Preliminary Report Toyota

Toyota is a Japanese automobile company with manufacturing plants operating all over the world.. It has branches spread across different regions of the world, as well as manufacturing plants in Japan and India. Toyota’s operations are guided by its mission statement, which states, “To attract and attain customers with high-valued products and services and the most satisfying ownership experience in America.” Over the years, Toyota has continued to gain international recognition and reputation for its products. Toyota’s strategies, financial records over the past five years, and competitive environment indicate that the company is likely to become the best car company not only in America, but also in the entire globe.

Recently, Toyota celebrated opening of a new manufacturing plant in Japan. These celebrations came amidst increased move by other car manufacturers to set manufacturing plants aboard. Nonetheless, Toyota’s president Akio Toyoda says that Toyota is optimistic that with its advanced, low cost production techniques, the company will eventually come out on top of all other car manufacturers in the world (Marshall, 2011). Moreover, in 2010, Toyota recalled a fleet of Vista and Corona models it had released in the market on safety grounds. The management of Toyota took the initiative to explain what was happening to the Congress and assured the entire world that they were doing the best they could to rectify the problem (Marshall, 2011). Although the memories of the recall are still fresh in the minds of the customers, Toyota has made sure that no other vehicles are recalled on safety grounds. This was an indication that Toyota is ready to take responsibility of its actions, thus increasing its chances of growing successful in the global automobile industry.

In March 2011, Toyota faced one of its biggest strategic challenges. Japan was hit by a serious earthquake, which left one of the Toyota’s plants incapacitated for normal operations. This tragedy came when Toyota sedan was on high demand in the American market (Marshall, 2011). The earthquake made Toyota to be unable to meet the high demand of Toyota sedan since it could not supply more Toyota sedan versions to the market. By the time it launched a newer version of Toyota sedan: Camry 2012, the market’s enthusiasm for Toyota sedan had already diminished. However, launching of new car model a few months after the earthquake was an indication that Toyota is ready to continue meeting the needs of its existing and potential customers despite the challenges. Such moves act as foundations for achievement of its desire for being the best car company in the world.

One of the competitive challenges that Toyota is currently facing is invasion of SUVs segment. In the 1990s, Toyota made substantial profits from the SUV segment since it was the first company to design SUVs. However, companies such as BMW, Nissan, Ford, Honda, and Porsche have invaded the segment, thus increasing competition pressure for Toyota in this segment. Nonetheless, Toyota seems determined to ensure that its SUV models remain the first choice for many customers by introducing advanced and efficient models of SUVs such as the Toyota RAV4, Land Cruiser, FJ Cruiser, and Sequoia, among others. Another competitive challenge faced by Toyota is inability to maintain its sales in the US (Eisenstein, 2011). After the 2010 recall, Toyota’s sales in the US have diminished and it appears that Honda and Ford are taking the place of Toyota in the US. If Toyota is not careful, Honda and Ford are soon going to occupy Toyota’s market share in the US (Marshall, 2011).

Information provided by NASDAQ indicates that Toyota has been recording positive net income, apart from year 2009 (NASDAQ, 2012). Last year, the company recorded net income of US$4.925 million. This was above 100 percent increase compared to the year 2010. In 2008, the company recorded substantial net income of US$17.146 million. During that year, Toyota was named the largest car company in the world. However, in 2009, it recorded net loss of US$ 4.424 million. Nevertheless, Toyota was able to recover and record positive incomes in 2010 and 2011 despite challenges such as safety recall and the Japan earthquake. Besides, Toyota’s stock is currently trading at NASDAQ at US$ 83.01, which is a 25.55 percent increase from last year and 6.4 percent increased from year 2010 (NASDAQ, 2012). Increase in Toyota’s stock price is a clear indication that the company ability to maintain growth and positive performance despite the tough economic environment thus, its ability to become the best car company in the world.

I chose Toyota, because it is the famous and largest car company in the global automobile industry. Besides, Toyota has managed to maintain positive performance as well as satisfy the needs of its customers despite experiencing numerous challenges in the recent past. This evoked an interest to learn more about the operations of the company.  

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