Premium Essay

Toyota and Its Recall Policy

In: Business and Management

Submitted By tanveerazmi
Words 1915
Pages 8
University of Modern Sciences

Project: Toyota’s Business Environment and its Recall Policy

Toyota Motor Corporation is Japan’s number one carmaker. Toyota has international presence in over 170 countries worldwide. It manufactures cars, pickups, minivans, and SUVs include models such as Camry, Corolla, 4Runner, Land Cruiser, Sienna, the luxury Lexus line, and full-sized pickup trucks. It has huge financial strength, a sales turnover of 131,511 million for 1997 and sales growth of 29.3%. It is the second largest car manufacturer in the world, after General Motors.

Some of the key reasons for its success include:

Successful brand - Toyota has developed a trusted brand based on quality, good performance and for being environmentally friendly.
Innovation - Toyota is at the forefront of car manufacturing innovation. It was the first car manufacturer to embrace lean manufacturing (known as Toyota Production System) which is a faster, more efficient process which leads to less waste compared to the traditional batch and queue method of manufacturing. It also applied JIT (Just in Time manufacturing) and smart automation.
Product Development - Key to the success in the car market is new models which stimulate demand and loyalty to the Toyota brand. Toyota has reputation for producing cars which are greener, more fuel efficient, and of good performance. Toyota has sought to meet government requirements (for reducing the impact on the environment), economic changes (as prices of fuel - oil continues to rise) through the development of hybrid fuels. Toyota was the first car manufacturer to market hybrid (gas and electric) fuel, with the launch of Prius model, ahead of competitors.
It successfully entered markets and penetrated them with both manufacturing and sales subsidiaries. Toyota gained first mover advantages by presence in globally...

Similar Documents

Premium Essay

Business Strategy

...University AUGUSTINE WEEKLEY Law, Ethics & Corp. Governance March 15, 2013 1. Describe the company and the product safety issue that led to the lawsuit. Toyota Motor Corp.'s announced massive recalls for acceleration and braking problems are creating a huge legal liability for the company and Toyota owners may share in the pain. The Japanese automaker faces dozens of lawsuits over injuries and deaths attributed to safety problems, with many more suits expected. Lawyers and legal experts said the lawsuits could be particularly expensive for the automaker if plaintiffs prove that Toyota was aware of problems but failed to correct them. (Hirsch, J and Pfeifer, S. 2010) On top of that, there are at least 30 lawsuits seeking class-action status to recover damages for the reduced value of the cars and the lost use of vehicles during repairs. Legal expenses and damages resulting from the safety defects could tack billions of dollars onto the $2 billion that Toyota had said it would cost the company in repairs and lost sales. That was before the global recall of 437,000 Prius and Lexus hybrids this week. Since the fall of 2009 Toyota has issued 10 million recall notices for problems related to unintended acceleration, with about 2 million vehicles subject to more than one recall. (Hirsch, J and Pfeifer, S. 2010) A Northeastern University law professor by the name of P. Tim Howard is leading a team of 22 law firms in 16 states that are pursuing a......

Words: 1884 - Pages: 8

Premium Essay


...& Recommendations | 10 | 7 | Bibliography | 14 | INTRODUCTION Toyota Motor Corporation, is a Japanese multinational automaker headquartered in Toyota, Aichi, Japan. In 2010, Toyota Motor Corporation employed 317,734 people worldwide, and was the world's largest automobile manufacturer by production. The company was founded by Kiichiro Toyoda in 1937 as a spinoff from his father's company Toyota Industries to create automobiles. TMC is part of the Toyota Group, one of the largest conglomerates in the world. It created its first product, the Type A engine, and, in 1936, its first passenger car, the Toyota AA. Toyota Motor Corporation group companies are Toyota (including the Scion brand), Lexus, Daihatsu and Hino Motors, along with several "non-automotive" companies. Sakichi Toyoda invented the Toyoda Model G Automatic Loom in 1924 incorporated the principle of Jidoka, which means that the machine automatically stops itself when a problem occurs, later becoming a part of the Toyota Production System. RESEARCH PROBLEM: Toyota has long been recognized as an industry leader in manufacturing and production. Toyota's management philosophy has evolved from the company's origins and has been reflected in the terms "Lean Manufacturing" and Just In Time Production, which was instrumental in developing Toyota's managerial values and business methods collectively known as the Toyota Way. In 2010, the Toyota Motor Corporation ranked first by the International Organization......

Words: 3481 - Pages: 14

Premium Essay

Toyota: an Industrial Role Model

...TOYOTA An Industry Role Model 5/19/2012   Toyota recognizes the impact their products have on the environment, and have taken the initiative to combat these issues. Through improvements in environmental information availability, active participation in environmental policies focusing on sustainable facilities and product developments, and self-criticism/evaluation to find flaws in critical operation tasks Toyota has become a role model in the automotive industry (Corporate Planning Div. 31). SUSTAINABILITY With constant environmental law and regulation changes, Toyota faces one of their biggest challenges to comply. The policies and strategies were easy enough to produce, but the hardest part is getting employee and business partners to adhere, internalize, and understand the overall picture of where Toyota wanted to be. Training programs were designed to educate dealerships and employees on becoming more eco-friendly and sustainable. The result was Toyota launching their Green Supplier Guidelines in 2001, in hopes that the suppliers would follow the same path (Toyota 47). The search for energy savings has produced what Toyota calls a “treasure hunt”, in which suppliers have access to tools and resources that Toyota themselves use to remain eco-friendly. The outcome has been Toyota’s reduction of around 34,000 metric tons of Caron dioxide (CO2) in their supplier’s processes (Toyota 47). Eco-friendly is not only emissions, but also conservation......

Words: 1517 - Pages: 7

Premium Essay

Toyota Motor Corporation- North American Region

...Project Contemporary Management Technique Research Paper: Toyota Motor Corporation Reginald A. Thomas Liberty University Toyota Motor Corporation is an organization that makes headlines on every news platform there is. They are known worldwide, as a dominating force within the automotives industry, and it is imperative to the organization to stay at the top of the industries pack. Not only that, but also to continue to be the leader in sales and to deliver quality products and services. Making headlines throughout the world regarding an electronic failure or mechanical problems causing sticking accelerator pedal and floor mat pedal entrapment is not something that an automotive organization would like to hear. However, this is the case with Toyota. Within the years 2009 and 2010 Toyota recalled millions of vehicles due to a mechanical problem of sticking accelerator pedal and floor mat pedal entrapment. This recall resulted in $48.8 million in lawsuits that Toyota received due to some fatal car accidents involving their vehicles and the nonresponsive actions that Toyota integrated (Wald, 2011, para 4). Eventually the reputation of Toyota had decreased tremendously. Despite the fact that in the early 1960s Toyota implemented Toyota Quality Control (TQC) activities, this did not respond well with the recalls and the trust that customers had instilled in Toyota. TQC is used to solve quality issues early and prevent......

Words: 3161 - Pages: 13

Premium Essay


...RUNNING HEAD: Toyota Corporation Toyota Corporation Marketing Plan Marketing Management Leslie W. Martin Jr Toyota Corporation is one of the world's leading car manufacturing companies. . Toyota has a wide variety of vehicles ranging from cars, to trucks and SUV's in order to accommodate every consumer generation. Toyota's main competitor's in the market is Honda and Hyundai. Since the decline of the economy Toyota has been working tirelessly to create eco friendly cars and promote the green initiative, As a result the company has rolled out a chain of hybrid solar power cars. Toyota has also marketed the new 2009 Corollas, which are guaranteed to get more miles per gallon of gas than the any full size vehicle in its class. Toyota's marketing strategy is as follows: define marketing goals and policies and devise tactics, and competitive strategy. Toyota's marketing team convene on a weekly basis to discuss the competitions' strategies, and where they are succeeding. Toyota then creates a competitive strategy based on the findings. The top advisors of the company prepare a targeted marketing plan, market a regional performance report, update and establish new contacts within banks for financing and leasing purposes, and monitor sales during their weekly meeting. By doing this, Toyota will stay at the top of a competitive market. Toyota's target market is a potential or current customer between the age of 18-60 years old. Toyota's promotional strategies include but......

Words: 674 - Pages: 3

Premium Essay

Individual Case-Toyota

...Toyota Motor Corporation Integrative Case Analysis Prepared by: Wenru Dai May 30, 2014 Professor Anna. Phillips Management 405 Table of Contents Cover/Title Page……………………………………………………………….1 Table of Contents…………...………………………………………………....2 Executive Summary.………...……………………………………..………….3 Organizational Overview……………………………………………………..4 Global Alliances and Strategy……………………..………………………….6 Organizational Strategy………………………………………………………….….9 Political/Culture………………………………………………………………...…...13 Conclusion………………………………………………………………………..…16 Work Cited……………………………………………………………………..……17 Executive Summary: Toyota Motor Corporation is one of the biggest motor companies in the world, although it started as a Toyoda Automatic Loom Works. From a small company to a worldwide cooperation, I believe there are a lot of thing I can learn. That’s why I choose Toyota Motor Corporation as my case. Toyota Motor Corporation is a Japanese automotive manufacturer headquartered in Toyota, Aichi, Japan. In 2013 the multinational corporation consisted of 333,498 employees worldwide and, as of January 2014, is the fourteenth-largest company in the world by revenue (Overview). The company operates both automotive, under the brand Toyota, Lexus, Hino and Daihatsu, and non-automotive. According to Japan Corporate News network, in 2007, the firm sold over 8.5 million vehicles in more than 170 countries. Toyota aims at localization and collaborates with automobile companies in foreign countries......

Words: 3540 - Pages: 15

Premium Essay

Ford Motor Company and the Toyota Motor Corporation

...Running Head: Ford Motor Company and the Toyota Motor Corporation Ford Motor Company and the Toyota Motor Corporation AIU – MGT680 Abstract Two major automakers are Toyota and Ford. This paper will compare the two companies to better understand the contributions to for success of each company. This paper will include a SWOT analysis which identifies strengths, weaknesses, opportunities, and threats to these companies. It will also include a plan of action for one weakness to turn them into strengths. It will discuss the current issues being faced by each company and how it affects the global operation because of the importance.   Ford Motor Company and the Toyota Motor Corporation Ford Motor Company was started by Henry Ford in 1903 (Heritage, 2014). Toyota Motor Corporation was started by Kiichiro Toyoda in 1935 (50 Years, 2014). While each firm has been able to develop a relationship between the political and economic forces within their communities, they also understand a strategic plan is important and will guide them to an effective relationship within their communities. This type of plan will help the two firms build brand name as both firms have successfully done. The following table will illustrate the main issues Ford and Toyota are facing. It briefly explains the current position or view of each company to help better understand who the two firms view their community responsibilities. Issues Ford Toyota Legal, Social and Economic......

Words: 2517 - Pages: 11

Free Essay


...actions will help move Toyota past their reputational issues. Our goal is to take Toyota back to a place where they can move themselves back to a place of growth, innovation and one of positive consumer confidence. For over the past 70 years Toyota has been considered the leader in new technology development. The brand is renowned for quality and reliability across all their models. The company is also seen as the market leader and flag-bearer for greener, hybrid technologies. The firm’s performance in the global market in recent year has delivered mixed results. In the beginning of 2009 Toyota was confirmed as the world’s largest manufacturer by volume, partly due to the collapse of General Motors. But Toyota hasn’t had much time to celebrate. The carmaker has been plagued by a variety of setbacks, including slumping sales, under-utilized assembly lines and multibillion-dollar losses. But perhaps most worrisome of all are signs that the company’s flaunted quality has been slipping. Long hailed as the industry benchmark, some key Toyota products have suffered quality snags in recent years regarding the overall safety of their vehicles. The auto media seems to believe that Toyota’s reputation is ruined. Consumers, though, are still under the impression that Toyota’s quality is tops when compared to all other automakers. Toyota had a rough 2009, to put it mildly. Toyota didn’t have a much better 2010 since the company announced a voluntary recall of 2.3......

Words: 837 - Pages: 4

Premium Essay

Products Liability

...and choose to purchase are solely up to the individual. If there is a problem or accident that may occur a result with use of that product, then the consumer is liable. But producers and manufacturers are not exempt being that it is there product, and this is where legal liability issues occur. “Product liability refers to the responsibility of manufacturers for injuries and damages caused by their products” (Hellriegel & Slocum, 2011, pg. 52). In this paper, I will examine the Toyota Motor Company and how this company has been the subject of a product liability lawsuit. First, I describe the company and the product safety issue that led to the lawsuit. Next, I will discuss the legal theories used by the plaintiff to recover in this lawsuit, how the lawsuit was resolved, and why I agree with the decision in the case. Then, it will be relevant to mention the changes that have taken place in the company to ensure greater safety of this product or its products, including specific policies that the company has put in place to protect consumers and end users who purchase and use its product. Afterwards, I will discuss the regulatory agency that oversees the particular industry the company is in, how it ensures quality assurance and compliance, how it addresses product safety, and how the company in question can work with the regulatory agency to improve operations and product safety. Lastly, there will be recommendations made to the company about avoiding future......

Words: 773 - Pages: 4

Premium Essay

Research on Toyota Csr

...Research on Toyota CSR Toyota is one of the largest car manufacturing multinational corporations in the modern world, it is necessary to underline that in recent years, it has become the leading automaker replacing the original world leader General Motors which has stayed on the first position for several decades. According to Akio Toyoda, the president of Toyota Motor Corporation, “the success of Toyota is due to the unchanging mission, which is to contribute to society through the production of safe and reliable vehicles” (Sustainability report 2010. p.2), Toyota, has been regarded as one of the top 500 companies in the world for a long time, and it has developed a trusted brand based on quality, good performance and for being environmentally friendly. They are holding a firm faith of CSR policy, which is to contribute towards sustainable development. August 2008, Toyota revised its CSR POLICY: Contribution towards Sustainable Development that takes into consideration Toyota's relations with stakeholders. In addition to applying this policy to all of its consolidated subsidiaries throughout the world, Toyota expects its business partners to also support its principles. (Sustainability report 2010. p. 8) In order to contribute to sustainable development, they believe that management interacting with its stakeholders is considerable importance. Based on “Customer First” philosophy, Toyota localizes their products to fit particular market in different countries. They......

Words: 2091 - Pages: 9

Free Essay

Seatbelt Recall

...Business Research Project: Part IV Darby Bess, Roslyn Mason, Jessica Hardin, Jennifer Steimle, Stephen Yeager QNT/561 December 3, 2013 James Krause The purpose of this research paper is to identify and correct causes of Toyota’s seat belt recall of 310,000 of its vehicles (Eisenstein, 2013). Seat belt failures contribute to loss of income as well as lives. If the issue is extrapolated to the economy, the loss of income and lives equate to a moderate yet significant portion of lost GDP. Thousands of people that contribute to the nations production essentially disappear effecting economic growth. Seat belt legislation is goverened by the states. Twenty-five states and the District of Columbia require seat belts for all passengers. All vehicles including buses are required to be fitted with what the Federal Motor Vehicle Safety Standards and Regulations (FMVSR) call a type 2 seat belt assembly consisting of a combination pelvic and upper torso restraint (Insurance Institute for Highway Safety, 2013). Currently, states are expanding their seat-belt laws to cover rear-seat occupants (Copeland, 2010). It is prudent for any organization to understand the mechanics, processes, and products they use or create. If a product or process fails, it is important the same institution initiates sound research to generate dependable data derived by professionally conducted practices that can be used reliably for......

Words: 2012 - Pages: 9

Premium Essay

Business Ethic

...Executive Summary This report will introduce Toyota company of business ethics, in the first part, the report described the definition of business ethics, and then introduced the environmental scanning method and PEST and concretely introduces the Toyota company's ethical dilemma, how to solve this problem, from the Angle of moral evaluation, the whole situation based on different kinds of ethical theory, business ethics from the perspective of moral comprehensive understanding of the problem, and then to carry on the analysis. Making companies in the society, the government, and people’s hearts set up a better image, which is beneficial to the development of the company and have more income. Hope this report from every Angle analysis Toyota company pedal events, brake event. Let the Toyota Company remember the lesson. And effectively solve it. 1.0What is business ethic? Have a lot about what is the business ethics idea, or is simple; some people think is right or wrong. Essentially, business ethics is the pursuit of truth. Can and should be regarded as for $5 and $5 $10 is equal to the initial level, the simple truth. Therefore, the businessman must provide good quality goods and service, with reasonable price to consumers' normal supply. They must avoid addicted to like adulterate unfair trade practices, promoting misleading advertising, cheating weights and measures, such as the black market, they must give fair wages and their workers provide good working conditions....

Words: 2990 - Pages: 12

Premium Essay

Toyota Decision Processes

...How Toyota Ought to Organize its Decision Processes to Minimize the Risk of Major Design Flaws that Lead to Massive Recalls and Driver Deaths from the Perspective of Organization Design and Decision-Making Abstract Japanese automaker, Toyota was a quality assurance trademark trusted by consumers worldwide. Though, in recent years, the company has been inundated by numerous vehicle recalls. Toyota’s quality problems surfaced when it was forced to recall nearly 7 million vehicles in the late part of 2009 (Chris, 2010). The recall crisis of 2009-2010 prompted a wave of negative publicity for the company (Chris, 2010). Many issues were discovered that led to the recalls. Sticky gas pedals, pedal entrapment, and software glitches that affected braking in some models were some of the problem areas (Trudell, 2014). Over time, the safety related recalls continued growing. In fact, by May 2011, the automaker had recalled close to 20 million vehicles (Trudell, 2014). Naturally, the numerous recalls and lawsuits that ensued threatened to damage Toyota’s image; thus, to rectify this the company should organize its decision processes more efficiently. Keywords: organizational change, recall, total quality management Introduction For decades, Toyota set the standard for quality and reliability in the automotive industry. In fact, the Toyota brand has been touted as the pinnacle of automotive excellence by rating industries and industry consultants (Piotrowski & Gray,......

Words: 4041 - Pages: 17

Premium Essay


...Assignment 2: Toyota BUSI2701H Name: Ronnel Belda Student CUID: 100847861 Executive Summary: With thorough understanding of the benefits and cost involved in allowing Toyota to operate in the country, it is apparent that the company should be permitted to expand in the country. This proposal was based on the numerous benefits that exceed the risks associated with the operation. These benefits include the mass production that will upsurge the country’s export and employment, and help produce supporting industries. In 2012, Toyota manufactured 9.75 million vehicles1. In addition, Toyota’s large sales will generate high tax revenue. In 2012, Toyota’s net revenue was $226,106 million2. Moreover, Toyota provides training to individuals that will improve the country’s level of knowledge. Furthermore, Toyota’s competitiveness will influence its rivals to operate in the same country. In addition, Toyota also operates in non-automotive business. Lastly, Toyota can improve its products and services in the country. Company Description: Toyota Motor Corporation, established by Kiichiro Toyota in 1937, is a Japan-based automaker company headquartered in Toyota, Aichi, Japan3. The company offers various types of vehicles such as sedans, minivans, 2BOX cars, sport-utility vehicles, and trucks, as well as car related parts and accessories. Moreover, Toyota extends its corporation to non-automotive business, including housing, financial services,......

Words: 3251 - Pages: 14

Premium Essay

Toyota vs Ford

...Toyota and Ford Comparison L. Johnson MGT680-1203B-12 Abstract Toyota and Ford companies are two of the major players in the auto industry. Comparing the two companies helps to understand what contributes to the success of each. The SWOT analysis can be used to identify weaknesses and a plan of action to turn those into strengths. The current issues faced by each company affect how it operates globally. It is important for each company to understand how each issue affects its operations. Introduction Every firm creates a relationship between the political and economic forces within its community. Toyota and Ford understand the importance of developing a strategic plan that guides them on how to create effective relationships within the community. This helps with building brand name, which both companies have done successfully. Ford and Toyota’s current position on the main issues that they face and a SWOT will be done to show their current market position. Issues The following table will compare the current issues faced by Ford and Toyota. The current position/views of each company are briefly explained. The purpose of this table is to understand how Ford and Toyota view their responsibility to the community. Understanding the companies’ positions help to develop strategic plan suggestions. |Issues |Ford |Toyota | |Legal, Social and......

Words: 4068 - Pages: 17