#VALUE CHAIN ANALYSIS OF TOYOTA MOTORS:
Toyota is a global brand of vehicles known for its excellent production and supply chain capabilities. The automobile brand based in Japan is also known for having built an excellent level of trust among its customers. Toyota is known for excellent engineering. It has managed its value chain very well. The value chain includes the entire stage from product conception to after sales service. This model was developed by Michael E Porter of Harvard Business School. Managing the value chain can help with increasing productivity. Toyota is known for its excellent production management. There are many more things too that are quite outstanding about the value chain of Toyota Motors. We will discuss it in this value chain analysis. There are two kinds of activities in the value chain which are primary and support activities.
Primary activities:
Inbound logistics:
Toyota has managed a large supply chain, It receives parts from thousands of suppliers located from around the globe. It has handled its inbound logistics efficiently. Its worldwide network of distribution centers and warehouses receives parts from the suppliers.
Outbound logistics:
Toyota has parts and logistics centers in various nations around the globe. The company has 14 parts logistics centers and 7 vehicle logistics centers around the globe, It ships thousands of parts and orders each day from its network of warehouses and distribution centers. Toyota notes on its website, “The Toyota Parts Centre Europe is its central distribution centre, at the core of its parts supply chain. The centre is located in Belgium and ships thousands of parts every day to its regional depots across the entire region”. On average it receives and ships 527,000 parts and accessories each day.
Operations:
Toyota is a global brand with its operations spread throughout the world. It has its headquarters in Japan. The brand also serves its customers across the globe through a large and global distribution network. Apart from its several manufacturing and R&D sites, the brand has several parts distribution centers a various locations throughout the globe. The company sells its products across 170 countries globally.
Toyota has established 71 manufacturing companies globally and 20 research and development centers.
Marketing & sales:
Toyota is a global brand but the level of competition in the industry is very high. It is facing stiff competition from the other vehicle brands. To retain its market share and customer base, Toyota makes major investments in marketing and promotions. Toyota uses a mix of traditional and modern advertising mediums for promoting its brand and products. Apart from its own website and social media, the brand also uses its sales and distribution channel for marketing. Events like races and motor shows are also an important method of promotion for Toyota. In 2015 and 2016, the brand invested more than 4 Billion US dollars in advertising.
Support Activities:
Technology :
Toyota is a major vehicle brand known worldwide for its exceptional engineering and technology. Apart from great production technology, the brand has increased its investment in technological innovation for growth. It has its own research centers and has entered into partnership with institutes like MIT and Stanford for faster innovation. Every year Toyota invests a large sum in R&D for innovation in AI and Robotics.
Infrastructure:
Toyota has maintained a large infrastructure globally. From its headquarters in Japan to North and South Americas as well as Asia and Europe, Toyota has maintained an extensive presence throughout the globe. Currently led by Akio Toyoda, the brand has an impressive presence in most of the major markets of the world.
HRM:
Toyota had 370,000 (approx.) employees in 2021. The brand believes in a human centric approach to value creation and therefore focuses on the development of its human resources. It follows the philosophy of human centered Monozukuri. In the automotive industry, smart and able human capital can be a major source of competitive advantage.
Procurement:
Toyota procures raw material from thousands of suppliers around the world. In 2009, the brand formulated a specific ‘Toyota way of purchasing’ that lays down the policies and principles that the procurement staff must follow. Through its procurement strategy, Toyota has always worked towards contributing to local economies.
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