Toyota value chain and SWOT analysis

1. GROUP MEMBERS
RIDHI
WASEEM
JYOTI
AFTAB
TWINKLE

2. INTRODUCTION
Sakichi toyoda, the founder of the toyota
group of companies, started toyota as a
textile machine company.
 Launched first car in 1947
 Toyota production system formed in 1950
based on just-in-time principle
 Overseas production starts in 1959
(BRAZIL).
 Ranked 6th in fortune global 500 list


3. TOYOTA

Public company traded on the NYSE and the
ADR exchange in Tokyo

Employed 400000 people in 2012

Revenue of $272,749 Million in 2012
 Year
end of March

4. Toyota seeks to create a more
prosperous society through automotive
manufacturing and to sustain profitable
growth by providing the best customer
experience and dealer support

5. VISION
Produce reliable vehicles &
sustainable development of society
by employing innovation & high
quality of product & services.

6. SOME BRANDS OF TOYOTA

7. OBJECTIVES
Waste of over production
 Waste of time on in hand
 Waste of transportation
 Waste of stock in hand
 Waste of movement
 Waste of making defective product


8. WHERE THEY ARE TODAY
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Second Largest automaker, but most profitable
51 manufacturing companies in 26 countries
- Produce a vehicle every 6 seconds
Brands: Toyota, Lexus, Scion
Business partners with Daihatsu and Hino
automotive business accounted for 90% of revenues
Other 10%: housing, marine, GAZOO,
telecommunications, ITS, Biotechnology and
Afforestation
Success attributed to Toyota Production System

9. MAJOR COMPETITORS OF TOYOTA

11. PLACE
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Toyota started their hybrid technology in Japan
After the high success in Japan, Toyota moved their Prius to the
US market where it has been very successful.
The first introduction of the Prius was in 2002 and since then
Toyota has come out with the Highlander and Lexus RX 400H and
next year they will release the Camry.
Most Toyota hybrid vehicles are available for purchase nationwide
Toyota Prius is offered nationwide but there are waiting lists for
the vehicles
Lexus first hybrid RX400H is available for purchase nationwide
Toyota Highlander has limited availability as of right now,
consumers can order the vehicle but they are not available on sales
floors.

12. PROMOTION


Toyota Overall Promotion
 The main promotion for Toyota hybrids is the tax deduction given to
consumers who purchase hybrid vehicles
Toyota Promotions
 Bluetooth technology
 Option
with in the Prius that if the consumer has a
Bluetooth mobile phone, that allows customers with
onboard navigation system and hands free phone
capabilities with the vehicle

Land Speed
 Aiming
for the younger market by having a race car that
reached the speed of 130.794 mph

13. PRODUCT
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The Toyota Prius and Highlander are both in transition from
the introduction stage to the growth stage of the product life
cycle
Limited number of products are available through few
competitors
Other competitors are becoming attracted to the market and
will have similar offerings soon
They are focused on building brand and customer loyalty.
The Toyota Sienna and Camry are still in development but
will be ready for the introduction stage soon
They are focused on promoting these products to create
awareness

14. PRICE
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Toyota is offering high quality at a relatively low price in
order to penetrate the market
The Prius is priced the same as other five seater hybrids in
its class but gets much better gas mileage
Same price as the Honda Insight but holds three more
people
A hybrid Highlander SUV costs $5,000 more than the
conventional Highlander
It delivers more horsepower than the conventional
Highlander (30 horsepower)
It gets 10 more miles to the gallon
It greatly reduces the tail pipe emissions

15. SWOT ANALYSIS

16. STRENGTHS
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Dedication to R&D
High market share
High durability
Easy availability of spare parts
Comfortable ride
High good will
Good resale value
Low fuel consumption

17. WEAKNESSES
Over dependency on Japan & U.S. Market..
 Risk that R&D outlays will not generate new
competitive advantages.
 Poor organisational structure
 The cars steering is a bit light and driver can
not feel the road
 The body of the car is too heavy.
 The rims and tyres of the car are not
impressive.


18. OPPORTUNITIES
Expanding HEV line in U.S. – gain more
market share
 Demand growth in China and India
 Modifying designs that are proven for other
countries
 Consolidation through acquisition –
European foothold
 Develop new variety and style


19. THREATS
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Supply chain costs tied to oil (materials,
production and shipping)

Foreign exchange fluctuations

Growth of competitor.

20. VALUE CHAIN

21. INBOUND LOGISTICS
Primary activities logistics toyota in
obtaining-Raw material
 They do not process their own, or create
your on, they use a third party.
LIKE- leather seats, stearing, wheel, tyre to
local companies.


22. TOYOTA PRODUCTION SYSTEM(TPS)
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The production system developed by toyota motor
corporation to provide best quality, lowest cost, and
shortest lead time through the eliminating of waste.
The toyota production system was established on two
concepts:
JIDOKA: Automation with a human touch, means
that when the problem occurs, the equipment stops
immediately, preventing defective product from being
produced.
JUST-IN-TIME: In which each process produces only
what is needed by the next process in a continuous
flow.

23. OUTBOUND LOGISTICS

Outbound logistics means Collecting, storing
& distribution the product to buyers.

Toyota cars directly sent to toyota dealer, its
for local.
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If sending more distance or export its
delivery using container.

24. MARKETING & SALES
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Its provide means & incentives which allow buyers to
purchase the product.
Corporate Environmental Awareness: In 2003, Toyota
embarked on its first pan-European corporate advertising
campaign conducted by its Corporate Affairs department.
In order to better communicate its environmental
principals and activities – and support the "Aim: Zero
Emissions" message – Toyota created an Environmental
Brochure in early 2004. The Environmental Brochure was
designed and published to target the general public,
presenting Toyota’s basic environmental messages with a
clear focus on the environmental technologies that are
beneficial to consumers.

25. C0NTINUED...
1-Brand Environmental
Awareness:
a) Toyota vehicles stand at the
Brussels International Airport.
b) Toyota vehicles advertisement on
the front of Toyota Motor Europe’s
head office in Brussels, Belgium.

26. CONTINUED,,,,
 Survey:
Customer Satisfaction.
 Greening the Supply Chain: Toyota
therefore enlists the participation of those
suppliers in the effort to provide
environmentally friendly parts and materials
to its customers. To do this, Toyota
developed a set of Environmental
Purchasing Guidelines, which the company
encourages suppliers to follow.
 Remanufactured Parts.
 SMART Repairs.
 Chemicals & Oils.

27. SERVICE
Service means it enhance or maintain the
value of the product.
PARAMETERS- Quality of service, type of
problem, service user friendly, service
advisor, service delivery.


28. TOYOTA PHILOSOPHY
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Selling price-cost=profit
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Customer decide the selling price

Profit is what remains after subtracting the cost
from it.
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The main way to increase profit is to reduce
cost.

29. SUPPORTIVE ACTIVITIES

30. FIRM INFRASTRUCTURE

Modern and sophisticated

Robotic system used with human as the
operator

31. HUMAN RESOURCE MANAGEMENT

Toyota has approximately 400000 employees
world wide
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In placement of an employee, the co. hold
the test continued with the training according
to its disciplines and expertise

32. TECHNOLOGY
4 major technology used by Toyota is
concerned with safety of its costumers....
1.
2.
3.
4.
Pre-crash safety with collision-avoidence
assists
Adaptive driving beam
Pop up bonnet
Emergency response technology.

33. PROCUREMENT
1.
2.
3.
Acquire our supplier to provide quality item
at low price and in timely manner.
We co-operate with them to promote
environmental preservation and meet the
other demand of our society.
Long term view toward our relationship with
supplier based on fair business practices..

34. FINANCIAL INFORMATION

35. TOYOTA
Revenue - $172,749 million
 Gross Profit - $43,517 million
 Operating Income - $15,571 million
 Total Net Income - $10,907 million


36. COMPETITORS

Annual Revenue
 Ford
- $171,652 million
 General Motors - $193,517
 Honda - $80,705

37. GROWTH

1-year sales growth: 5.6%

1-year net income growth: 0.8%

1-year employee growth: 0.1%

39. millions of Japanese Yens'
As of:
Mar 31
2010
JPY
Mar 31
2011
JPY
Mar 31
2012
JPY
Mar 31
2013
JPY
Revenues
17,724,729.0 17,820,520.0 17,511,916.0 20,914,150.0
TOTAL REVENUES
18,950,973.0 18,993,688.0 18,583,653.0 22,064,192.0
Cost of Goods Sold
15,971,496.0 15,985,783.0 15,795,918.0 18,010,569.0
GROSS PROFIT
2,267,176.0
2,378,362.0
2,195,089.0
3,423,197.0
Selling General & Admin
Expenses, Total
2,119,660.0
1,910,083.0
1,839,462.0
2,012,309.0
OTHER OPERATING
EXPENSES, TOTAL
2,119,660.0
1,910,083.0
1,839,462.0
2,012,309.0
OPERATING INCOME
147,516.0
468,279.0
355,627.0
1,410,888.0
Interest Expense
-33,409.0
-29,318.0
-22,922.0
-22,967.0
Interest and Investment Income
78,224.0
90,771.0
99,865.0
98,673.0
Other Non-Operating Expenses,
Total
147,031.0
256,489.0
251,835.0
240,678.0
Other Non-Operating Income
(Expenses)
33,372.0
27,168.0
17,029.0
3,608.0
4 Year
Trend

40. EBT, INCLUDING UNUSUAL ITEMS 336,876.0
778,306.0
630,574.0
1,635,168.0
Income Tax Expense
92,664.0
312,821.0
262,272.0
551,686.0
Minority Interest in Earnings
-34,756.0
-57,302.0
-84,743.0
-121,319.0
Earnings from Continuing Operations 244,212.0
465,485.0
368,302.0
1,083,482.0
NET INCOME
209,456.0
408,183.0
283,559.0
962,163.0
NET INCOME TO COMMON
INCLUDING EXTRA ITEMS
209,456.0
408,183.0
283,559.0
962,163.0
NET INCOME TO COMMON
EXCLUDING EXTRA ITEMS
209,456.0
408,183.0
283,559.0
962,163.0

41. Data
Hide charts

43. Currency in
Millions of
Japanese Yens
Mar 31
2010
JPY
Mar 31
2011
JPY
Mar 31
2012
JPY
Mar 31
2013
JPY
Cash and Equivalents
1,865,746.0
1,300,553.0
1,104,636.0
1,107,409.0
Short-Term Investments
2,185,889.0
1,240,429.0
1,095,927.0
1,311,147.0
Trading Asset Securities
--
154,887.0
69,149.0
38,500.0
TOTAL CASH AND
SHORT TERM
INVESTMENTS
4,051,635.0
2,695,869.0
2,269,712.0
2,457,056.0
Accounts Receivable
1,886,273.0
1,449,151.0
1,999,827.0
1,971,659.0
Other Receivables
360,379.0
306,201.0
408,547.0
432,693.0
Inventory
1,422,373.0
1,304,242.0
1,622,282.0
1,715,786.0
Prepaid Expenses
511,284.0
359,948.0
437,698.0
481,194.0
Finance Division Loans
and Leases, Current
4,209,496.0
4,136,805.0
4,114,897.0
5,117,660.0
As of:
Assets
4 Year
Trend

44. LIABILITIES & EQUITY
Accounts Payable
1,956,505.0
1,503,072.0
2,242,583.0
2,113,778.0
Accrued Expenses
1,735,930.0
1,008,864.0
988,689.0
1,182,514.0
Short-Term Borrowings 160,735.0
192,309.0
410,276.0
227,829.0
Current Portion of LongTerm Debt/Capital
249,416.0
Lease
303,369.0
334,492.0
205,866.0
Finance Division Debt,
5,087,846.0
Current
5,528,179.0
5,258,899.0
6,399,948.0
Finance Division Other
-Current Liabilities
--
10,434.0
15,331.0
Other Current Liabilities 1,342,395.0
2,127,477.0
2,397,904.0
2,603,061.0
TOTAL CURRENT
LIABILITIES
10,686,214.0
10,790,990.0
11,781,574.0
12,912,520.0
Long-Term Debt
955,060.0
913,737.0
608,134.0
583,538.0
Minority Interest
570,720.0
587,653.0
516,217.0
624,821.0
Finance Division Debt,
6,060,349.0
Non-Current
5,669,456.0
5,555,112.0
6,876,849.0
Finance Division Other
-Non-Current Liabilities
7,104.0
8,191.0
11,752.0

47. In Millions of JPY (except for 12 months ending 2013-03per share items)
31
12 months ending 2012-0331
12 months ending 2011-03-31
12 months ending 2010-0331
Net Income/Starting Line
1,083,482.00
368,302.00
465,485.00
244,212.00
Depreciation/Depletion
1,105,109.00
1,067,830.00
1,175,573.00
1,414,569.00
Amortization
-
-
-
-
Deferred Taxes
-
6,395.00
85,710.00
25,537.00
Non-Cash Items
-190,256.00
27,152.00
-6,777.00
332,608.00
Changes in Working Capital
452,981.00
-17,244.00
304,018.00
541,604.00
Cash from Operating
Activities
2,451,316.00
1,452,435.00
2,024,009.00
2,558,530.00
Capital Expenditures
-1,938,974.00
-1,532,082.00
-1,691,191.00
-1,437,601.00
Other Investing Cash Flow
Items, Total
-1,088,338.00
89,424.00
-425,153.00
-1,412,583.00
Cash from Investing Activities -3,027,312.00
-1,442,658.00
-2,116,344.00
-2,850,184.00
Financing Cash Flow Items
-
-
-
-
Total Cash Dividends Paid
-190,008.00
-156,785.00
-141,120.00
-172,476.00
Issuance (Retirement) of
Stock, Net
-43,098.00
-37,448.00
-28,617.00
-10,251.00
Issuance (Retirement) of
Debt, Net
710,348.00
-161,114.00
604,064.00
-95,255.00
Cash from Financing
Activities
477,242.00
-355,347.00
434,327.00
-277,982.00
Foreign Exchange Effects
137,851.00
-55,939.00
-127,029.00
-8,898.00
Net Change in Cash
39,097.00
-401,509.00
214,963.00
-578,534.00

49. COMPETITIVE ADVANTAGES
Cost leadership scm in Toyota vendor
manufacture dealer customer
 Local part receiving pc(panama city) store
production dock dealer.
 Internal and vendor local part stock reduction
using kanban cycle
 Use “pull” system to avoid over production
 Best mini MPV (toya avanza)


50. SUGGESTED STRATEGY
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Developed and produced multi product line
for different income class.

Design less fuel consuming engines.

Developing new brands with unique features.

51. RECOMMENDATION
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Invest in other product line

Make more hybrid car.

52. QUESTIONS FOR AUDIENCE
Q1-When Toyota motors
launched his first car?

53. Answer- In 1947

54. Q2- Full form of TPS?

55. Answer- Toyota Production
System

56. Q3- What is the two concept of
Toyota Production System?

57. Answer- JIDOKA & JIT