An in-Depth Study of the Success of the Kaizen Philosophy

In: Business and Management

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TOYOTA MOTOR COMPANY:
AN IN-DEPTH STUDY OF THE SUCCESS
OF THE KAIZEN PHILOSOPHY

Toyota Motor Company recently claimed number one spot in global sales in the auto industry. Many practitioners of the “Toyota Way” concur that Toyota is the model company to imitate, but recent years Toyota has seen a decline in their core competence of quality control. Weaknesses to social and environmental fluctuations have had negative effects on Toyota’s continued profitability. Analysis of strategy and execution precedes recommendations for improving Toyota’s implementation of its famed kaizen philosophy.

CURRENT SITUATION
Background
Toyota Motor Corporation (NYSE: TM) is a multinational corporation with headquarters in Japan. They are the world’s most profitable automaker, now having 15% market share in the U.S. (Taylor, 2007) They sold 2.5 million cars and trucks last year alone, causing them to displace Chrysler’s Big Three position in car sales in the U.S. Soon Toyota estimates it will beat out Ford’s sales, and not too distant in the future it will beat GM as well.
Toyota has an admirable presence in the U.S., and even Fortune magazine has named Toyota as one of America’s Most Admired Companies—twice in a row. Toyota has returned the gratitude from the U.S. by deciding to enter in to NASCAR racing, and also by introducing the American-targeted Toyota Tundra full-sized pick-up truck.

Profitability
By no means does Toyota rely solely on the U.S., as their ability to turn out a quarterly profit in the last quarter of 2007—when the U.S.’s economic downturn caused stagnation—proved, as they had a 7.5% rise in profit due largely to their marketing in emerging markets such as China, Russia, and others. (Toyota net, 2008) In fact they profited $4.3 billion, ahead of most industry estimates.

CURRENT PERFORMANCE Price Average 50-day:
$…...

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