Investigation of Toyota Assignment Help
Table of Contents
The aim of the undertaken report is to investigate and evaluate the organisation ‘Toyota’ located at Cyprus with regard to the delivery of products and services to the internal as well as the external customers.
The objectives of the following report are:
- To evaluate Toyota, the organisation, located at Cyprus
- To investigate the delivery of products and services to the customers, both internal as well as external, of Toyota, Cyprus
- To identify the areas that requires attention and subsequent improvement in such delivery.
- To provide recommendations as to such delivery may be improved upon.
Toyota was founded in the year 1937 and has developed to become among the best known and largest manufacturers globally. Toyota believes in leading the way towards the future in terms of mobility by means of enriching the lives of people with the safest and responsible most ways of moving. By means of the organisation’s commitment towards quality, constant means of innovation and respect demonstrated towards the planet, Toyota aims towards exceeding the expectations and being rewarded with a smile.
As a result of the economic crises present in Cyprus, Toyota has been facing certain financial problems with regard to the financial packages of the products. This is primarily so as the banks are not in a position to provide loans easily for the purpose of purchasing a vehicle.
Toyota being a global brand, it is significant to sort this problem without delay. Cyprus being among the most populated islands in the Mediterranean is in close proximity with Syria, Lebanon, Israel, Greece, Egypt and Turkey. Cyprus is also a member of the European Union. Hence the market being hindered in Cyprus would not only affect the local market, but the global growth of the brand as well as have an effect on the nearby locations in an adverse manner. With political turmoil being common in some of the neighbouring countries, it is essential that the market of Cyprus for Toyota is hassle free (Toyota CY, 2015).
Methods
The methods engaged in finding relevant information for the undertaken report include extensive literature review, with data gathered from secondary sources and online database and information. In order to get an insight into the view point of the customers, a survey was conducted where the internal customers or employees and the external customers or the end users of Toyota products were provided with a questionnaire. The internal customer were provided with an open ended questionnaire with 5 questions to get an idea about their view point and the external customers were provided with a multiple choice questionnaire where they were asked to select the answer of their choice. The questionnaires were mailed to the respondents with a deadline been given within which they had to reply with a complete questionnaire. The internal customers selected for the purpose of the interview were 3 managers of different departments such as marketing, customer service and human resource, to get diversified view points. The external customers targeted with the questionnaire were 50.
The limitations that may arise included the respondents not submitting the questionnaire in time. The managers may be too busy to reply to the questions and hence the viewpoint of internal customers not being obtained. The questionnaires being incomplete and hence, not considered for the purpose of the survey.
The ethical issues that may occur would be inappropriate use of information. Leakage of information to the competitors that might adversely affect the survey. The reply being influenced by the loyalists of the competitors and hence not serve the purpose of the undertaken survey.
Cyprus banks invested their funds in Greece even though the Cypriot banks have assets equivalent of eight times the country’s GDP, they receive a big percentage of the deposits by means of Russians who dodge tax, and they are immensely dependent on the Central Bank financing in order to survive. Hence the banks are too big for Cyprus to save. The system of Cypriot banking would definitely collapse if not for the emergency funding that was approved by the European Central Bank (Anastasiou, 2009). To provide a vehicle loan, the banks look for a self contribution ranging from 25% to above 50% with the loan interest being calculated in three tiers in accordance with the self contribution. The vehicle cannot be resold legally till the finances have been settled and the rate of interest is different for new and used vehicles. The loan period ranges from 1 year to 7 years. At times a guarantor is required to ensure there are no default and other such clauses. Toyota being a global brand, if the people face problem in obtaining loans for making purchases, then their market gets hampered and the business profit of the region is adversely affected (USA Today, 2015).
People lost a lot of money deposited in Cyprus banks as a result of money being seized to cover for the bank losses. Due to capital controls, there were restrictions imposed on the transfer and withdrawal of money specially to exit the country. Hence the bigger investors too did not demonstrate alliance. Toyota being a global brand, such financial restrictions in one such market as Cyprus hindered their global returns with business from that particular market being not as par expectation (Cervi, 2007). The operations of the organisation had to be altered as per the circumstances of the market. Dealership of the brand got abandoned as a result of the invasion by Turkey in the year 1974. The European market was penetrated by the brand in the year 1963 with the European operations being supported by a network that comprises of 31 nationwide sales and marketing companies in 56 countries with 3000 retailers and so on (Christou, 2013). Hence the Cyprus situation had a hold back feeling amidst the others. Toyota operations include a production system that empowers the members to optimise on the quality with constant improvement of the processes and subsequent elimination of waste that is unnecessary.
The production system of the company influences all the aspects of the organisation and also includes a common value set, procedures and knowledge. The employees are entrusted with responsibilities that are well defined in each of the production steps and encourage them to strive for improvement on the whole (Davies, 2007). To the internal customers, Toyota strives to provide encouragement and deserving opportunities for both professional as well as personal development. The employees are provided with learning programmes in order to build a strong level of mutual trust. The principle of the brand is to encourage continual improvement. People associated with the brand have the liberty to speak their mind in terms of the problems identified and propose their suggestions to improve further. The members are richly diversified with the inclusion of different genders, cultures, age as well as nationalities of the customers and the brand is committed towards enforcing the highest level of safety standards in the operations of the company at all given times (Shibita, 2003). The internal customers work towards improving the operations of the brand and the external customers are the ones who are directed towards for improving the returns of the business.
Toyota has huge expectations from the current market and their customers. Due to the problem faced due to the bank loans Toyota came up with the concept of Toyota Flex which is a new innovative way of owning the desired Toyota vehicle by means of paying low monthly instalments as per the need of the customer. By this the customers has a 3 year duration benefit with regard to the unique advantages offered by Toyota. Toyota Flex is considered to be the most flexible, convenient and advantageous scheme for car ownership in the market. As per the scheme, the customers is ensured perfect ownership experience for a duration of 3 years that include scheduled maintenance and required repairs with just the parts and labour aspects being chargeable (Anon, 2015). Post 3 years, the customer may upgrade to a new model, continue with his existing automobile or return the vehicle back to Toyota. By means of such low monthly instalments and a feasible rate of interest, Toyota flex is considered to be highly advantageous as compared to a personal loan or an impersonal lease contract. When the customer selects the model of his choice, he needs to agree on the deposit of his choice which can be as low as just 20% of the new Toyota value. Future resale value is guaranteed by Toyota (Harris, 2007). The balance amount is calculated as monthly instalments between the guaranteed future related value and Deposit along with the interest that ensures the package of the Toyota Flex ownership is made more affordable as compared to a personal loan or typical lease contract.
Toyota is set up to deliver to the expectations by providing Toyota Flex to the customers. By means of the scheme, a huge portion of the loan which is the guaranteed amount of future value gets rescheduled towards the end of the contract period of the customers. This enables him to have access to instalments that are lower and also more affordable as compared to the other schemes available in the market. By having access to an affordable and low instalment, the customers have the possibility of easily upgrading to a model of higher specification or add on additional equipment (Kobayashi, 2001). Toyota provides to the customers the opportunity of driving a new Toyota in every 3 years with nil maintenance cost and repair cost during the given period of time. The company guarantees the actual future value of the car with this scheme so that the customer is not at a risk and will not be in a position to lose any money if the value of the used car declines in terms of the market (Ewing, 2015). The customer is given a unique term of flexibility after 3 year with the flexible options of keeping the car, upgrading it or returning it. There is a clause of depreciation or VAT refund for commercial vehicles. The most significant aspect would be with the unprecedented reputation and complete trust of Toyota, Toyota Flex offers to the customers complete peace of mind.
The customers at the end of the day look for a bargain that would serve their purpose and be mainly in their favour. In terms of the external customers, the Toyota Flex scheme is highly approved since they get the opportunity of owning a car for certain duration of time and at the end of the pre decided 3 years tenure, they have the liberty to either upgrade the same, continue with it or simply return it (Anon, 2015). Since the rate of interest and other scheme details are preferable on being compared to other funding options and personal loans, it is accepted in the market. However, there exists other solutions like the option of business finance and lease where full ownership benefits are provided from the very initial stage with flexibility up to 84 months, unlimited miles, no excess charges for use and wear, balloon financing and also seasonal payment options in certain places. There are closed end plans of lease where the vehicle is operated without the entire ownership related cost and a lease plan that is open end where the customer drives the vehicle without having to pay for the excessive mileage or charges for use (New Toyota, 2015).
The problem that may arise within the organisation as a result of the scheme would be slower growth in terms of the market. Toyota being a global brand has its presence across different countries. Being originated in Japan, the brand has immense scope for business and generates high revenue from other countries. With the financial crisis, the rate of employment has gone up and hence customer base for Toyota products have diminished. Post the recession of year 2008, the financial scenario has been poor with a lot of money being taken as bailout money from the International Monetary Fund and also the European Union (Golub, 2007). Hence with finances not in place, it is difficult for not only the customers to indulge in luxuries like a vehicle, but also to survive in a market where there is minimal demand. In order to continue presence in any nation, there has to be a break even point where the business did not incur losses. The scenario in Cyprus was not such and business modifications had to be made in order to avoid losses. When the banks were not in a position to approve of loans, the brand itself provided lucrative schemes to the potential customers in order to ensure rolling business. Cyprus had undergone division since the invasion of turkey in the year 1974. Though Cyprus is a member of the European Union, Turkey cannot join the body without a deal being made on Cyprus as a result of the Greek – Cypriot republic which is a member since the year 2004 and has a veto. In order for Turkey to be a member, it is essential to engage in a Cypriot settlement (Kokubo, 2004). Again, turkey is a member of NATO of which Cyprus is not (Varwick, 2011). So the financial condition of Cyprus hampers the improvement of the business sector.
While investigating the core areas of Toyota, the strengths, weaknesses, opportunities and threats underwent an analysis as enlisted below (Bertelsen, 2012):
STRENGTH
· Toyota is a trusted brand
· Popularity of certain models enhance business scope
· Diversified ranges of vehicles are available
· Year 2007 witnessed Family Sedan as car of the year
· Per Gallon miles are high
· Vehicles feature convenience of a luxury vehicle
· Vehicles easy to drive like a sedan
· Ideas are innovative
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OPPORTUNITY
· Toyota is the future of the Automobile Industry
· Brand is environment friendly specially with the growing concern regarding environment
· With the rise of gas prices, the Flex Scheme would be approved by customers
· Dependency on Foreign products is led
· Subsidies are made available
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WEAKNESS
· The initial cost may be perceived as high
· Toyota being a Japanese company might need time and patience to penetrate other nations
· Pricing strategy needs to be altered as per the market
· The advertising strategies need to be designed to suit the preference of the market
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THREAT
· In markets like Cyprus, where there is financial problems, sustenance may not be easy
· Global increase of competition
· Constant requirement for improved technology
· Continual maintenance
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There are also a number of political, economic, social, technological, legal and environmental factors that may affect the business opportunities of Toyota in any market. These have been enlisted below (Warner, 2010):
POLITICAL
· Attitude of the government or the organisation in the market
· Political scenario in terms of stability or instability
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ECONOMIC
· Rate of economic growth
· Policy for unemployment
· Monetary policies, rate of interest and impact of inflation
· Confidence of the consumers
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SOCIAL
· Distribution of income
· Changes in demography
· Mobility in terms of society or labour
· Changes in lifestyle
· Changes in trends
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TECHNOLOGICAL
· Development and new inventions
· Rate of transfer of technology
· Speed of obsolescence of technology and life style
· Alterations in information technology
· Modifications in mobile technology
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LEGAL
· Policies of tax
· Laws of employment
· Regulations of safety
· Regulations in terms of competition
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ENVIRONMENTAL
· Protection and regulations with regard to the environment
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As per the STP Analysis, in terms of segmentation, the philosophy followed is the right car being in the right place with all nations globally being reached. The automobiles cater to different segments of consumer depending on stage of life cycle, gender, income, need and so on. The vehicles are such designed that they attract the basic choices of life cycle and also specific attitudes. Behavioural and psychographic approaches are adopted by Toyota. In terms of segmentation, the PRIUS targets environment conscious consumers who save at the gas station and care for quality, family and safety. The TUNDRA caters to consumrs who like recreation and functionality. The LEXUS caters to the sophisticated consumers looking for luxury. In terms of positioning, both price and quality wise, Toyota is medium placed as compared to Hyundai which is low and Lamborghini which is high.
Toyota developed a 4P model. Philosophy wise the leaders of the company view it as a mode of providing customers, community, society and associates with value. Process wise it is believed with following the right process, the right results are obtained. Certain process brought returns immediately like shedding of inventory or elimination of wasted human motion, other long term investments enable reduction of cost and improvement of quality. People and partner wise value is added by means of challenging the people and partner to demonstrate growth. Problem solving wise the root problems were dealt with continuously to enhance organisational learning. In terms of variation, versatility, value and vibration, Toyota moderated as per the demands of the Cypriot market.
Figure: Competitive Environment Analysis for Auto Industry Market Share as per year 2013 [Source: Toyota CY, 2015]
| New Entrant Threat - Low | Entry to automobile manufacture market is risky and expensive with high initial capital requirement. Toyota has competitive advantage over new entrants. |
| Substitute Threat - Medium | Customers have strong reliance on market for used car. With economic unrest, demand for automobile taken by used car industry. Price gap narrowed by Toyota between own vehicles and used cars. Compared to contemporaries, Toyota faces less danger by substitution of used car. |
| Competitors Rivalry - High | Prevalence of constant competition for industry dominance and market share. Increasing competition fuelled by high expectation of consumer with anticipation of low price. Strong strategy for cost cutting by Toyota. Toyota is leader in low cost for manufacture. |
| Power of Buyer - Moderate | Consumer seek fuel efficient vehicles as price of oil rise due to which demand of hybrid card increase that offer cheap alternative of vehicle operation and high expectation of quality of product. Cost cutting of Toyota in operations lower power of buer and creates advantages as compared to competitors. |
| Power of Supplier- Low | Suppliers are likely small manufacturers who sell to different manufacturers. As competitive advantage of Toyota is strong, so relation with suppliers also strong. With efficient monitor od supply chain, suppliers have low bargain power. |
Toyota is a globally renowned brand with presence across several nations. The market in Cyprus for Toyota was facing certain problems as a result of the economic conditions prevalent. As a result of the economic turmoil, the banks in Cyprus were unable to offer hassle free and easily available loans to the potential buyers of vehicles which was hindering the business of Toyota. The big depositors in the banks of Cyprus had to accept losses to almost 60% as per the European rescue package in order to save the country from absolute bankruptcy. With the financial scenario in such disastrous state, it was not feasible to offer loans to the public. The banks themselves were securing loans from the EU and IMF.
As a result of this, Toyota came up with certain schemes that would benefit the customers and also ensure that their business did not suffer. In order to obtain details pertaining to the same, a report has been given above considering the view points of the internal as well as external customers of the brand. With Cypriot banks being imposed with such huge losses, the customers further squeeze the crippled businesses that are existent while Cyprus attempts to rebuild the banking sector in exchange to the rescue package internationally.
Toyota is a known brand. The problem is with the financial condition of Cyprus which the company cannot alter. Like the Flex Scheme, Toyota needs to come up with new and innovative ideas so that the customers are enticed to purchase the products, with the aid of such schemes.
The company needs to maintain transparency with the internal customers. Proper and clear sharing of information and the factors that affect the business operations need to be clearly communicated with the customers both internal as well as external so that there is no scope for discrepancy in the future. With economic unrest and unavailability of loans, often standard of living of both internal and external customers dwindles with unemployment being an end result. Toyota is required provides work related security to the employees and provides to the external customers true value for their money so that they maintain a positive perception about the company. With a content internal customer base, the operations of Toyota would be smooth which would help to cope with the external problems. A competent team needs to come up with new financial schemes to offer to the customers.
The economic condition of Cyprus and certain neighbouring nations are not desirable so also the political conditions of certain neighbouring areas like Syria. Hence instead of business focus on any one nation, an all encompassing strategy needs to be thought of that would suit the altering economic as well as political conditions of these areas, if specific markets are not present in these places.
The economic condition of Cyprus is such that it would be futile to market the high end costly vehicles. Hence focus should be on those models that are more affordable or are considered to be feasible in terms of price by the customers. Competition mapping would help in analysing the spending power of the customers and models that belong to that price range could be marketed to intrigue the interest of the potential customers.
With the poor economic conditions, the competitors of Toyota too would face similar problems in terms of bank loans. Hence it would be recommended that Toyota conducts extensive competition mapping and maintain a competitive edge over existing competitors in the market to enhance the scope of business. Being the highest demanded brand among the peers not only provides an edge but also ensures the market niche which is extremely essential in such disturbed economic situation. Schemes should be such formulated that the people can afford and are willing to consider them as an option since purchase of a car would be a luxury specially if the brand is world renowned like Toyota.
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