Toyota Public Relations Report - Case Study Example

Title: Toyota Public Relations report Name: Unit: Figure 1. Toyota Website Features Executive Summary To be able to carry out SWOT analysis on Toyota, both qualitative and quantitive analysis were used. This was carried out with a main aim of identifying the areas which needed to be improved in the company public relations. Despite the success that Toyota Motors enjoys in the automotive industry, there were issues that were identified in the company ability to handle public communications as witnessed during recalls and the challenges in the environmental friendly vehicles. The following recommendations were recommended to be adopted by the company. Restructure the public relations department by 2015. To come up with new and cheaper designs for eco-friendly vehicles by 2015. Increase the global presence by 2015. To achieve the set goals above, the plan was able to come up with a comprehensive strategy. The main aim is to improve the communications between the company and the public and ensure that the company increases their efforts in developing eco-friendly products. The main aims are: Due to the public relations failures that were witnessed during the recalls, the company should restructure their public relations management. Monitoring the digital media and apply the rapid response method. Investing in environmentally friendly vehicles. Increasing the global presence especially in the developing economies. A response plan to disasters. There will be need for the evaluation to determine the success of the adopted strategy and tactics. The success will depend by the company satisfying the objectives that have been developed above. The status of the plan should be done by the end of 2015 to determine the success. Table of Contents Executive Summary 2 Table of Contents 4 Background 5 Situational analysis 7 Strengths 7 Weakness 9 Opportunities 11 Threats 11 Goals and objectives 12 The Toyota way 13 Global vision 13 Stakeholders 14 Primary stakeholders 14 Secondary stakeholders 15 Strategy 15 Tactics 16 Budget 17 References 19 Background Toyota Motor Corporation was founded in 1937. The company headquarters are located at Toyota, Aichi Japan. The company is a Japanese auto manufacturer engaged in the designing, manufacturing, assembly and sales of vehicles. The company product ranges from passenger cars to commercial vehicles and their parts. The main market is in Japan, North America, Europe and Asia. At the moment, the company has been rated as the leading corporation in vehicle manufacturing and the eight largest companies worldwide. The company has more than 333, 498 employees at the moment with an annual turnover of $213 billion (Toyota Motor Corporation, 2011). Toyota Motor Corporation has two operating divisions. The two divisions are automotive and the non-automotive sectors. The automotive division is involved in manufacturing automotives such as the passenger cars, SUVs, LT trucks, LCV trucks and the commercial vehicles. The non automotive sector of the company is involved in housing, marine engines, afforestation and e-business. The company housing sector has been able to come with sustainable housing designs and earthquake resistance buildings (Liker & Morgan, 2006). Figure 2. Toyota website features. The company financial services referred to as Toyota Financial Services (TFS) mostly deals with the purchase of vehicles and offering the leases. The e-commerce sector has been able to grow due to the rise in information technology. This sector makes the customer value enhancement through use of the information technology. The sector has been able to come up with a portal site for the automobile which provides an exclusive access to a virtual three dimensional city. The marine sector has been able to come up with pleasure crafts and other marine engines. The sector has been praised for being environmentally friendly and reliable. The business focus has been aimed at delivering high technology fields that are capable to adapt to the changes in the environment (Cusumano, 2011). Though Toyota has been praised for their success in the automotive industry, analysis has proved that there have been challenges in their public relations which in some cases have led to a bad image. There have also been indicators that the main competitors for Toyota may overtake them in the recent future. This is due to fact that GM and Volkswagen have started gaining into the global leader (Liker & Morgan, 2006). The analysis has been gained from the company staff and a situational analysis has been done. The challenges that have been obtained from the situational analysis have been addressed through creation of tactics and strategy that will enable Toyota to achieve their set goals and objectives. Situational analysis Using the situational analysis, Toyota will be able to rank its issues. This will allow the company management to look at the main problems that faces Toyota. Toyota strategic plan will be based on the SWOT analysis. This will look at the company strength, weaknesses, opportunities and threats. Toyota has launched a new strategy in Europe and other markets to boost their sales in the regions. This will allow the company to adjust and rectify the areas in which may act to their disadvantage. Strengths The company has been successful in their marketing mix. This has been by providing high quality products at a lower price as compared to their competitors. This has been enabled by the company use of new technology which has enabled them to serve the mass market. The company have also been able to utilize a unique production, management tactics, sales promotion and well managed distribution systems to the consumers. This has enabled the company to have low prices without compromising on their profits (Cusumano, 2011). Toyota has a strong brand image internationally. This has enabled the company to attract and maintain a stable consumer base which is loyal to the brand. The company has been praised for their use of the current technology in their operations. This has been through their research and development (R&D), innovation in their products. The company has 11 research and development centers around the globe. These centers deal with R&D for the vehicle engines, testing and speed verifications. There have been efforts by the company to penetrate the concept car industry (Cusumano, 2011). Toyota has been able to make their products just in time. This has been through the lean management, mass production and use of precise details. The company has been able to initiate mass production over the competitors due to their manufacturing prowess. At the moment, none of the competitors have attained the Toyota status due to their advance in mass production. The [principle that is used in manufacturing the products makes sure that they optimize the materials used and reduce the cost in inventory and operations. Lean manufacturing initiatives deals with high efficiency, quality services, efficiency, waste reduction, and synergy between the people, technology and the manufacturing processes (Cusumano, 2011). Toyota has gained reputation in their environment protection efforts. This is through their efforts in the development of their products. The company has embraced an eco-friendly approach to development, design, production, sales and the advertising practices (Liker, 2004). This is through producing fuel efficient, hybrid vehicles at lower prices than those offered by the competitors. The company has also expanded their efforts to other sectors of the environment such as biotechnology and afforestation. Toyota production and distribution network is extensive. This has given them a competitive edge among the competitors. The company has more than 500 manufacturing companies outside the country. Their production outside Japan also matches the production in the country. The distribution network enables the company to diversify their risks (Toyota Motor Corporation, 2011). Weakness Toyota has suffered from vehicles recalls over the recent past. This has led the company reputation to suffer in matters of security and safety. The customer and public relations have also suffered a lot while the brand image has diminished. During the year 2009 and 2010, the company was forced to recall more than 11 million of their Lexus and Toyota Brand vehicles. The main issues that were associated with the recall were due to brake failures, steering issues, fuel pump and the accelerator pedals. The reports on the faulty vehicles were made public in 2010 on the Toyota Prius. The company public relations failed as they took too long to respond to the issue. This led to lowered trust from the customers and other sectors of the automotive industry (Glionna, 2011). The company efforts to compete with major competitors had led to breakdowns in communication and quality management. Figure 3: Toyota recalls The recalls have cost the company a lot of revenue and customer trust. The company had to work hard to gain the lost customers. There was another major recall in 2011 which involved the Toyota and Lexus model. This was associated with the steering problems (Glionna, 2011). Figure 4: Ranking of total recalls in 2012. Opportunities Toyota has a wide range of opportunities for growth and demand. This is due to changes that are occurring in the world today. There have been cases of rising employment opportunities, high consumer confidence, credit card facilities, and economic growth in many countries. These factors are expected to drive an increase in the consumer demand for vehicles. The Asian market has been able to achieve a strong economic recovery. This has led to Toyota to have growth prospects as it seeks to expend in the region. The company has started to invest strategically in the region making relationships with the suppliers in the local market. This has an opportunity to make Toyota a leader in the Asian region (Liker & Morgan, 2006). The Chinese market offers Toyota an expansion opportunity. Currently, General Motors are the leaders in the Chinese market. Toyota has been able to come up with a strategy that will enable them to double their annual sales in the company by the year 2015. China has put strict rules on environment pollution (Dunleavey, 2010). This follows the reports that have ranked the country to be the top world polluter. This gives Toyota a market for their low emission cars in the country. In 2011, the company launched the low emission vehicles in the country which when combined with the reputation of being the most ecological company give them a competitive advantage (Cusumano, 2011). Threats Toyota has come under stiff competition from other automotive manufacturers such as General Motors, Honda, Ford and Volkswagen. The main threat has been predicted to come from Volkswagen who has continued on brand and products improvements. Honda has also been cited to have the best record in safety at the automotive industry. Natural disasters have affected Toyota motors than any other manufacturers. This is depicted by the 2011 Tsunami which led to a huge loss in the company. This was due to damage of the company assets and power shortages due to destroyed nuclear plants which lead to destroyed supply chain. The country Yen has become stronger against the dollar. This has made the company to face a costly and complicated foreign exchange (Liker & Morgan, 2006). The costs of going green in response to environment may increase the company production costs. There has been an increase in demand for the hybrid vehicles while most of the countries have tightened control on the environmental rules. This will lead to the production costs rising in the long run. The company may be forced to change their production methods which can lead to increased vehicles costs (Liker & Morgan, 2006). Goals and objectives The company mission is, “to be the most admired and respected Company”. Toyotas mission is defined through its guiding principles that were developed in 1992. The company guiding principles commits it to honor and respect the language, laws, culture and customs of the communities in their countries of operation. The company is also committed to providing clean, safe and technologically advanced products to the consumers. The principle sets the company to pursue growth through harmony with the international community and work with the business partners to research and manufacture for mutual benefits (Liker & Morgan, 2006). The Toyota way This is a guiding principle that was put in place in 2001. This is in line with the company values and is based with the seven principles discussed in the mission (Liker & Morgan, 2006).The two platforms that are pillars in the Toyota way are; Continuous improvement Respect for people Global vision The global vision is used to outline the company the company aspirations. These are the required inputs that the company is supposed to develop so that it attains future prosperity (Liker & Morgan, 2006). The vision is represented as a tree in which: Roots- Toyotas precepts and guiding principles Trunk- stable company business base Leaves- Toyota sustainable growth Fruits- quality cars and enriching the lives of the society To attain the set objectives, Toyota is supposed to have objectives that are achievable and measurable. The company should aim for the following objectives Restructure the public relations department by 2015. To come up with new and cheaper designs for eco-friendly vehicles by 2015. Increase the global presence by 2015. Stakeholders Toyota motors target audience in the public relations plans are, the company customers, countries of operations, environment bodies and the research and development team. The stakeholders were identified while conducting the situational analysis (Friedman & Miles, 2006). Stakeholders can be segmented into primary and secondary stakeholders. Primary stakeholders are directly affected by the company actions and events while the secondary stakeholders are not affected directly (Friedman & Miles, 2006). Primary stakeholders Customers- this is the group that uses the company products. The group can be targeted by Toyota motors by production of sustainable, cost friendly and quality vehicles. They can also be retained through effective public relations by communication and fast response. Countries of operations- these are worldwide locations where the company performs business. The company can increase their global presence through negotiating fair deals and honoring their culture and language. Company president and CEOs- they are responsible for efficient running of the company. They are accountable for the performance of the company. This is due to fact that they set the company objectives. Research and development team- this is the team that is tasked with carrying out the company research on developing new products. The team is directly affected by changes in policies, technology and customers taste. Secondary stakeholders Environmental bodies- they are concerned by the carbon emission that the company emits to the environment. They can be affected if the company fails to follow their rules. Community- the community may benefit from the increase in employment if the company advances. They can also be affected by pollution from Toyota products. Strategy This is a process in which the company is able to come up with future goals due to research conducted on the present past and future predictions. Toyota Motors have analyzed a number of strategic issues in their meetings. This is in concern to the issues that have been identified in the situational analysis. Despite the recognition of the issues not much has been done on implementation (Cusumano, 2011). The recommendations on how the company can attain their goals and objectives are set below: Due to the public relations failures that were witnessed during the recalls, the company should restructure their public relations management. There is need for Toyota to realize the rise in the use of the social media among the public. This requires Toyota to use the social media effectively and efficiently to respond to issues. The company public relations strategy needs to be changed. During the crisis, it was claimed that the company strategy led to low response and information retention. Toyota needs to be monitoring the digital media and apply the rapid response method. This is due to fact that in the digital world, the company reputation can be easily damaged. Investing in environmentally friendly vehicles is one of the aspects that will enable Toyota to expand as the world becomes more concerned with degradation and carbon emissions. The company research and development should focus more on eco-friendly vehicles. Toyota should continue increasing their global presence especially in the developing economies. This will offer them cheap production costs and market for their products. Toyota should come up with a response plan to disasters that will enable them to recover their loss fast in case of a natural calamity. Tactics These are the tasks that are required by the company in order to fully implement the public relations plan. The following are the required tactics that are required in order to accomplish the public relations strategies that have been outlined. Restructuring the public relations 1. Toyota needs to come up with a new structure for their public relations management. 2. This should be composed of a group which will be able to act swiftly in case of a problem. Implementation- 2014-2015 Digital media vigilance 1. Making a team composed of technology experts and public relations members to monitor the social media. 2. Continuously analyzing the digital content about their company in the social sites Implementation: 2014-2015 Increase their research and development on eco-friendly products 1. Analyze the current rules on environmental protection. 2. Come up with designs for eco-friendly products. 3. Minimize the costs for developing the hybrid vehicles. 4. Increase the availability of the hybrid vehicles Implementation- 2014-2015 1. Global presence in the developing economies. 2. Increase in the rising economies such as china and other Asian countries. 3. Invests in countries with cheaper production costs. Implementation: 2014-2015 Disaster management 1. Being able to come up with plan for sustainance during the disaster. 2. Reducing disaster impacts. 3. Distributing risks. Budget Toyota Motors will have to incur costs in implementing the proposed public relations plan. The costs will be both fixed and program costs. The costs will come from the following activities: 1. Employing more public relations staff 2. More funding for research and development department to develop low cost eco-friendly vehicles designs. 3. Saving more funds in the disaster management program. 4. Expanding their presence to more global regions. There will be other costs that will be associated with their promotional plans, especially after their recalls which reduced their safety ratings. Evaluation The research was carried out at Toyota and the obtained information was used to come up with a situational analysis. Through these efforts, it was possible to identify the areas which were of major concern and objectives established on how to solve the issues within the shortest time possible. Using strategy and tactics, it was possible to come up with the recommendations on the course of action to be taken (Liker & Morgan, 2006). The success of the public relations plan will be determined through the attainment of the objectives set: Restructure the public relations department by 2015. To come up with new and cheaper designs for eco-friendly vehicles by 2015. Increase the global presence by 2015. There is a need for the company to conduct a qualitative and quantitive plan so that they can review the progress of each aspect in the plan. This can be carried out through surveys, collecting data and coming up with research teams. The results can help the company to come up with new plans and also develop their campaigns. References Cusumano, M 2011. ‘Technology strategy and management reflections on the Toyota debacle’, Communications of the ACM, Vol. 54, no. 1, pp. 33-35. Dunleavey, M 2010. ‘Don’t overlook the rewards for thinking green’, New York Times: Your Taxes. Viewed 14 May 2014, http://www.nytimes.com/2010/02/14/business/yourtaxes/14energy.html Friedman, A & Miles, S 2006, Stakeholders: Theory and practice, Oxford, Oxford University Press. Glionna, J 2011, ‘Toyota recalls 420,000 vehicles in U.S. to fix crankshaft pulley’, Los Angeles Times, Viewed 14 May 2014, http://articles.latimes.com/2011/nov/10/business/la-fi-autos-toyota-recall-20111110 Liker, J 2004, The Toyota way: 14 management principles from the world’s management greatest manufacturer, New York, NY: McGraw-Hill. Liker, J & Morgan, J 2006, ‘The Toyota way in services: The case of lean product development’, Academy of Management Perspectives, Vol. 20, no. 2, pp. 5-20. Toyota Motor Corporation 2011, Hoover’s Company Records, (Tm-Tz), 41,889. Viewed 14 may 2014, from Hoover’s Company Records database. Read More