Vision, Mission, Values, Objectives and Strategy

Vision, mission, values, objectives and strategy

Strategic Direction

Toyota was founded in 1937 in Japan. Until today Toyota has its headquarters in Japan, but operates and manufacturers worldwide.  Toyota has been the biggest car manufacturer worldwide in 2014 and sold more than 9.98 million vehicles^[1]. Their strategic direction is led by the Toyota ways and production system, strive for innovations and their joint ventures with other car manufacturers and suppliers.

The Toyota ways and production system

The Toyota ways as core values and the Toyota production system are related because they influence each other.^[2] Toyota ways are described in the core values. As for the production system, Toyota is famous for their Just in Time (JIT) production strategy that strives to reduce inventory waste and carrying cost. This helps Toyota to gain competitive advantage over their competitors and makes their products more popular with customers. Today their production system is largely adapted as well by other car manufacturers.

Strive for Innovation

Already in the 1980s Toyota was able to show their innovative approach to the automobile industry: after both oil crises, Toyota was able to satisfy the increasing demand for smaller, more fuel efficient cars. In this market they are well positioned until today. As the world’s oil reserves are rapidly decreasing, an innovation in the automobile industry is necessary: Toyota recognized this problem early and already introduced its first Hybrid car in 1997^[3].

Joint Venture and Partnerships

Toyota established over time several joint ventures with other car manufacturers in order to serve and enter into new operating markets. One of their very first joint venture was with GM in the U.S. They established a company of which they hold an equal share of 50%. Gm ended up this joint venture in 2009.

Global Vision

“Toyota will lead the way to the future of mobility, enriching lives around the world with the safest and most responsible way of moving people. Through our commitment to quality, constant innovation, and respect for the planet, we aim to exceed expectations and be rewarded with a smile. We will meet our challenging goals by engaging the talent and passion of people, who believe there is always a better way.”^[4]

A good vision statement is distinctive and specific to one organization. Toyota’s vision statement states clearly that in the future the company wants to be the safest and most responsible car manufacturer on the globe. This is a forward looking goal; the management can stick to while making strategic decisions. Moreover it is as well defined how the company intends to come beyond the position where they are today: their commitment to quality, constant innovation, and respect for the plant. In our opinion the vision statement is feasible as today Toyota is able to offer high- quality cars to the customers to a price which is lower than those of their competitors. The vision statement is mostly easy to communicate and while reading it the overall goal is immediately understood. The vision statement has a consumer/ market/ technology focus but does not include how they want to change their products. They show that they want to do innovation (technological), serve almost all global markets (enriching lives around the world) and exceed the expectations of their consumers.

On the downside of this vision statement is the last sentence. It does not show clearly and comprehensible how they engage people and talent. The sentence is rather uninspiring for the employees of Toyota because it does not motivate. Another issue is the word ‘smile’ in the vision statement. In our opinion it does not show clearly what they mean with it. The purpose of the word ‘smile’ is to show that the purchase of a Toyota car will satisfy the customer. However it might not be understood immediately without further explanations.

Regional Missions:

As a global manufacturer Toyota formulated a global vision statement for all its business divisions in the different countries. This global vision should serve the business divisions as a guide to formulate regional mission statements. Therefore not only one mission statement for Toyota exists. For this report two sample mission statements are chosen and analyzed.

“We deliver outstanding automotive products and services to our customers, and enrich our community, partners and environment.” (Toyota Australia)^[5]

“To attract and attain customers with high-valued products and services and the most satisfying ownership experience in America.” (Toyota USA)^[6]

A mission statement should define the company’s present business scope and purpose- who we are, what we do and why we are here. In both mission statements it is mentioned that the company is a car manufacturer but the products and services remain largely unidentified. Either business divisions want to satisfy the need of the consumer of ‘outstanding’ or ‘high- quality’ cars. This is the main way how they want to attract customers.  The American mission statement states that they want to serve the American market but does not specify customer groups. The Australian mission statement neglects both.  As for the last point of the analysis that a mission statement should give the company its own identity both mission statement do not fulfill that requirement. They are too general to be able to give a company its own identity as most car manufacturers advertise with high quality products. A reference to the price might be necessary as Toyota offers their products to a reasonable, affordable price.

 Core values:

Many companies have developed a statement of values to guide the actions and behavior of personnel in conducting the company’s business and pursuing its strategic vision and mission. Values are beliefs, traits, and behavioral norms that company personnel are expected to display to fulfill vision and mission of the company.

Toyota success stems from vision and dedication to a set of common principles, which are known as the Toyota way.^[7] The Toyota way consists of five core values which express the beliefs and values shared by Toyota’s employees. All Toyota team members, at every level are expected to apply these values in their daily work and relations with others.