Strategic Management Paper FINALEEE

FAR EASTERN UNIVERSITY
Institute of Accounts, Business and Finance

Business Administration Department
A Strategic Management Paper
In Partial Fulfillment of the Requirements for the Degree of
Business Administration Major in Business Management
Submitted By:
Garcia, Arjay
Mendoza, Cedrick L.
Mendoza, Charlotte V.
Submitted To:
Prof. Celmer Santos
Date:
April 8, 2019
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Table of Contents:
EXECUTIVE SUMMARY
1. INTRODUCTION
2. RESEARCH DESIGN AND METHODOLOGY
3. MACRO-ENVIRONMENTAL ANALYSIS
3.1 Economic Forces
3.2 Socio-cultural Forces
3.3 Technological Forces
3.4 Political Forces
3.5 Environmental Forces
4. INDUSTRY AND COMPETITOR ANALYSIS

4.1 Industry Value Chain Analysis
4.2 Porter’s 5-Forces Model
4.3 Strategic Positioning Analysis & Recommendation
4.4 Market Share, Size and Growth Trend and Market Analysis
4.5 Competitive Profile Matrix (CPM)
4.6 External Factor Evaluation (EFE) Matrix
5. COMPANY ANALYSIS
5.1 Company Vision and Mission Statement
5.2 Review of Toyota Motor Corporation Mission and Vision Statement
5.3Toyota Motor Philippine Corporation’s 7s Framework
5.4 Company Internal Audit
5.5 Key Financial Ratio Analysis
5.6 Internal Factor Evaluation (IFE) Matrix
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6. STRATEGY FORMULATION
6.1 Strengths, Weaknesses, Opportunities, Threats (SWOT) Matrix
6.2 Strategic Position and Action Evaluation (SPACE) Matrix
6.3 Boston Consulting Group (BCG) Matrix
6.4 GE Toyota Motor Corporation Matrix
6.5 Grand Strategy Matrix
6.6 Internal-External Matrix (IE)
6.7 Summary of Strategies
6.8 Quantitative Strategic Planning Matrix (QSPM)
7. STRATEGIC OBJECTIVES AND RECOMMENDED STRATEGIES

7.1 Recommended Revised Vision and Mission Statements
7.2 Key Strategic Challenge & Recommended Corporate Strategic Objective
7.3 Recommended Functional Strategic Objectives
7.4 Recommended Strategies
7.5 Recommended Departmental Programs and Actions
7.6 Financial Projections
8. STRATEGY EVALUATION, MONITORING, AND CONTROL

8.1 Balance Scorecard Strategy Map
8.2 Balance Scorecard Objectives and Initiatives Matrix
8.3 Balance Scorecard Performance Monitoring Dashboard
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9. CONTINGENCY PLAN
Appendices Audited Financial Statements of Toyota Motor Philippines
Audited Financial Statements of Mitsubishi
Audited Financial Statements of Hyundai
Audited Financial Statements of Ford
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EXECUTIVE SUMMARY:
The Philippine automotive manufacturing covers the assembly, importation/distribution,

Rebuilding of motor, vehicles, and the manufacturing of automative parts and components. Its
Consists of Highly diverse sectors such as metal, electrical, rubber and composite materials. It is
Also characterized by heterogeneous firms, (Toyota, Mitsubishi, Honda, Nissan and Isuzu)
Operating side by side with many small under developed by firms.
The industry players are serviced by the following industry associations: The Philippine
Automative Federation Inc. (PAFI), the Industry’s largest umbrella organization and recognized
As forums such as the ASEAN Automative Federation and APEC Auto Dialogue. The Chamber
Of Automative Manufacturers in the Philippines (CAMPI), which a core manufacturers and
Second tier importers and distributers.
There are currently fifteen vehicles manufacturers with operating plants in the country,
Practically seven of which are equipped with electro – deposition painting systems. There are
Total of 272 parts and components manufacturers in the country. The industry has an annual
Capacity of 250,000 units. All the different types produced plants rated as compliant standards
And certified by the International Standard Organization (ISO).
In 2011, the automative industry generated production valued at P. 368 billion – equal
To 4% share in GDP.
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INTRODUCTION:
The Toyota Industries Corporation is a Japanese machine maker. The Company was
Founded in 1926 as Toyoda Automatic Loom Works, Ltd. By Sakichi Toyoda, the inventor of
Series Manual and machine – powered looms. The most impressive of theses was the 1924
Toyoda Automatic Loom, Type G, a completely automatic high – speed loom featuring the
Ability to changes shuttles without stopping and dozens of other innovations.
The Toyota Motor Philippines Corporation (TMPC) is subsidiary of Toyota Motor

Corporation, based in Santa Rosa Laguna, Philippines, responsible for the assembly and
Distribution of Toyota vehicles in the Philippines since in 1988. The Company was established
On August 3, 1988, as a joint venture between Toyota Motor Corporation, Mitsui and Company
Limited and GT Capital Holdings Inc. GT Capital Holdings Inc. (51%), Toyota Motor
Corporations(34%), Mitsui & Co .,Lt (15%).
TMPC is the largest automotive Company in the country, with the wildest vehicle line – up
Of 17 models and a sales distribution and service network composed of 47 dealerships
Nationwide. TMP’s head office and manufacturing plant are located inside 82 hectare Toyota
Special Economic Zone in (TSEZ) in Santa Rosa Laguna. The Company currently produces
The best -selling Innova and Vios. It’s existing manufacturing plant has the Capacity to produces
Over 51,000 units per year on two shift production operation.
Toyota Motor Philippines grew its net income by 11% to 13.4 billion last year from P.12.1
Billion in 2016 on the back of a 19% growth in consolidated revenues to P185. 3 billion from
P.155.8 billion in 2016. The automotive company hit retails sales volume of 183, 908 units
Last year, garnering a 16% improvement from 158,728 units in 2016 to corner all over the
Market share of 39%
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II. REASEARCH DESIGN AND METHODOLOGY
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III. MACRO – ENVIRONMENTAL ANALYSIS

3.1 ECONOMIC FORCES
3.1.1 MANUFACTURING INDUSTRY GROWTH
Philippine auto sales ended the third quarter of 2018 on a positive note showing signs
Of recovery in a challenging year which was opened with higher excise taxes on vehicles, fuel
And rising global oil prices. The Philippines automotive industry sold a total of 101, 226 units,
Based on the latest figures consolidated from distributor groups AVID (Association of Vehicles
Importers and Distributors), CAMPI (Chamber of Automotive Manufacturers of the Philippines)
And TMA (Truck Manufacturers Association). The figures represented a 6.58% gain from the
Previous quarter’s 94,978 units and a 15.26% decrease compared on 2017.
Relevance to Firm:
Toyota Motor Philippines (TMP) Corporation expects vehicles sales to bounce back this year
As its targets a 5% growth after as industry – wide slump in 2018. The vehicle industry sales
Slump last year due to the imposition of a new taxes and soaring inflation. In 2018, car sales
Dropped 16% from 183, 908 in 2017.
Car Industry Growth

According to the combined reports of the association of vehicle Importers and Distributors
(AVID) and the Chamber of Automotive Manufacturers in the Philippines (CAMPI), the
Philippine automotive market grew in the First quarter this year from 86, 527 units in 2016
To 105, 073 units in 2017. That’s a growth from of almost 22%.
Relevance to Firm:
Toyota remains to be the automotive leader in the Philippines with 183,908 units sold in 2017.
This was significant increase from its 2016 sales record with 16% growth. This led TMP t
Achieve its 16th consecutive Triple Crown. No. 1 in Passenger Car Sales, No. 1 in Overall
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Sales. On Top of these milestones , TMP ranked 9th in Sales Performance among all Toyota
Distributors worldwide. TMP owes its success to the unwavering support of its entire value chain
TMP will remain committed to deliver better products and services to its customers.
It has always been Toyota’s mandate to be a positive impact to a society wherever it conducts
Business. With the robust growth of the automotive market, TMP continuous to flourish enabling
The Company to infuse more investment in the country to support its business requirements.
3.2 SOCIO –CULTURAL FORCES
Population Growth
The Chamber of Automotive Manufacturers in the Philippine Inc. (Campi) and Truck
Manufacturers Association (TMA) have shown five months of consecutive sales slump over last
Year and this year. The AVID said sales of imported automotive vehicles in the first half
Dropped 11 percent to 43,138 units from 48,344 units in the 2017 period. The fact that the
Philippines population has grown beyond 105 million of mostly young citizens, and has a
Rapidly growing middle class, is a reason for cautious optimism.
Relevance to Firm
Toyota Philippines expecting that the New Vios model will help them the Company recover
Sales after the market correction in the second half of the year. The new – Vios is poised to
Succeed its predecessors as the largest volume model manufactured in the country. Along
With the Vios, Toyota also resembles the Innova at the factory. Together, the two models
Combine for about 53,000 units total.
Filipino Buyer choosing SUV

Based on industry data from 2015 – 2018, A Filipino Buyers are starting to prefer SUV and
Other Light commercial vehicles. 32% percent of the buyers bought a passenger car ( Average
Of 10,300 units per month.) This year’s figures are much lower than both 2016 and 2017 where
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Passenger cars and sold an average 12,050 units per month equating to a 36 percent and a 32
Percent market share respectively.
Relevance to Firm
The Fact that Toyota has been a presence in both official and unofficial capacity in our
Country has a done a lot to sway in hearts and minds. Toyota currently holds close to 40%
Market share of all vehicles sales in the country, and that number has been steadily on the rise.
They also have the widest vehicle line up at more 15 models available for customers at different
Trim levels and at all of their 45+ dealership nationwide.
3.3 TECHNOLOGICAL FORCES

Technological Change
A large push in 2015 also includes more modern security features for the car, with some high
-To – mid ranges model installed with video cameras and radar sensors. These features signal
Warnings against course collision and lane departure. Research on these features is pushing
Toward an autonomous or driverless car by the end of the decade. The automotive has been
Constantly innovating to update transportation into new realms.
Relevance to Firm:
Toyota Motor Philippine Corporation produces vehicles and components of outstanding quality,
Using advance technology, continuously improving methods and environment -friendly
Processes while maintaining safe working conditions.
3.4 POLITICAL FORCES

Excise Tax
Train Simplifies the excise tax on automobiles, but lower – priced cars continue to be
Taxed at lower rates while more expensive cars are taxed at higher rates. This excise
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Will raise revenue in a very progressive manner as the richer buyers tend to own more
And expensive cars compared to those who earn less.
When we consider the TRAIN as a package, the increase in take home pay from
The personal income tax reduction will be more enough to offset the increase in
Prices resulting from adjustments in excise taxes.
Relevance to Firm
NMISP Current auto excise tax TRAIN auto excise

tax
₱600,000 and below 2% 4%
From ₱600,000 to ₱1.1 ₱12,000 + 20% excess of ₱600,000 10%

million
From ₱1.1 million to ₱2.1 ₱112,000 + 40% in excess of ₱ 1.1 20%

million million
Over ₱2.1 million ₱512,000 + 60% in excess of ₱2.1 50%

million
The Toyota Vios which typically sells for Php. 587, 255. Under the new excise tax schedule,
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Such a vehicle would fall under the first tier, which means that it is subject to a 4% excise tax.
The TRAIN simplified the taxes on automobiles by replacing the complicated tax structure
Before.
Toyota Vios
Current excise tax TRAIN’s auto excise
Net Manufacturer’s or Importer’s Selling Price ₱587,255 ₱587,255

(NMISP)
Before VAT (₱587,255 +2%) (₱587,255 + 4%) =

₱599,000 ₱616,618
Final price after VAT (12%) ₱670,880 ₱690,612
Price difference ₱19,732
3.5 ENVIRONMENTAL FORCES:

GLOBAL ENVIRONMENTAL CHALLENGE 2050
GLOBAL ENVIRONMENTAL CHALLENGE 2050
SG (Environment, Social, Governance) Activities ESG (Environment, Social, Governance)
Activities Sustainability Our ESG activities are rooted in the belief that our efforts in the
Environmental, Social, and Governance-related fields are a driving force behind long-term
growth for Toyota, while supporting the formation of a sustainable society. Environmental
Toyota Environmental Challenge 2050 To go beyond zero environmental impact and achieve a
net positive impact, Toyota has set itself six challenges. Environmental Management Toyota has
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positioned the environment as a priority management issue. Toyota promotes environmental
management in all regions around the world and in all fields, while collaborating and
cooperating with related companies, business partners, employees, and other stakeholders.
Environmental Data View data regarding environmental protection, environmental management,
and environmental accounting by Toyota and all our global subsidiaries. Environmental Report
Read our annual environmental report. Social Initiatives for Improving Traffic Safety Toyota
believes it is important to promote an "Integrated Three Part Initiative," involving people,
vehicles, and the traffic environment, as well as to pursue "real-world safety" by learning from
accidents and incorporating that knowledge into vehicle development. Customer First and
Quality First Measures Toyota constantly seeks to improve customer safety, security, and
satisfaction, putting the principles of customer first and quality first into practice. Creating a
Prosperous Society To help realize the future mobility society and enable prosperous lifestyles,
Toyota is working on a wide variety of initiatives that extend beyond automotive manufacturing.
Social Contribution Activities Social Contribution Activities Toyota is active in social
contribution activities to support the sustainable development of a sustainable society. We want
to be a strong corporate citizen. Respect for Human Rights Toyota respects and honors the
human rights, and other rights, of all people. We take care to source conflict-free minerals.
Collaboration with Business Partners Collaboration with Business Partners Toyota is bolstering
its CSR initiatives through increased cooperation with suppliers, dealers, and other business
partners. Employees Toyota's employees are the bedrock of stable business. Learn more about
our way of thinking and our activities. Governance Corporate Governance Learn more about
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Toyota's corporate governance-related activities. Risk Management Learn more about Toyota's
risk management-related activities. Compliance Learn more about Toyota's compliance
Relevance to Firm:
Toyota aims to create a more sustainable community in all locations of its dealerships by
Contributing to the preservation and protection of the environment. Toyota believes in creating
Sustainable society by Incorporating Environmental Challenge (TEC) 2050 to serve as guide
Achieving zero environmental impact in all aspects of its operation, and create a net positive
Impact to contribute to a better society. Guided by the TEC 2050, TMP shall continue to
Implement environmental programs in line with the global challenges and its Corporate
Environmental Policy.
4.1 INDUSTRY VALUE CHAIN

4.1 A: Value Chain of Toyota Motor Corporation
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4.1.1 Primary Activities:

The Primary Activities of Toyota’s Value Chain Analysis constituted by Inbound
Logistics second the Operations third Outbound Logistics fourth the Marketing Sales
And Fifth the Service.
4.1.2 Inbound Logistics:

Inbound Logistics use JIT (Just in Time) system of production as it decrease the
Inventory Cost. JIT helps Toyota to optimize their assembling and production
Process as well to minimize parts going to waste or getting unused as inventory.
Inbound Logistics are the good that the Company receives from its suppliers and
Store for some period of time until the moment when they will be used in production
And process.
Toyota Company does not have and is not able to create own raw materials that are
Needed for assembling of cars, thus it has to collaborate with a third party. Toyota
Orders the raw materials from all over the world and in the interest of maximizing
Their availability of raw materials they maintain good relationship in their suppliers.
Toyota just used Just In Time (JIT) to manage the supply of raw materials as well
As optimizing the Supply and production processes.
4.1.3 Operations:
These activities compromise mainly of manufacturing and assembling process of the
Motor vehicles. Other activities in the operations may include motor tuning,
Configuration of Motor parts and Final Engine Tuning. Toyota Motors have established
And Maintained the image of producing reliable and long lasting vehicles largely due to
Their well – designed and moderated operation process. One of the main factors of Toyota
Successful sales record is credited to their comprehensive implementation of an exquisitely
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Planned operation system.

Toyota Production System (TPS) is an operation structure followed, which consists of
The integration of the lean production concept and Just-In-Time (JIT) management, controls
The production process in accordance with the customer requirements. Other operation
Activities also include the “Jidoka” system, which stops the production process if any defects
Or other operational problems occur. Operational constancy is also a part of TPS and consists
Of “Heijunka” concept which focuses on the uniform distribution of work at any position of
The production process, Work Organization focusing on the accurate distribution of tasks in the
Correct order and description, and Total Productive Maintenance (TPM) which emphasizes on
Overall check-up of all equipment and tools used in the production process.
4.1.4 Outbound Logistics
On completion of the operation process, final products are transferred to the retailers,
Wholesalers and, ultimately, to the final customers. Toyota controls the whole process of
Vehicles distribution, from the factory to their branches worldwide, to ensure that the final
Products are delivered in the right place and at the right time.
Each Toyota dealer is directly linked and controlled by Toyota, with few or no subsidiaries
Involved in the distribution process. Outbound logistics of finished vehicles are the responsibility
Of Toyota Motor Sales. Parts Distribution manages the supply of service parts from the plant to
The service center. It supports service parts production and shipping preparation which includes
Containerization and overseas shipping. This group is also responsible for quality, technical
Support and overseas logistics and customs.
4.1.5 Marketing and Sales

In these activities, Toyota’s marketing department assigns new products to the precise
group of targeted customers. Marketing and Sales activities of Toyota also include emphasis on
their planned promotion mix and marketing communication approaches, like advertising and
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sales promotions, as well as building groundwork for offers that would be suitable for meeting
the expectations of the customers and the company, as well.
4.1.6 Service
Service is the final Aspect of the Primary activities that mainly add value to the
Products and ensures successful distribution, as well as, obtaining feedbacks and response from
The customers. This includes all areas of service such as final checking, after-sales service,
maintenance, handling complaints, training, repair services and additional customer services.
Toyota believes that customers are the “driver” of the company’s success, thus it provides and
improve several types of their offered services. As Toyota product’s main factor is reliability,
therefore services are delivered by qualified personnel ensuring all services provided are of high
quality. The importance of perfection ensures service.
Support Activities:
The support activities include Procurement,Technolgy, Human Resource Management
And Firm Infrastructure.
Procurement
These activities are associated with the purchase of goods, materials, equipment, and
Services, and focus on reducing the cost of purchases and receiving them on the assigned
Time. Toyota used E – buying and outsourcing methods to manage procurement to
Activities. Furthermore, in collaboration with its suppliers, Toyota support the reduction
Of environmental pollution that occurs during the delivery of supplies.
Technology
These activities are the integration of constantly developing technologies in the
Processes used in help to create and maintain their competitive advantage. Every
Department of Toyota is build up on Technologies. The main focus on technology
Development is to guarantee the customers of safety of the vehicles.
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Toyota has integrated safety technological systems that are aimed to provide safety
Technological systems that aimed are to provide safety for the driver and vehicles. The
First technology is PCS (Pre – Cash Safety) system that helps to predict cash and thereby
Minimizes the risk of damage and injuries. The second is Pop – Up Bonnet technology
Which is definite design of the car frame structures that was created by the Toyota to
Avoid the damage caused to other vehicles and pedestrians.
The third one is Adaptive Driving Beam System which is assimilated in some models
Of Toyota cars that helps to regulate High Beam in Automatic way.
High Resources Management

It is important of the whole organization business and Toyota and uses
Different tactics to sustain its employees. Other car manufacturing companies are
Considered as producers of High qualities of Cars, However they cannot compete
With Toyota in Human Resources management, as well its suppliers and methods of
Distribution.
Toyota has a highly integrated Lean Production System in order to use the
Workforce in more productive and efficient way. The main concept of managing
Human resource is to expand the capacity and capability of the employees by
Providing them a material encouragement for the extra work, training them to
Develop their working skills and giving them various rewards.
These methods lead to friendly and comfortable working atmosphere in the

Company that in turn increase in productivity and quality of the product and result
In creating of the Competitive Advantage.
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Firm Infrastructure:
These activities are connected with strategic plans of the organization. MIS (
Management Information System ) plays a vital role in designing Strategic Plan,
Organizing, MIS(Management Information System) plays a vital role in designing
The strategic plan, organizing and controlling the various departments of Toyota
Such as Finance, Accounting and Corporate strategy. Moreover, Toyota uses
Robotic system where people act as operators that make the production process
Fast and Efficient.
4.2 PORTES’S 5 FORCES MODEL

4.2.1 Industry Definition and its Competitors
Toyota Motor Philippines was finally formal established in Philippines, Along with the
Descent on the Pearl of the Orient. Toyota brought along with it the hope for numerous job
Opportunities for Filipino and the removal of the need of the purchase of Toyota vehicles abroad.
In 1998 TMP was awarded an ISO 14001 certificate for environmental management, Becoming
The First Automotive manufacturers in the Philippines.
Toyota reached a record breaking number of sales as it sold more than 106,000 vehicles
In 2014 alone, showing a 41% increase of sales over 2013. This number proved to be a milestone
Since the Company didn’t expect to reach it until 2018. Because of this, TMP gained entry into
The prestigious group of Toyota Manufacturers worldwide to reach more than a hundred
Thousand sales. It was also this year that the Chamber of Automotive Manufacturers of
The Philippine Inc. (CAMPI) awarded Toyota Motor Philippines Corporation (TMP) the
Triple Crown award which is comprised of Number one in Passenger Car sales, Number One in
Commercial Vehicles Sales, for the thirteenth year in a row.
Toyota Motor Philippines Corporation reported consolidated earnings and result for the
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Nine months ended September 2018. For the nine months, the Company revenues reached Php.
119.3 Billion. The Company realized Php. 6.6 Billion in net income. For the nine months, the
Company attained retail vehicles sales of 109, 402, units. The Company sales grew 3% to
12, 686 units from 12,315 units in the previous month.
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Summary of 5 – Forces Analysis

Forces Conclusion
1.) Rivalry of Players MODERATE
2.) Threat from New Entrants WEAK
3.) Bargaining Power of Suppliers MODERATE
4.) Bargaining Power of Buyers STRONG
5.) Threat from Substitutes MODERATE
Rivalry of Players
Rating: MODERATE
Analysis Criteria Description Ratings
Industry Growth Automotive industry is a fast 1 = Low intensity of rivalry
growing market. Companies can grow without
The worldwide automotive capturing market share from
industry has been enjoying a each other, which leads to
period of relatively strong decreased competition.
growth and profitability, and
annual sales have reached
prerecession levels in some
regions.(strategyand.pwc.com)
Product Differences Automotive industry has 3 = High intensity of rivalry
undifferentiated products with Customers can choose any
regards to their cars and other brand because the products
vehicles. But with regards to are almost the same. But not
advancements in the use of that much if talking about
technology, there is a big technological advancement.
difference.
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Information Technology (IT) is

the new driving force behind
product differentiation in the
auto industry.(Ed Richardson)
Brand Identity Almost all of the firms in the 5 = High intensity of rivalry
industry have their own brand Customers are widely
identity with regards to price dispersed with regards to
and quality. choosing a brand.
Automakers that promote
strong branding in campaigns
make the most impact when it
comes to being top-of-mind
among potential buyers.
(luxurydaily.com)
Switching Cost The switching cost is low 1 = Low intensity of rivalry
because of the Due to undifferentiated
undifferentiated products. products, customers don’t
There isn’t much brand loyalty need to sacrifice a lot of costs
in the automotive industry. to switch with another brand.
(termpaperwarehouse.com)
Concentration and Balance There are a lot of competitors 5 = High intensity of rivalry
in the automotive market. Other competitorsare not
In pursuit of growth and happy with their position in
development, companies have the market.
tried to strike a balance
between competition and
across
time.(http://papers.ssrn.com/)
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Exit Barriers If a firm will decide to leave 5 = High intensity of rivalry

the industry, the capital that There are high exit barriers
was rendered will not gain that prevent firms to leave,
anymore. like bankruptcy.
Companies have already made
the investment in machinery
and facilities and so it makes
more sense for them to
remain in the industry and
continuously decrease prices
than to exit altogether.
(ukessays.com)
Total Average 3.33 = There is a moderate
intensity of rivalry
Threats from New Entrants

Rating: WEAK
Economies of scale The industry has a huge size of 1 = Weak threat of new
companies and most of them entrants
are leading in the market. New competitors cannot
The worldwide automotive easily enter because of the
industry has been enjoying a big companies in the
period of relatively strong industry. It will be hard to
growth and profitability, and achieve economies of scale
annual sales have reached for small companies and new
prerecession levels in some entrants. (Nkomo)
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regions. (strategyand.pwc.com)
Proprietary product Automobile companies can 5 = Strong threat of new
differences upgrade and improve their entrant
products with quality Companies should always
innovation can also help them upgrade their research and
attract buyers that will give the development to sustain their
new entrants strategies. competitiveness because
New technologies are competitors can do it too.
constantly being discovered
that improve the quality of
automobiles in market as well
as reduces cost throughout the
manufacturing process.
(psu.edu)
Products of different
companies are mainly
differentiated by design and
engineering quality (Nkomo)
Brand identity Almost all of the companies in 1 = Weak threat of new
this industry are well-known to entrants
provide good quality products New entrants cannot easily
at reasonable prices. And build up their brand identity
because of that, new entrants because of the large existing
will have to take more time to companies in the industry.
have their own identity in the
industry.
Brand identity of companies is
based on quality, safety,
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performance, value, fuel

economy, design/style and
technology/innovation.
(Toyota Annual Report 2011)
Switching cost Some clients may complain 3 = Moderate threat of new
about the products or services entrants
for not being consistent and High switching costs make it
they may tend to buy in other difficult for customers to
companies, including the new change which products they
entrants, which will offer normally purchase.
buyers their expectations in a
product.
There isn’t much brand loyalty
in the automotive industry.
(termpaperwarehouse.com)
Capital requirements Automobile industry incurs 1 = Weak threat of new
high capital cost. entrants
There is an extremely high New firms that are planning
amount of capital that is to enter in the industry with
required to purchase physical low capital cannot compete
manufacturing plants, raw in the industry.
materials, as well as, to hire
and train employees. It takes a
great amount of capital, not
only for the manufacturing
process, but also to keep up
with the latest innovations in
order to compete with the
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industry leaders. (psu.edu)

Access to distribution New entrants in the industry 3 = Moderate threat of new
could have an access to entrants
distribution for their products New entrants can possibly
but it will not be easy for them have an access to distributors
to have their own method of and suppliers.
distribution like in other
companies.
It can sometimes be difficult
for a new company in the
industry to find an adequate
means of distribution because
space within a dealership lot is
limited. (psu.edu)
Absolute cost advantages Today’s successful automobile 3 = Moderate threat of new
companies possess at least entrants
some of the following Firms are competing for
attributes: production innovation and new products
efficiency, well-planned cost that differ from other
structures, manageable size, competitors that a new
distributed management of entrant can also provide.
brands, attention to
underserved markets, focused
strategy, and well-respected
brands and products. (Team A
2005)
Government policy For the new firm to enter in the 1 = Weak threat of new
industry, they must comply entrants
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with the requirements that are The companies that are

needed by the government. planning to enter the industry
The worldwide automotive will have to follow
industry is subject to various government regulations and
laws and government to comply with many
regulations including those government requirements.
related to vehicle safety,
environmental matters, and
number of vehicles. The
government may also impose
tariffs and other trade barriers,
taxes and levies, or enact price
or exchange controls. (Toyota
Annual Report 2011)
Expected retaliation Since big companies are in the 3 = Moderate threat of new
industry it cannot be avoided entrants
that they are providing high Due to the companies’ big
prices to their products which name in the industry, there
may cause new entrants to are possible retaliations that
offer low prices, promos and will be thrown to them.
discounts to buyers.
High retaliation is possible from
existing companies if new
entrants would bring
innovative products and more
affordable prices to the
industry. (Nkomo)
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TOTAL AVERAGE 2.33 = There is a nearly

moderate threat of new
entrants.
Bargaining Power of Suppliers

Ratings: MODERATE
Analysis criteria Description Ratings
Differentiation of inputs There are innovated products 3 = Moderate bargaining of
that attract customers to help suppliers
them to save more. Suppliers of the industry may
Auto manufacturers require also offer new materials and
inputs-labor, parts, raw at the same time, the
materials and services. The suppliers can increase their
cost of these inputs can have a prices due to the innovations.
significant effect on
profitability. (ukessays.com)
Switching cost of suppliers There are multiple choices of 3 = Moderate bargaining
and firms in the industry suppliers to lessen cost so that power of suppliers
it will not affect the price of a Some price of raw materials
product. cannot be avoided to rise.
Establishing part designs and
specification requires a fair
initial investment.
(ukessays.com)
Presence of substitute inputs There are alternative types of 3 = Moderate bargaining
substitutes on raw materials. power of suppliers
The problem with the quality In the industry, a company
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of equipment and can choose to switch from

compatibility of parts made by one raw material to another
different manufacturers in order to save cost, but still,
became too expensive as it it is not of the same quality.
was costing more comparing
to buying from suppliers.
(ukessays.com)
Supplier concentration There is a large population of 3 = Moderate bargaining of
suppliers in the industry. suppliers
Suppliers in this market, either There are large numbers of
big or small, may have a mild suppliers are competing.
competition because of high
accessibility of materials or
supply.
If a manufacturer is reliant on
one supplier almost
exclusively, this creates a
monopolistic situation that
requires that the
manufacturer keep the
supplier satisfied, especially if
they are exploring other
manufacturing opportunities
with rivals.
Importance of volume to The purchasing power of 3 = Moderate bargaining
supplier clients puts weight on power of suppliers
organizations by requesting There must be an assurance
less cost but of high quality. that the concern for clients
29
The top automobile and the quality of materials

component suppliers have the delivered are met.
ability to leverage their buyers
to accept engineering changes
that affects their production,
dictate supply availability and
dates, and set prices in line
with their own profitability
requirements.(ukessays.com)
Impact of inputs on cost or Buyers are price sensitive and 3 = Moderate bargaining
differentiation their decision is often based power of suppliers
on how much do a vehicle cost Suppliers can produce
and its features or buyers will materials that are needed by
switch to another brand. the firms to meet the needs
The cost of the inputs can and wants of the customers.
have a significant effect on
profitability. (ukessays.com)
TOTAL AVERAGE 3 = Moderate bargaining
power of suppliers
Bargaining Power of Buyers

Rating: STRONG
Buyer concentration vs. Large numbers of 3 = Moderate bargaining
Firm concentration manufacturers, either big or power of buyers
small, are competing to a With a large number of
small volume of customers. potential buyers, firms in the
Baby boomers, born between industry may also tend to
30
1946 and 1964, kept their spot increase their competition with
as the largest consumer group, other companies.
buying 38 percent of new
vehicles sold in the same time
frame.(autonews.com)
Buyer volume Some buyers are individuals 5 = Strong bargaining power
that buy only one or two of buyers
vehicles and some are The more frequent your
corporations or government customer purchases and the
agencies that buy large more they are likely to
quantities that they will give negotiate on price, quality and
in reasonable prices and service
request for discounts. (Nkomo)
Switching cost Firms in the industry have 3 = Moderate bargaining
been through in different power of buyers
issues regarding to their It doesn’t cost much for buyers
products that might tend to to switch to another brand of
switch to another company. vehicle.
Few switching costs exist
(little cost for moving to
another brand). (marsdd.com)
Buyer information Meanwhile, consumers are 3 = Moderate bargaining
awash in easily accessible power of buyers.
information about automobile Buyers are being wise these
specifications, prices, days they are being too strict
discounts, quality, and with different aspect.
performance, giving buyers
greater bargaining power.
(Strategy&.pwc.com)
31
The buyer should have full

information (knowledge of
demand, market prices and
supplier costs provides them
with leverage). (marsdd.com)
Ability to backward Buyers cannot easily 1 = Weak bargaining power of
integrate backward integrate in the buyers
industry. Buyers can’t compete to large
The worldwide automotive in firms in the industry .
the market is highly
competitive, companies faces
intense competition. (Toyota
Annual Report 2011)
Substitute products Buyers may tend to use 5 = Strong bargaining power
substitutes like buses, trains, of buyers
bicycle or walking rather than People nowadays may tend to
to buy a private vehicle to use substitute products to save.
save money in terms of fuel.
Current technological
developments suggest that
cars, as used today, will be
replaced. Established
alternatives to car use include
public transit (buses,
trolleybuses, trains, subways,
monorails, tramways),
cycling, walking, rollerblading
and
skateboarding.(wikipedia.org)
32
Product differences The factors that affect 3 = Moderate bargaining

consumer to make buying power of buyers
decision are the appearance, Each firms offer products that
quality price and are differ from other
environmental effect that a companies that a buyers has
one company is offering that different varieties to choose
differs from any other brand. from.
(Sun.2008)
Brand identity Almost all of the companies in 3 = Moderate bargaining
this industry are well known power of buyers
that provide good quality Brand identity of a one firm
products and reasonable has an impact to buyer’s
prices that are new to buying decision.
entrants may take more time
to have its own identity.
Brand identity of companies is
based on quality, safety,
performance, value, fuel
economy, design/style and
technology/innovation.
(Toyota Annual Report 2011)
Buyers Profits Some clients are willing to buy 3 = Moderate bargaining
with a higher price just to power of buyers
meet their needs, wants, and The buyers are less concern to
expectations. the price if they are profitable
The mass market is catching and the product they are
up with luxury. Consumers are buying meets their
also demanding more expectation. Buyers are basing
33
sophisticated infotainment their buying decision on

systems and are expecting variety of lifestyles.
more high-end features to be
standard.
(Strategy&.pwc.com)
TOTAL AVERAGE 3.22 = There is moderate
bargaining power of buyers
Threats from Substitutes

Rating: MODERATE
The relative price Increasing fuel prices have 3 = Moderate threat of
Performance Substitute. been pushing some urban substitution
drivers to use public If the increase in fuel prices
transportation. Most vehicle continuously grows, most
owners still agree that the customers will tend to choose
convenience of using a the use of public
personal vehicle offsets transportation. But if not, they
increases in fuel prices, would rather choose to buy
however if this trend continues their own private cars that to
and automobile manufacturers use public vehicles.
are not able to provide a more
cost-efficient solution, this
threat will increase.
(ukessays.com)
Switching Cost It is cheaper for the customers 3 = Moderate threat of
to use public mode of substitution
transportation or by walking. Some people may choose
34
The switching costs associated substitute to product or service

with using a different mode of that will fulfill their same need
transportation, such as train, with low cost
may be high in terms of
personal time (i.e.,
independence), convenience,
and utility (e.g., luggage
capacity) (Team A 2005)
Buyer propensity to Buyers use substitute products 3 = Moderate threat of
Substitutes because of environmental substitution
aspects and for them to save Substitute products are often
cost. just temporary for some
There is no realistic substitute buyers may tend to buy their
to motor vehicles with the own car for convenience,
exception of large scale utility and safety.
transportation that railways
provide. The evolution of
consumer reliance on motor
vehicles began with the mass
producing of automobiles.
(Grant, 2008, p. 41)
TOTAL AVERAGE 3 = The industry has a
moderate threat of substitution
35
4.3 Strategic Positioning Analysis and Recommendation

(Competitive Pricing) High Toyota
Mitsubishi
Honda
Ford
Isuzu
Narrow Wide
(Market Coverage)
Low
Among the Market positioning Variables classified. The two most important variables examined
Are Price Competitiveness and Market Coverage.
The x – axis represent the Market Coverage of Toyota while the Y – axis represent the
Competitive Prices of Toyota and its Competitors.
36
Variable Low, Narrow, Etc. High, Wide, Etc.
X – Price of Toyota Narrow High
Y – Quality of Toyota Narrow High
X – Price of Mitsubishi Narrow High
Y- Quality of Mitsubishi Narrow High
X – Price of Honda Narrow High
Y – Quality of Honda Narrow Wide
X – Price of Ford Narrow Wide
Y – Quality of Ford Low Wide

X – Price of Isuzu Low Wide
Y – Quality of Isuzu Low Wide
37
5. COMPANY ANALYSIS
5.1 Company Vision and Mission Statement
5.1.1 Company Vision Statement
To be the No. 1 Automotive Company where great people work as a team to provide the
Best products and services to our customers.
5.1.2 Company Mission Statement

Driven by the will to serve, we, hereby, commit ourselves:
To dominate our markets through Dynamic Selling and Timely delivery of attractive
Products, with excellent customer service and continuous product improvement.
To produce vehicles and components of outstanding quality, using advanced technology,

Continuously improving methods and environment –friendly processes while maintaining
Safe working conditions.
To sustain Company profitability, stability, productivity and growth by efficiently engaging

In effective Financial and resource management for the collective gain of Toyota Family and
Society we serve.
To sustain Team Member’s morale and productivity by Developing their full potential and
Total well – being, and by establishing mutual trust, mutual responsibility and harmony through
Open communication.
38
5.2 Revised of Toyota Motor Corporation Vision and Mission Statement.

Vision Comment
The Company has a good vision statement except for a global to be” the No. 1
Automotive Company.” We think this is a little Ambitious because since there are a lot of
Company in the Industry who are now producing electronic car and Toyota focuses themselves
On Hybrid Cars.
They can achieve their vision if the innovation of the Research and
Developments are active not limiting themselves in manufacturing only Hybrid Cars however,
The whole vision statements were clearly stated.
5.2.1 SUGGESTED VISION

“To be the No.1 of the leading Automotive Company where Great People work as a
Team to provide the Best products and Services to our Customers.”
Parameter Yes/No Why

Does it clearly answer the Yes According to the Vision
question: What do we want statement the Toyota want to
to Become? become the No. 1 Company in
the Car Industry and also
where great people work as a
Team and still keep innovating
so they can create and give the
best products on their
customers.
Is it concise enough yet No Because the Company want to
inspirational? become the leading and No. 1
Company in Car Industry but
where. What specific country
or in the world so they need to
be Specific.
Is it aspirational? Yes Because they already said that
they want to become the no. 1
Automotive Company and still
39
they kept on innovating their

technology and keeping
Forward.
Does it give clear indication No Simple there is no time line
as to when it should be That was indicated in the
attained? Vision statement. They should
at least state they want to
achieve on the next 6years, 10
years or more so we don’t
have any idea.
5.2.2 SUGESTED MISSION STATEMENT

Parameter Yes/No Why
1.) Customer No The Mission statements are
not specific which customer
they are referring I mean who
the American people, the
Japanese people. They are too
broad when they are
pertaining on which people.
They should classify it and be
specific.
2.) Products and Yes The Mission Statement talked
Services about to produces vehicles and
Components of Outstanding
and Quality.
3.) Market No The Mission statement is very
wide and broad and it did not
clearly state who Primary
Target Market are there.
4.) Technology Yes Because the Mission
Statement stated that they
intended to produce vehicles
and components of
outstanding quality using
Advanced Technology and
Continuously improving
methods.
5.) Concern for Survival, Yes According to the Mission to
Growth and Sustain Company profitability,
Profitability Stability and Growth by
Engaging in Effective
Financial and Resource
40
Management for the

Collective gain of Toyota
Family and the Society we
Serve.
6.) Philosophy Yes The Mission Statement
tackled about the Dynamic
selling and Timely delivery of
Attractive products, with the
Excellent Customer Service
and continuous product
Improvement.
7.) Self - Concept Yes Because the Mission
Statement Emphasize the
continuously improving
methods and Environment –
Friendly processes while
maintaining safe working
conditions.
8.) Concern for Yes According to the Mission
Employees statement they said to sustain
member’s morale and
productivity by developing
their full potential and total
Well – being, and by
Establishing the mutual trust,
Mutual Responsibility and
Harmony through Open
Communication.
9.) Concern for Public Yes To dominate our markets
Image through Dynamic Selling and
Timely delivery of attractive
Products, with excellent
customer service and
continuous product
improvement. It means they
want to be viewed as a good
image on the Public.
10.) Concern for Yes According to the Mission

National Image Statement to sustain Team
Member’s morale and
productivity by Developing
their full potential and
Total well – being, and by
41
establishing mutual trust,

mutual responsibility and
harmony through
Open communication.
42
5. 3 Toyota Motor Philippine Corporation’s 7’s Framework

5.3.1 Strategy
a.) Toyota Motor Philippines to Expand Capacity
The Philippine unit of Japan’s biggest Automaker Toyota Motor Corporation is
Planning to expand its Local production Capacity by as much as 20 percent in the next two years
To take advantage of new government incentives.
Toyota Motor Philippine Corporation a Joint venture with local conglomerate GT

Capital Holdings Inc., Is looking at increasing production capacity by 10 t0 20 percent
From the Current 40,000 a year.
Conclusion:
The Toyota Motor Philippines Corporation wanted to expand its Local production
Capacity and it is very good idea and opportunity because by broadening it can create a
Huge impact on the market and it can also help them to recognize more when it comes
On the Car Industry and they can benefit a lot on it.
Recommendation:
It opens an opportunity for the Company if they continues to Expand the Capacity because
It means they are ready to take a massive responsibility and improvement and they are ready to
Build and design new things a better concept that they will introduce in the industry.
b.) Differentiation
Toyota’s uses both differentiation and low cost as generic strategies to try and gain a
Competitive advantage over their competitors in the Automotive Industry. The Market scope
That Toyota uses in broad one that encompasses nearly every type of customers that in the
43
Market to purchase an automobile. Toyota is able to target such a large market because they
Have something for everyone. Toyota has four wheel drive trucks and SUV’s for
The outdoor types or those live in areas that face severe weather conditions, Hybrids model like
The Prius for the Eco – friendly customers that are interested in saving the Environment. Along
With the standard Cars for general, everyday use.
Conclusion
The Toyota Differentiates on several levels on their competitors. First of all, Toyota has
Been very successful in differentiating on the Basis of superior design and quality. This has lead
To Toyota being able to create a brand image that is strong and one that brings to mind quality,
Long lasting cars when a potential buyer sees it.
Recommendation
The Toyota should continue the Differentiation strategy because it create a huge impact on
The Company and also they are benefiting on it. Because of the Company differentiation the
Toyota was the first successful mass produce the Hybrid car on the market when it released in
Prius in 2003. Being the first to get their Hybrid on the Market allowed Toyota to gain a large
Portion of the market share in the Area of Hybrid Cars.
44
5.3.2 Structure
https://mysullys.com/toyota-flow-chart/organizational-structure-toyota-organizational-chart/
The Company has a Functional structure with 5- 6 Hierarchal Levels. It is breaking into 6
Major parts which are leading by the Vice President reporting directly on the President.
Each division was arranged according on based on the importance namely the Chief Finance
Officer , The Head of Investor Relations and Corporate Communication, Head of Legal and
Compliance, The Head of Human Resources and Administration, The Chief Risk Department
And last the Chief Audit Executive.
45
Finance Department - According to the Organizational Chart of Toyota Motor Philippines

Corporation the Finance Department are part of the Company that manages its money. The
Business functions of a finance department typically include planning, organizing, auditing
Accounting for and controlling its Company’s finances. They also produces the Company’s
Financial Statements.
Head of Investor and Relations and Corporate Governance – The Company has Head of
Investor and Relations and Corporate Governance has Investor Relations and Corporate
Communication Department that concern about the relationship between the Company and the
Investors id there are things that needed to know or clarify they are the one who are handling this
Head of Legal and Compliance – According to the Organization Chart of Company the Head
Of Legal and Compliance who ensures that a Company complies with outside regulatory and
Legal requirements as well as internal policies and by laws. Their objectives is to ensure that
An Organization has internal Controls that adequately measure and manage the risks it faces.
Human Resources and Administration - According to the organizational chart of the

Company the Human resources and Administration is the management of the overall
Employment experience of people working at an organization. The team of Human resources
Management of Toyota is responsible of implementing effective workforce management and
Employee Development.
Risk Department- The Company risk management is the processes of identifying, analysis, and
Acceptance or mitigation of uncertainty investment decisions. The risk management plan
Increasingly includes companies processes for identifying and controlling threats to its digital
Assets, including proprietary corporate data, A customer’s personally identifiable information
And Intellectual Property.
46
Audit Department - The Audit Department is a unit within a Company that is responsible for
Evaluating operational procedures, Risk Management, Control Functions and government
Processes. Reporting internally to the Audit Committee of the Board of Directors. The Audit
Department is supposed to be completely objective and receive no influence or interference
From the areas of the Company or organization examines.
Conclusion:
The Company’s organizational chart expressed the importance of each Department in the
Company and there role and contribution on each Department. They value each contribution
On the Company and also show the support and encouragement on each employees.
5.3.3 Systems
Just In Time
Toyota Motor Corporation’s vehicles production system is a way of making things that
Is sometimes referred to as a “Learn Manufacturing System.” or “Just in Time System (JIT),”
And has come to be well known and studied worldwide. This production control system was
Established based on many years of continuous improvements, with the objective of making
The vehicles ordered by customers in the quickest and most efficient way, in order to deliver the
Vehicles as swiftly as possible.
Just In Time Production System

What it is What it Does
 Management Philosophy.  Attack waste (Time, inventory, scrap.)
 “Pull” System through the plan.  Exposes problems and Bottlenecks.
 Achieves streamlined production.
What it Requires What it Assumes
 Employee Participation.  Stable Environment.
 Industrial Engineering/ Basics.
 Continuing improvement.
 Total quality Control.
47
 Small Lot Sizes.
Conclusion:
The advantages of Just in Time (JIT) included Price Flexibility, reduction in product
Variation, quick response to customer, demand high quality products at low cost for consumers,
And above all, Customer satisfaction. The system also offered the advantages of low inventory
Investment, Shortened lead times and early detection of quality problems. By using the JIT
Model, a manufacturer has a better level of control over its entire manufacturing process,
Thereby, by making it easier to respond quickly when the needs of customer changes.
Recommendation
With Just In Time (JIT), manufacturers will know when employees are needed at different
Stations off Assembly to meet the demand of those stages manufacturing. A more flexible
Workforce can focus on quality production with lower defect rate, which lower costs and
Increase customer satisfaction.
5.5 Key Financial Ratios Analysis
LIQUIDITY/ CURRENT RATIO 113,983/42, 790 = 2.66
LEVERAGE (DEBT/ TOTAL ASSETS) 57, 021 / 307, 691 = 18.5
ACTIVITY (SALES/TOTAL ASSETS) 239, 811/ 307, 691 = 78%
PROFITABILITY (EBIT/ TOTAL 25,775/307,691 = 8.4%
ASSETS)
GROWTH
SALES 19%
NET INCOME (6%)
EARNING PER SHARE 17%
48
Company Sales by Segment

Year Ended December 31 Increase (Decrease)
2017 2016 Amount Percentage
221, 692 177,709 33,893 19%
15, 406 14, 731 1,675 12%
8,699 6,366 2,333 37%
640 620 20 3%
940 826 114 14%
771 969 (198) (20%)
56 192 (136) (71%)
- 125 (125) (100%)
1,607 1,586 21 1%
239, 811 202, 124 37, 687 19%
1.) Automotive Operations

2.) Real States sales and Interest Incomes on Real States Sales
3.) Equity in Net Income of Associates and Joint Ventures
4.) Sales of Goods and Services
5.) Rent Income
6.) Interest Income on Deposits and Investments
7.) Commission Income
8.) Gain on revaluation of previously held interest
9.) Other Income
COMPANY OPERATING EXPENSES

2017 2016 2015
Salaries, wages and P3,347 P2,866 P1,920
employees benefits
Advertising and 1,915 1,838 1,313
Promotions
Taxes and Licenses 1,608 2,010 991
Commissions 1,536 1,394 725
Delivery and 709 586 427
handling
Depreciation and 655 495 344
amortization
Light, water and 496 420 352
other utilities
Office supplies 418 244 138
49
Outside services 388 223 70

Unrealized foreign 385 468 89
exchange losses
Repairs and 311 258 108
maintenance
Professional fees 236 429 133
Transportation and 232 183 132
travel
Rent (Note 30) 159 149 74
Provision of 121 121 119
product warranties
Communications 82 93 45
Entertainment, 72 89 65
amusement and
recreation
Administrative and 59 55 16
management fees
Insurance 44 40 27
Provision for credit 13 (6) 95
losses
Royalty and service 11 13 10
fees
Donation 3 - -
Provisions for other - 353 136
expenses
Others 99 516 153
P12,899 P12,837 P7,482
IN PERCENTAGES
2017 2016 2015

Salaries, wages 26% 22% 26%
and Employees
benefits
Advertising and 15% 14% 18%
Promotions
Taxes and 12% 16% 13%
Licenses
Commissions 12% 11% 10%
50
Delivery and 5% 5% 6%
Handling
Depreciation and 5% 4% 5%
Amortization
Light, water and 4% 3% 5%
other utilities
Office supplies 3% 2% 2%
Outside services 3% 2% .9%
Unrealized foreign 3% 4% .1%
Exchange losses
Repairs and 2% 2% 1%
Maintenance
Professional fees 2% 3% 2%
Transportation 2% 1% 2%
and travel
Rent (Note 30) 1% 1% .9%
Provision of .9% .9% 1.5%
product
warranties
Communications .6% .7% .6%
Entertainment, .5% .7% .9%
Amusement and
Recreation
Administrative .4% .4% .2%
and Management
fees
Insurance .3% .3% .4%
Provision for .1% (.04%) 1.3%
credit Losses
Royalty and .08% .1% .1%
service Fees
Donation .02% - -
Provisions for - 3% 1.8%
other Expenses
Others .07% 4% 2%
100% 100% 100%
51
5.6 Internal Factor Evaluation Matrix (IFE)

Internal Factor Importance Weight Firm’s Rating Weighted Source
Strength
S1 – Strong Brand 10% 2 0.20
Image
S2 – Rapid 10% 2 0.20
Innovation
S3 – Forward 5% 3 0.15
looking and Leading
– Edge Technology
S4 – Toyota 20% 2 0.04
Production System
S5 – Strong Supply 10% 2 0.20
Chain and
Distributional
Challenge
Weaknesses
W1 – Dependence of 15% 3 0.15

Suppliers
W2 -Product Recalls 5% 1 0.005
W3 – Not grabbing 5% 1 0.005
markets
W4- Passenger 10% 1 0.001
Safety Issues
W5 – Financial 10% 1 0.001
Crisis
TOTAL 100% 1.00
STRENGTH
Strength Sources Importance Weight Reason For
(0 – 100%) Importance Weight
Strong Supply Chain Internal Audit 10% Toyota boast a large
and Distributional and Efficiency supply
Channel chain and
Distributional
network. Each of the
vehicles produced by
Toyota is made from
52
thousands of parts
sourced suppliers
located around the
Globe.
Strong Brand Image Internal Audit 10% Toyota has one of the
strongest brands in the
Global Automotive
Industry.
The Company’s
global supply chain is
also strength that
enables resilience and
market – based risk
minimization. The
Company has
developed a strong
intellectual property
moat that maintains
the Company leads.
Rapid Innovation Internal Audit 10% The Toyota has an

and Capabilities organizational culture
Facilities rapid
innovation, which is
crucial for long- term
Competitive
Advantage.
As companies in the
Automotive industry
transform themselves
into broader mobility
providers.
Strength Sources Importance Reason For

Weight (0 – Importance
100%) Weight
Toyota Internal Audit 5% TPS is a widely
Production recognized
System system for its
efficiency
elimination of
53
waste,
irregularities and
over burdening
from the
production
process.
Forward – Internal Audit 10% Toyota is

looking and famous for its
Learning innovative
Edge culture. The
Technology Technological
Development breakthroughs
related to
components and
system.
Development
leading – edge
components and
system ahead of
competitors.
Weaknesses
Weakness Source Rating Reason For Rating
Dependence on http://www.gotabout.info/- 3 The Toyota has
Suppliers of-toyota/ suppliers around the
world. Most of the
time they leaning on
them.
Product Recalls http://heartofcodes.com/- 1 In 2017, Toyota was

of-toyota/ forced to recall around
2.9 millionvehicle due
to faulty Airbags.
Not Grabbing https://www.academia.edu/ 1 Toyota markets most

Market 13175662/Marketing products in the US,
Strategy of Toyota Motor Europe and Japan.
Corporation. Therefore, it is
exposed to fluctuating
Economic and
Political conditions
54
those markets.
Passenger Safety https://research- 1 The significant cases

Issues methodology.net/toyota- involves the recall of
6.5 million cars
because of the steering
and seat problem in
2014.
Financial Crisis https://mba- 1 On December 22,

lecturesmarketing/1204 - 2008, Toyota declared
of-toyota-motor- that it experienced the
corporation.html first time loss in 70
years in its Core –
Vehicle – making
business.
6 STRATEGY FORMULATIONS
55
6.3 BCG MATRIX

High Relative Market Low Relative Market
Share Share
High Market Growth Star Question
 Lexus-luxury sedans  Camry/Corolla
 Prius hybrid  Small cars
 Land Cruiser SUV  More SUV’s and MPV’s

: Fortuner
Low Market Growth Cash Cow Dog

 Camry, Corolla sedans  Tundra- Pick up
 Innova, Venza-MPV  Corona, Crown,
 Small cars  Celica
56
References:
https://www.bworldonline.com/gt-capital-core-profit-hits-p15-billion-in-2017/
https://www.bworldonline.com/toyota-phl-targets-5-sales-growth-for-this-year/
http://industry.gov.ph/wp-content/uploads/2017/11/DTI-Policy-Brief-2017-02-The-Philippines-
in-the-Automotive-Global-Value-Chain.pdf.
https://www.imoney.ph/articles/automotive-tax-philippines/
57

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FAR EASTERN UNIVERSITY

Institute of Accounts, Business and Finance

FAR EASTERN UNIVERSITY

A Strategic Management Paper

In Partial Fulfillment of the Requirements for the Degree of

Business Administration Major in Business Management

Prof. Celmer Santos

4. INDUSTRY AND COMPETITOR ANALYSIS

7. STRATEGIC OBJECTIVES AND RECOMMENDED STRATEGIES

8. STRATEGY EVALUATION, MONITORING, AND CONTROL

The Philippine automotive manufacturing covers the assembly, importation/distribution,

The Toyota Motor Philippines Corporation (TMPC) is subsidiary of Toyota Motor

II. REASEARCH DESIGN AND METHODOLOGY

III. MACRO – ENVIRONMENTAL ANALYSIS

Car Industry Growth

Filipino Buyer choosing SUV

3.3 TECHNOLOGICAL FORCES

3.4 POLITICAL FORCES

NMISP Current auto excise tax TRAIN auto excise

₱600,000 and below 2% 4%

From ₱600,000 to ₱1.1 ₱12,000 + 20% excess of ₱600,000 10%

From ₱1.1 million to ₱2.1 ₱112,000 + 40% in excess of ₱ 1.1 20%

Over ₱2.1 million ₱512,000 + 60% in excess of ₱2.1 50%

Current excise tax TRAIN’s auto excise

Net Manufacturer’s or Importer’s Selling Price ₱587,255 ₱587,255

Before VAT (₱587,255 +2%) (₱587,255 + 4%) =

Final price after VAT (12%) ₱670,880 ₱690,612

Price difference ₱19,732

3.5 ENVIRONMENTAL FORCES:

positioned the environment as a priority management issue. Toyota promotes environmental

Environmental Data View data regarding environmental protection, environmental management,

believes it is important to promote an "Integrated Three Part Initiative," involving people,

Social Contribution Activities Social Contribution Activities Toyota is active in social

contribution activities to support the sustainable development of a sustainable society. We want

risk management-related activities. Compliance Learn more about Toyota's compliance

4.1 INDUSTRY VALUE CHAIN

4.1.1 Primary Activities:

4.1.2 Inbound Logistics:

Planned operation system.

4.1.5 Marketing and Sales

High Resources Management

These methods lead to friendly and comfortable working atmosphere in the

4.2 PORTES’S 5 FORCES MODEL

Summary of 5 – Forces Analysis

1.) Rivalry of Players MODERATE

2.) Threat from New Entrants WEAK

3.) Bargaining Power of Suppliers MODERATE

4.) Bargaining Power of Buyers STRONG

5.) Threat from Substitutes MODERATE

Information Technology (IT) is

Exit Barriers If a firm will decide to leave 5 = High intensity of rivalry

Threats from New Entrants

performance, value, fuel

industry leaders. (psu.edu)

with the requirements that are The companies that are

TOTAL AVERAGE 2.33 = There is a nearly

Bargaining Power of Suppliers

of equipment and can choose to switch from

The top automobile and the quality of materials

Bargaining Power of Buyers

The buyer should have full

Product differences The factors that affect 3 = Moderate bargaining

sophisticated infotainment their buying decision on