Toyota Company Automotive Increase in Sales Units - Example

TOYOTA COMPANY AUTOMOTIVE INCREASE IN SALES UNITS Student’s name Course &Code Professor’s name University City Date Executive Summary Toyota automotive industry is among the cheapest production industry of automobiles globally. The Toyota vehicles and products are primarily manufactured in Japan and across the globe regarding the location of its facilities. The envision of Toyota automobiles is to become people’s car which can easily be affordable by everyone. The business plan has been developed on the agenda of increasing Toyota sales units in years to come. The business plan advocates for the sale of the old model and new model Toyota automobiles across the globe. Contents Introduction 2 1.0 Market Feasibility 3 2.0 Technical Feasibility 5 3.0 Human Resource Feasibility 7 4.0 Financial Feasibility 10 Reference List 11 Appendix 12 Introduction It is imperative that companies experience an increased growth in production capacities ion order to gain realized profits. In this respect, companies can be compelled to enter new markets and exploit their capabilities using available resources. One such company, Toyota Corporation has struggled to maintain its competitive position in the contemporary market hence, the need to expand its market size. This retrospect paper highlights a possible strategy that can be followed in augmenting its profits The Business plan intends to improve the sales unit of Toyota automotive across the globe. The plan tends to advocate the use technology approaches through subcontracting and joint venture to improve the Toyota unit productions from the current production. The company tends to acquire project management skills through HRM to manage the company operation effectively. 1.0 Market Feasibility The Toyota Company Corporation business plan focuses across 170 countries in North America, Europe, Asia, and Japan. The Global automotive industry encountered a relatively strong growth indicating profitability in annual sales that reached prerecession levels in some continent (KPMG, 2015). The annual sales in North America indicate a 3.1% growth rate of 13 million cars in 2008 to 16 million cars in 2014 (Sturgeon, 2012). However, some continents like Europe, Russia, and South America, sales have slumped up to 25% (Sarwade, 2013). Reacting strategically towards such market slow growth is an absolute for the Toyota Company Automotive plan to be an industrial leader. The automotive industry capacity has been achieved at the brim. Based on the analysis and prediction forecasted between the years 2012 to 2017, it indicated that in the year 2015, the automotive industry is projected to have produced around 93 million units indicating an excess capacity of about 28 million units (Statistical Portal, 2016). As such, in automotive business industry production from 90% to 95% indicates a full utilization of the capacity. As such, the Toyota Company realization towards the full capacity intends to focus on new models and meeting the higher demands from the West European car market. Currently, the Toyota Company Automotive consumers receive the Toyota products from Japan. Additionally, the company products are received across 50 manufacturing companies in United States, Canada, China, Taiwan, France, Turkey, Malaysia, Thailand, South Africa, Australia, Brazil, Argentina, India, United Kingdom, Indonesia, Japan, and India. All this manufacturing countries production can reach the global demand for Toyota product consumer across all the global continents. The company purchase power from the consumers is based on segmentation approach regarding the geographic regions, demographic, psychographic and behavioral consumers. The Government external focus on the increase in incentives for the automotive industry proves challenging for the industry. The purpose is to maintain the automotive industry facilities a prospect which proved to be difficult to be absorbed by the industry. The new intended automotive industries are likely to experience challenges to compete into the new market. The most challenging barrier of entry into the new market is the extreme high amount capital required to purchase a new physical manufacturing plant, the required raw materials and hiring qualified employees while offering to train to some of the employees. Additionally, the new entrant company requires great amount of capital purposefully for the innovation to compete with the competitive automobile industries. Access to the distributional channel is another barrier to entry for a new automotive industry. The contributing factor for the challenge is inadequate dealership lot that is limited. As such, the Toyota company has the required capital, the managerial skills and the required technologies hence the company has managed to establish market in its own country, managed to enter into new market through competitive strategies hence achieving some level of success and winning customer loyalty (Dorf, 2012). 2.0 Technical Feasibility The Toyota Automotive Company intends to use the development of its technology through subcontracting. With its main manufacturing plant in Japan, the research indicates that the Japanese subcontracting contributes towards high-growth economy, heavy competition and product proliferation (Fujimoto, 2013). Using the approach will enable the company to produce different units of automotive at different platform. As such, the intended subcontracting approach in the Toyota automobiles tends to focus on clustered control, the block-box one design, the engine, transmission and various colors among others. The company tends to use the joint venture for the production purposes. As such, the joint venture will be held on a 50-50 basis with the partnering company through though the company will use the Japanese engine while the body will be fitted depending on the operating plant in oversees partnering countries. As such, the company would be improving on its inter-national market. Additionally, the company tends to have a joint venture with Microsoft company purposefully on issues regarding technology development. The main agenda would be to bring new internet connected services into the new Toyota Automotive without overwhelming drivers with technology. As such, the company is eager to use the cloud computing software from Microsoft company, Azure, to crunch data and help develop new products for drivers and even dealers. The Toyota automotive, either old brands or new brands require implementation of new strategy in distribution and sales. The new distribution strategy intends to strike a chord with new values for the current needs of the customers. The company currently holds a network of 295 car dealers and approximately 5,750 vehicle sales outlets (Lefontaine, 2012). The company focuses on increasing the number of car dealers and vehicle sales outlets by using the joint ventures across the country and overseas continent. Additionally, relations with overseas companies would be of benefit for the company. The Toyota Way strategy with overseas distributors needs mutual trust through a distribution agreement. As such integration of actions between the dealers, distributors, and Toyota would be helpful for the company to improve on its sales. The company has diverse skilled resource available and intends to increase the skilled power. The company has various Toyota Technical Institute to increase the company skill manpower. The institutes provide a high standard of education and quality training in the field of automotive industry especially in join and assembly technologies and electronics (JILPT, 2014). Additionally, the company search for highly skilled and flexible workers that can easily adjust to changes in technology and environmental requirements. The new employees to be recruited are expected to have skills in teamwork, ability to take initiative, problem solver, willing to work for the common success of the organization and the capabilities of handling multiple jobs. Raw materials account for 47% of the production cost of an automotive in automobile industries (Automotive News, 2013). The company purchases its raw materials across the world among the competitive suppliers to more than 100 operating facilities for Toyota company. The company, Toyota, works closely with the suppliers hence cost reduction in obtaining the raw materials. As such, no single supplier accounts for more than 5% of the Toyota consolidated raw materials. The company intends to use similar strategy in obtaining the raw materials hence it does not anticipate any difficulties in obtaining the raw material from the supplies in the nearby future. Additionally, market research indicates the prices of steel, the raw material, has a fluctuating condition in either upward tendency or lower tendency hence the company response is to increase the purchase of raw materials when the prices are law and to reduce the purchase of raw materials when the prices are high in order to lower its costs. The increasing pressure in environment sustainability is likely to position the industry to face many tough challenges. As such, the plan is to transform the Toyota automotive industry ways in life. As such, the environmental liability focuses on the reduced emissions, waste management regulations and vigorous innovation on the current changing consumer’s preferences for the automobile products. Though the acquiring the intellectual property through litigation is expensive and time-consuming, the company intends to acquire the intellectual property rights to prevent the emerging and rival companies from copying Toyota company ideas and making their ideas that might reduce the company sells. The company tends to acquire the personal certification as a way of proving to the society of the functional safety needs qualification and competence hence improving on the market sell for the products. Rapid technological changes impact the operation of the Toyota automotive industry. The power train technological advances require new skilled manpower for the production of electronic car and displacement of the traditional engines. As such, the company would incur costs for training purposes, recruitment of new employees and research for new raw materials. Additionally, the new technology requires the use of light materials for a lighter vehicle that improves on the fuel economy. The shortcomings of light materials are the availability of few domestic metallurgy programs advocated on the light materials and the limited alternative of light materials to be used (U.S. Department of Energy, 2014). 3.0 Human Resource Feasibility The technical and management experience for increasing the automotive sales requires project management skills and am experience in engineering filed or automotive specialization. The technical skills enable the company to conduct research and analysis to identify a new market for distribution of both old and new models automobiles from Toyota company. An experience in automotive industry contributes toward designing of automobiles that are aligned with the latest technology and best suit the consumer demands. As such, the company would be able to realize its goals in increasing the sales units. The business plan advocates different owners for the company. An entrepreneur is expected to be vigilant and aggressive in picking a winning technology for the company. The strategy needs to be done at the right times hence the company would be able to make a lot of money off transition through competitive strategy. As such, the entrepreneur is expected to transform the auto industry of Toyota company. The sales manager is expected to handle the sales representative in automotive dealerships that are identified. As such, the sales manager oversees the staffs, hiring and training the new employees, setting the sales quotas and goals, ability to make financial arrangements for the company, making warranties and rebates for the consumers. The analysis based on the future of automotive industry inclusive of electric cars is determined the available expert hired by the company. The company manpower needed is towards the realization of sales unit increase for the organization. The manpower requires more than 1000 thousand employees which are achieved through recruitment, contracting, making temporary hires, retaining the company personnel and having the attrition programs. The pay for knowledge compensation arises in the industry once an employee makes an improvement within the industry. The compensation process begins at the hiring process, then the progress in which the hired employee learns on how to complete assigned jobs in a work team to a satisfactory level and the employee becoming a flexible and completing variety of jobs assigned through replacing other members and covering other employees when absent. The pay for production process is achieved when the employees on how smartly employees performances are rated during the production rate and sales record for the company. The company pay plan and work schedules determine the motivation of the employees. The company salaries department intends to fix all the employees into salary system but advocates for more commission on additional performances from the employees. As such the employees are entitled to both the salary and commission. Regular training activities realize the performance of the organization. The major ongoing training activities include the leading online marketing strategies and techniques, and the dealership best practices so as to improve the company sales. Additionally, the training is based on reflecting the changes in technology and industry changing the environment so that the employees are updated on how to remain competitive in the market. The company growth strategy focuses on a flexible workforce within all the working organization, openness to creativity and innovation capabilities for the company. Organization growth might advocate for the structural changes based on the structures that best suit the new vehicle concept, new models, and the new technology. Employees working in the automotive industry have career opportunity within the industry due to limited manpower available. The industry covers a wider scope in career paths, especially in automotive mechanic, the automotive electrician, and the motor vehicle parts technician. 4.0 Financial Feasibility An important role for any business is profit generation, and maintaining a net profit level if the between 10 percent to 23 percent of a level higher. To achieve this, it is imperative that the company introduces and increases the number of the dealership within the intended markets that is sought to sell out its models. An appropriate cost structure needs to be enhanced in the region so as to enhance the anticipated sales of any/all the production units available for sale. The company has outperformed the automobile industry in the last five years. Evidently, Toyota’s assets have increased by 586.8 billion yen in FNY2012 as a result of increased market value of investments securities. In its fiscal year 2015 the global economy witnessed a mild recovery overall as a result of China’s reduced growth rate, amidst a solid performance in the US economy. Contrariwise the Japanese economy has reduced considerably amidst a tax hike reduced consumer spending. In this respect, the company undertook strategies to maintain customer trust through the consolidation if the dedication quality, and through expansion of the sales through flexibility in market trends. As a result, the total consociated bet sales was realized at $19.76 Billion an increase of $ 1.45 billion, or about 4 per cent from the FNY 2014. The automobile showcased an increased growth overseas against some robust sales in the China, European market and North American market; despite the reduced sales in the Japanese market. Despite the bad markets the company witnessed a growth sale of $ 9.58 billion sales. In the similar segment net sales of the Vehicle Business was registered. Despite an increased sale of the RAV4, other brands such as Vitz decreased tremendously. The Net sales of the Engine Business was evidenced at $ 1.73 billion, a decrease of 5 % from previous year. A primary cause of such reduction was realized through the decreased sales of AR gasoline engines and KD diesel engines. The material handling segment continued to showcase increased growth globally, where the global and Japanese markets in the North America, China and Europe. Amidst market environments, the company augmented its production and the sales structures and released new products that matched the respective markets. In 2014, for examples the company released the sales of the 1.5 to 8-ton capacity lift trucks in Japan. Under such operating conditions sales of the lift trucks increased tremendously. Contrariwise, the company made efforts to increase its business area through the sales and manufacture of lift truck attachments. Reference List Automotive News 2013, ‘The European Automotive Industry faces Over-Capacity in Conventional Car Production’, The Wall Street Journal, Vol. 37, No. 2, p. 125. Dorf, B 2012, ‘The Startup Owner’s Manual: The Step-By-Step Guide for Building a Great Company’, Pescadores. Fujimoto, H, 2013, ‘Japan’s Automobile Keiretsu Changing for the Better’, Tokyo Business Today, p.50. JILPT, 2014, ‘Employment Relations in the Automobile Industries of Japan, Korea, and China’, Focusing on the Nonstandard Workers in Toyota, Hyundai and Shanghai Volkswagen. KPMG 2015, KPMG’S Global Automotive Executive Survey. Lefontaine, F 2012, ‘Markets State Franchise Laws, Dealer, Termination, and the Auto Crisis’, Journal of Economic Perspectives, Vol.24, No.3, p. 235 Sarwade, W 2015, ‘Evolution and Growth of Indian Auto Industry’, Journal of Management Research and Analysis, Vol. 2, No. 2, p. 136. Statistical Portal 2016, Capacity of the Global Automobile Production Industry from 2012 to 2017 in Million Units. Sturgeon, T 2012, ‘Globalization of the Automotive Industry: Main Features and Trends’, International Journal of Technological Learning, Innovation, and Development, Vol. 2, No. p. 12. U.S. Department of Energy 2014, FY 2014 Annual Progress Report- Lightweight Materials R&D. Vehicle Technological Office. Appendix Start-up Expenditure and Expenses Worksheet Item Unit Price Total cost Cash required ($) Land Leased N/A 65,000 Capital equipment N/A 1,000,000,000 Computers and Industrial Robots (KUKA Technologies i. Casting Mould Clean Up Robots ii. KR 1000 Titan Cyllinder Clean Up Robot iii. KUKA KR 16 painting Robot iv. KUKA KR Quabtec Series Robots 10 Unit 134,000 133,324 140,335 135,875 Beginning inventory 1,000,000,000 Startup supplies and Equipment 500,000,000 Licenses and Permits 10,000 Lease improvements 40000 Utility hook ups & Installation 957,000 Insurance 1,000,000 Other 1,000,000 Total Estimated One-time cash requirements 2,503,830,534 Start-up operating expenses Item $ Owners salary N/A Employees salary, wages, benefits Yearly 600,000 Rent Yearly 200,000 Supplies and postage 100,000 Vehicle expenses 100,000 Telephone 6000 Travel 15000 Maintenance 20,000 Other 80,000 Total cash for operating expenses 97500 Add: One-time cash requirement 215,000 Add: 10% Safety factor 31,250 Total cash required for startup 1,711,000 Read More