CHAPTER I

Introduction

Strategic management involves formulating and implementing plans to achieve an

organization's goals and objectives. This process includes formulating strategy, planning
organizational structure and resource allocation, leading change initiatives, and controlling
processes and resources. SWOT analysis is used to assess opportunities and threats between
the organization, its competition, and the market. Strategic management can occur at broader
levels like organization-wide leadership or at a department or team level Staff, C. (2024). The
process of strategic management helps a company and its leadership make plans for the future,
which is the primary role of the board of directors. Unlike once-done strategic plans, it provides
direction for the company and its staff, increasing operational efficiency, market share, and
profitability Roy, M. (2022). In today's age, where customer demands continue to increase and
preferences are ever-changing, it is essential to know where your business is headed.

Companies and operations that manufacture motor vehicles, including engines, bodywork,
tires, batteries, and gasoline, are included in the automotive industry. Commercial vehicles are
the company's secondary products, with passenger cars and light trucks being its primary
offerings Binder, A. K. et al. (2024). One of the main centers for the production of automobiles
in Southeast Asia is the Philippines. The two sectors of the industry are assembly operations and
part production. Several major international corporations, such as Toyota, Mitsubishi, Isuzu, and
Ford, have established production facilities in the Philippines according to the Philippines (2023).
They have the ability to enhance their offering by providing high-quality products and services if
they want to keep expanding and lead the automobile industry. In order to create a plan to save
money, they need to be aware of the threats and weaknesses facing their company as well as
the areas in which they still must improve.

According to the yearly average of the Metropolitan Manila Development Authority, private
automobiles are the "kings of the road" in the Philippines, occupying eighty percent of the limited
road space Cruz, K. M. I. (2022). The automotive industry has to provide a reliable partner as
well as exceptional products and services since consumer demand is always increasing.
Businesses need to assess both their internal and external surroundings in order to offer the right
kind of strategic planning assistance.

It is imperative for companies to keep their customers informed about any advancements
made to their products and services during development, so that they can reduce any possible
inconvenience. Maintaining consistent and effective communications with the customer will create
a good relationship that will increase trust among customers. The automobile company will benefit
from having strong strategic planning since it makes them more robust, competitive, and goal-
oriented. Strategic management will help the automotive sector since it gives staff a clear path for
enhancing the performance of the organization.

Company Background

Toyota Motor Philippines Corporation (TMP), a subsidiary of Toyota Motor Corporation in

Japan Wikipedia Contributors (2024). According to Toyota Motor Philippines with 24 Toyota
models, it has the largest vehicle lineup of any automobile brand in this country. With regard to
sales, distribution, and service centers, it has more than 70 dealers countrywide, including Lexus
Manila, Inc. Toyota Motor Philippines (TMP) became an incorporated company on August 3,
1988. It is a joint venture between three prestigious companies: Toyota Motor Corporation, Mitsui
& Co. Ltd., and GT Capital Holdings, Inc., whereby each owns, respectively, 51% and 49% of
TMP's shares GT Capital - Toyota Motor Philippines Corp. (TMP) (n.d.).

In 1989, Toyota Motor Philippines officially established in the Philippines, offering job
opportunities and eliminating the need to purchase vehicles abroad. The company opened its first
two dealerships on February 27, Toyota Bel-Air Incorporated and Toyota Quezon Avenue,
followed by Toyota Shaw on April 7. On September 15, Toyota opened its first dealership in the
south of Metro Manila, Toyota Alabang. In 1990, Toyota Motor Corporation opened two new
dealerships in Quezon City and the first dealership outside of Metro Manila, Toyota Cebu. The
year also saw the establishment of Toyota Motor Philippines Foundation Inc., which aimed to
serve the community through educational, health, environmental, and community service
projects. The Toyota Santa Rosa Industrial Complex, which currently manufactures Innova and
Vios, was opened in 1993. In 1998, Toyota was awarded an ISO14001 certificate for
environmental management, becoming the first automotive manufacturer in the Philippines. In
2009, Toyota launched the first Lexus dealership in the Philippines. In 2014, Toyota sold over
106,000 vehicles, a 41% increase from 2013. In 2018, Toyota entered the prestigious group of
Toyota Manufacturers worldwide. In 2018, Toyota won the triple crown award from the Chamber
of Automotive Manufacturers of the Philippines Inc. for thirteen consecutive years. Today, Toyota
has 46 dealerships and numerous awards, cementing its status as a trusted brand in the
Philippines Team, T. Q. (2021).

According to Toyota Motor Philippines, TMP is a leading automotive manufacturer, has its
head office and manufacturing plant in the Toyota Special Economic Zone (TSEZ) in Santa Rosa
City, Laguna. The company produces the best-selling Innova and Vios and has a manufacturing
plant capable of producing over 55,000 units per year on two-shift operations. TMP operates nine
organizational units, including Marketing, Manufacturing, General Administration,
Comptrollership, Treasury, Purchasing, Corporate Affairs, Vehicle Logistics, and Affiliate
Operations Support & Audit, with 3,781 team members as of end-December 2021.

Products/Services of Toyota Motor Philippines

In the midst of the country's shift to the new normal, Toyota Motor Philippines (TMP) is
committed to providing customers with ever-better products and services that will ensure their
convenience and safety. The company's digital platforms are updated frequently to make
information easily accessible, and new features will be added soon to meet the needs of all
customers at all times and locations. Additionally, TMP will provide customers with more
alternatives and discounts to make the process of buying a car easier.

Table 1. Products of Toyota Motor Philippines

Vans & Pick Electrified Gazoo Racing Hatchbacks & Crossovers & MVPs
Ups Sedans SUVs

Commuter Zenix GR86 Vios Raize Zenix

Deluxe

Super Grandia Yaris Cross GR Yaris Camry RAV4 Avanza

GL Grandia RAV4 GR Supra Corolla Altis Veloz Innova

GL Grandia Camry Corolla Altis Wigo Rush

Tourer GR-S

Alphard Corolla Rush GR-S Fortuner

Altis

Hiance Alphard Corolla Cross Corolla Cross

GR-S Hev

Lite Ace Corolla Hilux GR-S Land Cruiser

Cross

Coaster Fortuner GR-S Land Cruiser

Prado
Hilux Fortuner GR-S
Hilux Fleet Yaris Cross

Figure. 1 Services of Toyota Motor Philippines

Toyota Motor Philippines’ Financial Performance

Table. 2 Toyota Motor Philippines Financial Positions

2019 2020 2021 2022 2023

Assets ₱84,764,084, ₱82,012,672, ₱107,368,183, ₱121,288,398, ₱134,890,515,

984 946 550 166 636

Liabilitie ₱75,183,696, ₱72,354,746, ₱95,862,877,6 ₱106,976,032, ₱118,923,617,

s 804 432 54 723 769

Equity ₱9,580,388,1 ₱9, ₱11,505,305,8 ₱14,312,365,4 ₱15,966,897,8

80 657,926,514 96 43 67

Total ₱84,764,084, ₱82,012,672, ₱107,368,183, ₱121,288,398, ₱134,890,515,

984 946 550 166 636

Table 3. Toyota Motor Philippines Comprehensive Income

2019 2020 2021 2022 2023

Net Interest ₱3,202,047,1 ₱3,238,015,0 ₱3,318,343,1 ₱5,240,641,3 ₱6,224,622,9

Income 45 02 81 87 28

Service Fee ₱318,356,95 ₱317,662,02 ₱538,128,61 ₱556,524,57 ₱238,467,55

and Other 1 6 0 6 3
Income

Operating ₱2,474,280,4 ₱2,813,120,9 ₱3,833,810,8 ₱4,394,685,6 ₱4,055,616,7

Expense 85 11 68 82 17

Income ₱1,046,123,6 ₱742,556,11 ₱22,660,923 ₱1,402,480,2 ₱2,407,473,7

before 11 7 81 64
Income Tax

Net Income ₱762,618,29 ₱498,473,68 (₱36,006,810 ₱1,306,432,9 ₱1,792,201,2

2 1 ) 58 13

Total ₱741,214,50 ₱77,538,334 (₱132,620,61 ₱827,059,54 ₱1,654,532,4

Comprehensi 9 8) 6 24
ve Income

2021 2022 2023

Consolidated Service Revenues (Q1) ₱33.9 billion ₱42.1 billion ₱53.7 billion

According to the Toyota Motor Philippines’ annual report, the company gathered
₱132,620,618 loss in their comprehensive income as of 2021 during the pandemic. As the
country shifts to a new normal their comprehensive income increases at ₱827,059,546, and as
of 2023 the company gained ₱1,654,532,424 higher than the previous years. Furthermore, the
company’s assets, liabilities and equity are also higher than the previous years, amounting to
₱84.764 Billion, ₱82.012 Billion ₱107.368 Billion, ₱121.288 Billion and ₱134.890 Billion
respectively.

In the first three months of 2022, Toyota Motor Philippines (TMP) recorded consolidated
revenues of Php42.1 billion, up 24% from Php33.9 billion in the same period the previous year.
Furthermore, TMP's consolidated revenues increased from Php42.1 billion to Php53.7 billion in
the first quarter of 2023. This is a 28% annual growth. Conversely, consolidated net income
increased significantly from Php2.1 billion to Php4.5 billion, or 118%, over the same period last
year.
Research Methodology and Limitations

In order to identify and analyze the crucial success components for the automotive sector, this
study employs an exploratory qualitative methodology. To learn more about Toyota Philippines'
strategic planning, the researchers employ a quantitative methodology. Toyota Financial
Services Philippines Corporation and Toyota Philippines Company provided primary or internal
data, and GT Capital provided Toyota Philippines' financial statements.

The Toyota Philippines Company was identified and investigated through the use of qualitative
research methods such as observational studies in the approach. The Competitive Profile
Matrix, Internal Factor Evaluation, External Factor Evaluation Matrix, TOWS Matrix, BCG Matrix,
and SPACE Matrix were the tools utilized during the strategy formulation process. For strategy
prioritization the researchers use Quantitative Strategic Planning Matrix.

Although there are a number of limitations to be aware of, the study provides insightful
information about Toyota Philippines. The goal of this article is to develop a new strategy for
Toyota Philippines.

Mission and Vision

3.1 Company Mission

Driven by the will to serve, we, hereby, commit ourselves:

• To dominate our markets through dynamic selling and timely delivery of attractive
products, with excellent customer service and continuous product improvement
• To produce vehicles and components of outstanding quality, using advanced
technology, continuously improving methods and environment-friendly processes while
maintaining safe working conditions
• To sustain Company profitability, stability, productivity, and growth by efficiently
engaging in effective financial and resource management for the collective gain of the
Toyota Family and the society we serve
• To sustain Team Members’ morale and productivity by developing their full potential and
total well-being, and by establishing mutual trust, mutual responsibility and harmony
through open communication

3.2 Company Vision

To be the No. 1 automotive company where GREAT PEOPLE work as a TEAM to provide the
BEST products and service to our CUSTOMERS.

3.3 Review of Mission and Vision

Toyota Motor Philippines Mission Statement

Driven by the will to serve, we, hereby, commit ourselves:

• To dominate our markets through dynamic selling and timely delivery of attractive
products, with excellent customer service and continuous product improvement
• To produce vehicles and components of outstanding quality, using advanced
technology, continuously improving methods and environment-friendly processes while
maintaining safe working conditions
• To sustain Company profitability, stability, productivity, and growth by efficiently
engaging in effective financial and resource management for the collective gain of the
Toyota Family and the society we serve
• To sustain Team Members’ morale and productivity by developing their full potential and
total well-being, and by establishing mutual trust, mutual responsibility and harmony
through open communication

Table 3. Mission Statement Analysis

COMPONENTS OF MISSION STATEMENTS

Customers N/A

Product or To produce vehicles and components of outstanding quality, using

Services advanced technology, continuously improving methods and environment-
friendly processes while maintaining safe working conditions
 Markets N/A

Technology To produce vehicles and components of outstanding quality, using

advanced technology, continuously improving methods and environment-
friendly processes while maintaining safe working conditions

Concern for Survival: To dominate our markets through dynamic selling and timely
survival, growth, delivery of attractive products, with excellent customer service and
and profitability continuous product improvement
Growth and Profitability: To sustain Company profitability, stability,
productivity, and growth by efficiently engaging in effective financial and
resource management for the collective gain of the Toyota Family and
the society we serve

Philosophy • Driven by the will to serve

• continuous product improvement,
• continuously improving methods
• To sustain Company profitability, stability, productivity, and
growth,
• environment-friendly processes while maintaining safe working
conditions
• To sustain Team Members’ morale and productivity by developing
their full potential and total well-being,

Self-concept To sustain Team Members’ morale and productivity by developing their

full potential and total well-being, and by establishing mutual trust, mutual
responsibility and harmony through open communication

Concern for the To sustain Company profitability, stability, productivity, and growth by
Public Image efficiently engaging in effective financial and resource management for
the collective gain of the Toyota Family and the society we serve

Concern for To sustain Team Members’ morale and productivity by developing their
Employees full potential and total well-being, and by establishing mutual trust, mutual
responsibility and harmony through open communication

Overall Assessment of Toyota Motor Philippines

The TMP mission statement is well written since only two components of the mission
statement didn’t mention but the proponents suggest making an improvement. A mission
statement defines a company's values, purpose, and direction, attracting customers, inspiring
employees, and guiding decision-making. It builds a strong brand identity, fosters a positive
culture, and stands out in a market, ensuring long-term success and growth. Prioritizing values
beyond profit contributes to a better world Team, A. (2023). The following information is an
assessment for Toyota Motor Philippines. The mission statement is composed of 110 words
which is less than 250 words.
• Customer - TMP didn’t directly mention its target customer in their mission statement.
• Product and Services - Toyota Motor Philippines mention that they’re producing
vehicles.
• Market - in the mission statement the statement "dominate our markets" does not
mention the specific product they are serving.
• Technology -It denotes the utilization of advanced technology in the production process
to ensure the production of quality automobiles and parts. They additionally address
continually developing methods, recommending the use of new strategies and
technological advancements to boost productivity and sustainability in the manufacturing
process.
• Concern for survival, growth, and profitability
o Survival - The commitment to dominating the market through dynamic, selling,
timely delivery and continuous product improvement reflects a focus on
remaining competitive and ensuring the company’s survival in the market.
o Growth - it indicates a desire for continuous expansion and development for the
Toyota Motor Philippines.
o Profitability - TMP implies a commitment to profitability as a means of ensuring
the company’s sustainability and ability to contribute positively to its
stakeholders.
• Philosophy - in the first bullet it indicates the dedication of TMP to serve both internal
and external stakeholders. Second bullet is a philosophical stance towards innovation
 and progress. As for the third bullet it reflects a philosophical perspective that prioritizes
long-term viability and ethical practices. Lastly, it focuses on team member development
as reflected by belief in human capital and fostering a supportive work environment.
• Self-Concept - TMP shows commitment that reflects Toyota’s acknowledgement of its
team members’ self-concept of self-perception. It aims to foster an environment where
team members feel valued, supported, and empowered to develop their potential and
contribute positively to the company’s goal and objectives.
• Concern for public image - Toyota recognizes its role in society and aims to operate in a
manner that benefits both its stakeholders and the broader community, thereby
enhancing its public image as a responsible corporate citizen.
• Concern for Employees - it includes developing employees’ full potential, ensuring their
total well-being, establishing mutual trust and responsibility and fostering harmony
through open communication. TMP recognizes the importance of supporting and
nurturing the workplace.\

Toyota Motor Philippines Vision Statement

“To be the No. 1 automotive company where GREAT PEOPLE work as a TEAM to provide the
BEST products and service to our CUSTOMERS.”

Table 4. Vision Statement Analysis

Evaluation Criteria Results Remarks

1. Is the vision Yes The vision is motivating and inspirational

statement because it does emphasize the main goal of
inspirational? the company in order to inspire their people
or employees.

2. Is it a reflection of the Yes The company's vision statement outlines its long-term
company's long term goals? objectives, including market dominance, high-quality
product production, sustainable profitability, and team
member well-being and development.

3. Is the vision easy to Yes The vision statement has one sentence that is easy to
understand and remember? remember for the employees and their whole
organization.

4. Is it clear as to what Yes The vision does specify what sector in which the
the company's goals are? company is in or what it aspires to
be.

Overall Assessment of Vision Statement

Toyota Philippines has a good vision statement. A strong vision statement needs to be
ambitious and inspirational. They are supposed to be motivating, comprehensive statements of
the future goals your business aspires to. They help customers connect their support with your
vision because they too believe in the future of your business, giving them a glimpse into your
company's path and building brand loyalty Cox, L. K. (2023). According to the website Brex a
vision statement is crucial for an organization's success, uniting team members towards a
shared purpose. It boosts employee engagement and provides strategic guidance. Aligned
organizations grow revenue 58% faster and are 72% more profitable. Without a clear vision,
opportunities are limited and employees struggle to stay committed.

3.4 Recommendation (Mission Statement)

Driven by the will to serve, we Toyota Motor Philippines, hereby, commit ourselves to our fellow
Filipinos:
• To dominate our markets through dynamic selling and timely delivery of attractive
products, with excellent customer service and continuous product improvement
• To produce vehicles and components of outstanding quality, using advanced
technology, continuously improving methods and environment-friendly processes while
maintaining safe working conditions
• To sustain Company profitability, stability, productivity, and growth by efficiently
engaging in effective financial and resource management for the collective gain of the
Toyota Family and the society we serve
 • To sustain Team Members’ morale and productivity by developing their full potential and
total well-being, and by establishing mutual trust, mutual responsibility and harmony
through open communication

Table.5 Mission Statement Evaluation

Customers Filipino

Product or To produce vehicles and components of outstanding quality, using

Services advanced technology, continuously improving methods and environment-
friendly processes while maintaining safe working conditions

Markets Philippines / Filipinos

Technology To produce vehicles and components of outstanding quality, using

advanced technology, continuously improving methods and environment-
friendly processes while maintaining safe working conditions

Concern for Survival: To dominate our markets through dynamic selling and timely
survival, growth, delivery of attractive products, with excellent customer service and
and profitability continuous product improvement
Growth and Profitability: To sustain Company profitability, stability,
productivity, and growth by efficiently engaging in effective financial and
resource management for the collective gain of the Toyota Family and
the society we serve

Philosophy • Driven by the will to serve

• continuous product improvement,
• continuously improving methods
• To sustain Company profitability, stability, productivity, and
growth,
• environment-friendly processes while maintaining safe working
conditions
• To sustain Team Members’ morale and productivity by developing
their full potential and total well-being,

Self-concept To sustain Team Members’ morale and productivity by developing their

full potential and total well-being, and by establishing mutual trust, mutual
responsibility and harmony through open communication

Concern for the To sustain Company profitability, stability, productivity, and growth by
Public Image efficiently engaging in effective financial and resource management for
the collective gain of the Toyota Family and the society we serve

Concern for To sustain Team Members’ morale and productivity by developing their
Employees full potential and total well-being, and by establishing mutual trust, mutual
responsibility and harmony through open communication

The group has improved the mission statement of Toyota Motor Philippines by defining its
target demographic, which is the Filipino people, and its market, which is the Philippines. By
adding these key elements, the mission statement becomes more targeted and narrowly defined,
bringing the organization's goals and objectives into line with the preferences and demands of its
target audience. With a greater knowledge of the company's goals and objectives made possible
by this strategic adjustment, resources and efforts may be more effectively and efficiently directed
toward serving the Filipino market.