Key Issues
Toyota Company is the largest car manufacturer in today’s world. This company, founded in 1937 by Kiichirro Toyoda, is developing rather fast. 2007 brought $15.09 billion to Toyota as annual revenue. However, the modern world sets new tasks for market players, and Toyota has also to take into account the modern conditions and especially the world financial crisis. Drawing from this, the following key issues can be singled out as those demanding urgent and strategic planning of the solution (Viljoen, J. and Dann, 2000).
The first, and the most important issue that Toyota face today is the world financial crisis and the cuts of sales that are conditioned by it. Thus, for example, the total sales in the first quarter of 2008 declined by 673, 000 cars and amounted only to 8, 24 million vehicles sold worldwide. Moreover, only at the markets in the Northern America Toyota suffered $352 million of losses, while last year the same period brought record profit of $2, 8 billion. Accordingly, the company’s production plans for the end of this fiscal year tend to be on decrease as well amounting to the forecasted cutting of production by 230, 000 items only for domestic markets.
Consequently, the shortage of money supply resulting in the necessary wage cuttings and firing of employees is another burning issue. For instance, in the US Toyota plans cut the numbers of their employees and organize their work in one shift instead of formerly used two-shift production process. Together with the recently identified law technical quality of new Toyota concepts like Tundra, these issues are the points that demand urgent measures to be taken to settle them.
Strategic Plan (687)
To solve the above-mentioned current issues faced by Toyota Company this very strategic plan has been created. Its main focuses are the financial performance of the company, the employment policies of Toyota, and its work with its client base. The major steps proposed for settling the issues faced by Toyota can be limited to the following points. As far as strategic planning is a means of successful management over a company for a considerable period of time (Lewis et al., 1999), it is first of all necessary for Toyota to indicate the most important directions of its further development, especially under the conditions of world financial crisis and permanently growing competition in the market of automobiles. The second step to be taken is the defining of people responsible for reaching the outlined company’s goals, and the third step is the identification of the means to achieve this or that goal under present conditions and in respect of possible future changes of the market (Miller, A. and Dess, G., 1996).
Thus, to successfully carry out the first step of the proposed strategic plan, Toyota has to assess its main strengths and weaknesses in the market. As far as the domestic market of automotive suffers little losses, and even vice versa is on the rise due to the increase of yen prices, the bulk of the urgent activities should be directed at international markets and foreign subsidiaries of Toyota in the United States and Europe. Thus, the major priorities for Toyota in these directions should be the ability to increase sales through successful advertising campaigns and new offerings, stop the firing of employees and balance the correlation of the company’s incomes and expenses. This can be executed by offering cheaper concepts to the markets and by keeping to the strategy that allowed Toyota to overcome General Motors in sales over the recent years.
As soon as the priorities are defined and seen clearly in their achievement, Toyota should take time to single out the people responsible for carrying this strategic plan out. Moreover, specially trained people should be employed by Toyota to compensate for the lack of qualified staff in the fields of economics and human resources management. Also, special committees are to be established to deal exclusively with certain points of the problematic areas for the company’s activities (Robbins, S.P., Millett, B., et al., 2001). This can be something of the kind of the Emergency Profit Improvement Committee that has already been established by Toyota’s President Katsuaki Watanabe. The major assignment set for this committee is the reduction of costs that the company has and the increase of sales benefits in different markets. Similar committees and other bodies can be established by Toyota executive management to deal with the areas of staff management, regional employment policies, local sales strategies, etc. The heads of these committees should be freed from any other tasks and deal only with their specified areas to ensure the highest rates of efficiency of their work.
Further on, the identification of means to fight the above-outlined issues faced by Toyota should be considered. For example, all the innovative suggestions of management staff and outside observers should be examined in respect of their usefulness (Robbins, S.P., Millett, B., et al., 2001). This is true for the strategies of money accumulating, diverse ways to use the funds of Toyota with the highest levels of efficiency and profitability. For example, the initiative by Senior Managing Director Takahiko Ijichi could be followed who proposed to redirect the company’s funds from the purposes of development of new directions to the creation of new concepts that could exercise more demand on the market due to their originality, low prices, and innovative opportunities. These are hybrid automobiles like Toyota Pius or Toyota Volt that are rather controversial, but they conform to the demands of the situation, i. e. they are risky but fast and promising concepts. Thus, such initiatives as the introduction of new concepts to the market, redirection of major funds of the company to the areas hurt by the crisis most of all, etc. should be welcomed by Toyota’s officials. Thus, if properly considered and carried out, this plan is an effective instrument of fighting the current financial and human resources issue faced by Toyota (Robbins et al., 2000).
Plan Support
On the whole, the plan proposed for fighting the urgent issue of Toyota is directed at the financial aspects of the company’s performance, but human resources management should not also be left without attention (Haines, 1995). Thus, for example, the issues of unemployment that rise from the staff cutting in Toyota can be solved in a somewhat different way, i. e. by giving unpaid holidays to employees in turn so that to reduce the pressure on the company’s budget. Another way can be the introduction of the shift system of work when a part of employees is changed by another part after a weak of work which will also allow for less severe expenses from Toyota’s side and leave all the employees with their jobs. So, the strategic plan proposed is an effective means of solving urgent and long-term problems for Toyota Company, and the only condition of its success is the proper conduct t by Toyota officials.
Bibliography
- Viljoen, J. and Dann, S. 2000, Strategic Management – planning and implementing successful corporate strategies (3rd edn.) Frenchs Forest, Pearson Education Australia Pty Ltd., NSW.
- Haines, S.G. 1995, Successful Strategic Planning: Building a High-Performance Business. Crisp Publications, California.
- Lewis et al. 1999, Australian and New Zealand Strategic Management – Concepts, Context and Cases (2nd edn.) Prentice Hall, Australia. pp. 426-434.
- Miller, A. and Dess, G. 1996, Strategic Management (2nd International edn.) McGraw-Hill, New York.
- Robbins, S., Bergman, R., Stagg, I. and Coulter, M. 2000, Management (2nd edn.) Prentice Hall Aust Pty Ltd., Sydney.
- Robbins, S.P., Millett, B. et al. 2001, Organisational behaviour, leading and managing in Australia and New Zealand (3rd edn.), Pearson Education Australia Pty Ltd., Frenchs forest, NSW.