[Sophia1994]

(Original post by PPF)
7 *(a) Evaluate the usefulness of business contingency planning to Toyota.

Contingency planning is when firms make back up plans in case of a crisis which could affect physical, financial or even human resources.

Contingency planning would be rather useful to Toyota and this is because it will help them react quicker to potentially damaging events for example the safety problems associated with the faulty pedals. However if Toyota had a contingency plan such as the product recall in place prior to the actual problem then they could react much faster and therefore reduce any ill effects such as lawsuits, fines and compensation claims. More so it would reduce the negative media coverage through pressure groups which may of have portrayed a negative image on Toyota and so reduced sales. With a contingency plan however quicker reaction would prevent these events and so reduce costs of dealing with legal and public claims.

Secondly as Toyota would react more effectively rather than a long silence as was the case with Toyota. Toyota customers would feel more assured and cared for which would further enhance brand loyalty and image increasing future sales and prospects however without a contingency plan customers may feel as if they are receiving rather poor after sales service and may switch brands in the long run which is rather simple considering the high level of competition in the market and so Toyota’s must keep back up plans to safeguard their future sales.

Thirdly Toyota is a rather large corporation and so have a great deal of expertise within and so a contingency plan can be easily produced without having a major impact on their resources and so Toyota should have a contingency plan to improve the core of the business for example contingency planning will force managers to look ahead and so they can more easily spot any downturns or shortcomings for example with finances etc and so could arrange for something such as loans beforehand to give the firm’s business portfolio greater stability and so increase shareholder investment

However in evaluation there are many unforeseen eventualities in business such as the Tsunami which was not predicted and so this had a massive negative impact on Toyotas such as damage to stocks, supply chains etc and so led to great production disruption hence contingency plans aren’t always useful as firms are always vulnerable to economic or natural shocks hence they must try to improve their focus on quality from the beginning to prevent the need for any contingency which also involves opportunity cost for example rather than paying to create a contingency plan they could improve quality checks in the production process which has certainty in improving Toyotas products and future whereas the crisis planned for may never actually occur.

Secondly contingency planning could actually increase costs for Toyota such as storing more components in case of the need for a recall etc and this goes against their corporate culture of lean production trying to minimize the holding of stock etc and so this will further raise costs and reduce profits for Toyota as they will need more storage space, more admin costs and if the parts are not needed and become obsolete this will lead to wastage and so further cut profit through increased costs for Toyota’s.

In conclusion contingency planning has many pros and cons but in the scenario of a firm like Toyota a contingency plan is very useful and should be used and this is because Toyota is a very large MNC with a huge customer base and therefore cannot afford negative coverage to reduce these sales as Toyota is a mass market producer and so needs very large customer bases and a contingency plan will ensure that these customers are retained which is a difficult task considering the level of competition in the market and for a firm as big as Toyota a contingency plan would be rather easy to prepare and will give greater future stability.

Considering Toyota’s MOPS a contingency plan seems to be even more important as there market objectives were growth and when trying to push for growth a backup plan is even more important as there are many negative possibilities such as diseconomies of scale etc and so they should have created a plan. Secondly the cars with the faulty pedals were the hybrids which are new technologies and so Toyota has less experience with these and so there are increased risk possibilities and so making a backup plan even more valuable. In addition considering that Toyotas core competencies are quality and reliability a backup plan is crucial as this separates Toyota from the rest and so it should ensure that it keeps this advantage as it gains them many sales over other firms hence it’s important to protect this distinctive capability or else sales could fall.

I know its a batty answer but i have very little practice with section B. Its too hard.
You guys post your answers to so when can improve our answers and grades hopefully!

contingency planning was the last question in january so i doubt it will come up again. i reckon culture, ratios and decision trees as none of them were in the jan paper

[PPF]

I know i was just posting my answer. I agree that culture and ratios will come up but not decision trees as they usually give those in the case study i believe.

[PPF]

Possible Questions ( feel free to add to the list )

Evaluate the extent to which Toyota's corporate culture has contributed to the safety problems. (20)

Evaluate whether Toyota should develop its markets (30)

Assess how the change in Toyota's corporate objectives caused the
safety problems (6)

Analyse how the safety problems have created a conflict
between two stakeholder groups (5)

Calculate the net profit margin for 2009 and 2010 (4)
Explain your answer (4)

[jaya44]

(Original post by deex)
im so scared for this exam but i found a great website for analysing the case study

Can you please give the link of the website.

Thank you.

[deex]

decisions trees could come up dont we get new evidence in the exam ?

[deex]

http://www.bizstudies.tk/home/business-studies---unit-4

Hopefully this helps i think its good as it also gives possible questions that might come up and extra information from the pre release material that we got..

[PPF]

(Original post by deex)
decisions trees could come up dont we get new evidence in the exam ?

As far as i know they will always give this sort of info in the case study because they cant expect you to carry out all the calculations in the exam. Personally i wouldve loved for them to come up but i severly doubt it as theres not even too many q's they can ask with the pre release

[asrag73]

all the best guys

[PPF]

Anyone else taking this exam?

[cncn]

hey, i am taking this exam as well - how is revision going?

I have a quick question regarding one of your predicted questions a few posts up

"Evaluate whether Toyota should develop its markets (30)"

could you provide a short bullet point approach to answering this question as it has confused me a little - i assume discussing the ansoff matrix is going to be the core of this question, addressing the four corners of the diagram and evaluating the risk/reward associated with each in terms of Toyota etc? starting with market penetration, product development, market development, and finally diversification possibly by doing something crazy like producing consumer electronics or something

Thanks

[cncn]

PPF or anyone else, have you got any mock answers for culture and ratios?

in terms of culture i think toyota are a hybrid between task and role culture, which is the root of many problems they are experiencing

the main problem i see is with the ROCE and net profit ratios, due to the enourmous overheads toyota are having to deal with etc.

[PPF]

(Original post by cncn)
PPF or anyone else, have you got any mock answers for culture and ratios?

in terms of culture i think toyota are a hybrid between task and role culture, which is the root of many problems they are experiencing

the main problem i see is with the ROCE and net profit ratios, due to the enourmous overheads toyota are having to deal with etc.

In the case study it says they promote individual creativity and teamwork as they believe that everyone thinks from different angles and perspectives so they have greater chance to come up with the next big thing, and teamwork is for motivation i.e. cell production

im sure they have an element of Task, the tutor2u pack says they have a Role culture.
The safety problems however came about from change in culture to an oppressive power
culture.

ROCE and NPM are rather low but they have been improving, overheads and expenses are falling i believe. Gearing ratio is mid-hig so high possibility of that comin up

[PPF]

(Original post by cncn)
hey, i am taking this exam as well - how is revision going?

I have a quick question regarding one of your predicted questions a few posts up

"Evaluate whether Toyota should develop its markets (30)"

could you provide a short bullet point approach to answering this question as it has confused me a little - i assume discussing the ansoff matrix is going to be the core of this question, addressing the four corners of the diagram and evaluating the risk/reward associated with each in terms of Toyota etc? starting with market penetration, product development, market development, and finally diversification possibly by doing something crazy like producing consumer electronics or something

Thanks

Hmm, no i would of have answered it like that. Ive created more questions which i am currently answering and later today i will post them up and provide a bullet point answer to how i would answer the above question,

btw why so less people taking this exam?

[GottaLoveToast]

I don't even have the case study yet and I've been looking everywhere for it. I don't suppose you have the link for it, do you? Thanks

[cncn]

thats great ppf, please do post your answers and i will post my thoughts/extras on them, if i can think of any.

also, the tutor2u toyota pack - do you have a pdf/digital copy of this that you could email me? my school did not get any :/ or perhaps some summarised notes you may have of the tutor2u toyota pack? i would be extremely grateful

agree with the financial ratios, i think given the (reasonably) high gearing ratio and poor(ish) current ratio, we will certainly have a ratio question

i am not sure why not many people are taking this exam, a few reasons i believe are that many chose to take the exams in January, but i think a lot of people are trying to avoid subjects like business studies, as some top universities dont see it as a 'real subject' so many people elect to take edexcel economics instead which is more favourable in the eyes of many universities

[Rizzy J]

(Original post by GottaLoveToast)
I don't even have the case study yet and I've been looking everywhere for it. I don't suppose you have the link for it, do you? Thanks

Did your teacher not give you a case study?

http://www.bizstudies.tk/home/business-studies---unit-4

http://www.thestudentroom.co.uk/show....php?t=1898165

[Rizzy J]

http://www.scribd.com/doc/94530205/E...n-and-Jun-2012

the toolkit for toyota

[Rizzy J]

http://www.scribd.com/doc/94530205/E...n-and-Jun-2012

[GottaLoveToast]

No, I've got nothing for it and I'm really panicking.
I've tried to google for the exact case study but I'm not even sure what it contains. I only know it's about Toyota.
...help...
:'(

[Rizzy J]

(Original post by GottaLoveToast)
No, I've got nothing for it and I'm really panicking.
I've tried to google for the exact case study but I'm not even sure what it contains. I only know it's about Toyota.
...help...
:'(

Help is here!!!

Hope you can read it. Any problem let me know. x