Introduction
In every organization, success is dependent on the ability of the organization to effectively implement its strategies. It should be noted that in the business environment difficult situations for example, complaints from customers may not be completely avoided. Consequently, managers are expected to exercise strategic management in their day-to-day activities and be well prepared for any eventuality. Strategic management puts into consideration the interrelationship between strategy, structure and culture to improve a company’s productivity as well as increase profitability for the firm by creating customer value. After the recalls of 2009 and 2010, Toyota sort to implement some strategies that were aimed at ensuring that the problems could not recur. The strategies were to be fostered by Toyota’s vision, values and culture.
The Problems Reported in 2010
Around the end of 2009 and the beginning of 2010, vehicles manufactured by Toyota were reported to have unintended acceleration. Toyota carried out a research and reported that there were vehicles whose driver seat floor mat had been wrongly fixed and it thus, pushed the acceleration pedal causing unintended acceleration. This led to the first recall which was done at the end of 2009. The U.S. highway traffic safety administration worked together with Toyota in expediting the first recall (Cunningham & Harney, 2012).
In the beginning of 2010, customers reported other cases of unintended acceleration. However, the second cases were different as they were not caused by the floor mat. The mechanical department of Toyota carried out investigations and reported that the cases would have been caused by sticking of the acceleration pedal. Consequently, Toyota announced another recall in January 2010. On February 2010, Toyota also recalled its vehicles due to what was termed as anti-lock brakes (Ciravegna, 2012). It should be noted that the recalls were not only done in the U.S. market, but also in other markets all over the world.
The recalls highly affected the performance of Toyota in the market. The sales reduced, suppliers incurred losses and customer confidence was reduced. Moreover, its competitors used the opportunity to increase their sales. General Motors for example was reported to have used the predicaments of Toyota to its benefit, by offering cash rebate to Toyota owners. On the same note, the media gave the issue too much coverage thus increasing the magnitude of the problem. In addition, several deaths were reported to have been caused by the unintended acceleration issue. It is important to note that there were also some people who went to court to sue (Toyota, 2012). However, investigations done by American government and Toyota mechanical team revealed that the problem was mechanical and not electrical.
Strategies Proposed In 2011 Report
Having discovered the problem, Toyota sent its mechanical team to investigate the issue. It is important to note that the mechanical team was sent to the grass roots and did not wait for feedback in their offices. This is inline with Toyota’s value of working on challenges and not running away from them. In addition, Toyota did not try to divert attention by shifting the blame to any other person or department as it is with some typical firms. Instead, they reported the cause of the problem and took it upon themselves to solve it. The action ensured that customer confidence was maintained and passed a message that as is their culture, Toyota puts the needs of their customers first before any other thing (Liker & hoseus, 2007).
Toyota introduced a global quality committee which is mandated with the responsibility of ensuring that defect analysis is carried out effectively. Additionally, the committee ensures that any reported defect case is adequately addressed. The move aims at establishing long term relationship with Toyota’s customers besides ensuring that they have confidence with the firm (Ciravegna, 2012). It is vital to note that Toyota risked loosing a lot of clients if it did not assure them that their safety was its first priority. Therefore, the implementation of the swift market analysis response team which is responsible for on-site vehicle inspection is paramount. The culture of Toyota requires that safety be the first priority followed by quality and then volume (Liker & Hoseus, 2007). The swift market analysis response team will ensure that vehicles running on the roads are of the required quality. Moreover, the strategy is crucial in winning back customer confidence by assuring them that their safety is taken care of.
The problems of Toyota were reported to be purely mechanical. Customer’s interpretation could have been that there were people in the production team who were not effectively executing their duties. Consequently, Toyota needed to do some changes in the production line to convince customers that adequate precautions have been implemented to avoid future mechanical problems. In this regard, the move by Toyota to change all the chief quality officers in each region was critical not only in gaining customer confidence, but also in ensuring that its value of continuous quality improvement is upheld (Cunningham & Harney, 2012).
It was also reported that the root cause of the problem that led to unintended acceleration problem was the lack of knowledge transfer. The allegation was that despite the quick expansion into overseas markets, Toyota was reluctant to share its craftsmanship among it overseas employees. In this regard, the move to set up global production center training facilities is timely. This ensures transfer of knowledge to associates of Toyota and thus upholds Toyota’s culture of empowering people (Toyota, 2012).
Two main strategies are, however, being implemented to ensure that Toyota wins back customer confidence. The first one is enhancing the communication between Toyota and its customers. Customers need to be assured that their feedback will reach management at the highest rate possible and that actions will be taken on the same. By enhancing communication, Toyota will ensure that any problem is reported in a timely manner and that failure mode and effective analysis can be quickly conducted (Toyota, 2012). The strategy is effective because it gives customers the feeling that their say is highly regarded. Similarly, the introduction of customer first training centers is another effective strategy in enhancing customer confidence. The strategy equips customers with some mechanical knowledge that will enable them to tell when there is a mechanical problem. Training customers will make them feel highly valued and thus enhance their confidence to the firm. The strategy not only improves Toyota’s respect to people but also fosters the company’s quality-improvement program
Conclusion
No firm can totally avoid mechanical problems given that every program is not100% perfect. Therefore, a firm’s approaches to issues popping up determine how it is rated in the market. It should be noted that much as any firm strives to maximize its profits, customer satisfaction should be the main target. Through enhancing the value customers get, a firm can be able to maintain customer loyalty and thus enhance its sales. Therefore, strategies implemented by a firm together with the values and the culture of a firm highly determine the success or failure of a firm.
References
Ciravegna, L. (2012). Sustaining Industrial Competitiveness after the Crisis: Lessons from the Automotive Industry. City: Palgrave Macmillan.
Cunningham, J. & Harney, B. (2012). Strategy and Strategies. New York: Oxford University Press.
Liker, J. & Hoseus, M. (2007). Toyota Culture: The Heart and Soul of the Toyota Way. City: McGraw Hill Professional.
Toyota. (2012). Annual Report. Web.