Crisis Management at Toyota


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Case Details:

Case Code : MKTG256
Case Length : 27 Pages
Period : 2009-2010
Pub Date : 2010
Teaching Note : Not Available
Organization : Toyota Motor Company
Industry : Automotive
Countries : Global

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Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Excerpts

Background Note

Toyota was founded by Kiichiro Toyoda (Kiichiro) in 1937. The history of Toyota goes back to 1897 when Sakichi Toyoda (Sakichi), father of Kiichiro, diversified into the textile machinery business from the traditional family business of carpentry. In 1926, Sakichi founded the Toyoda Automatic Loom Works, Ltd., (TALW) which manufactured automatic power looms...

Quality - The Hallmark of Toyota

Over the years, Toyota witnessed dramatic growth and emerged as the number one automaker in the world mainly because of its quality products. The company had set a standard for manufacturing, product development, and process excellence in the automotive industry...

Issues Related to Quality

According to analysts, Toyota's quality problems began in the mid-2000s when the automaker began to use the same components across its different models, reduced assembly quality, and ignored customer complaints in order to increase its production volumes...

Image Implications

Industry experts considered the spate of recalls as a major crisis for the company as it not only led to financial loss but also became a significant threat to the reputation of the company. The suspension of the sales of eight of its popular models cost the company sales of 20,000 cars and light trucks, accounting for over US$ 500 million in lost revenue in the last week of January 2010, based on average vehicle sale prices...

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