Quality Management of Toyota

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However, A study conducted by collecting over 200 responses from executives and senior leaders in some of the top manufacturing and industrial organizations shows that 45% of executives said they have no plans to benchmark performance at any time in the near future. Nearly 20% said they have not yet participated in a benchmarking project but plan to, and the remaining 36% have at least one project under their belt. The concerning issue is that over half of the companies that participated in the study have yet to take advantage of one of the most important continuous improvement tools (See Figure 1) (7 Benefits of Benchmarking Your Manufacturing Performance)

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Figure 1: Companies that have benchmarked manufacturing performance (7 Benefits of Benchmarking Your Manufacturing Performance)

2.2 Competitive Benchmarking

Toyota is one of the companies which has the highest quality throughout the world. The company can apply competitive benchmarking and internal benchmarking to measure its quality management and to improve its overall performance. Competitive benchmarking is bout analyzing process and performance of its direct competitors in order to make improvement. The major competitor of Toyota is Honda without any doubt, both of them are Japanese company and both of them are the global hybrid leaders, together controlling 70% of the market around the world (Benchmarking Shows Toyota, Honda Follow Different Paths to Hybridization). Toyota company can use SWOT analysis to find the difference between them and make adjustment. The SWOT analysis of Toyota is showed as follow (See Table 1) (Analysis of Toyota Motor Corporation)

Strengths

Strong market position and brand recognition and brand loyalty

Strong focus on R&D

Extensive production and distribution network

Product with extremely high quality

Weakness

Product recalls could affect brand image

Declining sales in key geographic segments

Poor allocation of resources as compared to peers

Opportunities

Growing global automotive industry

Toyota poised to benefit from growing partnership with BMW

Strong outlook for the global new car market

Weaknesses

Intense competition

Appreciating Japanese Yen a major concern

Natural disasters could impact production structure

Table 1: SWOT analysis of Toyota company (Analysis of Toyota

Motor Corporation)

Toyota is famous for its innovative culture. The company’s focus on being ahead of its competition by introducing some of the most innovative vehicles in the market has proven to be a successful choice. The company operates 17 research facilities in 8 different countries. Focus on innovation has resulted in one of the highest automotive R&D spending. Toyota’s R&D expenditures were approximately US$9.37 billion in 2016. Besides, Toyota is the most valuable automotive brand in the world. According to Interbrand and Forbes, Toyota’s brand is the world’s 5th and 6th most valuable brand worth, US$53.6 billion and US$42.1 billion, accordingly. In both lists, it is the No 1. automotive brand in terms of value (See Figure 2) (SWOT analysis of Toyota)

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Figure 2: Automotive brand value ranking (SWOT analysis of Toyota)

However, Toyota has conducted a number of product recalls in the recent past, which could affect the brand image and overall sales of the company. Toyota witnessed a decline in its sales in key geographic segments. In the final year of 2012, the company witnessed declining sales across North America, Asia, Europe and other geographic regions, which together accounted for 60.8% of the total revenues of the company (Analysis of Toyota Motor Corporation). In addition, Toyota has poor portfolio, it sells its vehicles under 4 different brands, Hino, Daihatsu, Lexus and Toyota. Only Lexus and Toyota brands have considerable brand recognition. From the perspective of Honda company, the SWOT analysis is showed as table below (See Table 2)

Strengths

Competence in engine manufacturing , which is company’s core product

Diversified product portfolio

Dominance in motorcycle and engine industries leading to a high brand awareness

Strong position in Asia’s motorcycle markets

Weaknesses

Dependence on North America to generate most of the revenue

Low investments in research and development leading to innovative products

Opportunities

Increasing government regulations

Improving U.S. economy

Timing and frequency of new model releases

Low fuel prices are increasing the demand for pickup trucks and SUV

Threats

Intense competition

Appreciating Japanese Yen a major concern

Natural disasters could impact production structure

Table 2: SOWT analysis of Honda company (SWOT analysis of Honda)

According to the table above, it can be seen that all Honda’s businesses are built around the engines, which is its core product. Honda is the world’s largest engine manufacturer, which produced over 27 million units of engines for automotive, motorcycle, marine, and power equipment products, in 2015. The company has lots of experience in manufacturing quality and well-performing