Term Paper Research on Toyota Kirloskar Motor Private Limited
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Term Paper Research on Toyota Kirloskar Motor Private Limited 11 Introduction Toyota Kirloskar Motor Private Limited (TKM) is an Indian joint veventntururee bebetwtweeeenn KiKirlrlososkarkar GrGrououpp anandd woworlrld’d’ss lalargrgesestt auautotomomobibilele company by volume Toyota Motor Corporation. TKTKM'sM's grogrowthwth sinsincece incincepteptionion can be attattribributeutedd to one simplsimple,e, yet impimportortantant aspaspectect of its busbusineinessss phiphiloslosophophyy -- "Putt"Puttinging CustCustomeromer First". While managing growth, TKM has maintained its commitment to provide quality products at a reasonable price and has made every effort to meet changes in customer needs. TTKMKM fifirmrmlyly bebelilieveveses ththatat ththee sucsuccecessss of ththisis veventntururee dedepependndss on providing high quality products and services to all valued customers through the efforts of its team members. TKM, along with its dedicated dealers and suppliers, has adopted the "Grow"Growinging TogeTogetherther"" phphililosoosophphyy of ititss paparerentnt cocompmpananyy Toyota thisMotor way, Corporation TKM aims to (TMC) furtherto contribute create long-term to the pro businessgress in growth.the Indian In autoautomotmotiveive indindustustryry,, rearealilizeze gregreateaterr ememploploymeymentnt oppopportortuniunitietiess for local citizens, improve the quality of life of the team members and promote robust economic activity in India. All Toyota employees are expected to embody these values in their daily work, including environmental protection activities. To "respect" the environment, we go to the source to identify and analyze problems ("Genchi Genbutsu"), move forward to "challenge" conventional ideas and old habits, to improve further ("kaizen") throuthroughgh "teamwork." The framework provided by The Toyota Way enables our company to resresponpondd to, amoamongng othotherer thithings,ngs, the envenviroironmenmentantall chachallellengengess atat various stages of the life-cycle of a vehicle. These include greenhouse gas emissions, waste reduction, increased recycling and the banning of hazardous substance use in parts and components. These challenges wiwillll hahaveve ininevevititablablee coconsenseququenencecess foforr ToToyoyotata's's ororgaganinizazatitionon anandd ememplployoyeeees,s, and we mumustst balbalancancee ththemem wiwithth ouourr dedesisirere foforr fufututurere growth. In 1992, the Toyota Guiding Principles were established in direct response to the international initiatives agreed to at the Rio 'Ea'Eartrthh SuSummmmitit.'.' ThThisis susummmmitit fofocucusesedd on ththee popotetentntiaiall foforr a clclashash between trade and environmental rules, and resulted in a statement of priprincinciplepless abouaboutt forforestest manmanageagemement,nt, conconserservatvationion and sustsustainainablablee devdeveloelopmepment.nt. The ToyToyotaota GuiGuidindingg PrPrincinciplipleses are a corcornernerstostonene of ToToyotyota’sa’s corcorporporateate manmanageagemenmentt phiphiloslosophophy.y. TheThesese priprincinciplepless wewerere 22 updated in 1997, to ensure they continue to provide Toyota with a clear path towards achieving sustainable development. These principles have been explored and developed in Toyota's Global Vision 2010, adopted in April 2002, which proposes a series of long- term policies on the theme of "Innovation into the Future." Toyota's Global Vision 2010 guides management in its response to long-term socsocialial chachangenges,s, comcombinbininging conconsidsidereratiationon for the envenviroironmenment,nt, the bbeenneeffiitt ttoo iittss ccuussttoommeerrss ooff vvaalluuee--aaddddeedd pprroodduuccttss aannd tthhee encouragement of its employees through shared prosperity and social involvement. Based on the Guiding Principles, which codify Toyota's business spirit, ththee ToToyoyotata EarEarthth ChChararteterr (a(adodoptpteded in 19199292 anandd rerevivisesedd in 19199797)) embodies a comprehensive approach to global environmental issues. It outlines Toyota's basic policy and action guidelines towards effective envenviroironmenmentantall manmanageagemenmentt and impimprovrovemeementsnts.. The ToyToyotaota EarEarthth CharteCharterr underunderlineliness a commcommitmeitmentnt to envienvironmronmentalental exceexcellenllence,ce, not only through broad principles, but in concrete examples of what can be PriPrincidonenciple plesthroughs and action the ToyToyota guidelines.ota EarEarthth In CharCharter connectionter,, a EurEurope withopean thean ToyotaEnvEnviroironme nmentaGuidingntall Policy was developed as a means of linking principles, goals, targets and action plans with management structures and systems. Empowering Employees.... To Achieve Perfection TKM firmly believes that employees are the main source of strength for the organization. The human resources management in Toyota seeks to crcreateatee a cocorprpororatatee cucultltururee whwhereree vavalulueses susuchch as "C"Conontitinunuououss Improvement" and "Respect for People" are fully reflected in all actual corporate and individual activities. The company takes maximum care to ensensureure stastabilbilityity of empemployloymenmentt and strstriveivess to impimprovrovee worworkinkingg conditions. To develop human resources and improve the technical skills of its employees, TKM's young team members are regularly sent to Japan, InIndodonenesisiaa anandd TaTaiwiwanan foforr trtraiaininingng prprogograramsms.. MoMorere ththanan 424255 teteamam members have benefited from such programs at various Toyota plants worldwide. TKM also believes in continuously improving its products and practices. Every team member is encouraged to give suggestions to improve the product, efficiency of processes or working conditions. They are also appropriately rewarded for the same. Thus TKM seeks to progress by empowering its employees. Recognition 33 At TKM, they look to continuously improve not only products but also pprrococesessesess anandd seserrvviicce.e. ThTheieirr obobsesessissionon wiwithth peperfrfecectitionon hahass bebeenen rreecocoggninizzeded by vvaarriiououss iinsnsttiittuuttiiononss susucchh as JD PPowoweerr anandd TNTNSS Automotive, as well as automotive publications like Overdrive, as the rreeasasonon ffoorr tthhee sucsuccecessss of ToToyoyotata pprrododucuctsts in InIndidiaa and acacrroossss tthhee globe. Local Community Development At TKM, every effort is made to contribute to society. A residential school at Bidadi, reconstructed by Toyota, now houses 75 students, mainly belonging to backward communities. In the aftermath of the tragic earthquake in Gujarat, TKM and its dealers played a major role in distributing food, clothing and relief in remote affected area. TKM also takes a lead role in contributing to the community, distributing books and bags in local school etc. Competitors The Indian car market is divided into various segments from Segment segsegmenA toment). E(witht).BelBelow Aow being gragraphs smallphs proprovid carvide segmente the catcatego andegory E rybeing wiwisese the brebreaku bigakupp luxury of carthe market share in each segment where Toyota is present based on the sales data of Jan-June 2010. Fig. 1: Segment B Sedan 44 Fig. 2: Segment C Fig. 3: Premium D 55 Fig. 4: Multipurpose vehicle Fig. 5: SUV Medium 66 Fig. 6: SUV Premium Factors that affect the Industry Michael Porter identified five forces that influence an industry. These forces are: (1) Degree of rivalry; (2) Threat of substitutes; (3) Barriers to entry; (4) Buyer power; and (5) Supplier power. Like other industries operating under free market, capitalistic systems, vieviewiwingng the autautomoomotivtivee indindustrustryy thrthrougoughh the lelensns of PoPorterter’sr’s FivFivee Forces can be helpful in understanding the forces at play. Degree of Rivalry Global companies today compete in the Indian market, while INDIAN companies have globalized themselves. In the 1990s, after the opening up of Indian economy, many Global players entered INDIA and have been very focused in growing their shares of the market. The great diversity of rivals in terms of cultures and associated philosophies has intensified rivalry in the industry. The degree of rivalrivalryry in the automotiautomotiveve indusindustrytry is furthfurtherer heighteneheightenedd by high fixed costs associated with manufacturing cars and trucks and the low switching costs for consumers when buying different makes and models. The rivalry is especially very intense in the small car segment where INDIA is emerging as a global manufacturing hub. 77 Threat of Substitutes ThThee thrthreateat of subsubstistituttuteses to the autautomoomotivtivee indindustustryry is faifairlrlyy mimild.ld. Numerous other forms of transportation are available, but none offer tthhee uuttiilliitty,y, coconvnvenenieiencnce,e, inindedepependndenencece,, anandd vavalluuee aaffffoorrddeded by automobiles. TThehe swswititchchiinngg cocoststss asassosocciiaatteded wiwithth ususiinngg aa ddiiffffeerrenentt momodede of transportation, such as train, may be high in terms of personal time (i.e., independence), convenience, and utility (e.g., luggage capacity), but not necessarily monetarily (e.g., round trip train fare would most likely be less expensive than the cost of fuel consumed on a similar round trip, daily parking, car insurance, and maintenance). The exceptiexceptionon to this statestatementment occurs in the global urban areas with highighh poppopulaulatiotionn dendensitsitiesies.. In thethesese areareas,as, the subsubstistituttuteses