?How has Toyota changed its strategies toward value chain management as a result of these quality and safety problems? The failure of some of Toyota’s models to meet quality and safety standers gave the company the opportunity to made adjustments to their value chain management. According to Gu (2010), value chain is a framework that divides a firm’s activities into economically and technologically distinct ‘value activities’ that part of the firms daily business. Toyota’s engineers started the product development function.
According to Griffin (2010), the company’s engineers developed and tested some solutions that can support the accelerator pedal assembly. Actually, Toyota’s management is confident about their solution and confirmed the effectiveness of it through testing. Jones & George (2011) classify the product development function as the first function in the value chain, and identify it as the engineering and scientific research activities involved in innovating new or improved products that add value to a product. The marketing function is the next stage in the value chain.
It is simply announcing the new product to the public and persuading the consumers that this product can satisfy their needs (Jones & George, 2011). In Toyota; marketing added value to the product by reveling the features of the adjusted vehicles to the public. In addition, marketing managers addressed to the press that the company is capable of finding solutions to the recalls. The next stage of value chain is the materials management function that controls the physical flow of the materials starting from raw materials, work in process and finally distribution of the product.
Toyota is a well-known company for its materials management function. They strongly control the materials when they receive it from their suppliers, through warehouses and finally into customers’ hands (Jones & George, 2011). The product function is the transforming operation of inputs to the final product form after a process of assembling, creation and development. Toyota is famous brand of high production value but after the recalls they realized that they have some problems with the production function.
Therefore, they developed it to make it with high quality and safety standers. The next stage in the value chain is the sales function. This is an essential element in the value chain because it influences the customer by contacting them and convincing them to buy the product. In Toyota, they have a precise strategy for salespeople. However, after the recalls the company adapted new strategy and functional-level for salespeople to be more capable of communicating with customers.
Lastly, the customer service function which is responding to consumers needs after they acquire the product and provide service and support. This is a crucial role for Toyota because it is an automobile company which provide a long lasting product. After the recalls, they received huge amount of vehicles and took care of them. All in all, Toyota Motor Corporation is well-known for quality and safety through decades of experience, success and good management. But in 2010 there was various recalls which Toyota responded to it and adjusted its value chain to cope with the industry.
George, J. & Jones, G. (2011). Contemporary management (7th ed. ). New York: McGraw-Hill/Irwin. Griffin, K. (2010). Final plans for Toyota Recall announced: Toyota answers questions about sticking accelerator recall. Retrieved from http://usedcars. about. com/od/avoidingproblems/a/ToyotaRecallAnswers. htm Gu, X. (2010). Toyota Recalls: Revealing the value of secure supply chain. Massachusetts Institute of Technology. Retrieved from http://www. academia. edu/281982/Toyota_Recalls_Revealing_the_Value_of_Secure_Supply_Chain