Strategic Management of Toyota - Case Study Example

? STRATEGY MANAGEMENT By + Profession’s Strategy Management Introduction Strategic management refers to set of actions that help an organization achieve its objectives. These objectives are usually covered in the vision and mission statements of the company, for the primary goals, whereas other objectives are contained in a firm’s strategic plan. The strategy serves the purpose of giving direction to the firm, making not only an essential tool in the business, but also necessary (Freeman 2010). This paper will cover several aspects of strategy management using the case study of Toyota, which is multinational motor productions company that has been formed by a number of companies that have joined to achieve the similar of objective of being the lead motorcar producer in the world and provide the safest and most responsible means of transport. Resource and methodology The information for this paper will be retrieved from internet databases, online libraries, newspapers, journals and books. This will ensure that the information is succinct and relates to the strategies of Toyota and all the aspects of strategic management that are in the firm. The key concerns will be the environmental scanning, strategy formulation, levels of strategies, the production levels strategy and the latest developments in strategic management. Body and Analysis Environmental Scanning Environmental scanning is one of the most significant components of the strategic plan of any company. This is because a business does not exists in a vacuum and will often suffer from the effects of its environment. A company like Toyota has set shop in parts of the world and continues with its strategy of expanding so as to provide the whole world with the safest and most responsible means of transport. For this company environmental scanning is one of the most significant environmental global analysis. It involves activities environmental monitoring, forecast and assessment. The global environment includes that macro environment, which is made up of industries, markets, companies, clients and competitors. There is also the micro levels environment, which is made up of customers, suppliers and competitors. In the environmental scanning the firm mainly concentrates on the macro environment as the micro environment is best dealt with at the industry or business level analysis. Environmental scanning refers to the study and interpretation of the political, economic, social, technological developments, legal issues and other tends in the business world that are likely to affect the company’s operations. The primary factors, which the frim needs to consider in the environmental scanning are events, expectations and trends of the different groups that have an interest in the firm’s operations. These issues are mostly the fore runners in a company’s trend break. A trend break in this case refers to a shift in the value people lay on the business, or a technological innovation that paradigms a change. A firm like Toyota needs to constantly analyse its business environmental so as to keep up with the trends and changes in the market. Trends seem to re occur and change often, whereas issues in the business environmental may either be temporarily or permanent (Freeman 2010). Strategy formulation The execution of s strategy in any organization goes through three phases, these are diagnosis, formulation and implementation stages. For Toyota strategic management is a continuous process to develop and revise the future-based strategies that allow the organization to continue being in the lead in the car production industry in the world for many years to come. The strategy allows the frim to achieve both its short term and long term objectives. Diagnosis refers to the conducting of the situational analysis, which is simply analysing the strengths, weaknesses, opportunities and threats of the company and identifying the critical factors that are likely to affect business operations in its environment. Formulation ,which is the main focus in this pare refers to the second phase of the strategic management process that helps produce a clear set of recommendations and actions that the business must undertake to achieve its objectives. In the formulation stage the business modifies the mission and objectives to make the organization more successful than it is at the time. There are four crucial stages in a strategy formulation, which are review of the existing objectives and strategies, identification of strategic alternatives, conducting an analysis of the limitations and benefits of each alternative and deciding the best alternative to recommend and implement (Eden & Ackermann 2013). Levels of strategy There are four levels of strategy namely: international (global), corporate, business and operational level. The international otherwise the global level of the strategy deals with the company identifying the best place in the international markets to set up its business. For Toyota this level of strategy would involve decisions and recommendations about the in international market and its position in this market. The second level is the corporate strategy level, which deals with the vision statement, the corporate goals, corporate culture and philosophy of the firm. Then there is the business level strategy, which deals with the business competences, mission and Business goals. The last strategy level is the operational or manufacturing level strategy level. The people in charge of his level of strategy are the department heads as it deals with issues to do with tactical operations of the company. The decisions passed at this level greatly influence the decisions in other levels of the strategy (Freeman 2010; Eden & Ackermann 2013). Strategies of three levels of production For Toyota car production take place I three levels namely, purchase of raw materials, which is the primary level, manufacture of the raw materials to car body parts, which is the secondary production level and the assembly of the car as the customer wants it. The strategies in each of these three levels fall under the operation strategy level category. In the primary production level there can be strategies such as purchase and supply of raw material strategy, while in the secondary strategy here can be the information technology strategy to ensure that the body parts manufactured are made using the best information. Finally, in the tertiary level of production, where the assembly of the car takes place there can be a marketing strategy to make sure that the vehicle fits the requirements of the customer and gets a buyer (Eden & Ackermann 2013). Corporate Responsibilities Toyota as a firm has the corporate responsibility to ensure that when executing its strategic plans it takes into consideration all the people who will be affected by the decisions. There have been issues of corporate bodies that have formulated and implemented strategies that help them meet and achieve all their objectives, but have adverse repercussions on the employees, investors, business community, suppliers and sometimes the customers of the business. When formulating strategies the business should ensure that it adheres to the regulations of the law and does not implement strategies that are likely to cause harm to the society (Hitt, Ireland & Hoskisson 2012). Developments in strategic management In the past strategic management focused more on the external factors than the internal factors. There are changes and development in strategic management that indicate that businesses are appreciating the significance of internally based strategic plans. It is almost impossible for the business to achieve its objectives if its dies not maximize ion its internal strengths and work on its internal weaknesses before proceeding to the external environment (Wheelen & Hunger 2011). Conclusion and recommendations In conclusion, a business without a strategy is like a ship without a radar. It simply lacks the direction, making it difficult for such a company to achieve its objectives. A strategy is crucial for the business to maximize its operations and diversify its operations. From this paper it is clear that Toyota has incorporated several aspects of strategic management in its future plans and objectives. This helps the firm take a clear approach towards achievement of its objectives. References Eden, C, & Ackermann, F 2013, Making strategy: The journey of strategic management, Sage Freeman, R 2010, Strategic management: A stakeholder approach, Cambridge University Press Hitt, M, Ireland, D, & Hoskisson, E 2012, Strategic Management Cases: Competitiveness and Globalization, CengageBrain. Com Wheelen, T, & Hunger, D 2011, Concepts in strategic management and business policy, Pearson Education India Read More