Toyota: The Once-in-a-Century Challenge
Case Code: BSTR362 Case Length: 16 Pages Period: 2006-2009 Pub Date: 2010 Teaching Note: Not Available |
Price: Rs.500 Organization: Toyota Motor Corporation Industry: Automotive Countries: Global Themes: Business Policy, Strategic Management, Leadership and Change |
Abstract Case Intro 1 Case Intro 2 Excerpts
Excerpts
Problems
In the new millennium, automakers had to contend with many challenges including high gas prices. As the global financial crisis deepened in 2008, the consumer demand for cars and other goods plummeted, especially in the US and European markets...
What Went Wrong?
Analysts felt that Toyota's bad performance was due to the fact that it had expanded its global production facilities in the mid-2000s to meet brisk demand, particularly for its fuel-efficient cars, leaving it vulnerable to the current slump in worldwide sales...
Change in Leadership
Toyota expected that the global vehicle demand would eventually increase. However, for the fiscal year 2010, the company expected its global unit sales to fall about 14% to 6.5 million vehicles. The projected slip forced Toyota to make changes at every level right from its plants to its dealerships to the top management of the company...
Back to Basics
Akio planned to adopt a "back to basics" approach to revive the company. "The global automobile industry has been facing extreme hardships since the latter half of last year... We expect our losses to deepen this fiscal year, and so all of us in the new management team at Toyota feel like we are setting sail during a storm...
Regional Autonomy
The company's management was to place a priority on meeting the needs of regional markets by closely watching consumers and markets and noticing changes. In order to respond to consumer needs, each of the EVPs was to oversee a global region - North America, Europe, Japan, and emerging markets...
Challenges Ahead
Akio expressed confidence that Toyota would bounce back but he added that it would take at least two more years for the company to turn a profit. Some analysts too echoed this view. According to CLSA's Richter, "Toyota has a history of rising to overcome crises...
Exhibits
Exhibit I: Vehicle Production, Sales and Exports of Toyota*: 2008
Exhibit II: Toyota's Primary Markets*: 2008
Exhibit III: World's Most Admired Companies
Exhibit IV: Toyota's Industry Rank on Key Attributes: 2009
Exhibit V: Toyota's Balance Sheet
Exhibit VI: Toyota's Income Statement
Exhibit VII: Five-Year Stock Chart of Toyota
Exhibit VIII: World's Top 10 Auto Groups by 2009 H1 Sales
Exhibit IX: International Car Sales Outlook
Exhibit X: Car Sales in Developing Nations Remain in the Fast Lane
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