The paper "Analysis of Toyota Company" is an outstanding example of a management case study. This report provides an analysis of Toyota Company. It gives its situational analysis, current performance management system, the fit between the performance management system and its strategies. The main information in aiding the research is obtained from the company. Analysis tools like SWOT (strength, weakness, opportunities and threats) analysis will be used in the situational analysis of this company. The current performance management system will be analysed and its link to the achievement of the company’ s objectives and strategies will be looked-into.
Recommendations towards the improvement of the current PMS are also analysed. Introduction Several scholars have defined performance management but the majority of them centre on the same ideas. According to Caldwell (2002) defines performance management as the active cooperation between the management and employees that align employees towards the goals and initiatives of the organization. Performance management in an organisation is the main activity that improves both their productivity and profitability. Toyota has adopted a good performance management system that has made it be a very competitive company in the motor industry.
Performance management activities improve the performance of the employees, (Selden & Sowa, 2011, p. 253). Situational analysis of Toyota Motor Company Toyota Motor Company is a multinational company that specialises in the production of cars, trucks, buses and robots. Its headquarters are in Toyota city, Japan. It is the largest car manufacturer in Asia and second-largest producer. Its products are sold under the names Scion, Toyota and Lexus. It owns majority shares in other companies like Daihatsu and Hino and a minority share in Fuji. It has manufacturing and assembling points all over the world, (Funaru, 2011). Toyota Motor Company had revenue of around ¥ 18.583 trillion in the 2012 financial year while its profit was ¥ 283.55 billion, (Toyota Company 2012 Financial Results, 2013).
The company has around 300,747 employees that distributed across its worldwide manufacturing and assembling plants. Despite the huge profits earned in the year 2012, it faces stiff competition from other motor and automotive companies. Some of its competitors include Ford Motor Co. , Honda Motor Company, General Motors, Nissan Motor, Tata Motors Ltd. , Volkswagen AG, Bayerische Motoren Werke AG, Chrysler Group LLC, Daimler AG and many other automotive companies, (Toyota, 2013).
Despite the presence of many competitors in the sector, Toyota is still one of the leading companies in the motor industry. Toyota has strengths in its operation that make it be competitive. For instance, it has an innovative culture that allows for constant innovations. This enables it to be the first in the introduction of new brands of cars. This enabled it to be the first to mass-produce and sell hybrid vehicles.
Its brand reputation enables to enjoy high sales. They are known to produce safe, environmentally friendly and durable cars sold in over 180 countries. Its production of many brands of vehicles ( over 70 models) makes it reach different customers with a wide range of tastes. Despite high strengths in its operation, Toyota still faces some weaknesses. One of the greatest weaknesses is a wide-scale recall of its vehicles. In the year 2009-2010, the company recalled nearly 9million vehicles and recalled 7.43 million vehicles in 2012. This increases their running costs and highly damages their image of being a quality vehicle producer.
The company also has a weak presence in emerging markets like China and India. The low presence in such markets makes it hard to compete with companies like Gm that has a high market share in such markets. Toyota has many opportunities in the market that they can explore to increase their market share and profitability. Such include investing in “ Green vehicles” , investing in low fuel consuming vehicles, monitoring changing customer taste and coming up with car models that suit them, growing its market share and profits through acquisitions and mergers among many other opportunities.
Currently, Toyota faces a wide range of threats in the market and the global economy. Some of which include: intense competition from rival companies, appreciating yen exchange rate, rising raw material costs thus increasing manufacturing expenses, implementation of tight emission standards among other threats that reduce its productivity and profitability.