Strategic Audit Laura Beatty Terry Bridges Susannah Fletcher Emily Moss

Agenda Industry Overview Background of Toyota  Current Issues/Recalls  Business Model  Financial Analysis Recommendations Implementation Process Questions & Comments

Automotive Industry Industry OverviewToyota BackgroundRecommendationsImplementation Porter’s Five Forces  Threat of new entrants High start-up cost  Power of Suppliers Susceptibility to large automakers  Buyer Power Cheaper Alternatives  Availability of Substitutes Choice of transportation  Competition Price Deals, Rebates, Warranties “Going Green”

Current Recalls Industry OverviewToyota BackgroundRecommendationsImplementation Floor Mat Pedal Entrapment Sticking Acclerator Pedal Anti-Lock Brake System Vehicle Stability Control System Date of RecallSeptember 29, 2009January 21, 2010February 8, 2010April 19, 2010 Toyota CamryCertain RAV4*2010 Prius AvalonCertain Corolla* Prius Matrix TacomaCertain Camry* TundraCertain 2010 Highlander* Highlander Tundra Corolla Sequoia Venza Matrix Lexus IS GX IS ES 350 *Highlander hybrids and Camry hybrids are not involved in this recall. Further, Camry, RAV 4, Corolla and Highlander vehicles with VINs that begin with “J” are not involved.

Business Model Industry OverviewToyota BackgroundRecommendationsImplementation Operations Markets Toyota’s Global Strategy Mission Statement “To attract and attain customers with high-valued products and services and the most satisfying ownership experience in America.” Competitive Advantage

Financial Analysis Industry OverviewToyota BackgroundRecommendationsImplementation Toyota Honda General Motors Daimler Chrysler Ford S&P 500

Hire PR Company DB Media Strategies, Inc. Industry OverviewToyota BackgroundRecommendationsImplementation Areas to Address:  Humble apology  Combat inaccurate information  Project message to larger audience Cost:  Minimum of $5,000 per month  Dependent on company’s budget and needs Specialization Areas:  Media Training  Media Management  Speech, Editorial, & Presentation Training  Public Relations  Strategic Communications  Crisis Communication 4 Main Attributes:  Straight Talk  Honesty  Collaboration  Provide good work at good price

Incentive Program Industry OverviewToyota BackgroundRecommendationsImplementation Extend Warranty o Basic 60 month/60,000 miles o Powertrain 60 month/100,000 miles Free cleaning & detailing o Unified effort among all dealers o More satisfaction Cash rebate o More incentive to stay o Show customers they care

Industry OverviewToyota BackgroundRecommendationsImplementation Timeline & Cost TimeAction: PRAction: IncentivesCost Month 1 Hire PR company Select appropriate workshops and programs Draw up plans for extended warranty Plan for cleaning Plan for cash rebates Min. $5,000.00/mo Workshops $6, $10, Month 3 Evaluate results Implement additional workshops/programs if needed Advertise all new incentives on Toyota’s website Send out letters to all recalled vehicle owners <$0.50 per letter Month 6 Reevaluate Implement warranty to all recalled vehicles Start rebates for all recalled Toyota owners Start washing and detailing 0% financing for 60 months plus $1, cash back per recalled vehicle (must be current and original owner) $8.00 per vehicle Month 9 Continue contact Evaluate customer reactions Monitor blogs, press, consumer reports, & ratings 1 Year Continue contact Make necessary changes

Questions & Comments

References (2010) Prius. Retrieved Apr. 26, 2010, from Toyota Motor Sales, U.S.A., Inc. Web site: (2010). Capabilities. Retrieved Apr. 20, 2010, from DB Media Strategies Inc., 275 Grove St. Suite Newton, Ma Web site: (2010). Doug Bailey. Retrieved Apr. 19, 2010, from DB Media Strategies Inc., 275 Grove St. Suite Newton, Ma Web site: (2010). Floor Mat Recall. Retrieved Apr. 20, 2010, from Toyota Motor Sales, U.S.A., Inc.. Web site: (2010). Our Clients. Retrieved Apr. 20, 2010, from DB Media Strategies Inc., 275 Grove St. Suite Newton, Ma Web site: (2010). Our M.O. Retrieved Apr. 19, 2010, from DB Media Strategies Inc., 275 Grove St. Suite Newton, Ma Web site: (2010). Pedal Recall. Retrieved Apr. 20, 2010, from Toyota Motor Sales, U.S.A., Inc.. Web site: (2010) Vehicle Dependability Study Results. Retrieved Apr. 27, 2010, from JD Power and Associates, Westlake Village, CA. Web site: (2010). Automoblies and Trucks Overview. Retrieved Apr. 22, 2010, from Plunkett Research, Ltd., Houston, Texas. Web site: (2010). The Industry Handbook: Automobiles. Retrieved Apr. 22, 2010, from Investopedia ULC, Edmonton, Alberta, Canada. Web site:

(2010). Toyota Motor Corporation TM. Retrieved Apr. 28, 2010, from Morningstar. Web site: Business Reference Services. (2009). Modern Global Automobile Industry. Retrieved Mar. 25, 2010, from BERA. Web site: Forbes.com LLC™. (2010). Akio Toyoda. Retrieved Apr. 19, 2010, from Forbes. Web site: Jones, J. M. (2010). Americans, Toyota Owners Still Confident in Toyota Vehicles.Retrieved Apr. 27, 2010, from Gallup, Washington DC. Web site: Vehicles.aspx. Levy, E. (2009). Autos & Auto Parts. Retrieved Apr. 22, 2010, from Standard & Poor’s Industry Surveys, New York, NY. Web site: antage/showIndustrySurvey.do?code=aup. Levy, E. (2010). Sub-Industry Review : Automobile Manufacturers. Retrieved Apr. 22, 2010, from Standard & Poor’s Industry Surveys, New York, NY. Web site: antage/showSubIndustryReview.do?subindcode= Robert, M. (2010). US Market for Toyota Automobiles. Retrieved Mar. 29, 2010, from Go Articles, Canada. Web site: Smith, S. E. (2010). What Is GDP? Retrieved Mar. 29, 2010, from Wise Geek, Phoenix. Web site: Toyota. (2010). 50 Years in the U.S. Retrieved Mar. 30, 2010, from Toyota, USA. Web site: Toyota. (2010). From 1957 to the 21st Century Toyota Moving Forward with America. Retrieved Mar. 30, 2010, from Toyota, USA. Web site: References