strategic technology management for toyota

Georgios Christoforidis

Pulkit Vijayvargiya

Gordon Bamford

Carol Santos

Pedro Miyake

Alexander Clayton

Strategic Technology Management Report For Toyota Motor

2013

12 December

Table of Contents

1. Introduction .............................................................................................................. 4

2. Company Background ............................................................................................... 4

2.1. Historical Review & Goals .................................................................................. 4

2.2. Guiding Vision .................................................................................................... 6

3. Competitors Environment ........................................................................................ 7

4. Toyota PESTLE Analysis ........................................................................................... 10

4.1. Political ............................................................................................................. 12

4.2. Economical ....................................................................................................... 12

4.3. Social ................................................................................................................ 12

4.4. Technological & Environmental ....................................................................... 13

4.5. Legal ................................................................................................................. 13

4.6. Pestel Analysis Conclusion ............................................................................... 14

5. Toyota SWOT Analysis ............................................................................................ 14

5.1. Value Proposition of Toyota ............................................................................ 14

5.2. SWOT analysis .................................................................................................. 15

5.2.1. Strengths ................................................................................................... 15

5.2.2. Weaknesses .............................................................................................. 16

5.2.3. Opportunities............................................................................................ 16

5.2.4. Threats ...................................................................................................... 17

6. Balanced Scorecard ................................................................................................ 17

7. Strategy Roadmap .................................................................................................. 20

7.1. Toyotas Strategy Roadmap .............................................................................. 20

8. Technology Roadmap ............................................................................................. 22

8.1. Technology Road mapping .............................................................................. 23

8.2. Technology Roadmap analysis ......................................................................... 24

9. Recommendations .................................................................................................. 26

10. Conclusion ........................................................................................................... 28

References ...................................................................................................................... 29

APPENDIX ............................................................................ Error! Bookmark not defined.

Meeting minutes ........................................................................................................ 35

Table of Figures

Figure 1. Top 10 car brands .............................................................................................. 7

Figure 2. Quality results .................................................................................................... 7

Figure 3. Value results ...................................................................................................... 8

Figure 4. Technology/Innovation results .......................................................................... 8

Figure 5. Global automobile market in 2013 .................................................................... 9

Figure 6. Toyota, VW and ford net income comparison .................................................. 9

Figure 7. Pestel Analysis ................................................................................................. 10

Figure 8. Strategic Roadmap .......................................................................................... 21

Figure 9. Strategic planning roadmap ............................................................................ 23

Figure 10. Technology Roadmap for TOYOTA ................................................................ 24

Table of Tables

Table 1. Political, Economical, Social, Technological, Legal and Environmental issues are

considered. Afterwards, actions can be defined ............................................................ 11

Table 2. Strengths, Weaknesses, Opportunities and Threats are considered in order

SWOT analysis to be applied .......................................................................................... 15

Table 3. Balanced Scorecard ........................................................................................... 18

Strategic Technology Management for Toyota 2013

4

University of Strathclyde

1. Introduction

This project is about a strategic plan for Toyota Motor. In order to produce this project

plan two basic methods are going to be used. The first one is Pestle analysis; it will be

used to define the political, economical, sociological, technological, legal and

environmental effects, and afterwards to lead for strategic decision-making. While the

second one is SWOT analysis; it will be used to understand the strengths and

weaknesses, as well as identify the opportunities and the threats that the company

face or will face in the future. [11][12]

Then a strategic and technologicalroadmap will be produce to present the path that

the company requires to follow in order to achieve its goals; the main reason of this

technique is to ensure that the company goes in the right direction. [11][12]

2. Company Background

Toyota Motor Corporation is an automaker company from Japan, and its main

headquarter is in a city named Toyota located in Aichi Prefecture of Japan. The

establishment of the company was on 28th of August, 1937, by Kiichiro Toyoda. In

2012, Toyota is a multinational company consisted of 325,905 consolidated employees

and 69,148 unconsolidated. [1]

This year Toyota’s capital is considered as 397.05 billion Yen, while the net revenue,

operating income and net income were 22,000, 1,320 and 962 billion Yen respectively.

Also, it should be mentioned that Toyota Motor Corp has 507 consolidated subsidiaries

and 57 affiliates. [1]

2.1. Historical Review& Goals

In 1924, the Toyota founder’s father (Sakichi Toyoda) invented the Toyoda Model G

Automatic Loom; an automatic high-speed loom featuring with the ability to change

shuttles without stopping. In 1929, the patent rights were sold to a British company

(Platt Brothers) and as a result, the capital gained due to start researching into a

gasoline powered engine and develops an automobile production. [1]


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In 1933, Toyota was a division of Toyoda Automatic Loom Works, specialized on the

production of automobiles. A1 prototype passenger car and G1 truck were completed

in 1935 and one year later the first passenger car, Model AA Sedan, produced, with

sales price approximately 400 yen cheaper than the competitor’s cars (Ford, GM, etc.).

Also, AB phaeton and GA truck produced the same period.

One year later, 1937, the company became independent and then,almost 10 years of

successful business development followed, where many facilities and plants were

established, as well as new models were produced and new technologies were

imported as well. [1]

However, this development stopped by the beginning of the World War II. When the

war ended Toyota had 3000 employees and no working facilities. But, 1947, the design

of a new postwar automobile leaded to an increment of company’s income. Two years

later, Japanese economy was continuing to suffer and raw materials were in short

supply, as well as the government taking measures which affected negatively Toyota’s

economy. The result was the company requested 1,600 voluntary retirements.

However, the company was continuing not to meet its goals; the president of Toyota

resigned and a greater number of employees than requested began leaving the

company voluntarily; 2,146 voluntary retires.[5][6][7]

In 1957, Toyota eventually entered in the American market and by the early 1980s

began building plants in the US.While, in 1990 Toyota Europe Marketing & Engineering

was established due to help vehicles market in the continent and two years later the

first base was set up in the UK; Toyota Manufacturing UK.

Some of the most important achievements are presented briefly below:

o In 1999, Toyota decided to list itself on the New York and London Stock

Exchanges.

o In 2002, Toyota entered Formula 1

o In 2003, Toyota produced cars in France

o In 2005, ranked 8th world’s leading companies


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2.2. Guiding Vision

The Toyota way is five core values to express the beliefs and values of the company.

These values are as follows:

o Always be faithful to your duties, thereby contributing to the company and to

the overall good.

o Always be studious and creative, striving to stay ahead of the times.

o Always be practical and avoid frivolousness.

o Always strive to build a homelike atmosphere at work that is warm and friendly.

o Always have respect for spiritual matters, and remember to be grateful at all

times.[2]

Toyota as global company has a system of ideas and ideals regarding economics,

politics and management. It honors the language and the spirit of the laws of every

nation that operates and supports open and fair business activities; as well as it

respects the culture and customs and contributes to economic and social

development. Also, it targets to produce clean and safe products due to enhance the

quality of life. Its priority is to create and develop advanced technologies in order to

produce outstanding products and services according to the customers’ needs around

the world.

Moreover, Toyota supports that the individual creativity, the value of teamwork, the

mutual trust and the respect between labor and management are factors which have a

key role in order for the company to be successful.[2]


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3. Competitors Environment

According to the 2013 Car Brand Perception Survey, which is conducted by the

Consumer Reports National Research Center, Toyota, Ford, Honda, Chevrolet,

Mercedes-Benz, Volvo, Cadillac, BMW, Dodge, and Tesla are the best brands globally.

The scores that were given by the consumers are presented below: [39]

Figure 1. Top 10 car brands

Regarding quality, road tests and reliability, Toyota was ranked 2nd: [39]

Figure 2. Quality results


8


Concerning value, consumers are looking to get the most for their money. The survey

shows that Toyota ranked 1st. [39]

Figure 3.Value results

While, when they were asked about technology/Innovation, their answers were shown

below: [39]

Figure 4. Technology/Innovation results


9


Other statistics, regarding the global market shares in 2013, shows that Toyota ranked

1st and it is considered as the best auto seller globally. [40]

Figure 5. Global automobile market in 2013

Regarding the net income concerning Volkswagen, Toyota and Ford, Toyota has the

highest for the years 2009, 2010 and 2012, while only on 2011 Ford is achieved a

higher one than Toyota. [40]

Figure 6. Toyota, VW and ford net income comparison


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4. Toyota PESTLE Analysis

PESTLE is an acronym for Political, Economic, Social, Technological, Legal and

Environmental, all factors to take in consideration when making external analyses [13].

This tool has been designed and improved especially for scanning markets and

environments and can be used as input to the SWOT analysis.

Figure 7. PESTLE Analysis

The group understanding of the PESTLE Analysis tool leads to the conclusion that to

obtain more consistent results it would be important to keep a broad horizon. Toyota

as a whole company is present in many parts of the globe, which causes it exposure to

several different contexts and different products, leading to superficial results.

Therefore, the group decided to approach Toyota globally without exploring deeply

specific topics, regions of the globe or restricted markets and to always keep the

Toyota Prius perspective for the technology topic but without missing global scenario.

To use the tool, the group organized a workshop, after individual reading, and trough a

brainstorming, generated the following results:


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Table 1. Political, Economical, Social, Technological, Legal and Environmental issues are considered. Afterwards, actions can be defined

PESTLE ANALYSIS Issue Time Importance Action

Political

public transportation Short term

Low Reduce car cost/more efficient car; less consumption of oil

oil crisis Short term

High more efficient car

middle east unstable countries Long term

medium understand the local market

emission laws Short term

high reduce emission

Economical

Energy rising cost Long term

High more efficient car

Global crises medium High Focus on another market

competitive/volatile market Long term

medium better advertising and improved products

Import/Export Long term

medium Import from low cost market and export to rising economy market

Social

Brand exposure (Recall2009-2010&2012-2013)

long term

high Improve the quality of products

New energy source improves life quality

Long term

medium hybrid technology targeting low emission

Exploring social networks Short term

low Improve the social presence by events and media

Emerging markets medium medium Efficient strategic plan; consider all parameters deeply

Low skilled society medium medium Provide educational assistance

Individualization and women empowerment

Short term

high More customized products

Technological

Development of hybrid car Long term

high Research/Education

Focus on new energy sources Long term

high Research/Education

Focus on quality control techniques

Short term

medium Research/Education

Innovation is crucial medium medium Research/Education

Cost of R&D (Design) Short term

medium Research/Education

Legal

Subject to different countries regulations

Short term

Low Efficient strategic plan; consider all parameters deeply

Legal proceedings Short term

Low Hire legal consultants

Incentive to produce eco cars medium medium Further legal research

Taxes high term

high Develop Taxation consulting department

Environmental

Japan Earthquake Short term

medium mechanism to recover quickly after environmental disasters

Gas Emissions Long term

High Improve technology to reduce gas emissions

Battery disposal Long term

High mechanism to recycle battery or limiting its impact to environment

Oil crises Long High Hybrid and electric car technology


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The analysis of the table is structured bellow. The Technology and the Environmental factors

were put together due to its proximity in the Toyota strategy context.

4.1. Political

In many countries, the public transportations networks are receiving a lot of investment,

decreasing customer necessity of purchasing a personal vehicle. It is a global tendency even

if it is still concentrated in developed and developing countries. This might demand more

effort in advertising and price strategies.

Oil increasing prices and political instability in the Middle East are some factors that can

cause impact in the entire automotive sector. With another oil crisis, demand for cars

powered by gasoline might decrease. A good strategy though, is the development of eco-

cars and alternative energy sources. Toyota is already working on hybrid cars that need

much less fuel and use nickel metal hydride batteries as their main power source [14].

4.2. Economical

Rising energy costs caused by long term investments to modernize energy production in

Europe may impact both car production and attractiveness of electric and hybrid cars [22].

In a place still recovering from crisis and with a still crescent unemployment rate, high cost

of production and, therefore, products, is a critical factor [15]. Markets are competitive and

volatile and consumers are more aware and demanding. In order to survive in such a hostile

environment is important to try mitigating those economic factors with cost reduction.

4.3. Social

Toyota is in a delicate position regarding their image. There have been recalls in 2009-2010

in the US and, again, in 2012-2013 in Canada, Mexico and Saudi Arabia [16]. Those recalls

showed decrease of reliability and low quality standards, factors that, in the past, were part

of Toyota Production System foundations [17].

Nevertheless, Toyota’s research on alternative energy sources cause good social impact and

media repercussion. Actions to improve life quality and reduce pollution are not just

restricted to law obligations but also are a market trend and very consumer appealing [23].


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To get even more connected to its consumers, Toyota started using social media data

collection and analysis. They are monitoring social networks like Facebook and twitter to

identify consumers’ needs and their thoughts about Toyota products *18].

By 2015 Toyota intends to have 50% of its vehicle sales in emergent markets. These

markets, inserted in developing countries, benefit from it as it generates income job

positions. Health and safety and employee satisfaction are part of Toyota’s values towards

their employees [19].

4.4. Technological&Environmental

Toyota is one of the car companies that are heavily investing on sustainability and

environmental performance improvement. The company focus is to develop new

technologies for eco cars and automotive power sources *24+. Prius, Toyota’s hybrid car is

part of this environmental initiative but note the whole program. Toyota also research

electric and fuel cell vehicles. The electric car, the Toyota FT EV III is a small 100% fuelled

vehicle and the fuel cell vehicle is said to be the “ultimate eco-car”, practically reducing the

gas emissions to zero [20].

4.5. Legal

Due to its presence in several countries (Japan, Brazil, Mexico, United States, Belgium,

France, Portugal, Poland, Australia, Czech Republic, United Kingdom, etc.), Toyota is subject

to many governmental regulations [21]. Safety and environmental laws may change from

one country to another and it increases difficulties in product development. It is important

to adapt their cars to each market. Trade taxes can be an issue also, since it affects directly

the decision process when it comes to entering new markets or installing new facilities.

Another issue is the recent recalls that might lead to legal proceedings. As a multinational

company, Toyota may be subject to law proceedings due to various causes, intellectual

property and product liability for instance which could have considerable financial impact.


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4.6. PESTLE Analysis Conclusion

Toyota has many opportunities and threats in all five topics analyzed. Most of Toyota’s

concern should be around their failures, cause of several recalls. Actions regarding recovery

of the brand’s liability might be fundamental to regain customers’ trust.

The group found it difficult to utilize the tool considering data gathering and narrowing the

object of analysis. It was fundamental to reduce the subject of analysis in order to produce a

more accurate environment reading. It was also challenging to relate data regarding

European countries political and economic situation and Toyota’s performance.

5. Toyota SWOT Analysis

5.1. Value Proposition of Toyota

The value proposition is described as being the unique competitive offering that your

company provides that allows you to stand out amongst your competitors. Within value

proposition there are three main categories that companies fall under which are Product

Leadership; Operational Excellence; and Customer Intimacy. Toyota comes under the

category of Operational Excellence as they strive to produce quality products across

numerous countries with varying economic climates. Due to this they have a high variety in

their portfolio to accommodate the many different countries they provide for.


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5.2. SWOT analysis

Table 2. Strengths, Weaknesses, Opportunities and Threats are considered in order SWOT analysis to be applied

Strengths Weaknesses

Strong/Recognized Brand

Varied portfolio of products

Highly innovative

Leaders in the fields of manufacturing and production

Correct types of products for the markets they are involved in

Knowledgeable in the areas of hybrid technologies

State of the art research and development facilities

Market leader in environmentally friendly car development

Large scale recalls due to manufacturing defaults

Not capitalizing on emerging markets

Smaller share of the European automotive market compared to its other competitors

Heavily focused on Japanese and US markets therefore exposing the company to the fluctuating economic and political conditions of those countries.

Therefore Toyota have focussed on producing cars for US and Japanese consumers that are not as desirable in other markets

Opportunities Threats

Increasing interest in green cars

Rises in fuel prices

New emerging markets (India and China)

Ahead of competitors in hybrid technology

Selling of hybrid technology to competitors

Increasing market share in European market (developing models that appeal to this market)

Fluctuating automotive market resulting in over or under capacity of manufactured vehicles

High levels of competition from equally successful automotive companies

Rising fuel prices

Government legislation changes to levels of emissions

Increase in raw material costs

Natural disasters

5.2.1. Strengths

Toyotas main strengths are their brand, their position in the automotive industry and their

manufacturing and production capabilities. The strong brand image they have created is due

to their extensive portfolio that includes 70 different models that cater for the requirements

of their numerous customers [27]. Providing this variety of vehicles not only allows Toyota

to satisfy numerous consumer groups but also increases their brand awareness. Toyota has

become a world class company for production and sales through adopting manufacturing

and quality management processes before its competitors [24]. Through utilizing total


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quality management processes Toyota are continuously researching new methods of

improving the overall quality of their products and by doing so are maximizing their profits

[27]. The benefits of using manufacturing and quality management processes saw Toyota

become the top global car producer until 2011 when unforeseen damages were caused to

their manufacturing facilities in Japan which allowed General Motors to reclaim the top

spot. [30]

5.2.2. Weaknesses

The most well know weakness that Toyota has is its record of vehicle recalls. In the period of

2009-2010 Toyota recalled 9 million vehicles while in 2012 that number was at 7.43 million

(a slight decrease) [24]. In November of this year they have recalled nearly 900,000 vehicles

with faulty air condition units that could compromise the deployment of the vehicles air bag

system. In October they recalled 780,000 recalls were announced due to faulty suspension

and in September another 615,000 were recalled due to faults with the parking system. A

mass recall from a manufacturer can be manageable however Toyota has been consistently

recall different models and with different faults which has severely compromised its image

with its consumers [31]. Another weakness of Toyota is its level of attention towards the US

and Japanese markets which has caused them to disregard emerging markets such as China

and India. Due to this neglect they have allowed one of their largest competitors, General

Motors, to claim a huge market share in these emerging economies. [27]

5.2.3. Opportunities

Emerging economies such as China and India provide huge opportunities for Toyota to

expand their market share. Along with China and India there is also a number of emerging

African nations with high population that desire cheaper vehicles. The experience Toyota

has in assessing what needs individual markets want and creating products that fit these

descriptions (such as they have done in the US and Japanese market) give them a significant

advantage over their rivals in establishing a majority market share in the new African

markets. Another opportunity for Toyota is the increase in interest from consumers in the

area of eco-friendly vehicles. Toyota is already one of the forerunners in eco-friendly cars

which would mean this opportunity would be ideal for them to capitalize on. [27]


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5.2.4. Threats

One of the main threats to Toyota is the area in which it conducts the majority of its

manufacturing (Japan, China, Thailand and Indonesia). These areas are subjected to natural

disasters which can disrupt Toyotas manufacturing processes [24]. Entire facilities could be

rendered inoperable due to these natural disasters which, if there are any weaknesses in

Toyotas supply chain, could halt manufacturing throughout the company. One example of

this in recent years was the tsunami that hit Japan in 2011. A supplier of Toyota was

destroyed during the tsunami which stalled Toyotas manufacturing as this supplier was the

only company that produced this specific item. Toyota had to invest money to help the

supplier rebuild its facility. After this Toyota and other companies in high risk natural

disaster areas have had to improve their approach to supply chain risk [30].

6. Balanced Scorecard

Balanced Scorecard is a strategic planning tool in which the entity has clearly defined its

goals and strategies. It is a technique that aims to measure business performance using the

integration and balancing of all key performance indicators existing in a company, since

financial and administrative to those relating to internal processes. [32]


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Table 3. Balanced Scorecard

Strategic Objectives Strategic Measurements

Lag indicators Lead indicators

Fin

anci

al

• Increase profitability;

• Increase sales on emerging

markets;

• Sustainable financial growth.

• Profit margin growth;

• Participation on emerging

markets;

• Cash flow.

• Mix revenue;

• Marketing investment;

Cu

sto

mer

• Regain customers’ trust;

• Establish a worldwide brand

leader;

• Improve communication

channels and feedback;

• Ethical approach towards

customers.

• Brand trustworthiness

• Brand Recognition

• Feedback answered x Car

sold

• Overall customer

satisfaction

• Marketing investment;

Inte

rnal

• To strengthen the

establishment of internal

systems aimed at quality

improvement;

• Improve product development

processes;

• Increase R&D results with

sustainable products;

• Innovative products.

• New product revenue;

• Customer satisfaction.

• Time invested on

employees training;

• Time to get the product

to the market.

Lear

nin

g

• To improve the ability to

respond quickly to market

quality issues from the

customer's perspective;

• Empowerment;

• Improve employee recognition;

• Training programs to improve

employee’s abilities.

• Employee improvement;

• Employees satisfaction;

• Objectives to achieve;

• Teamwork rewards.

The method determines in a balanced mode connections of cause and effect relationship

between the four indicators to evaluate the companies, which are:

o Financial: create new performance indicators so that shareholders may have better

return on its investments.

o Customer: knowledge about customer satisfaction with the company.


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o Internal processes: the company must identify if there are any products with

problems, if they were delivered on time and focus on innovation of its products.

o Learning and Growth: refers to the ability and motivation of employee, and a better

information system in the company. [33]

Two kinds of key indicators were used in the strategy map, lead and lag indicators. Lead

indicators measure actions that lead or induce future results. Lag indicators are based on

results' measures and are applicable to examine information regarding past actions, events

that already happened. In this perspective, lead indicators measure cause while lag

indicators measure effect. [34]


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7. Strategy Roadmap

In order to pursue primary objective goals within a company, whether it is a financial,

growth, processor customer goal, they need to be documented. This is done in the form of a

strategy map. A strategy map will highlight the key areas that a company should focus on to

achieve goals that are desired. An important aspect of the map is that goals are set through

all aspects of the company and none are forgotten, failure to do this could result in an

aspect of the company being forgotten about resulting in a drop in performance elsewhere.

All goals in a company that are set generally benefit the company finically, making a larger

volume of money and improving its market share. This measures the company’s success

rate; therefore all goals should lead to this.

Through using the Pestle and SWOT tools, key areas within the company that need to be

focused on can be identified.

7.1. Toyotas Strategy Roadmap

Toyota is a very innovational company, by striving ahead in ‘green’ technology. They are

succeeding in boosting their brand image as well as creating a next generation niche that is

expected to change the car industry. This is achieved through the use of hybrid, electric, and

hydrogen fuel-cell engines. It is also achieved through ‘green’ manufacturing, being able to

produce the car as efficiently and as kind to the environment as possible. In order to keep

this image, focus must be set on maintaining and bettering this aspect.

The next objective Toyota should be focusing on is marketing and internationalization. As

stated in the SWOT analysis, Toyotas focus has been set on specific countries around the

world, but as fail to capitalize on others, this has allowed other companies to stamp their

mark and benefit. Toyota needs to focus attention on designing, marketing, and supplying

cars all over the globe. By focusing on more countries will lead to a greater market and thus

creating a larger number of customers, leading to higher sales, however by expanding this

could lead to designs which don’t meet the user’s needs and could be damaging to the

brand.


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Lastly Toyota needs to look at quality issues. Toyota are very well set up to recall and repair

vehicles, this is down to a good customer service division. However this service is very

regularly required. Due to design and build quality issues Toyota have to regularly recall cars

in order to keep customer satisfaction high. This has a toll and damaging effect on the brand

image. To keep recalls at a minimum Toyota has to focus on quality. By improving quality it

will also mean less money/resources will need to be put in mass car recalls.

Shown in the diagram below is the strategy map and how each of these aspects fit into the

overall strategy.

Figure 8. Strategic Roadmap


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8. Technology Roadmap

A Technology management methodology called as ‘Technology Roadmap’ is applied for

defining the Toyota’s technology evolution in advance. Technology road map is a tool that

provides a clear direction of action to a firm; it was first developed by Motorola in 1970s in

order to achieve their goals by strategy and technology development [35]. According to

Galvin *36+, “A roadmap is defined as an extensive look at the future of a selected field of

research framed from collective imagination and knowledge of the most promising drivers

of change in that field” *36+. Technology Roadmaps are adjustable “strategic lenses” through

which evolution of complex systems can be viewed, affirming dialogue and communication.

[37]

Two of the main extremes of Technology road map are Market ‘pull’ and technology ‘push’.

Market pull leads to the goals of a company and technology push provides the opportunity

to be raised in order to meet the goals [36]. Technology Road map takes in to account the

relationship between different technologies, services or products and target markets of a

firm; thus the technology status of a firm can be developed or maintained. It is a

demand/need forced technology planning method to help identify, develop and select

technology options in order to achieve a set of product needs. It is an expert team work for

future technology planning in order to take suitable technology investment decisions. Thus

with the help of Technology roadmap a collaborative technology planning and coordination

for TOYOTA as an industry is done in order to make better investment decisions [38].

There are many types of technology roadmaps but in order to deal with the strategies of

TOYOTA strategic planning roadmap [36] is used by us. It evaluates different opportunities

that business tendencies and markets can offer at strategic level. A standard format of a

strategic planning road map is shown in the figure 9. [35]


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Figure 9.Strategic planning roadmap [35]

8.1. Technology Road mapping

For making the roadmap for Toyota a T-Plan approach is used [36]. It is divided in to four

different stages. In first stage the external and internal drivers depending upon market and

business are considered, second stage is the product oriented phase, third stage is focused

on technology which is pushed as a result of force from market needs. And the fourth stage

is mainly follow-up and bringing the first three stages together. [36][37]

Toyota’s technology road map is based on the two extremes market pull and technology

push as new technologies are forced to immerge as a result of market needs. The timeline

represented by columns used for the road mapping is divided in to three phases, 1) Current

situation (From now to 2016), 2) Plans and objectives (From 2016 to 2018) and 3) Vision

(From 2018 to 2020). The time line in the roadmap represents the targets and decision point

for Toyota.

The horizontal rows represent the different stages of strategy planning. First row represents

internal and external drivers depending upon market and business needs. The external

drivers are demands from customers, market, competition and surroundings. On the other

hand internal drivers are the business strategies dependent which includes budget, market

share, skills and a unified vision. The second row representing products is the result of pull

from the drivers. And the third row is technology which is either evolved or developed in

order to full fill the market needs and achieve the company vision. The last row consists of

other factors like skills, R & D facilities and overall customer experiences.


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8.2. Technology Roadmap analysis

The final Technology road map for Toyota is shown in the figure 10. The external drivers are

based on the PESTLE analysis performed by the team; they are mainly European and energy

crises considering the current situation. Desire for personalization, sustainability and

emission laws are the drivers which will effect in the future and threat from the European

market will be one of the major influencing driver for long term.

Internal drivers are mainly derived from the SWOT analysis performed by the team. They

includes the problem of recall because of faulty parts, launch of new car models, increase in

market share and a unified vision of being a global automotive leader.

Aging population and desire for personalization creates the market pull for customized and

fully automatic cars, which in turn will provides the scope for driverless and accident proof

technology in the field of automobiles. Energy crises and the need for sustainable mobility

generates the market pull for producing zero carbon footprint and zero emission products

by providing the technology push of more efficient hybrid technology and forced to research

in renewable fuel based technology areas.

Figure 10.Technology Roadmap for TOYOTA

Current Situation Plans Vision

Tech

no

logy

Oth

ers

Exte

rnal

Dri

vers

Inte

rnal

Dri

vers

Mar

ket

and

ne

ed

s

Pro

du

cts

Now 2016 2018 2020

European Crises

Legislations: Emmission Laws, VAT

Threat from european competitors

Energy Crises Aging PopulationSustainable Mobility

Investment: Buy other companies

Launch New Models

Increase european market share

Global Automotive leader

Shortage of high skilled staff

Better Designed Cars

New Hybrid Models

High Quality products (To avoid recall)

Customizded Cars

100% Localized Products

Zero Carbon foot print products

Fully Automatic Cars

Zero Emmission Cars

More efficient Hybrid Technology

Fully Automated Manufacturing Plants

Customer feedback

New R&D, Skills and knowledge centers

Maintaining Brand image

Social /online presence

Maintainance and after sales service

Renewable fuel based technology (eg. Biodiesel, Solar energy etc.)

Driver less technology

Renewable/Sustainable material use

Hydrogen fuel based technology

Accidents proof technology

Leader in innovation and R&D

Zero Recall

Personalisation

More Service centers and retail outlets

Legislations: Emmission Laws, VAT

Threat from european competitors

Launch New Models Global Automotive leader

Maintaining Brand image

Leader in innovation and R&D


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European crises and future threats from other European competitors will force TOYOA to

stay ahead in the market by launching new affordable car models, 100 % localization and

establishment of new R&D and knowledge centers in order to launch new innovative

products. Lack of skilled staff is also a driver which creates a market pull for fully automated

manufacturing plants.

Other factors like after sales service, maintenance and customer feedback also evolved as a

result of external drivers. Maintaining brand image of Toyota and an active social and online

presence will also act as an important factor in order to reach the final vision of Toyota.


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9. Recommendations

Based on extensive research, (by PESTEL analysis, SWOT analysis, Strategy map and

technology road map) recommendations for Toyota have been developed by the team. As

shown in the opportunities and threats analysis there are many key issues on which Toyota

must work out to get back on top as a global automotive leader. We divided the

recommendations in to two main categories as Financial/Business level and Functional level.

Financial/Business level recommendations:-

Toyota can improve its competitive strength by using its core competencies in order to

overcome the threats from European rivals. Various strategic actions recommended are:

Focus on hybrid, efficient and sustainable vehicles as Toyota’s future specialization

strategy: Toyota already has ground breaking achievements in the field of hybrid car

technology. But considering the future energy crises and increasing demand of energy

efficient products we recommend Toyota to improve and increase its hybrid cars production

by launching new models. The best strategic option would be to separate its hybrid models

in to a separate brand focusing on green technology. Considering the global financial crises,

a new brand offering moderately cheap, eco-friendly and efficient cars would be

comprehended very well.

Focus on emerging markets and enhance global market share: As a major point emerged

from the detailed analysis in the report, most of the Toyota market is based in Japan and US.

But in order to be a global automotive leader Toyota should also target the most emerging

markets of the world like India, China and Brazil as its focus. As these markets offer

maximum opportunities for growth in the future and in turn help Toyota to get extra edge

over its competitors. This can be achieved by developing research and manufacturing

facilities in these regions and focus on segmentation of market as the customer

requirements are different in these regions as compared to developed countries. Also the

European market share can be improved by better localization of child parts and

incorporating the strength of Toyota (like “The Toyota Way”) in Europe as did in Japan.


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Functional level recommendations:-

On the basis of strategic and technology road maps we came up with the point that Toyota

should focus on the functional level in order to achieve more profit, more operational

effectiveness and gain the competitive advantages. Following strategic recommendations

are suggested.

Operation strategy: - Focus on product quality control: Inadequate quality control which

results in many recalls is emerged as one of the major weakness of Toyota. In our analysis

we find that Toyota is deviated from its quality focused approach in the race of chasing the

increased global market share and profit. We recommend Toyota to stick to its core values of

maintaining quality by the implementation of Toyota way. Root cause analysis and

continuous improvement by learning from the mistakes are the main quality controlling

points Toyota must use.

Marketing strategy: - Maintaining the brand image: No doubt Toyota is one of the most

valuable automobile brands but due to recent circumstances like recalls, customers are now

thinking twice before purchasing a Toyota car. Thus Toyota marketing strategy will play an

important role in regaining its brand image. We suggest three main factors where Toyota’s

marketing efforts must be focused. Firstly, by reinforcing Toyota’s brand association with

quality. Secondly, by enhancing the brand loyalty with efficient customer service and

rewarding the loyal customers. Thirdly by increase the brand awareness by continuing selling

the reliable products to customers and creating a strong social presence.


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10. Conclusion

To conclude, presently Toyota has a strong competitive position globally. But major recalls

and certain quality issues, global financial crises and intense competition from global rivals

have created many challenges for Toyota to maintain its position in the future. Thus strong

actions are required to counter these challenges. Focus towards more emerging markets and

sustainable mobility will act as the core strategy for their future success.

The strategies designed and recommended by us will benefit Toyota to further heighten its

competitive position and increase the market share, in turn enhance its position as a global

automobile leader and achieve new heights in the future.


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APPENDIX:

(i) Work break down structure


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(ii) Responsibility chart


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Meeting minutes

Meeting 1 Minutes: Strategic Technology Management Group 2 Meeting Held: Friday 11th October 2013 Venue: Group Discussion room 2 - Strathclyde Library Time: 6pm Present: PulkitVijayvargiya Gordon Bamford Carolina Santos Pedro Miyake Meeting Agenda: Discuss Brief Put forward suggestions of businesses for report Meeting Highlights: 1. GE - suggested by Giorgos (prior to meeting) 2. Saab - suggested by Gordon 3. Giffgaff - suggested by Carol 4. Toyota - suggested by Pulkit 5. Dell/ Lenovo/ Compaq - suggested by Pedro Set weekly meet: every wednesday 10 am - 11 am Action Items: Next Meeting: Date: Wednesday 16th October 2013 Time: 10am Place: Group Discussion Area - Strathclyde Library


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Meeting 2 Minutes: Strategic Technology Management Group 2 Meeting Held: Wednesday 16th October 2013 Venue: Group Discussion Area - Strathclyde Library Time: 10am Present: PulkitVijayvargiya Gordon Bamford Carolina Santos Pedro Miyake Georgios Christofordis Alexander Clayton Meeting Agenda: Finalize Company Assign Areas to study Meeting Highlights: Decision: TOYOTA Weekly meeting on Wednesday 10 am Future attendance Weekly Plan to complete report Action Items: Pedro: Dropbox Pulkit, Giorgos: Study Boosh report Gordon: Organise Minutes Alex, Carol: Start Research on TOYOTA Next Meeting: Date: 23rd October 2013 Time: 10.00am Place: Group Discussion Area - Strathclyde Library


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Meeting 3 Minutes: Strategic Technology Management Group 2 Meeting Held: Wednesday 23rd October 2013 Venue: Group Discussion Area - Strathclyde Library Time: 10am Present: PulkitVijayvargiya Gordon Bamford Carolina Santos Pedro Miyake Georgios Christofordis Alexander Clayton Meeting Agenda: Discuss Aspects of Toyota Assign sections of report Meeting Highlights: Pulkit, Gordon to work on Roadmaps Georgios to work on introduction and company background Carol and Pedro to work on PESTEL Alex to work on SWOT Action Items: Pedro: Update timetable Pulkit: review Bosch report Alex: Write up meeting minutes Gordon, Carol, Giorgos: continue research Next Meeting: Date: 30th October 2013 Time: 5pm Place: Group Discussion Area - Strathclyde Library


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Meeting 4

Minutes: Strategic Technology Management Group 2 Meeting Held: Wednesday 30th October 2013 Venue: Group Discussion Area - Strathclyde Library Time: 5pm Present: PulkitVijayvargiya Gordon Bamford Carolina Santos Pedro Miyake Georgios Christofordis Meeting Agenda: 1) Check our responsibility chart and check idividual progress as per schedule.

2) To see if any one is facing any problem in the assigned job. 3) To discuss the issue raised by Pedro about selecting only hybrid car strategy. 4) Diciding next meeting agenda.

Next Meeting: Date: 6th November 2013 Time: 10.00am Place: Group Discussion Area - Strathclyde Library

Meeting 5 Minutes: Strategic Technology Management Group 2 Meeting Held: Wednesday 6th November 2013 Venue: Group Discussion Area - Strathclyde Library Time: 10 AM Present: PulkitVijayvargiya Gordon Bamford Carolina Santos Pedro Miyake Georgios Christofordis Meeting Agenda: 1) Check our responsibility chart and check individual progress as per schedule.

2) To discuss all the individual job finished till date 3) To decide our own strategy to catch up the target dates. 4) Further action required as per the schedule. 5) Decide next meeting agenda.

Next Meeting: Date: 29th November 2013 Time: 10.00am Place: Group Discussion Area - Strathclyde Library


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Meeting 6

Minutes: Strategic Technology Management Group 2 Meeting Held: 29th November 2013 Venue: Group Discussion Area - Strathclyde Library Time: 10 AM Present: PulkitVijayvargiya Gordon Bamford Carolina Santos Pedro Miyake Georgios Christofordis Meeting Agenda: Discuss report at this stage Start to produce slides for presentation Arrange next meeting to film sections of video Next Meeting: Date: 9th December 2013 Time: 6:00 PM Place: Group Discussion Area - Strathclyde Library

Meeting 7 Minutes: Strategic Technology Management Group 2 Meeting Held: 9th December 2013 Venue: Group Discussion Area - Strathclyde Library Time: 6:00 PM Present: PulkitVijayvargiya Gordon Bamford Carolina Santos Pedro Miyake Georgios Christofordis Alexander Clayton Meeting Agenda: Finish compiling the report Film sections of video Decide who will present at presentation Compile slides Next Meeting: Date: 11th December 2013


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Time: 5:30 PM Place: Group Discussion Area - Strathclyde Library

Meeting 8

Minutes: Strategic Technology Management Group 2 Meeting Held: 11th December 2013 Venue: Group Discussion Area - Strathclyde Library Time: 5:30 PM Present: PulkitVijayvargiya Gordon Bamford Meeting Agenda: Compiling report Editing video Next Meeting: Date: 12th December 2013 Time: 10.00am Place: Group Discussion Area - Strathclyde Library

Meeting 9

Minutes: Strategic Technology Management Group 2 Meeting Held: 12th December 2013 Venue: Group Discussion Area - Strathclyde Library Time: 10 AM Present: PulkitVijayvargiya Gordon Bamford Carolina Santos Pedro Miyake Georgios Christofordis Alexander Clayton Meeting Agenda: review slides Discuss peer review

strategic technology management for toyota

Documents

technology roadmap analysis

toyota swot analysis

toyota pestle analysis

toyota motor

pestel analysis conclusion

toyotas strategy roadmap

technology road mapping

value proposition of