Toyota Strategy

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Introduction The world is a dynamic marketplace and the constant drive for survival and excellence has put companies on toes to modify their strategies for the next round of competition. During early 1990’s, Toyota Manufacturing Company’s (TMCs) faced with severe challenges such as non-innovative products, less aggression in production shift to accommodate overseas markets and distrust from the Japanese dealers; consequently, these challenges led to TMC’s lower bottom-line. To rejuvenate the Toyota’s image and on a quest for survival, TMC launched a committee to design the car for the 21st century: Prius. Applying the RBV framework and analyzing the Prius launch case—utilizing the concepts of strategy as “resources leverage”—gives a better…show more content…
Historically, Toyota is synonymous with quality; furthermore, Toyota has done exceptionally well in overcoming the inefficiencies on the production line using just-in-time inventory methodology. Another critical strength for Toyota is an implementation of Toyota Production System (TPS). This enabled all the workers to get together and identify the root cause and solve the problem. These systems enabled Toyota to increase production efficiency, lower labor costs and deliver quality vehicles. Toyota’s management firmly believed that people are the most significant asset and invested heavily in training them to solve problems scientifically and introduced them to lean manufacturing techniques. This formed the basis for TPS, which is the valuable resource embedded into Toyota’s routines, processes and culture. These skills-sets enabled Toyota to transform a car, which is a commodity, into a superior quality product. Toyota’s overall organizational capability is the resource that is hard to imitate; furthermore, to substantiate this statement, the US Big 3 tried to imitate TPS system, but failed to replicate the performance of Toyota. The RBV analysis (Appendix 2) indicates that the overall organizational capability and culture are inimitable; therefore, the profit stream Toyota generates is likely to be…show more content…
Toyota formed G21 team and unlike other product development teams, this team comprised of various cross functional engineering assistant managers from different divisions—to reduce the silo mentality and facilitate more lateral discussions. This new organizational structure became a model for later product development teams. Toyota’s push for the best technology among 80 hybrid technologies signifies that attaining the competitive advantage with no later substitutes, in the hybrid market, is critical for Toyota. Cost of the technology development was not critical because of their confidence in their existing TPS that, once the car hits the market, Toyota will be able to reduce the

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