The Toyota Motor Company operates in a global industry and has operations ranging from product conception to the delivery of final products to the customers. The value chain analysis defines the processes that add value to the product until the product is sold to the customers. The value chain analysis is instrumental in determining where problems are likely to arise and means of making improvements. The Toyota Motor Company automobile industry has heavily invested in effective value chain management to improve operational efficiency, which then generates a competitive advantage.
The first step in production is inbound logistics, where the raw materials are received from suppliers. Toyota manages a large supply chain, receiving parts from thousand of suppliers scattered throughout the world. The raw materials are distributed from suppliers to manufacturing units as demanded and the remaining warehoused for later use. Toyota has managed to handle its inbound logistics efficiently through its networks of warehouses and distribution centres.
The second and main stage in production is operation where raw materials are converted to the final product. Toyota is a global brand, and its operations and manufacturing units are spread throughout the world. It relieves the costs accrued from the shipping of the final product to regional markets. The brand serves a sizeable global market through a distribution network. Informational technology has been instrumental in the brand’s research and development sites in addition to the running of distribution centres throughout the world.
Outbound logistics is a process where final goods are shipped from manufacturing units to retailers. Toyota has logistic centers in various regions and ships thousands of orders every day through its distribution centers and warehouse networks.
Marketing ensures that sales and profitability are increased. The automobile industry has experienced increased competition due to the huge investment by companies on advertising and marketing. Toyota makes major investments in promotions and marketing using both modern and traditional advertising mediums. To retain its customer base and market share, Toyota has used social media and its website to increase its sales amidst stiff competition from other automobile brands.
The final process involves services that add value to the final product and includes customer support after product sale and support regarding continual maintenance of the bought vehicles. The services offered to improve customer support and retention develop a stronger brand image and contribute to profitability.
Toyota, as a brand, is associated with exceptional engineering and technology due to its high production technology and investment in innovation for growth. The company has also maintained an extensive infrastructure throughout the world to maintain its presence in major markets. Toyota has a human-centric approach that focuses on the development of human resources. Following the philosophy of Monozukuri, the company has harnessed its human capital to be the primary source of its competitive advantage.
Toyota’s procurement strategy works with local economies as it procures from thousands of suppliers in different regions of the world. The development of global information systems for the company has required the integration of technological issues, custom laws, and local business practice and needs. Toyota has developed a way of purchasing by laying down the policies and principles that must be followed by staff. The organization has reduced purchasing costs, manufacturing costs, and distribution costs. It has also improved their ability to sell both locally and internationally.
Global information systems have increased profitability as revenue-generating transactions have been maintained and increased. It has also added flexibility to the traditional structure and the existing advantages. It has developed new opportunities for conducting commercial activities as internal networks are replaced by the internet.