time and no other competitor can claim the value proposition.

For three consecutive years the business has continuously received 11 segments awards out of 199 different segments. More importantly Toyota provides same quality brand across the globe and has established certain quality standards which are strictly followed. One of the recent introductions of Prius reflects a break-through technology which further contributes towards green provisions and sustainable development. Furthermore the top management believes in Kaizen (continuous improvement) which is applied across different functional units to attain quality management as an integral part of the system.

This research paper addresses the unintended acceleration in Toyota vehicles as a nonmarketing force and what factors lead to the issue. The prevalent issue that will be discussed in this paper is after thorough research procedures that have established the outstanding predicament which face Toyota as an international company.

More than one factor will be brought forward to help in diversification of the solutions. With strong sources from journals and publication, the paper will exhaustively expound on the nonmarketing force of Toyota Company which in turn leads to diversified proven solutions to all the factors.

In this paper solutions to the issue faced by Toyota will be strategically analyzed with a strong backing in relation to the references that will be provided (Koopman, 2014). The solution to tackle the problem will be effective in measure and also in application. Recommendations will be outlined with an aim of helping the company get out of the nonmarketing environment quagmire permanently.

Toyota became the subject of controversy in the media and the United States Government at the end of the year 2009 for numerous deaths and injuries associated with accidents emanating from the unintended and unrestrained acceleration of vehicles.

In spite of Toyota uncompelled recall of more than 4 million motor cars for floor mats that they claimed caused pedal jams and later another recall to increase the space between the floor and the gas pedal, Toyota stood still with both feet and issued a statement that there were no veiled faults and vehemently defended itself from press reports and other statements that said otherwise.

With the crisis intensification, Akio Toyoda, the president of the Toyota Motor Company later, through his testimony apologized to the U.S. Congress but by the time he did it Toyota’s had experienced $35 billion loss.

Table 1

Table 2

No. of crashes – 820
No. of injuries – 340
No. of deaths – 25
Total no. of incidents – 2260

Even with increased deaths caused by the Toyota vehicles, the Toyota Company responded to these allegations by renouncing to any claim that the Company was manufacturing faulty motors. The Toyota Company put blame on its customers who installed floor mats that did enmesh the pedal responsible for accelerating(Cole, 2012)..

Government intervention

These caused a stir in the U.S especially as the Toyota Company was well known for its auto-motive prowess. The media spurred the issue to greater heights which led to the intervention of the U.S. government because the increased tragic accidents caused by the Toyota vehicles were getting out of hand since the cases of death casualties and injuries were going up.

To face the rising and pressure which the company was almost succumbing to, the Toyota Company came up with a strategy to diffuse the SUA issue which the press now the press would not rest until it would be addressed. To address the issue, Toyota decided to do a recall of its vehicles with the help of the NHTSA Between the end of the year 2009 and the start of 2010.

The first recall happened when the Toyota Company recalled more than 50,000 vehicles which had thick rubber floor mats. The vehicles that were mainly recalled were the Camry’s and Sedans( Finch, 2009). The second recall happened on the 21st of January in the year 2010 with Toyota issuing reports in regards to the sticky pedal acceleration. Toyota addressed over 4million cars in the U.S., Europe, and China.

The third recall happened with the initiative of the NHTSA. Early January 2010, NHTSA sent out reports that it had received complaints that more than 100 Toyota Prius drivers of a braking system problem on this particular car model. Reports were that the anti-lock braking system had caused fatal accidents (Pollard,1989). Later on, Toyota issued a report that it had looked deeply into the matter and had resolved it as well. The Toyota Company had updated the software so as to improve the braking system

Effects of different aspects

• Effect on Toyota

The recalling had impacts on Toyota as the company sales had started to go down which meant that decreased low exchange rates of the Japan currency to the US dollars. People would lose jobs since the company was not earning as it used and so it had to cut down the costs. Toyotas reputation was stained which meant that sales would affect the sales.

• Economic Impacts

The economic impacts would affect the Toyota Motors which might lead to its closure. The recalling also led to manufacturing changes which helped to be more responsive to the customers since the building of a responsive team would lead to efficiency for the Toyota Company(Linebaugh, 2010). The recalling also lead to other competitors selling their shares at affordable prices especially to the big shareholders of Toyota further suppressing Toyota.

• Effect on the media

The media coverage of the Toyota issue was daily updated and this made it worse for the company to make sales as the criticism was getting out of hand. The media hugely affected the Toyota too since they pulled all the advertisement billboards making it hard for the Toyota marketing.

Publications and articles further criticized the company terming it responsible and greedy as the increased profits had led to the company manufacturing low quality and defective vehicles. After several companies doing some polling, it realized that the Toyota public image was going against the company as 25% perceived Toyota as an unsafe vehicle since the recalling caused by the SUA.

• Effect on Customers

Toyota customers likely would find a new automotive company who would cater for their needs. Losing their customers who are in one way or another, an advertisement too means that the company would adverse long term effects on its customer base. Finding new loyal customers would be hard since no one would like to be associated with a company that has counterfeit products

• Effects on employees

Toyota will have to retrench some of the workers therefore making some individuals jobless. In case the company decides to close then it means employees will lose their jobs and end up as unemployed flooding the market with more laborers then expected which means at the long run the automotive industry will have more workers at a cheap cost. This affects other employers from other companies since if they are not as qualified as the Toyota retrenched people, they will go out of market skillful wise.

• Effects on suppliers

The suppliers who did deliver services and goods are Toyota, likely are to be affected negatively. Toyota which will be an unpopular automotive will make low sales which will turn to low production meaning suppliers will have to reduce the deliveries. The amount of profits they were making will go down resulting to big losses for the suppliers.

In conclusion, the Toyota Company should come up with a smart responsive team which should be very efficient in terms of addressing rising issues within and outside the company. The responsive team is important since it will not let any issue get out of hand and get to a point where the company’s reputation and the image are stained. Facing issues within the required time would help save Toyota’s Company resources and also cut the costs of trying to bring back a good image into the company.

To end the SUA permanently the Toyota Company should first make a comprehensive design of the car they are designing. To eradicate problems such as sticky pedal the company should do experiments after designing a single vehicle. The vehicle testing helps in the accessing of the vehicle before its release into the market (Heller, 2012). Testing would take Toyotas little resources and also help in dispersing vehicles which the company is sure of their safety which in turn would help maintaining the social ethics of the company towards the community (O’Rourke, 2010).

The Toyota Company should adhere to the standards of the automotive laws and regulations which mean that it would be doing according to the accepted code of automotive manufacturers.The last recommendation would be the Toyota Company to build a strong connection with the media so that the public image is always positively placed above its competitors and by this, the Toyota Company will increase its sales to greater volumes and hence its globalization goal accomplished.

References

• Koopman, P. (2014): A case study of Toyota unintended acceleration and software safety. Presentation. Sept.
• Kane, S., Liberman, E., DiViesti, T., ; Click, F. (2010): Toyota sudden unintended acceleration. Safety Research ; Strategies.
• Pollard, J., ;Sussman, E. D. (1989): An examination of sudden acceleration. National Highway Traffic Safety Administratyion.
• Cole, R. E. (2011). What really happened to Toyota?. MIT Sloan Management Review, 52(4), 29.
• Heller, V. L., ; Darling, J. R. (2012): Anatomy of crisis management: lessons from the infamous Toyota Case. European Business Review, 24(2), 151-168.
• Finch, J. (2009). Toyota sudden acceleration: a case study of the national highway traffic safety administration-recalls for change. Loy. Consumer L. Rev., 22, 472.
• Linebaugh, K., ;Searcey, D. (2010). Cause of sudden acceleration proves hard to pinpoint. Wall Street Journal, 25.
  O’Rourke, M. (2010). Toyota’s total recall. Risk Management, 57(3), 8.

Uber Technologies Inc. said on Tuesday it would partner with car-sharing service Maven, operated by General Motors, to allow Uber drivers to rent GM vehicles on a weekly basis.

The 90-day pilot is a surprise move for Maven and General Motors, which with Lyft — Uber’s main competitor in North America — announced a program in March called Express Drive used mostly by Lyft drivers. Maven operates in 10 U.S. cities.

After GM invested $500 million in Lyft in January, the Express Drive program was the first initiative to come out of the partnership.

Carmakers are increasingly looking to invest in ride services, concerned over a projected eventual decline in private ownership of vehicles that threatens their core business. Other carmakers that have invested in ride service programs include Ford, Mercedes-Benz maker Daimler and Toyota.

Rachel Holt, Uber’s regional general manager for North America and Canada, said the service will operate only in San Francisco for now.

The cost per week is $179 plus taxes and fees, Holt said, with no extra fees if drivers use the car for personal use.

Julia Steyn, GM’s vice president of urban mobility, said the pricing for Uber drivers was “at parity” with what Lyft drivers pay, although both companies offer their own incentives.

Lyft spokeswoman Sheila Bryson said Maven’s partnership was similar to how Lyft worked with Hertz. Lyft drivers can also use Hertz cars through the Express Drive program.

“It’s expected that vehicle access programs have multiple partners,” Bryson said.

(Reporting by Alexandria Sage; Editing by Leslie Adler)

For Toyota, the instant threat of increased competition is greatly accentuated by these recent problems. However, on the other side of the equation, the company is best positioned to take advantage of the opportunities that exist for automakers: development and sales of hybrid and other “alternative fuel” vehicles, and expansion into developing markets such as Asia, Africa, and Central and South America. Body: With most of America, and to only a slightly lesser extent, the rest of the world talking about Toyota lately, most of the news is not good.

Talk centers on what is undoubtedly the greatest threat to the company; significant loss of its brand image ND customer loyalty, brought about by unintended vehicle accelerations, recalls and impending litigation. Toyota itself is rather quiet in this area in the body of its 2009 Annual Report. The company prefers to blame its problems on a “prolonged slump” in North America, a “sharp downturn” in Asia, a “rapid contraction” in Europe, “consolidated sales” in Japan, and “stagnant sales” in Central and South America, all brought about by the “economic deceleration” of 2008.

The President’s message obliquely mentions the company’s woes when he speaks of “implementing a stronger reduce-oriented management model focused on making better cars, and redoubling our commitment to the customer first” (Toyota, 2009 Annual Report). The only direct reference to the aforementioned problems is located in the Risk Factors section of the 2009 Annual Report under the heading “Toyota may become subject to various legal proceedings”. Here, the company admits that it “may become subject to legal proceedings… Including product liability… “, and that “… A negative outcome… Old adversely affect Toast’s future financial condition… ” (Toyota, 2009 Annual Report). In this area, analysts have quite a bit more to say. In his article, Toast’s Best Days Are Over, Timothy Louts summed up America’s changing attitude toward Toyota: “The fact is, in millions of households all over America, people are angry at Toyota for failing them. People who once automatically bought Toast’s cars because they trusted the company will now look elsewhere. Toyota has failed them, and like any lover who’s been disappointed, they will hold a grudge” (Louts, 2010).

With a recall of 8. 5 million vehicles worldwide, a suspension of sales of 57% of its new cars, assembly lines shut down for eight models and no fix for the “unintended acceleration” issue, the threat used by the damage to Toast’s brand image is fierce (Label, 2010). These problems, coupled with Toyota management’s blunders in handling the issues have opened the door to another constant and significant threat, competition from other considering a Toyota before the recall are no longer contemplating the brand” (Durbin, 2010).

She sites that polling has determined that Ford, Chevrolet, Hounded and Honda are all going to benefit greatly from Toast’s sullied reputation. 17% of those polled said they were moving from Toyota to Ford, and Toast’s Lexus brand has experienced a 25% drop in interested buyers in February 2010. (Durbin, 010). In Porter’s 5 Forces Analysis, one may glean that Toyota is in trouble from three of the five forces: Power of buyers, availability of substitutes and competitive rivalry (n. A. , The Industry Handbook: Automobiles, 2010).

In their 2009 Annual Report, Toyota prefers to address its opportunities. References to two opportunities I particular abound in the report: taking a leadership role in the development and sale of hybrid and other “alternative fuel” technologies, and expansion into developing markets such as China, Asia, Africa and Central and South America (Toyota, 2009 Annual Report). Independent analysts seem to all agree. An Internet SOOT analysis cites Toast’s targeting of the “urban youth” market with its “Cagy’ model as a strong opportunity as well (Anonymous, SOOT Analysis).

China is a particularly hot market for all of the automakers, and Toyota is poised to expand there with plans to open a factory in Changing in 2012 (Hitherto, 2010). In the Financial Strategy section of Toast’s 2009 Annual Report, the company identifies the key components of its strategy as growth, efficiency and stability; specifically targeting a shift towards fuel-efficient vehicles such as hybrids and compacts sold in resource-rich and emerging countries.

This is a wise plan, as their financial data indicates that while sales dropped hugely in Japan, North America and Europe, Toyota saw gains in emerging markets elsewhere (Toyota, 2009 Annual Report). In The Right Way Forward section of their 2009 Annual Report, Toyota places heavy emphasis on aggressively marketing hybrid and compact cars to emerging markets, citing China as “potentially as large as the US market” (Toyota, 2009 Annual Report).

Conclusion: Recent problems with their products including large recalls and impending litigation have greatly damaged Toast’s reputation and brand image, most especially n North America, Japan and Europe. This, coupled with the constant threat of competition from other manufacturers poses significant threats to the company. How Toyota manages to deal with the damage to its brand image and move forward will largely determine the extent of the threat of competition from these other manufacturers.

Conversely, the Toyota Company faces considerable opportunities to continue its leadership in the development and sales of hybrid and other “alternative fuel” vehicles. The company sites this repeatedly as one of its major aspirations. Toyota is well positioned to expand its operations in developing markets, particularly in China, Africa, Asia, and Central and South America.