Reference no: EM132812734

In 2001, Toyota's Toyo Trust and Banking merged with two other banks to form UFJ Bank, which was accused of corruption by Japan's government for making bad loans to alleged Yakuza crime syndicates with executives accused of blocking Financial Service Agency inspections. The UFJ was listed among Fortune Magazine's largest money-losing corporations in the world, with Toyota's chairman serving as a director. At the time, the UFJ was one of the largest shareholders of Toyota. As a result of Japan's banking crisis, UFJ merged with the Bank of Tokyo-Mitsubishi to become the Mitsubishi UFJ Financial Group. In 2002, Toyota managed to enter a Formula One works team and establish joint ventures with French motoring companies Citroën and Peugeot a year after Toyota started producing cars in France. Toyota ranked eighth on Forbes 2000 list of the world's leading companies for the year 2005 but slid to 55 for 2011. The company was number one in global automobile sales for the first quarter of 2008. Toyota released an update of its full-sized truck, the Tundra, produced in two American factories, one in Texas and one in Indiana in the year 2007. Motor Trend named the Tundra "Truck of the Year", and the 2007 Toyota Camry "Car of the Year" for 2007. It also began the construction of two new factories, one to build the RAV4 in Woodstock, Ontario, Canada, and the other to build the Toyota Prius in Blue Springs, Mississippi, USA. This plant was originally intended to build the Toyota Highlander, but Toyota decided to use the plant in Princeton, Indiana, USA, instead. The company has also found recent success with its smaller models-the Corolla and Yaris. In 2011, Toyota, along with large parts of the Japanese automotive industry, suffered from a series of natural disasters. The 2011 Tohoku earthquake and tsunami led to a severe disruption of the supplier base and a drop in production and exports. Severe flooding during the 2011 monsoon season in Thailand affected Japanese automakers that had chosen Thailand as a production base. Toyota is estimated to have lost production of 150,000 units to the tsunami and production of 240,000 units to the floods. On February 10, 2014, it was announced that Toyota would cease manufacturing vehicles and engines in Australia by the end of 2017. The decision was based on the unfavourable Australian dollar making exports not viable, the high cost of local manufacture and the high amount of competition in a relatively small local market. The company plans to consolidate its corporate functions in Melbourne by the end of 2017. The head office will remain in Port Melbourne and the Altona plant will be retained for other functions. The workforce is expected to be reduced from 3,900 to 1,300. 358SAM Page 3 of 4 The automaker narrowly topped global sales for the first half of 2014, selling 5.1 million vehicles in the six months ending June 30, 2014, and an increase of 3.8% on the same period the previous year. Volkswagen AG, which recorded sales of 5.07 million vehicles, was close behind. In August 2014, Toyota announced it would be cutting its spare-parts prices in China by up to 35%. The company admitted the move was in response to a probe foreshadowed earlier in the month by China's National Development and Reform Commission of Toyota's Lexus spare-parts policies, as part of an industry-wide investigation into what the Chinese regulator considers exorbitantly high prices being charged by automakers for spare parts and after-sales servicing.[44] The company announced that it would invest US$1 billion over the next 5 years into artificial intelligence and robotics research in November 2015. In 2016, Toyota invested in Uber. March 2016, to work against Myanmar and Marine business field to counter the Yamaha Motor announce that they have reached basic agreement. Recalls 2009 Toyota recalled more than 9 million cars and trucks worldwide in several recall campaigns, and briefly halted production and sales. Toyota initiated the recalls, the first two with the assistance of the U.S. National Highway Traffic Safety Administration (NHTSA), after reports that several vehicles experienced unintended acceleration. 2012 Toyota announced a recall of 7.43 million vehicles worldwide to fix malfunctioning power window switches, the largest recall since that of Ford Motor Company in 1996. The move came after a series of recalls between 2009 and 2011 in which it pulled back around 10 million cars amidst claims of faulty mechanics. In March 2014, Toyota agreed to pay a fine of US$1.2 billion for concealing information and misleading the public about the safety issues behind the recalls on Toyota and Lexus vehicles affected by unintended acceleration. 2014 Toyota USA enlisted a recall involving defective inflators' and propellant devices that may deploy improperly in the event of a crash, shooting metal fragments into vehicle occupants. More than 7 million vehicles are potentially affected in the United States. This recall only affects vehicles equipped with Takata airbags released after the year 358SAM Page 4 of 4 2000 in North America. The airbags were manufactured by Takata automotive manufacturing. Toyota is offering a free repair to all affected vehicles worldwide. The fault in the Takata air bags also affected other North American automobile manufacturers. From the case above, how can Toyota continue to survive in this fast moving industry and be able to stay competitive?

Question

Applying Porter's Five Forces Model to the case above, discuss and evaluate how the organization can develop competitive advantage using the model to defend its competitors.