Toyota Motor is one of the most competitive companies. Toyota was created in 1937 and since then it operates on the international level. Its products are valuable in Japan, North America, Europe, Asia, and many more countries. Toyota Motor is known by producing automobiles. The automobile Industry is very competitive and prosperous. Some of Toyota’s competitors are General Motors, Chrysler, Ford, Hyundai, and Mazda. To evaluate the company’s health it is necessary to review and analyze the company’s income statements, balance sheets, and cash flows.
Toyota Motor Corp., Consolidated Income Statement USD $ in millions, translated from JPY | |12 months ended |Mar 31, 2012 |Mar 31, 2011 |Mar 31, 2010 |Mar 31, |Mar 31, |Mar 31, 2007 | | | | | | |2009 |2008 | | |[pic] |Sales of products |213,066 |214,318 |190,507 |195,192 |247,734 |192,038 | |[pic] |Net revenues |226,106 |228,427 |203,686 | 208,995 |262,394 |202,864 | Table 1 Source: Toyota Motor Corp. , Annual Reports When analyzing the consolidated income statements of Toyota Motor for the last five years it is clear that the highest value of sales of production was registered in 2008.
It reached 247,734 million $. Unfortunately, in 2009 all the company’s numbers when down. The Toyota business was hit hard by U. S financial crisis and the rising cost of raw material. The net loss registered in 2009 was 4,448 million $. Toyota was not the only company that suffered from the crisis. All the other automobiles companies suffered decreases and losses. After recuperating from the crisis in 2009, the next years the company was registering positive income and profitability. The net income of Toyota Motor in 2011 was 4,909 million $.
The organization started to get bigger profits thanks to the new affordable and qualitative products placed on the internal and international market. In the process of analyzing an organization development and wealth it is necessary also to analyze the balance sheets. |Table 2 Toyota Motor Corporation | |Balance Sheet | | | | | |Period Ending | | | |Mar 30, 2012 | | | |Mar 30, 2011 | | | |Mar 30, 2010 | | | | | | | | | | | | | | | |Assets | | | | | | | | | | | | | | | |Total Current Assets | | | |149,720,000 | | | |142,734,000 | | | |139,914,000 | | | | | | | |Long.
Term Investments | | | |141,364,000 | | | |132,933,000 | | | |105,241,000 | | | | | | | |Property Plant and Equipment | | | |75,769,000 | | | |76,124,000 | | | |71,820,000 | | | | | | | | | | | | | | | |Total Assets | | | |372,452,000 | | | |359,775,000 | | | |324,800,000 | | | | | | | | | | | | | | | |Liabilities | | | | | | | | | | | | | | | |Total Current Liabilities | | | |143,163,000 | | | |130,200,000 | | | |114,364,000 | | | | | | | |Long Term Debt | | | |73,422,000 | | | |77,814,000 | | | |75,079,000.
| | | | | | | |Other Liabilities | | | |10,350,000 | | | |10,229,000 | | | |9,674,000 | | | | | | | |Deferred Long Term Liability Charges | | | |11,044,000 | | | |9,775,000 | | | |8,703,000 | | | | | | | |Minority Interest | | | |6,273,000 | | | |7,090,000 | | | |6,108,000 | | | | | | | |Negative Goodwill | | | |- | | | |- | | | |- | | | | | | | | | | | | | | | |Total Liabilities | | | |237,979,000 | | | |228,018,000 | | | |207,822,000 | | | | | | | |Currency in USD. | | | | | | | | | | | | | | | | Source: Toyota Motor Corp. , Annual Reports | | | The balance sheet reflects the assets and the liabilities of the company.
The Total Currents Assets of the Toyota Motor have a growing up character. In 2010 the value of the total current assets was 139,914,000 $ and it went up to 149,720,000 $ in 2012. The same as the Current Assets the Total Liabilities have an increasing character. The value of Total Liabilities in 2010 was 207,822,000 $ and by 2012 it increased with 30,157,000 $. The increased value of the Total Liabilities is explained by the increasing character of the company’s production and the presence of the company on new markets. After analyzing the income statement and the balance sheet of Toyota Motor Corporation it was identify a concern.
This concern is related to the total amount of debt of the company. Of course, like any other big company it is inevitable to not have short, current and long term debt. The total value of debt of the company in 2010 reached the value of 140,045,000 $. By 2011 this value went up to 156,617,000 $. The total debt of the company can be explained by the daily investments in the production process. To stay and be competitive on the international market the company has to invest in new technologies and new suppliers, which in result explains the debt.
Therefore, Toyota has to correlate the production and the marketing expenses with the revenue and the net profit. Toyota Motor Corporation is very competitive and has many competitors. To analyze how competitive is Toyota on the market it is necessary to compare it with other leading companies. We will compare it with other three companies: Ford, General Motors, and Honda Motor. | |Toyota Motor |Ford |General |Honda Motor | | | | |Motor | | |Market Cap: |136. 33B |43. 77B |39. 45B |60. 52B | |Employees: |325,905 |164,000 |213,000 |187,094 | |Quarterly Rev Growth |0. 18 |-0.
03 |0. 02 |0. 20 | |Revenue |272. 90B |132. 40B |150. 94B |115. 06B | |EBITDA |30. 58B |11. 64B |12. 50B |10. 97B | |Net Income |9. 53B |17. 68B |4. 44B |4. 23B | Table 3 Toyota’s Competitors Comparison Toyota Motor is a big company with over 325,905 employees, which excides the number of the employees of its competition. Toyota beats his competitors at the market value capacity. Toyota’s market capacity is 136. 33B. Combining all the three market capacity values of Ford, Honda, and General Motor it will result 143. 74B, which is just 7. 41B more that just Toyota’s indicator.
It results that Toyota’s automobile products are very competitive and meet the demand of the population. Toyota also beat his competitors at the revenue value. The company’s sales revenue is 272. 90B but for example, Ford’s revenue for the same period is 132. 40B. Therefore, after analyzing the competition it is clear to note that Toyota as whole company has a big advantage on the automobile market. In the last five year it is noticeable that the company had good and some less productive periods, so the aim of the company is to produce affordable and more efficient cars which will improve the community’s life.
According to T-TEN (n. d) “Toyota is a market leader in sales and a technology trailblazer. Its hybrid system is environmentally friendly and popular with consumers. Other technological advances make Toyota vehicles reliable and fun to drive, and also interesting to maintain and repair. ” The company is investing resources and time in advancing some vehicles of tomorrow: • Plug In-Hybrid Electric Vehicle • Fuel Cell-Hybrid Vehicle • Electric vehicles • Natural Gas Hybrids Toyota’s Report (2012) confirms that “Toyota remains the most fuel-efficient.
full line auto manufacturer in the United States and the Industry hybrid leader. ” It is considered the pioneer company in terms of hybrids on the market. The Prius was the first hybrid car available on the market and it is still a top seller in the industry. Nissan placed on market also a hybrid car, which is close to be a competition to Toyota’s hybrid products. Many people prefer Toyota Prius over the Altima, even if Toyota has a higher price on the market. Toyota develops unique strategies and technologies and it results with better products, faster services, cheaper rates, and higher quality products.
In comparison with General Motors which still develops old strategies Toyota has a clear advantage. General Motors offers similar design models without enabling technologies and it s generally out of touch with his customers. On the other hand Toyota produces new cars that customers want with steadily progressed technologies. Toyota vehicles have found their way in 170 countries and regions, which proves that the company has earned his popularity and existence over the years thanks to great global business strategies. The globalization has positive and effective changes in the daily Toyota’s organizational progress.
Thanks to the globalization process, Toyota became one of the most competitive automobile producers. The company has as aim quality assurance by adopting continuous improvement strategies. Doing global marketing means to provide products/services to the global customer better that your competition. Also a big Toyota advantage is that it is developing an adaptation approach. This means that the company offers different products to different regions to satisfy the local customer. A problem that was attested is the Toyota price strategy. The products prices should change in dependence the region and exchange difference.
Toyota’s benchmarking Analysis To achieve a performance, a company should be better than its competitors. For this reason, companies develop their capabilities, which are the scarcest resources in contemporary conditions of competition (Sutton, 2001). The aim of benchmarking is to create business knowledge about the factors on which the competitors base their market advantage. The above table consolidates information about Toyota’s competitors and benchmarking. Table 4 Toyota Motor Corporation benchmarking | | | | | | Indicators Toyota | |Indicators.
|Toyota |Honda |Ford |Hyundai |should improve | | |Motor | |Motor | | | |Production Management |Hourly plan-based |Flexible production |Consistent Standardized|Flexible control | | | |process Management |system, flexible |operating management |production, process at | | | |control by production |management | |the level of production|Flexible control | | |engineer division | | |departments | | |Production model |TPS based on |Honda performance | FPS production model |HPS “push” production | | | |“pull” production |development | |model |— | | | |(HPD) | | | | |
Operational goals |Minimization of |Innovative and quality |Align capacity to |Planning-led production|Innovative products | | |inventory |new products |demand | | | |Production conditions |Low uncertainty & |Safety & high quality |Proper working |High uncertainty & | | | |stable repetitiveness | |conditions& |fluctuations |Safety& high quality | | | | |environmental | | | | | | |management system | | | |Best practices |Know your supplier; the|Maintenance practices; |Understand & track the |Respect customer | | | |compliance oversight |new products |metrics & objectives: |privacy; low |New product development| | |committee |development |supplier diversity |supply-high demand; | |
|Hybrid strategies |Improve hybrid |Cost-reduction |Low-cost strategies |Hybrid technology | | | |performance |strategies | | |——- | |Products& Services |Cars, trucks, SUVs, |Cars, Crosstours, CR-V,|Cars, trucks, hybrids &|Compact cars, sedan, | | | |minivans, crossovers, |CR-Z, fit, Ridgeline, |EVs, Crossovers & SUVs,|hybrids, crossovers, |—— | | |hybrids & EVs |pilot, odyssey |future vehicles |premium performance | | Toyota’s Operational Processes & Procedures: • Customer oriented philosophy • Kaizen improvement Design & manufactory • Just in Time philosophy • Full utilization of workers capability and involvement • Innovate production methods Honda’s Operational Processes & Procedures: • Aggressively insurance of quality • Assuring quality through supplier audit.
• Using second-generation line and testers to inspect electronic control system • Assure Long term reliability through durability testing Hyundai Operational Processes & Procedures: • Relies on engineer-driven workplace innovations • Operational control • Utilize centralize IT-driven control process. The benchmarking analysis includes characteristics about practices, processes, procedures and products of Toyota Motor, Ford, Honda, and Hyundai. As a result of Toyota’s benchmarking there can be identified some areas of improvement in: Control procedures and Safety and quality processes. At the same time companies like Ford, Honda, and Hyundai could implement same of Toyota’s practices and policies.
Many companies have started to implement the Toyota Way System, which includes ideas about management decisions, production systems, continuous improvement, control, and employee empowerment. As well as his competitors Toyota should implement a cost reduction strategy in hybrid’s production without changing the quality or any other aspect of the product. By conducting a benchmarking analysis on Toyota Motor Corporation business it was clear identified that the organization is a strong company, which is very competitive on the International market. Although Toyota is one the most productive automobile producers on the global market, there can be implemented some changes in the organizational development and applied new market strategies.
“Without change there is no innovation, creativity, or incentive for improvement. Those who initiate change will have a better opportunity to manage the change that is inevitable. ” William Pollard, (n. d).
Reference T-TEN (n. d) Retrieved from http://www. toyota. com/about/tten/technology. html Respect for the Planet: Toyota’s Report, (2012).
Retrieved from http://www. toyota. com/about/news/environment/2012/12/06-1-Respect. html Sutton, J. (2001) Rich trades, scarce capabilities: industrial development re-visited, London School of Economics and Political Science, Discussion paper No EI/28, p. 34. Table 1- Toyota’s Competitors comparison Retrieved from http://finance. yahoo. com/q/co? s=TM+Competitors.