An Analysis of Toyota’s Strategic Procurement and Supply Chain Management

Purchasing & Materials Management| | Strategic Procurement & Supply Chain Management| Introduction The topic selected is (Strategic Procurement & Supply Chain Management). For this study, we have selected Toyota Motor Corporations as our company of choice. Toyota is without doubt the best in the world, with its many philosophies and principles on how to make the best out of the least; JIT, lean production and elimination of waste and the desire for continuous improvement are just a few ways how Toyota has become the best in the auto industry.Toyota as a name, a company, and as a brand has become synonymous with Quality. At the heart of its success, lie family values that have been passed down; a norm that has become the Organizational Culture of Toyota – The Quest for Excellence, and The Passion to Lead. Toyota’s achievement of excellence stems from implementing lean production, or which they refer to as ‘The Toyota Way’. The most visible product of Toyotaà ¢â‚¬â„¢s quest for excellence is its manufacturing philosophy, called the Toyota Production System (TPS).We have selected to apply this topic to Toyota, because to perfect their way of lean production, they work on it from the root; i. e. their suppliers, and purchasing strategy. Scope of Project Analyzing the strategies of Toyota, and how they implement it in their purchasing and procurement policy. Also, analyzing how Toyota selects it suppliers and what selection processes do they go through; and also conducting an analysis of Toyota’s supply chain and its supply chain management. Limitations This study was really difficult to attain, as personal interviews or nteractions with Toyota’s direct employees was beyond our budgets to conduct. This study is a result of hard work and extensive internet and textual or written research from more than ten websites and three books. Also, the study of Toyota was too large and very difficult to summarize into the limited requirem ents of this paper. Company Background The Toyota Motor Co. Ltd was first established in 1937 as a spin-off from Toyoda Automatic Loom Works, one of the world's leading manufacturers of weaving machinery. The Toyoda Automatic Loom Works was then headed by Japan's â€Å"King of Inventors† Sakichi Toyoda.The patent rights to one of his machines had been sold to Platt Brothers (UK) and provided the seed-money for the development and test-building of Toyota's first automobiles. August 2007 marked the 70th anniversary of TMC. The fledgling company founded by Kiichiro Toyoda, Sakichi's son, has since blossomed into the leader that it is today. In 1950 the company experienced its one and only strike. Labour and management emerged from this stoppage firmly committed to the principles of mutual trust and dependence, and that corporate philosophy still guides T0oyota’s growth today.Production systems were improved in the late 1950s, culminating in the establishment of the Ã¢â‚¬Ë œToyota Production System. ‘ It became known as TPS in 1970 but was established much earlier by Taiichi Ohno. Based on the principles of Jidoka, Just-in-time and Kaizen, the system is a major factor in the reduction of inventories and defects in the plants of Toyota and its suppliers, and it underpins all of Toyota’s operations across the World. Toyota launched its first small car (SA Model) in 1947.Production of vehicles outside Japan began in 1959 at a small plant in Brazil, and continued with a growing network of overseas plants. Toyota believes in localizing its operations to provide customers with the products they need where they need them; this philosophy builds mutually beneficial long-term relationships with local suppliers and helps the company fulfill its commitments to local labour. Over and above manufacturing, Toyota also has a global network of design and ‘Research and Development' facilities, embracing the three major car markets of Japan, North Am erica and Europe.In every community in which the company operates, Toyota strives to be a responsible corporate citizen; close relationships with people and organizations in the local community are essential contributors to mutual prosperity. Across the world, Toyota participates enthusiastically in community activities ranging from the sponsorship of educational and cultural programmes to international exchange and research. Toyota has the fastest product development process in the world. New cars and trucks take 12 months or less to design, while competitors typically require two to three years.Toyota is benchmarked as the best in class by all of its peers and competitors throughout the world for high quality, high productivity, manufacturing speed, and flexibility. Toyota automobiles have consistently been at the top of quality rankings. Strategic Analysis To better understand a firm and its placement of its strategies, we must conduct an analysis of factors that might affect its selection of strategies. SWOT Analysis Strengths * Toyota Motor Corporation is the world’s largest vehicle manufacturer by production and sales. * Toyota is best known for environmentally safe, quality, reliability, durability and value for money. Toyota’s Camry and Corolla have been the top-selling cars in their respected categories; in the past eight out of nine years. Also, Toyota produces the globe’s best selling hybrid car, the Prius – which by 2010 had surpassed two million sales worldwide. * Strong distribution and marketing efforts focused on meeting diverse needs, high quality sales and services, and close involvement with customers. * Low cost, high quality factory operations guided by just in time. * Toyota maintains long-term partnerships with suppliers, and strategic partners. Toyota holds the competitive edge of being the undisputed quality leader in automotive marketing. * Strong brand equity. * Diversified product portfolio (Lexus, Daihat su, Hino) leading to increasing customer base. * Toyota’s success allows it to invest heavily in Research and Development and in the future. Weaknesses * From the last quarter of 2009 through to the 1st quarter of 2010, Toyota had recalled more than 8 million cars and trucks globally in numerous recall campaigns, and temporarily stopped production and sales. * Toyota was badly hit by the 2008 financial crisis, and declared its first annual loss in its 70 years history. Toyota does not have detailed customer segmentation * Customers are not involved in the process. * Toyota places a very high level of responsibility on employee shoulders. * After the 2009-2010 recall crisis, Toyota was criticized for not having or employing enough PR staff, and that it was not able to manage its Customer Relations. Opportunities * Joint ventures with French motoring companies Peugeot and Citroen has provided various opportunities for the company to produce cars in France. * North American cons umers have shifted to more fuel-efficient and higher quality products of the European and Japanese automakers. Produce fuel-efficient, higher quality and smaller automobiles that can attract the consumers in developing and poor countries. * There is a growing demand for hybrid electric cars. Threats * Rising oil prices and other car maintenance costs, leading to decrease in car ownership. * Encouragement from governments and pressure from environmentalists to turn to more environmental friendly methods of transportation (e. g. cycling and public transportation) * Escalating competition in the low priced car market by the entrance of several newly industrialized countries. Continuing trade frictions due to trade imbalances between Japan and other countries and the lack in openness of the Japanese market to import. * Declining economic growth on a global scale. * Major producers, including the Big Three of U. S (G. M, Ford and Chrysler) offered significant discounts across their lineu ps. PESTLE Analysis Political The auto-industry is being pushed into a socio-politico-economic corner. Carmakers are regularly being restricted with new laws or policies or requirements; that they must adhere to. Toyota likewise is linked closely to the policies of the government.Not only this, but emerging countries, that are keen to develop an auto sector are putting political pressure on Toyota, so as to protect it and develop it. Economic Toyota Company is a pillar company in the auto mobile business, a flag of economic progress. The Toyota Company has been a core company, a unique phenomenon, which has dominated the twentieth century. However, the automobile industry, including Toyota Company has suffered a series of structural problems and has become riddled with contradictions and economic discontinuities; including the recent financial crisis. SocialAs part of the development in automotive industry, the Toyota Company actually affects the society as a whole. It employs milli ons of people directly, and tens of millions others indirectly. Its products have transformed society, bringing unbelievable levels of mobility and changing the ways people live and work. Nearly since its startup, Toyota has been a model of social discipline, control and improvement and it is not just the auto sector, where it has left a mark. Toyota is considered a role model in millions of organizations and institutions worldwide. It has with its culture been the example that professors use in every business school.Technological Toyota works on a brilliant scale and has such a vast influence that it is impossible to miss. Due to continuous improvement in demands, the level of technology that Toyota has to implement is increasing, and this adds to the challenges of heavy investment burdens on its R&D, and increases its uncertainties and risks in developing the technologies. Technologically, the automotive industry is becoming increasingly competitive. Legal Toyota is subject to a m ultitude of rules and regulations, as well as laws and legislations of a more legal nature.These laws and legislations cover areas such as competition law, intellectual property law, taxation, consumer protection law and emissions. Environmental Transportation through automobiles consumes a lot of the earth’s precious resources. Also to include as environmental issues are the network of roads that are made for the running of automobiles. The forests or ecosystems that are destroyed to make those roads are also environmental issues. Also, the extraction of oil as a usage of fuel; all are environmental costs. Another environmental cost is the extraction of raw materials that go into the making of these automobiles.Indirectly the automotive industry brings people congestion, pollution, traffic accidents and fatalities and a wave of other environmental troubles. Due to this, Toyota needed to establish R&D centres to take advantage of research infrastructure, human capital and tec hnical and technological knowledge, so they can develop vehicles to satisfy the requirements of the environmental and safety regulations more effectively. Toyota’s Core Competencies Toyota has several core competencies which they could utilize to further gain advantage over their competitors. In January of 2009, Toyota overtook the U.S. auto giant General Motors, to become the market leader in the automotive industry. One core competency of Toyota is their brand management. The strength of their automotive marketing has been such that their brand is known even in the parts of the world where cars are not the common medium of transportation. Another core competency is their supply chain management, which shows their ability to maintain a steady stream of raw material coming in for production, because of their long-term good relationships with their steel, glass, plastics and other raw material suppliers.Another thing that forms part of their core competencies is their highly c oordinated logistics system, which is outsourced; and leads to excellent inventory management and always on schedule production activities. Another major core competency of Toyota is their ability at the moving assembly line. Not only this; The Toyota Way of lean production, its JIT and TQM approach; all are part of its core competencies. Being the pioneer of such mass production and waste elimination system, they were able to get ahead of the competitors manufacturing process-wise and were also able to save on cost and time.Yet another core competency is Toyota’s focusing on its product development technology under a single product-information-management program through standardizing and incorporating them; thus highlighting Toyota’s work and effort on the development of sustainable production, and their commitment to perform environmentally. Toyota and its suppliers Toyota has basically 14 management principles, which combine to make ‘The Toyota Way’. Of those 14 principles, Principle 11 states that: â€Å"Respect your Extended Network of Partners and Suppliers by Challenging Them and Helping Them Improve†.This is merely a small sentence, but is more than enough to illustrate the importance of its suppliers to Toyota, and how it sees them as strategic partners and a part of its organization. Toyota in its early days was very small, and didn’t have a lot of business or production. It didn’t have the resources, capital or equipment to design and make the myriad of components that go into the making of a car. Toyota’s offer to its suppliers was small. It was the opportunity for all partners to grow the business together and mutually benefit in the long term.So, like the associates who work inside Toyota, suppliers became part of the extended family who grew and learned the Toyota Production System. Even when Toyota became a global powerhouse, it maintained its supplier partnerships. One way that Toyota has honed its skills in applying TPS is by working on projects with suppliers. Toyota needs its suppliers to be as capable as its own plants at building and delivering high-quality components just in time. Moreover, Toyota cannot cut costs unless suppliers cut costs, lest Toyota simply push cost reductions onto suppliers, which is not the Toyota Way.Since Toyota does not view parts as commodities to be sourced on the market through open bidding, it is critical that it works with highly capable suppliers that are following TPS or an equivalent system. Toyota’s purchasing department has its own quality and TPS experts to work with suppliers when there are problems. Toyota pays careful attention to its suppliers and their performance. It provides ample hands-on assistance and monitoring to avoid problems; or in the case of an occurrence of a problem, to correct it as soon as possible.If problems do occur, Toyota sends a team of its experts to address the problem and to create the ac tion plan. Whereas other companies would threaten problem suppliers—â€Å"Fix the problems or we will drop you†Ã¢â‚¬â€Toyota nurses them out of their â€Å"sickness† in a very holistic way. There are several advantages for Toyota in treating suppliers as strategic partners or part of the Toyota family. First of all Toyota’s JIT system is a practiced specimen, of how important and beneficial supplier relationships truly are. This system would have never been truly effective if successful integration with suppliers had not taken place.Parts and components arrive just when they are needed and hence Toyota saves on storage and warehouse costs. Toyota’s suppliers are integral to the just-in-time philosophy, both when it is working smoothly and when there is a breakdown in the system. Toyota also saves money on its logistics, and this as well roots from careful integration with suppliers. Also the TQM system of Toyota can be traced back to Toyotaâ€℠¢s supply chain management. Toyota outsources almost 70% of the components that go into its cars, and it maintains close relationships with its key suppliers, so as to procure quality parts and components.Toyota has been rewarded time and time again for its serious investment in building a network of highly capable suppliers that is truly integrated into Toyota’s extended lean enterprise. Much of the award winning quality that distinguishes Toyota and Lexus results from the excellence in innovation, engineering, manufacture, and overall reliability of Toyota’s suppliers. Toyota’s Purchasing Strategy Toyota’s Purchasing/Procurement Policy The ultimate objective of Toyota is to produce vehicles that fully satisfy the customer.To this end, Toyota has developed three basic principles that guide its relationship with suppliers with a view to optimizing its purchases in a global context. These principles are the following: i) Fair competition based on an open d oor policy Toyota is open to any potential supplier, regardless of nationality, size or whether this company is a first-time supplier or not. Toyota’s co-operation with suppliers is solely based on business considerations, which include an assessment of the overall economic and technological capacities of the potential supplier.Critical parameters of this evaluation are quality, cost, technological capabilities and reliability regarding the on-time delivery of the required quantities of inputs, as well as the entrepreneur’s ability to implement a kaizen strategy, which means the continued improvement and enhancement of products, services and management. ii) Mutual benefit based on mutual trust Toyota believes in developing mutually beneficial, long-term relationships with suppliers based on trust and confidence. Close and wide-ranging communication with them is considered a key factor in building and maintaining trust. ii) Contribution to local economic development thr ough localization and good corporate governance As part of the on-going globalisation efforts, Toyota is relocating a larger part of its production to other countries. It is its objective to contribute to the host country’s economic development in line with Toyota’s market presence by purchasing parts and other inputs from local suppliers. This is a Flowchart of the Toyota’s Purchasing Process Toyota’s Supply Chain Management Toyota’s Supplier Consideration and the Selection Process At Toyota, choosing a supplier is a long, drawn-out process that involves erifying whether the supplier will mesh with the supply network. In some cases, suppliers are selected because they have innovations that improve processes or decrease costs. Both new and existing suppliers are expected to share their innovations with other suppliers that supply similar products. As a basic rule, Toyota expects its suppliers to excel in quality, cost, delivery, and engineering, in cluding technology, and management. These are the five key areas that shape competitive entrepreneurs and make them successful in a competitive environment.Thus, Toyota requires suppliers to maintain consistently high quality levels which can be measured in terms of the number of defect parts per million. In addition, suppliers need to build and to maintain a strong position regarding unique designs or special technologies, while being cost- competitive. They also need to follow and to monitor trends in information technology and be able to harmoniously amalgamate state-of-the-art technology with their business organization. It is often necessary that potential suppliers undergo a preparatory process before entering a business partnership with Toyota.During this period, the management should attach particular emphasis on the following issues: * Encouragement of an enterprise culture of creativity, continuous learning and improvement; * Particular attention on R & D, which should go beyond technological issues to include an analysis of both customers’ needs and competitors’ competitive potential; * Improvement of employees’ satisfaction in order to promote creativity and strengthen organizational development; * Strengthening the management information system to help executives to take informed and effective decisions.Toyota views new suppliers cautiously and gives only very small orders. They must prove their sincerity and commitment to Toyota’s high performance standards for quality, cost, and delivery. If they demonstrate this for early orders, they will get increasingly larger orders. Toyota will teach them the Toyota Way and adopt them into the family. This is a model of what Toyota expects from its suppliers. Toyota’s suppliers have to show excellence in areas that Toyota sees as critical. These areas are cost, delivery, engineering, management and quality.Toyota’s philosophy is that suppliers have to excel in thes e areas if they wish to stand out amongst other suppliers and to be successful with global competitiveness Tiered Supplier Organizations Toyota like many auto carmakers is a network of suppliers. Tier 1 suppliers are Toyota’s direct suppliers, which is followed by Tier 2 suppliers and so on. Lastly, there are the Tier 4 suppliers. These are generally small in size, but are critical to the suppliers that are supplying Toyota. Toyota, to maintain the smooth flow in its supply chain, even handles when problem exist in these Tiers.An example of this can be a situation in which a government regulation required a change in antirust coatings. More than 4,000 parts were impacted by this change, but there were only a small number of suppliers that supplied the coating materials. Thus, Toyota was able to focus attention on a few suppliers to develop the new coating materials to be provided to suppliers that coated the 4,000 parts. Working with these lower-tier suppliers was the key to making the necessary changes in a timely and efficient manner. Toyota chooses suppliers across multiple tiers so as to guarantee availability of innovative solutions across the supply chain.Pressure on Suppliers to Perform Toyota’s suppliers are always at their toes. They do not get complacent or feel that they can ease-out, even if they are considered as Toyota’s trusted suppliers and have been supplying Toyota quality materials for a number of years. Even suppliers who have acquired long-term contracts from Toyota, for supplying specific components for a model or set of models have to prove that they are worth the trust to have been given the contract. Otherwise they would jeopardize their opportunity of continuing as Toyota’s suppliers or risk not acquiring such a contract in future models.The depth of Toyota’s Supplier Relationship Toyota’s suppliers suggest that Toyota’s processes have a few characteristics that enable their success, na mely: * Pervasive collaboration tools that have common standards and are compatible with one another * Visibility and visual control not fogged by analysis * Trust to share intellectual property without fear of abuse * Modular view of teams and processes and flexible planning to keep goals aligned with customer needs * Encouragement of teams as a vehicle to solve problems Assisting and Helping SuppliersA key feature of Toyota’s supply chain is the automaker’s role in supplier capability development. This point has already been addressed earlier in this project, how Toyota provides assistance to its suppliers and helps them learn. Supplier Location Decisions Toyota’s planning for assembly plant sites assumes that most suppliers will be located at a reasonable distance from the assembly plant and that their delivery schedules will permit efficient operation of the assembly plant to produce vehicles based on the final vehicle mix and sequence.The low lot sizes of a ssembly plant parts orders imply that suppliers need to be located close to the assembly plant. Many suppliers choose to be located close to an assembly plant. In Japan, 85 percent of the volume comes from suppliers located within a 50-mile radius of a plant (i. e. , within a one-hour drive). In North America and Europe, the goal is for 80 percent of the parts to be delivered within three to five days lead time. The Toyota Target Value System The Toyota Target Value System is a complex system that is continuously applied in Toyota-supplier relationships.Under this system, Toyota and a supplier agree on a number of long-term issues and objectives to strengthen the supplier’s competitiveness. In the course of intense consultations, the long-range objectives are scaled down to annual targets, the so-called â€Å"target values†. On this basis, the supplier undertakes appropriate steps and measures to reach these goals as agreed. Progress is regularly evaluated in terms of organization, effort and achievement and the assessment is communicated to the supplier. Suppliers that succeed in raising their levels of competitiveness receive awards.In case suppliers experience difficulties in their efforts to attain the agreed targets, Toyota provides expertise to analyze the problems and to design measures to remedy the situation. The continuing circle of improvement, attainment and further improvement enables suppliers to improve their competitive edge, while laying the foundation for a stable and long-term business relationship with Toyota, as well as for a broadened range of business opportunities. This long-term approach also helps to overcome problems emanating from economic recession and turmoil.Environmentally-Friendly Products Based on â€Å"Green Procurement† In order to produce environmentally-friendly products, Toyota aims to procure parts, materials and equipment that have low environmental impact from suppliers that always give sufficient consideration to the environment. Toyota’s Supplier Strategies: Strengths and Weaknesses Strengths Suppliers are considered part of Toyota’s value chain. Having strong relationships with partners provides Toyota with certain advantages. Its lean production methods are directly integrated with the efficiency of suppliers.The advantages that Toyota acquires of its supplier strategies include the inventory that Toyota receives JIT from its suppliers. Toyota’s suppliers work hand in hand with Toyota to improve processes and the quality of its products. These supplier strategies also help Toyota shed its costs. The work that Toyota has done with its suppliers has helped the suppliers in eliminating waste from their factory floors; shedding cost and getting the best out of the least. All these savings and reductions in costs are passed on to Toyota as low priced – high quality parts and components.These supplier strategies have also increased Toyota’s qu ality, and have decreased defects to a bare minimum. Another visible advantage of Toyota’s supplier strategies is that the company has decreased its time-to-market for its new or developing products. Suppliers respect Toyota and share common interests and mutual benefits with Toyota. These strong ties also help improve Toyota’s insight on the occurrence of problems and avoiding them, as it goes beyond just handling its direct suppliers; in fact it also deals with its Tier 2, Tier 3 and Tier 4 suppliers.Also, Toyota’s decision to select most of its suppliers that are geographically located near to it, also helps solve logistics problem and brings a large reduction in the cost of transporting the parts or components to its plants. Weaknesses (Toyota has a very studied and planned organizational structure. Its departments are perfectly set and planned. We as students did not have the ample resources to conduct a study on the weaknesses of Toyota – so what we mention here are just assumptions. ) Recent recalls that Toyota has suffered, have been to some extent blamed on its suppliers and Toyota’s Supplier Management.There is a wide speculation that since Toyota, after overtaking GM as the largest auto manufacturer set its goal to increase its market share from 11% to 15%. Due to this Toyota lost sight of its core philosophies, and grew complacent in its supplier selection process. Thus, summarizing that Toyota is only as good as its network of suppliers. Denso, a core supplier of Toyota, which conducts more than 30% of its business with Toyota is said to be somewhat frustrated with the closeness that Toyota maintains with it. This is due to the reason being that Denso also supplies to other customers which are also car manufacturers.These customers are namely Honda, Nissan and Mazda etc. and are considered by Toyota as its main competitors; especially Honda and Nissan. These deviating relationships might possibly hurt or damage T oyota in the long run; if corrective measures are not taken. Also, some suppliers complain that although Toyota is their best customer, it doesn’t let go of its bargaining power; meaning that Toyota keeps an upper hand over everything. It can also be argued that having low inventories, if not managed well can cause problems in the production line.Corrective Actions Required Knowing how Toyota works, if these problems come into existence; Toyota will have a carefully planned approach to solving them. To begin with Toyota would first clarify the problem and see the comparison between the current and the ideal or required state. Then as second step, it would grasp the actual situation and see the gaps, which have caused the problem to occur. A third step would be to break down the problem and set targets to correct them bit by bit. Finally, it would conduct an analysis of the underlying causes.What Toyota should do to prevent the problems mentioned in the (Weaknesses) section ab ove is that Toyota must improve its supplier management process and make some corrections to its supply chain. Conclusion Japanese carmakers have always been considered the benchmarks in their industry, and Toyota is the best among the Japanese car manufacturers, establishing it as the benchmark of benchmarks. Toyota has excellence embedded deep in its core and has helped and developed its suppliers to do the same, by integrating and applying a scope of mutual learning and development.Fun Fact As a full stop to this project, we would leave you with a fun fact to think over. Today, Toyota is the world's largest manufacturer of automobiles in unit sales and in net sales. It is by far the largest Japanese automotive manufacturer, producing more than 10 million vehicles per year, equivalent to one every six seconds. In the time it has taken you to read this paragraph, Toyota would have produced at least another three or four cars! Resources Books 1. TOYOTA SUPPLY CHAIN MANAGEMENT: Anant h V. Iyer, Sridhar Seshadri and Roy Vasher 2.THE TOYOTA WAY – 14 Management Principles from the World’s Greatest Manufacturer: Jefferey K. Liker 3. THE TOYOTA LEADERS – An Executive Guide: Masaaki Sato Online Resources and Websites 1. http://www. economist. com/node/15576506 2. www. toyota-industries. com 3. http://www. strategicsourceror. com/2011/04/toyota-supply-of-cars-will-be-impacted. html 4. www. toyota-global. com 5. http://blogs. gxs. com/morleym/2010/02/improving-visibility-across-toyota%E2%80%99s-supply-chain. html 6. http://thethrivingsmallbusiness. om/articles/what-can-we-learn-from-the-toyota-crisis/ 7. www. businessweek. com 8. http://www. toyota. co. nz 9. www. toyotasupplier. com 10. http://www. industryweek. com/articles/toyotas_real_secret_hint_its_not_tps_13432. aspx 11. http://www. autoweek. com/article/20060818/free/60816004 12. www. inc. com 13. http://www. businessweek. com/bwdaily/dnflash/content/jan2010/db20100128_907800. htm 14. http:/ /www. bnet. com/blog/mba/lessoned-learned-from-toyotas-crisis/1939 15. http://findarticles. com/p/articles/mi_m0KJI/is_10_118/ai_n27023150/ An Analysis of Toyota’s Strategic Procurement and Supply Chain Management Purchasing & Materials Management| | Strategic Procurement & Supply Chain Management| Introduction The topic selected is (Strategic Procurement & Supply Chain Management). For this study, we have selected Toyota Motor Corporations as our company of choice. Toyota is without doubt the best in the world, with its many philosophies and principles on how to make the best out of the least; JIT, lean production and elimination of waste and the desire for continuous improvement are just a few ways how Toyota has become the best in the auto industry.Toyota as a name, a company, and as a brand has become synonymous with Quality. At the heart of its success, lie family values that have been passed down; a norm that has become the Organizational Culture of Toyota – The Quest for Excellence, and The Passion to Lead. Toyota’s achievement of excellence stems from implementing lean production, or which they refer to as ‘The Toyota Way’. The most visible product of Toyotaà ¢â‚¬â„¢s quest for excellence is its manufacturing philosophy, called the Toyota Production System (TPS).We have selected to apply this topic to Toyota, because to perfect their way of lean production, they work on it from the root; i. e. their suppliers, and purchasing strategy. Scope of Project Analyzing the strategies of Toyota, and how they implement it in their purchasing and procurement policy. Also, analyzing how Toyota selects it suppliers and what selection processes do they go through; and also conducting an analysis of Toyota’s supply chain and its supply chain management. Limitations This study was really difficult to attain, as personal interviews or nteractions with Toyota’s direct employees was beyond our budgets to conduct. This study is a result of hard work and extensive internet and textual or written research from more than ten websites and three books. Also, the study of Toyota was too large and very difficult to summarize into the limited requirem ents of this paper. Company Background The Toyota Motor Co. Ltd was first established in 1937 as a spin-off from Toyoda Automatic Loom Works, one of the world's leading manufacturers of weaving machinery. The Toyoda Automatic Loom Works was then headed by Japan's â€Å"King of Inventors† Sakichi Toyoda.The patent rights to one of his machines had been sold to Platt Brothers (UK) and provided the seed-money for the development and test-building of Toyota's first automobiles. August 2007 marked the 70th anniversary of TMC. The fledgling company founded by Kiichiro Toyoda, Sakichi's son, has since blossomed into the leader that it is today. In 1950 the company experienced its one and only strike. Labour and management emerged from this stoppage firmly committed to the principles of mutual trust and dependence, and that corporate philosophy still guides T0oyota’s growth today.Production systems were improved in the late 1950s, culminating in the establishment of the Ã¢â‚¬Ë œToyota Production System. ‘ It became known as TPS in 1970 but was established much earlier by Taiichi Ohno. Based on the principles of Jidoka, Just-in-time and Kaizen, the system is a major factor in the reduction of inventories and defects in the plants of Toyota and its suppliers, and it underpins all of Toyota’s operations across the World. Toyota launched its first small car (SA Model) in 1947.Production of vehicles outside Japan began in 1959 at a small plant in Brazil, and continued with a growing network of overseas plants. Toyota believes in localizing its operations to provide customers with the products they need where they need them; this philosophy builds mutually beneficial long-term relationships with local suppliers and helps the company fulfill its commitments to local labour. Over and above manufacturing, Toyota also has a global network of design and ‘Research and Development' facilities, embracing the three major car markets of Japan, North Am erica and Europe.In every community in which the company operates, Toyota strives to be a responsible corporate citizen; close relationships with people and organizations in the local community are essential contributors to mutual prosperity. Across the world, Toyota participates enthusiastically in community activities ranging from the sponsorship of educational and cultural programmes to international exchange and research. Toyota has the fastest product development process in the world. New cars and trucks take 12 months or less to design, while competitors typically require two to three years.Toyota is benchmarked as the best in class by all of its peers and competitors throughout the world for high quality, high productivity, manufacturing speed, and flexibility. Toyota automobiles have consistently been at the top of quality rankings. Strategic Analysis To better understand a firm and its placement of its strategies, we must conduct an analysis of factors that might affect its selection of strategies. SWOT Analysis Strengths * Toyota Motor Corporation is the world’s largest vehicle manufacturer by production and sales. * Toyota is best known for environmentally safe, quality, reliability, durability and value for money. Toyota’s Camry and Corolla have been the top-selling cars in their respected categories; in the past eight out of nine years. Also, Toyota produces the globe’s best selling hybrid car, the Prius – which by 2010 had surpassed two million sales worldwide. * Strong distribution and marketing efforts focused on meeting diverse needs, high quality sales and services, and close involvement with customers. * Low cost, high quality factory operations guided by just in time. * Toyota maintains long-term partnerships with suppliers, and strategic partners. Toyota holds the competitive edge of being the undisputed quality leader in automotive marketing. * Strong brand equity. * Diversified product portfolio (Lexus, Daihat su, Hino) leading to increasing customer base. * Toyota’s success allows it to invest heavily in Research and Development and in the future. Weaknesses * From the last quarter of 2009 through to the 1st quarter of 2010, Toyota had recalled more than 8 million cars and trucks globally in numerous recall campaigns, and temporarily stopped production and sales. * Toyota was badly hit by the 2008 financial crisis, and declared its first annual loss in its 70 years history. Toyota does not have detailed customer segmentation * Customers are not involved in the process. * Toyota places a very high level of responsibility on employee shoulders. * After the 2009-2010 recall crisis, Toyota was criticized for not having or employing enough PR staff, and that it was not able to manage its Customer Relations. Opportunities * Joint ventures with French motoring companies Peugeot and Citroen has provided various opportunities for the company to produce cars in France. * North American cons umers have shifted to more fuel-efficient and higher quality products of the European and Japanese automakers. Produce fuel-efficient, higher quality and smaller automobiles that can attract the consumers in developing and poor countries. * There is a growing demand for hybrid electric cars. Threats * Rising oil prices and other car maintenance costs, leading to decrease in car ownership. * Encouragement from governments and pressure from environmentalists to turn to more environmental friendly methods of transportation (e. g. cycling and public transportation) * Escalating competition in the low priced car market by the entrance of several newly industrialized countries. Continuing trade frictions due to trade imbalances between Japan and other countries and the lack in openness of the Japanese market to import. * Declining economic growth on a global scale. * Major producers, including the Big Three of U. S (G. M, Ford and Chrysler) offered significant discounts across their lineu ps. PESTLE Analysis Political The auto-industry is being pushed into a socio-politico-economic corner. Carmakers are regularly being restricted with new laws or policies or requirements; that they must adhere to. Toyota likewise is linked closely to the policies of the government.Not only this, but emerging countries, that are keen to develop an auto sector are putting political pressure on Toyota, so as to protect it and develop it. Economic Toyota Company is a pillar company in the auto mobile business, a flag of economic progress. The Toyota Company has been a core company, a unique phenomenon, which has dominated the twentieth century. However, the automobile industry, including Toyota Company has suffered a series of structural problems and has become riddled with contradictions and economic discontinuities; including the recent financial crisis. SocialAs part of the development in automotive industry, the Toyota Company actually affects the society as a whole. It employs milli ons of people directly, and tens of millions others indirectly. Its products have transformed society, bringing unbelievable levels of mobility and changing the ways people live and work. Nearly since its startup, Toyota has been a model of social discipline, control and improvement and it is not just the auto sector, where it has left a mark. Toyota is considered a role model in millions of organizations and institutions worldwide. It has with its culture been the example that professors use in every business school.Technological Toyota works on a brilliant scale and has such a vast influence that it is impossible to miss. Due to continuous improvement in demands, the level of technology that Toyota has to implement is increasing, and this adds to the challenges of heavy investment burdens on its R&D, and increases its uncertainties and risks in developing the technologies. Technologically, the automotive industry is becoming increasingly competitive. Legal Toyota is subject to a m ultitude of rules and regulations, as well as laws and legislations of a more legal nature.These laws and legislations cover areas such as competition law, intellectual property law, taxation, consumer protection law and emissions. Environmental Transportation through automobiles consumes a lot of the earth’s precious resources. Also to include as environmental issues are the network of roads that are made for the running of automobiles. The forests or ecosystems that are destroyed to make those roads are also environmental issues. Also, the extraction of oil as a usage of fuel; all are environmental costs. Another environmental cost is the extraction of raw materials that go into the making of these automobiles.Indirectly the automotive industry brings people congestion, pollution, traffic accidents and fatalities and a wave of other environmental troubles. Due to this, Toyota needed to establish R&D centres to take advantage of research infrastructure, human capital and tec hnical and technological knowledge, so they can develop vehicles to satisfy the requirements of the environmental and safety regulations more effectively. Toyota’s Core Competencies Toyota has several core competencies which they could utilize to further gain advantage over their competitors. In January of 2009, Toyota overtook the U.S. auto giant General Motors, to become the market leader in the automotive industry. One core competency of Toyota is their brand management. The strength of their automotive marketing has been such that their brand is known even in the parts of the world where cars are not the common medium of transportation. Another core competency is their supply chain management, which shows their ability to maintain a steady stream of raw material coming in for production, because of their long-term good relationships with their steel, glass, plastics and other raw material suppliers.Another thing that forms part of their core competencies is their highly c oordinated logistics system, which is outsourced; and leads to excellent inventory management and always on schedule production activities. Another major core competency of Toyota is their ability at the moving assembly line. Not only this; The Toyota Way of lean production, its JIT and TQM approach; all are part of its core competencies. Being the pioneer of such mass production and waste elimination system, they were able to get ahead of the competitors manufacturing process-wise and were also able to save on cost and time.Yet another core competency is Toyota’s focusing on its product development technology under a single product-information-management program through standardizing and incorporating them; thus highlighting Toyota’s work and effort on the development of sustainable production, and their commitment to perform environmentally. Toyota and its suppliers Toyota has basically 14 management principles, which combine to make ‘The Toyota Way’. Of those 14 principles, Principle 11 states that: â€Å"Respect your Extended Network of Partners and Suppliers by Challenging Them and Helping Them Improve†.This is merely a small sentence, but is more than enough to illustrate the importance of its suppliers to Toyota, and how it sees them as strategic partners and a part of its organization. Toyota in its early days was very small, and didn’t have a lot of business or production. It didn’t have the resources, capital or equipment to design and make the myriad of components that go into the making of a car. Toyota’s offer to its suppliers was small. It was the opportunity for all partners to grow the business together and mutually benefit in the long term.So, like the associates who work inside Toyota, suppliers became part of the extended family who grew and learned the Toyota Production System. Even when Toyota became a global powerhouse, it maintained its supplier partnerships. One way that Toyota has honed its skills in applying TPS is by working on projects with suppliers. Toyota needs its suppliers to be as capable as its own plants at building and delivering high-quality components just in time. Moreover, Toyota cannot cut costs unless suppliers cut costs, lest Toyota simply push cost reductions onto suppliers, which is not the Toyota Way.Since Toyota does not view parts as commodities to be sourced on the market through open bidding, it is critical that it works with highly capable suppliers that are following TPS or an equivalent system. Toyota’s purchasing department has its own quality and TPS experts to work with suppliers when there are problems. Toyota pays careful attention to its suppliers and their performance. It provides ample hands-on assistance and monitoring to avoid problems; or in the case of an occurrence of a problem, to correct it as soon as possible.If problems do occur, Toyota sends a team of its experts to address the problem and to create the ac tion plan. Whereas other companies would threaten problem suppliers—â€Å"Fix the problems or we will drop you†Ã¢â‚¬â€Toyota nurses them out of their â€Å"sickness† in a very holistic way. There are several advantages for Toyota in treating suppliers as strategic partners or part of the Toyota family. First of all Toyota’s JIT system is a practiced specimen, of how important and beneficial supplier relationships truly are. This system would have never been truly effective if successful integration with suppliers had not taken place.Parts and components arrive just when they are needed and hence Toyota saves on storage and warehouse costs. Toyota’s suppliers are integral to the just-in-time philosophy, both when it is working smoothly and when there is a breakdown in the system. Toyota also saves money on its logistics, and this as well roots from careful integration with suppliers. Also the TQM system of Toyota can be traced back to Toyotaâ€℠¢s supply chain management. Toyota outsources almost 70% of the components that go into its cars, and it maintains close relationships with its key suppliers, so as to procure quality parts and components.Toyota has been rewarded time and time again for its serious investment in building a network of highly capable suppliers that is truly integrated into Toyota’s extended lean enterprise. Much of the award winning quality that distinguishes Toyota and Lexus results from the excellence in innovation, engineering, manufacture, and overall reliability of Toyota’s suppliers. Toyota’s Purchasing Strategy Toyota’s Purchasing/Procurement Policy The ultimate objective of Toyota is to produce vehicles that fully satisfy the customer.To this end, Toyota has developed three basic principles that guide its relationship with suppliers with a view to optimizing its purchases in a global context. These principles are the following: i) Fair competition based on an open d oor policy Toyota is open to any potential supplier, regardless of nationality, size or whether this company is a first-time supplier or not. Toyota’s co-operation with suppliers is solely based on business considerations, which include an assessment of the overall economic and technological capacities of the potential supplier.Critical parameters of this evaluation are quality, cost, technological capabilities and reliability regarding the on-time delivery of the required quantities of inputs, as well as the entrepreneur’s ability to implement a kaizen strategy, which means the continued improvement and enhancement of products, services and management. ii) Mutual benefit based on mutual trust Toyota believes in developing mutually beneficial, long-term relationships with suppliers based on trust and confidence. Close and wide-ranging communication with them is considered a key factor in building and maintaining trust. ii) Contribution to local economic development thr ough localization and good corporate governance As part of the on-going globalisation efforts, Toyota is relocating a larger part of its production to other countries. It is its objective to contribute to the host country’s economic development in line with Toyota’s market presence by purchasing parts and other inputs from local suppliers. This is a Flowchart of the Toyota’s Purchasing Process Toyota’s Supply Chain Management Toyota’s Supplier Consideration and the Selection Process At Toyota, choosing a supplier is a long, drawn-out process that involves erifying whether the supplier will mesh with the supply network. In some cases, suppliers are selected because they have innovations that improve processes or decrease costs. Both new and existing suppliers are expected to share their innovations with other suppliers that supply similar products. As a basic rule, Toyota expects its suppliers to excel in quality, cost, delivery, and engineering, in cluding technology, and management. These are the five key areas that shape competitive entrepreneurs and make them successful in a competitive environment.Thus, Toyota requires suppliers to maintain consistently high quality levels which can be measured in terms of the number of defect parts per million. In addition, suppliers need to build and to maintain a strong position regarding unique designs or special technologies, while being cost- competitive. They also need to follow and to monitor trends in information technology and be able to harmoniously amalgamate state-of-the-art technology with their business organization. It is often necessary that potential suppliers undergo a preparatory process before entering a business partnership with Toyota.During this period, the management should attach particular emphasis on the following issues: * Encouragement of an enterprise culture of creativity, continuous learning and improvement; * Particular attention on R & D, which should go beyond technological issues to include an analysis of both customers’ needs and competitors’ competitive potential; * Improvement of employees’ satisfaction in order to promote creativity and strengthen organizational development; * Strengthening the management information system to help executives to take informed and effective decisions.Toyota views new suppliers cautiously and gives only very small orders. They must prove their sincerity and commitment to Toyota’s high performance standards for quality, cost, and delivery. If they demonstrate this for early orders, they will get increasingly larger orders. Toyota will teach them the Toyota Way and adopt them into the family. This is a model of what Toyota expects from its suppliers. Toyota’s suppliers have to show excellence in areas that Toyota sees as critical. These areas are cost, delivery, engineering, management and quality.Toyota’s philosophy is that suppliers have to excel in thes e areas if they wish to stand out amongst other suppliers and to be successful with global competitiveness Tiered Supplier Organizations Toyota like many auto carmakers is a network of suppliers. Tier 1 suppliers are Toyota’s direct suppliers, which is followed by Tier 2 suppliers and so on. Lastly, there are the Tier 4 suppliers. These are generally small in size, but are critical to the suppliers that are supplying Toyota. Toyota, to maintain the smooth flow in its supply chain, even handles when problem exist in these Tiers.An example of this can be a situation in which a government regulation required a change in antirust coatings. More than 4,000 parts were impacted by this change, but there were only a small number of suppliers that supplied the coating materials. Thus, Toyota was able to focus attention on a few suppliers to develop the new coating materials to be provided to suppliers that coated the 4,000 parts. Working with these lower-tier suppliers was the key to making the necessary changes in a timely and efficient manner. Toyota chooses suppliers across multiple tiers so as to guarantee availability of innovative solutions across the supply chain.Pressure on Suppliers to Perform Toyota’s suppliers are always at their toes. They do not get complacent or feel that they can ease-out, even if they are considered as Toyota’s trusted suppliers and have been supplying Toyota quality materials for a number of years. Even suppliers who have acquired long-term contracts from Toyota, for supplying specific components for a model or set of models have to prove that they are worth the trust to have been given the contract. Otherwise they would jeopardize their opportunity of continuing as Toyota’s suppliers or risk not acquiring such a contract in future models.The depth of Toyota’s Supplier Relationship Toyota’s suppliers suggest that Toyota’s processes have a few characteristics that enable their success, na mely: * Pervasive collaboration tools that have common standards and are compatible with one another * Visibility and visual control not fogged by analysis * Trust to share intellectual property without fear of abuse * Modular view of teams and processes and flexible planning to keep goals aligned with customer needs * Encouragement of teams as a vehicle to solve problems Assisting and Helping SuppliersA key feature of Toyota’s supply chain is the automaker’s role in supplier capability development. This point has already been addressed earlier in this project, how Toyota provides assistance to its suppliers and helps them learn. Supplier Location Decisions Toyota’s planning for assembly plant sites assumes that most suppliers will be located at a reasonable distance from the assembly plant and that their delivery schedules will permit efficient operation of the assembly plant to produce vehicles based on the final vehicle mix and sequence.The low lot sizes of a ssembly plant parts orders imply that suppliers need to be located close to the assembly plant. Many suppliers choose to be located close to an assembly plant. In Japan, 85 percent of the volume comes from suppliers located within a 50-mile radius of a plant (i. e. , within a one-hour drive). In North America and Europe, the goal is for 80 percent of the parts to be delivered within three to five days lead time. The Toyota Target Value System The Toyota Target Value System is a complex system that is continuously applied in Toyota-supplier relationships.Under this system, Toyota and a supplier agree on a number of long-term issues and objectives to strengthen the supplier’s competitiveness. In the course of intense consultations, the long-range objectives are scaled down to annual targets, the so-called â€Å"target values†. On this basis, the supplier undertakes appropriate steps and measures to reach these goals as agreed. Progress is regularly evaluated in terms of organization, effort and achievement and the assessment is communicated to the supplier. Suppliers that succeed in raising their levels of competitiveness receive awards.In case suppliers experience difficulties in their efforts to attain the agreed targets, Toyota provides expertise to analyze the problems and to design measures to remedy the situation. The continuing circle of improvement, attainment and further improvement enables suppliers to improve their competitive edge, while laying the foundation for a stable and long-term business relationship with Toyota, as well as for a broadened range of business opportunities. This long-term approach also helps to overcome problems emanating from economic recession and turmoil.Environmentally-Friendly Products Based on â€Å"Green Procurement† In order to produce environmentally-friendly products, Toyota aims to procure parts, materials and equipment that have low environmental impact from suppliers that always give sufficient consideration to the environment. Toyota’s Supplier Strategies: Strengths and Weaknesses Strengths Suppliers are considered part of Toyota’s value chain. Having strong relationships with partners provides Toyota with certain advantages. Its lean production methods are directly integrated with the efficiency of suppliers.The advantages that Toyota acquires of its supplier strategies include the inventory that Toyota receives JIT from its suppliers. Toyota’s suppliers work hand in hand with Toyota to improve processes and the quality of its products. These supplier strategies also help Toyota shed its costs. The work that Toyota has done with its suppliers has helped the suppliers in eliminating waste from their factory floors; shedding cost and getting the best out of the least. All these savings and reductions in costs are passed on to Toyota as low priced – high quality parts and components.These supplier strategies have also increased Toyota’s qu ality, and have decreased defects to a bare minimum. Another visible advantage of Toyota’s supplier strategies is that the company has decreased its time-to-market for its new or developing products. Suppliers respect Toyota and share common interests and mutual benefits with Toyota. These strong ties also help improve Toyota’s insight on the occurrence of problems and avoiding them, as it goes beyond just handling its direct suppliers; in fact it also deals with its Tier 2, Tier 3 and Tier 4 suppliers.Also, Toyota’s decision to select most of its suppliers that are geographically located near to it, also helps solve logistics problem and brings a large reduction in the cost of transporting the parts or components to its plants. Weaknesses (Toyota has a very studied and planned organizational structure. Its departments are perfectly set and planned. We as students did not have the ample resources to conduct a study on the weaknesses of Toyota – so what we mention here are just assumptions. ) Recent recalls that Toyota has suffered, have been to some extent blamed on its suppliers and Toyota’s Supplier Management.There is a wide speculation that since Toyota, after overtaking GM as the largest auto manufacturer set its goal to increase its market share from 11% to 15%. Due to this Toyota lost sight of its core philosophies, and grew complacent in its supplier selection process. Thus, summarizing that Toyota is only as good as its network of suppliers. Denso, a core supplier of Toyota, which conducts more than 30% of its business with Toyota is said to be somewhat frustrated with the closeness that Toyota maintains with it. This is due to the reason being that Denso also supplies to other customers which are also car manufacturers.These customers are namely Honda, Nissan and Mazda etc. and are considered by Toyota as its main competitors; especially Honda and Nissan. These deviating relationships might possibly hurt or damage T oyota in the long run; if corrective measures are not taken. Also, some suppliers complain that although Toyota is their best customer, it doesn’t let go of its bargaining power; meaning that Toyota keeps an upper hand over everything. It can also be argued that having low inventories, if not managed well can cause problems in the production line.Corrective Actions Required Knowing how Toyota works, if these problems come into existence; Toyota will have a carefully planned approach to solving them. To begin with Toyota would first clarify the problem and see the comparison between the current and the ideal or required state. Then as second step, it would grasp the actual situation and see the gaps, which have caused the problem to occur. A third step would be to break down the problem and set targets to correct them bit by bit. Finally, it would conduct an analysis of the underlying causes.What Toyota should do to prevent the problems mentioned in the (Weaknesses) section ab ove is that Toyota must improve its supplier management process and make some corrections to its supply chain. Conclusion Japanese carmakers have always been considered the benchmarks in their industry, and Toyota is the best among the Japanese car manufacturers, establishing it as the benchmark of benchmarks. Toyota has excellence embedded deep in its core and has helped and developed its suppliers to do the same, by integrating and applying a scope of mutual learning and development.Fun Fact As a full stop to this project, we would leave you with a fun fact to think over. Today, Toyota is the world's largest manufacturer of automobiles in unit sales and in net sales. It is by far the largest Japanese automotive manufacturer, producing more than 10 million vehicles per year, equivalent to one every six seconds. In the time it has taken you to read this paragraph, Toyota would have produced at least another three or four cars! Resources Books 1. TOYOTA SUPPLY CHAIN MANAGEMENT: Anant h V. Iyer, Sridhar Seshadri and Roy Vasher 2.THE TOYOTA WAY – 14 Management Principles from the World’s Greatest Manufacturer: Jefferey K. Liker 3. THE TOYOTA LEADERS – An Executive Guide: Masaaki Sato Online Resources and Websites 1. http://www. economist. com/node/15576506 2. www. toyota-industries. com 3. http://www. strategicsourceror. com/2011/04/toyota-supply-of-cars-will-be-impacted. html 4. www. toyota-global. com 5. http://blogs. gxs. com/morleym/2010/02/improving-visibility-across-toyota%E2%80%99s-supply-chain. html 6. http://thethrivingsmallbusiness. om/articles/what-can-we-learn-from-the-toyota-crisis/ 7. www. businessweek. com 8. http://www. toyota. co. nz 9. www. toyotasupplier. com 10. http://www. industryweek. com/articles/toyotas_real_secret_hint_its_not_tps_13432. aspx 11. http://www. autoweek. com/article/20060818/free/60816004 12. www. inc. com 13. http://www. businessweek. com/bwdaily/dnflash/content/jan2010/db20100128_907800. htm 14. http:/ /www. bnet. com/blog/mba/lessoned-learned-from-toyotas-crisis/1939 15. http://findarticles. com/p/articles/mi_m0KJI/is_10_118/ai_n27023150/

Investigating the Factors Affecting Tensile Strength of Human Hair Essay

Hypothesis There will be a difference in tensile strength in blonde hair and black hair of similar thickness. Blonde hair will have a higher tensile strength than black hair when at similar thickness. Blonde hair has more sulphur-sulphur covalent bonds than black hair. Hair contains the protein keratin, which contains a large proportion of cysteine with S-S bonds. The disulphide bond is one of the strongest bonds known anywhere in nature. The cross-linking by disulphide linkages between the keratin chains accounts for much of the strength of hair. Blonde hair has more of these bonds therefore blonde hair will have a higher tensile strength and elasticity levels. Null Hypothesis There will be no difference in tensile strength between black hair and blonde hair of similar thickness. Blonde hair having more sulphide bridges will not mean that blonde hair has a higher tensile strength than black hair. Background Knowledge Hair has a very high tensile strength. It can hold up 60kg of weight before breaking. This high strength is due to its structure. Hair is made of the fibrous protein keratin. Figure 1 shows keratin molecules are made up of three helices. They are held together by strong covalent bonds called sulphur bonds. Eleven of these molecules group together to form a micro fibril. Then, hundreds of micro fibrils join together to form a single hair. Hair is made of cells called epithelial cells which are arranged in three layers. The inner most layer is the medulla, the middle layer is the cortex and the out layer is the cuticle. The medulla is mainly soft keratin and the cortex and cuticle are mainly hard keratin. This structure has great strength. The cuticle, the outermost layer, is where you find a lot of the protein keratin. The cortex is the thickest middle layer, providing strength and defining colour of hair. The cortex also gives the hair its elasticity and flexibility. The medulla, central core, gives hair its strength and breadth. The structure of keratin is maintained by numerous sulphur to sulphur covalent bonds. Keratin contains high concentrations of the amino acid cysteine. Every Cystine unit contains two cysteine amino acids in different chains which have come to lie near to each other and are linked together by two Sulphur atoms, forming a very strong chemical bond known as a disulphide bridge. Many disulphide bonds form down the length of the keratin chains, joining them together like the rungs of a ladder. The disulphide bond is one of the strongest bonds known anywhere in nature. This cross-linking by disulphide linkages between the keratin chains accounts for much of the strength of hair. A suitable amount of Sulphur Bridge is important in enhancing the elasticity of hair due to the strength of the disulphide bond. Within each hair bonds of a different kind, called hydrogen bonds also link the keratin chains. There are far more hydrogen bonds than disulphide linkages. The hydrogen bonds are much weaker than the disulphide linkages and more easily broken, and give hair its flexibility. Hydrogen bonds are broken apart when the hair is wetted, and form again when the hair dries. Hair used for the investigation must not be ‘damaged’ in any way, i.e; should not be dyed/coloured, permed, straightened, etc. The hair also must not be curly. I will be only looking at naturally straight hair for this investigation. Permed and dyed hair cause severe damage to hair by reducing and breaking disulphide bonds between protein amino acids (which keep the hair strong) and they change the chemistry of hair by altering the protein rich internal structure of the fibre. In perming, a mild reducing agent is used to break the sulphur bonds. The helices are unwound and the hair is styled. A gentle oxidising agent (usually hydrogen peroxide) is treated to the hair to make the sulphur bonds reform. This results in a ‘permanent wave’. (Figure 3 shows the breaking and reforming of sulphur-sulphur bridges can produce permanent changes in the shape of protein molecules). Permed hair has only 90% of the original disulphide bonds, which leaves hair weaker than before it was permed. Heat (like from hair straighteners) disrupts the structural bonds (particularly weak Hydrogen bonds) enough to give hairs wounded around a roller some temporary curly aspect. However, this effect can be easily abolished by an increase in humidity or contact with water. Longer lasting permanents use chemicals such as thioglycolic acid to disrupt the disulphide bonds. Hairs to be tested with should not have their disulphide bonds damaged/broken or our hypothesis will become invalid even before the investigation takes place. Variables To Control†¦(keep the same) To investigate†¦(measuring/changing) Hair MUST NOT be: Tensile Strength (masses applied on hair) co loured/dyed Thickness of hair/colour of hair straightened (by applying heat) permed (by applying heat) curly (naturally) from the same person Hair MUST be: black or blonde straight (naturally) from the same age group Equipment 2 X Clamp stand – to hold everything upright 2 X Clamp – to hold paperclip/hair and ruler 100cm ruler – to measure how far hair stretches before it breaks (tensile strength) 2 X paperclip – to hold hair and mass 10kg masses with holder – to put tension on hair Selotape – to hold loop of hair in paperclip 15 pieces of black hair – to compare 15 pieces of blonde hair – to compare Micrometer – to measure hair thickness Method 1. I will first take five pieces of hair randomly from six different people. Three of these people should have black hair and three should have blonde hair. My total numbers of hair should be fifteen black and fifteen blonde. Hair samples should be taken from six different people to make sure that a fair and accurate test takes place. For example if all fifteen black hairs were taken from the same person, it could just mean that that person had thicker hair than normal thickness of black hair. This would make my results invalid. I will take all hairs from the same age group (my age group, 17-18), to erase the ‘age of hair follicle’ variable when comparing its tensile strength. 2. I will set up the micrometer to measure each hair thickness by placing hair under lens and measuring its thickness using a shown scale. I will record each thickness in an appropriate table. 3. I will place a black hair and a blonde hair of similar thickness side by side. This will be done to compare tensile strength of hairs of similar thickness. 4. Equipment will be set up as shown in Figure 5, (below) to start investigation. The hair will be carefully put in. The meter rule should be touching the bottom of the clamp stand with 0cm at the top and 100cm at the bottom. I need to make sure the hair can not slip out of the paperclip from the bottom or the top. Everything must be secure. The length of the loop of hair formed should be similar as with all hairs being tested. The weight should not be added until the rest of the equipment has been set up accurately. 5. Once the hair is set up in with the equipment, I will measure how far down the hair is on the meter rule. (Look at Figure 4, for assistance). I will record this reading in a table similar to Table 1. 6. A mass of 10kg will be placed on the paperclip at the bottom only after first measurements have been taken. 7. I will add the masses slowly so when the hair breaks I have a better view of the length of the hair. 8. When I see the hair break I will record its maximum length in my table and the weight in kg applied on hair at that point, when it reached its maximum elasticity. 9. I will repeat this whole process for all the blonde hairs and the black hairs. I will do the hairs of similar thickness after one another. For example; a blonde hair of thickness x would be measured first than a black hair of thickness x would be measured. There will be six people in my group including me. Each person will test five hairs each. Hair B1 B1 B2 B2 B B B B no. length bfr W app length bfr breaking length stretched bfr breaking max W app bfr breaking (cm) (cm) (cm) 2 minus 1 (kg) 1 2 Statistical Test I will use the t-test because I am looking for a difference of tensile strength in black and blonde hair. I will be using actual measurements (e.g. weights), and will have a large data set (30 pairs of data). I am comparing two sets of data. Investigating the factors affecting tensile strength of human hair Implementing: (Skill B) Modifications * Four different colours of hair need to be used; to increase range of results and to make my conclusion more reliable. Ginger, Blonde, Black and Brown hairs will be used. * 30 strands of hair will be used for each colour. 5 hairs from 6 people for each colour will be taken. * An eyepiece graticule will be used to measure hair thickness. Similar thickness of hairs will be compared. * Girls’ hair will be used. There are two reasons for this: a) Girls have longer hair b) Hormones may affect hair strength. Girls and boys may have different hormones. * There should be a 10cm (100 mm) gap between each paperclip. (Figure 5). * A 10g weight must be used each time. * I will need to modify my Hypothesis and Null Hypothesis because instead of comparing just two colours of hair I am now comparing four different colours of hair. Hypothesis There will be a difference in tensile strength between brown, blond, ginger and black hairs of similar thickness. Blonde hair (lighter coloured hairs) has more sulphur-sulphur covalent bonds than black hair (dark coloured hairs). Hair contains the protein keratin, which contains a large proportion of cysteine with S-S bonds. The disulphide bond is one of the strongest bonds known anywhere in nature. The cross-linking by disulphide linkages between the keratin chains accounts for much of the strength of hair. Lighter coloured hair has more of these bonds therefore lighter coloured hair will have a higher tensile strength and elasticity levels. Null Hypothesis There will be no difference in tensile strength between brown, blonde, ginger and black hair of similar thickness. Lighter coloured hairs having more sulphide bridges will not mean that lighter coloured hairs have a higher tensile strength then dark coloured hair. * Now that I am not comparing just two sets of data I can no longer do the T-Test. I am comparing four sets of data. My data will be categorical. There is a simple statistical test which looks at the difference between observed and expected values and relates them to a probability level, thus making it possible to identify how likely it is that the values are significantly different. This test is called the Chi squared test. Precautions to ensure reliability * We are assuming ethnic background does not affect our results. It will not cause a massive variation in our conclusion. * All hair samples must be taken from 16-18 year old females. * 6 different samples must be taken for each colour of hair. * Make sure all equipment is set up; ensuring the strand of hair is fastened to the shown equipment correctly. (Figure 5). * Each hair is tested five times, so I am repeating the experiment, to make my results reliable and more accurate. Results (My own (raw data) results will be highlighted in dark red on tables 2, 3, 4 & 5). (The letter ‘B’ is used in my results to show where the hair broke). Investigating the factors affecting tensile strength of human hair Analysing: (Skill C) Calculations Strength is determined by the amount of stress a hair can withstand without breaking. To work out the strength of each hair I calculated the stress applied to each when breaking. To do all the calculations I used the following formulas: 1. Force (N) = Mass (g) X 0.001 X 9.8 E.g. 10 x 0.001 x 9.8 = Force (N) Force = 0.098N 2. Cross Sectional Area (à ¯Ã‚ ¿Ã‚ ½m2) = ?r2 E.g. 3.14 x 26 x 26 = Cross Sectional Area (à ¯Ã‚ ¿Ã‚ ½m2) Cross Sectional Area = 2122.64à ¯Ã‚ ¿Ã‚ ½m2 3. Stress (Nm-2) = Force (N) / (Cross Sectional Area (à ¯Ã‚ ¿Ã‚ ½m2)/1000000) E.g. 0.098 / (2122.64/1000000) = Stress Stress = 46.16892172 (Nm-2) 4. Strain = Extension (mm) / Original Length (mm) E.g. 32 / 100 = Strain Strain = 0.32 The tables on pages 14 to 36 show how I calculated my values to do the statistical test. Discussion Melanin molecules are proteins, which are produced at the root of each hair. The more melanin in your hair, the darker it will get. An amino acid called tyrosine is converted into melanin so the hair will have colour. First, the body’s blood vessels carry tyrosine to the bottom of each hair follicle. Then, in this ‘melanin factory’ tyrosine is used as the raw material for the production of the natural melanin that is the colour in hair. In short, natural hair colour depends upon the presence, amount and distribution of melanin, a natural pigment found in the cortex. All natural hair colours are created from two types of melanin. Eumelanin = black pigment Pheomelanin = red/yellow pigment Mixed melanin’s = when both eumelanin and pheomelanin mix together inside one melanin granule. The natural colour of the hair is decided by: a) What type of melanin is in the hair b) How much melanin is in the hair c) How closely packed or scattered the melanin is within the cortex. The type of melanin and the size of the granules determine whether hair will be brown, blonde, ginger or black. The amount of melanin and its distribution determine how dark or light the hair colour will be. Black hair is created from granules full of eumelanin densely packed in the hair’s cortex. Brown hair, depending on its cool or warm tones and its darkness or lightness, is created either from granules filled with eumelanin and more sparsely distributed along the cortex than those of black hair, or granules filled with a blend of mixed melanin’s. The red/yellow pheomelanin is believed to cause the warm, golden, or auburn tones found in most brown hair. Blonde hair has a very low melanin content. And while scientists have not yet determined which is dominant, it is believed that eumelanin creates blonde hair. Melanin in blonde hair is so sparse that what we actually see is the colour of the hair fibre itself, keratin, which is a pale yellow, off-white shade. Granules filled with pheomelanin create Ginger hair. The pheomelanin in ginger hair is less densely packed in its granules. Its shape is somewhat more irregular than its black counterpart, eumelanin. It is slightly rounder and more spread out. From my results I found out that brown hair needed the greatest amount of force to break. Blonde hair needed the least amount of force to break. Black hair was second strongest and ginger hair was third strongest. The order of strength (from my results) of hair is as follows: Brown, Black, Ginger, and then Blonde. Brown hair stretched the most before breaking. Blonde hair stretched the least before breaking. Black hair stretched the second furthest and ginger hair stretched the third furthest. The order of length of hair stretched (from my results) before breaking is as follows: Brown, Black, Ginger, and then Blonde. Brown hair experienced the highest strain before breaking and blonde hair experienced the lowest strain before breaking. The order of strain experienced by hair (from my results) before breaking is as follows: Brown, Black, Ginger, and then Blonde. Brown hair experienced the highest tensile stress value before breaking and blonde experienced the lowest tensile stress value before breaking. The order of tensile stress experienced by hair (from my results) before breaking is as follows: Brown, Ginger, Black, and then Blonde. Graph 1 shows the average force required to break the four colours of hair. From this graph I can see that brown hair required the greatest force to break. Black hair also required a large amount of force to break and so did ginger hair. Black hair only required a small amount of more force to break then ginger hair. The breaking force required for brown, black and ginger hair was quite similar. Blonde hair required much less force to break compared to the other colours of hair. This proves that the disulphide bonds in the blonde hair are not a big advantage for strength of the hair. The darker the hair the stronger the force required for the bonds in the hair to break. The darker the hair the more resistant it is to breaking when forces are applied. The darker the hair the higher concentrations of melanin present along the hair cortex. The same sort of pattern is seen in graphs 2, 3, 4 and 5. Graphs 2, 3, 4 and 5 show the extension of hair when masses are added. Blonde hair breaks the earliest and brown hair breaks the latest. Graph 2 shows brown hair. Brown hair requires about 120g to extend up to about 70mm before breaking. The graph follows a basic trend and there are no anomalous results. All results fit the line of best fit. Graph 3 shows blonde hair. Blonde hair requires about 80g to extend up to about 35mm before breaking. The graph follows the basic trend and most results fit the line of best fit. There is one anomaly, though. The extension should not increase and then decrease. It should keep on decreasing. There must have been an error in recording this result. The results in graphs 2, 3, 4 and 5 are all averages. To work out the blonde values in table 32, the results in tables 12, 13, 14, 15, 16 and 17 were used. There was only one value for the extension at 80g, in table 15. This value was smaller than the average of all the extensions in all six tables. This sample of hair should have broken at 80g not 90g. This did not happen. This may have been an error in not measuring correctly. Graph 4 shows ginger hair. Ginger hair requires about 100g to extend up to about 60mm before breaking. The graph follows the basic trend until it gets to 55g point. From this point onwards the hair length increases and decreases dramatically. This should not happen. The reason why this happens is described above with the blonde hair. It is an error in measuring. Graph 5 shows black hair. Black hair requires about 140g to extend up to about 65mm before breaking. This graph is perfect. There are no anomalies. All points meet the line of best fit accurately. Graph 6 shows the average stresses and strains experienced by each hair colour. All four hair colours are plotted on the same graph so they can be easily compared against each other. Brown, blonde and ginger hairs do not follow the normal trend. The stresses and strains for these three should continue to increase. Tables 57, 58, 59 and 60 show where the stress and strain values came form. The results are like this because when the stress and strain values were calculated the average extensions were used, which had a few faults, as describe above. Graphs 7, 8, 9 and 10 show clearly what is happening to the stress-strain curves. Graph 7 shows one anomalous result. It has a high stress and strain value. Graph 8 also shows only one anomalous result. These two graphs show the basic trend. Graph 9 shows the normal trend until the stress value gets to 150Nm-2. Then it decreases and goes back on itself. This should not happen. The reason for this is explained above. There is an error in the extension averages. Graph 10 shows no anomalies. Graphs 11, 12, 13 and 14 show modified values for stress and strain in all colours of hair. Graph 11 shows the modified stresses and strains for brown hair. This graph does not bend backwards and the stress and strain values do not decrease. Graph 12 shows the modified stresses and strains for blonde hair. This graph does not show values of stress and strain decreasing. Graph 13 shows the modified stresses and strains for ginger hair. This graph has changed a lot. It reads much clearer. Stress and strain increases throughout. This is exactly what the graph should look like. Graph 14 is the same as graph 10. It did not need any modifications. The toughness of a hair is measured of its resistance to break. A lot of energy is required to break a tough material. Finally, the strength of a material (or ‘tensile strength’) is the greatest tensile stress it can undergo before breaking. Hair is an elastic material; it can stretch to a certain maximum point (elastic point) before breaking. The largest tensile stress that can be applied to a material before it breaks is known as its ultimate tensile stress (UTS). This value is sometimes referred to as the materials breaking stress. Graph 7 shows the stress-strain points for brown hair. Graph 11 shows a modified version of this. The UTS for brown hair is 359.03. Graph 8 shows stress-strain points for blonde hair. Graph 12 shows a modified version of this. The UTS for blonde hair is 125.48. Graph 9 shows the stress-strain for ginger hair. Graph 13 shows a modified version of this. The UTS for ginger hair is 286.58. Graph 10 shows the stress-strain points for black hair. Graph 14 shows a modified version of this. The UTS for black hair is 158.31. Overall I can see that brown hair was the strongest. This was not expected. I expected black hair to have the highest tensile strength, as it had a higher density of melanin along the cortex. Blonde hair turned out to be the one with the lowest tensile stress. Ginger haired people have a high density of the pheomelanin pigments in their hair fibre. Those who produce virtually no eumelanin have a red to orange colour depending on the density of the pigment in the hair fibre. Red haired people who have a greater relative proportion of eumelanin production have a deeper red to red brown colour. Ginger hair also should have a high tensile strength. This is what I saw in my results. Black hair should also have a high tensile strength. My results showed black hair to have high tensile strength but not the highest. There are other ways in which hair tensile strength could have been measured. Hair products like shampoos have an effect on hair tensile strength. They are now designed to change hair strengths. Different makes of hair shampoos could be used. Strength could be measured in a similar way to how I measured it. A control will be also be needed, with hair with no products added. These modifications in Graphs 11, 12, 13 and 14 show what the stress strain graphs should look like. In Graphs 7, 8, 9 and 10 the lines should not bend backwards. Statistical Test I will be using the (Chi squared test) X2. The formula for the Chi squared test is as follows: X2 = ? [(O – E) 2 /E] O = Observed value E = Expected value The ((O – E) 2) part of the formula considers the size of the difference between the observed and expected values. This difference could be either positive or negative. To avoid the mathematical problems associated with negative values, the difference is squared. The (E) part of the formula relates the size of the difference to the magnitude of the numbers involved. The sigma (?) ‘sum’ symbol is required because there is not just one pair of observed and expected values, but several (in this case four). By taking all the observed values of stress from tables 57, 58, 59 and 60, I can work out the expected value for each hair colour. I can then place these values in a table and work out the value for X2, using the chi squared formula. E = ( OBrown + OBlonde + OGinger + OBlack ) / 4 E = ( 297.3 + 121.5 + 246.7 + 158.3 ) / 4 E = 205.95 Brown Blonde Ginger Black O 297.3 121.5 246.7 158.3 E 205.95 205.95 205.95 205.95 ( O – E ) 91.35 -84.45 40.75 -47.65 ( O – E ) 2 8345 7132 1661 2271 (( O – E ) 2) / E 40.519 34.629 8.063 11.025 X2 = 40.519 + 34.629 + 8.063 + 11.025 X2 = 94.235 To calculate the degrees of freedom to be used can be found as follows: * Number of categories minus 1. In this case: 4 – 1 = 3 The critical value (taken from critical values for the Chi squared test) at 3 degrees of freedom is 7.81 (at the 5% level). The test statistic (X2 = 94.235) is greater than the critical value (C.V = 7.81, at the 5% significance level). We therefore can reject the null hypothesis and state there is a significant difference between the observed a Investigating the factors affecting tensile strength of human hair Evaluating: (Skill D) Limitations * The selotape holding hairs in the paperclip at the top and at the bottom could have interfered with the tertiary structure of the protein, keratin. This could have increased or decreased the bond attractions in the hair to cause the hair to have a high or low tensile stress. This would make my results unreliable. The hairs showing higher tensile stress may just be showing how sticky the selotape is and how strongly it is holding the hair structure together. This though, would affect all my results, as all hair samples had selotape on them to hold them together at the top and at the bottom. So, this limitation would affect all hairs making it a very weak limitation. My conclusion will not be affected as this limitation affects all hairs. * The time in between weights were added is another limitation. When each weight was added the hair stretched. But when there were a lot of weights on hair, the hair stretched quickly and then the length was measured. After I finished measuring the hair had slowly stretched a little bit more. So the measurement was wrong. When the next weight was added extra extension was added onto the new extension. My results were affected by this because some extensions were false making some data imprecise. Therefore, my conclusion will be invalid, because some hair samples could have broken at lower weights if I had waited for the hair to stretch, very slowly until it broke. There needed to be a time limit in which I had to record the extension of the hair, before adding the next weight to the hair. * The eye piece graticule can be a limiting factor. Different people measured hair thickness and recorded it to what they felt the thickness ought to be according to the scale. It was not very clear to see how thick the hair was, as the hair was faded under the microscope at all magnifications and the outline was difficult to see. This could affect my results as the thickness of hairs was used to calculate the cross sectional area of the hairs, which was then used to calculate the tensile stress experienced by the hair. This could make my tensile stress values incorrect. My conclusion therefore could be affected; by making out that a certain coloured hair had a higher tensile stress than another coloured hair, when really it shouldn’t have. This would make my conclusion unreliable. * There were different shades of hair colour, for example, there were light brown hair colours and dark brown hair colours. It was sometimes hard to distinguish between brown and blonde. This was the same for blonde hair. This would have an affect on the reliability and precision of my results making the accuracy of the strengths of different colours of colours of hair inaccurate. There should have been a certain shade of colour of hair (same amount of melanin in each brown hair) used for each colour sample. My conclusion will be imprecise because brown or blonde hair shades could cause incorrect results and make my conclusion incorrect. * The 10g mass is a limitation as the hair could break at lower masses than they actually did, for example a hair that broke at 50g could have broken at 41g, but I wouldn’t know that as I only used 10g masses. So, I got false readings implying the hair is stronger than it actually is. If smaller masses were used my results would be much more accurate to make my conclusion reliable. This limitation could cause my conclusion to be invalid, causing the hairs strength and point on breaking higher or lower than it actually is. Conclusion After doing my statistical test I can reject my null hypothesis and accept my hypothesis and say that brown, blonde, ginger and black hairs differ in tensile strength. I have proved this difference in my calculations, mainly in graphs 1 and 6. From my results I can see that darker coloured has a higher tensile stress compared to lighter coloured hairs. In my hypothesis I said that lighter coloured hair would have a higher tensile strength than darker coloured hair, due to lighter coloured hair having sulphur-sulphide bonds, which are very strong. I have disproved this. Through testing all four colours of hair I can see that these strong sulphur bonds do not reflect any tensile strength qualities. Lighter coloured hair does not have an advantage over dark coloured hair when it comes to tensile strength. It mainly depends on the type of melanin the hair contains. The denser the melanin quantity is the stronger the hair.

Philips Kotler Marketing Management Essay

Analyzing Consumer Markets Since marketing starts from the customer, it is of primary importance to understand the psyche of the customers and their buying motives. This chapter talks about the various behavioural patterns that govern the decision making process of a customer. A marketer needs to understand these factors affecting the customer’s purchase decisions so as to design an appropriate marketing strategy. Factors affecting Consumer Buying Behaviour 1. Cultural Factors a. Culture – Frames traditions, values, perceptions, preferences. E.g. Child learning from family & surroundings. b. Sub-culture – Provides more specific identification and socialization. Include nationalities, religions, racial groups and geographic regions. c. Social Class – Homogeneous and enduring divisions in a society which are hierarchically ordered. Members share similar tastes and behaviour. 2. Social Factors a. Reference Groups – Have direct or indirect influence on person’s attitude and behaviour. Primary groups: regular interaction, e.g. family, friends, neighbours. Secondary groups: religious, professional, trade union groups. Aspirational Groups: ones that a person hopes to join. Dissociative groups: whose values or behaviour and individual rejects. b. Family – Family of orientation: parents and siblings. Acquires orientation towards religion, politics and economics, sense of personal ambition, self worth and love. Family of procreation: spouse and children. More direct influence on buying behaviour. c. Roles and Status – Role consists of activities a person is expected to perform. Each role carries a status. Marketers must be aware of the status symbol of each product. Chapter 6 – Analyzing Consumer Markets 3. Personal Factors a. Age and Stage in the Life Cycle – Tastes are age related. Markets should also consider critical life events or transitions. b. Occupation and Economic Circumstances – Economic Circumstances like spendable income, savings, assets, debts, borrowing power etc affect consumption patterns. c. Personality and Self Concept – Personality, set of distinguishing characteristics that influence his/her buying behaviour. Consumers match brand personality with their ideal self concept instead of their actual self concept. d. Lifestyle and Values 4. Psychological Factors a. Motivation: Freud’s theory of id, ego and super ego; Maslow’s need hierarchy theory; Herzberg’s two factor model. b. Perception: Process by which we select, organize and interpret information inputs. In marketing, perceptions are more important than reality. c. Learning – Induces changes in behaviour arising from experience. Marketers can build demand by associating the product with positive drives. d. Memory – Short term and long term memory. Build brand knowledge and brand recall as node in memory. Problem Recogniton Information Search Evaluation of Alternatives Purchase Decision Postpurchase Behaviour The Buying Decision Process Problem Recognition – Customer recognises a need triggered by internal or external stimuli. Marketers need to identify circumstances that trigger needs. Information Search – Two levels of involvement – Heightened attention when person becomes more receptive to information about the product. At next level consumer may enter into active information search, looking for reading material, phoning friends etc. Evaluation of Alternatives – Factors influencing a particular choice over the other include attitudes, beliefs and expectancy value. Purchase Decision – Between purchase intention and purchase decision, 2 intervening factors come into play- Attitudes of others and Unanticipated situational factors. Marketers should understand that these factors provoke  risk and should provide information to reduce it. Post purchase Behaviour – Marketers must monitor postpurchase satisfaction, postpurchase actions, and postpurchase product uses. Chapter 6 – Analyzing Consumer Markets Trends Level of customer involvement Involvement Significant Insignificant Differences in Brands High Complex Buying Behaviour Low Variety Seeking Dissonance Reducing Habitual 1. Complex Buying Behaviour: When a customer purchases something for the first time. 2. Variety Seeking: Consumers will keep switching varieties just out of boredom. Eg- Biscuits. Marketer should keep introducing new products and display the product prominently. 3. Habitual: Buying the same thing out of habit and not out of loyalty. Distribution network should be excellent in this case. Maintain consistency in product and advertising. 4. Dissonance Reducing: In case of repeat purchase of same product.

Management - Strategy Process Essay Example | Topics and Well Written Essays - 2500 words

Management - Strategy Process - Essay Example The word strategy was introduced by Sun Tzu in his book The Art of War though at that time he discussed about the military strategy (Tzu, 1971). The main concept behind using of word strategy was to gain advantage over something or someone and in business strategy has been defined as a comprehensive and integrated plan that has been devised to make sure that the main objective of the organization is achieved (Glueck, 1980). Strategy has been used by firms globally to identify what the organization would like to achieve and how it is going to achieve therefore the importance of strategy becomes very vital as proper strategic planning will influence the future of the organization and it will define whether the organization would be able to achieve success or not. Strategic management in the last few years have become a field for the managers which helps them in managing STRATEGY PROCESS Devising strategy for the management has become an important task as it leads to the success or fail ure of the organization. ... Plan 2. Ploy 3. Pattern 4. Position 5. Perspective 1. Strategy as a Plan Plan is defined as the first P of the 5Ps of Strategy as proposed by Mintzberg. Strategy is about planning in order to achieve something or in order to deal with certain situation. Planning involves guidelines that have to be followed to achieve the main objective of the organization. So, this definition of strategy leads to two important characteristics of strategy which are: Planning or strategy has to be made in advance There is an objective or purpose behind formulation of strategies (Henry, Mintzberg, Quinn, & Cliff, 1992) Managers use different tools like SWOT and TWOS to plan their actions according to what they have and what they do not have along with the opportunities that exist in the market that they can exploit. 2. Strategy as Ploy Strategy can be described as a ploy as well with the aim to get the better of competitors. According to Mintzberg (2002) with the ploy of outsmarting the competitors and disrupting or discouraging them, strategy can be considered as a ploy as well. Scenario analysis is one of the tools that have been used by managers to analyze the situation of the company against competitors. 3. Strategy as Pattern Strategy according to Mintzberg (1987) is also defined as a pattern as using the word strategy with plan only is not sufficient. Pattern means consistency in actions and consistency in the way things are managed and done. It has been explained that patterns are realized strategy whereas plans are intended strategies. 4. Strategy as Position Strategy is also defined as position which refers to how the management decides to position the organization in the market. With this definition, the