Description
Toyota’s uses both differentiation and low cost as generic strategies to try and gain a competitive advantage over their competitors in the automotive industry. The market scope that Toyota uses is a broad one that encompasses nearly every type of customer that is in the market to purchase an automobile. Toyota is able to target such a large market because they have something for everyone. Toyota has four wheel drive trucks and SUVs for the outdoor types or those who live in areas that face severe weather conditions, hybrid models like the Prius for the eco-friendly customers that are interested in saving the environment, along with the standard cars for general, everyday use.
Toyota’s uses both differentiation and low cost as generic strategies to try and gain a
competitive advantage over their competitors in the automotive industry. The market
scope that Toyota uses is a broad one that encompasses nearly every type of customer that
is in the market to purchase an automobile. Toyota is able to target such a large market
because they have something for everyone. Toyota has four wheel drive trucks and SUVs
for the outdoor types or those who live in areas that face severe weather conditions,
hybrid models like the Prius for the ecofriendly customers that are interested in saving
the environment, along with the standard cars for general, everyday use. !dditionally,
Toyota provides vehicles for all price ranges. "rom the low price Toyota #orolla line of
cars to the high priced lu$ury line of cars and SUVs with %e$us, Toyota has something
for everyone.
Toyota differentiates on several levels form their competitors. "irst of all, Toyota has
been very successful in differentiating on the basis of superior design and &uality. This
has led to Toyota being able to create a brand image that is very strong and one that
brings to mind &uality, long lasting cars when a potential customer sees it. The strength
of Toyota’s brand image has been seen in recent years with the recalls and problems
Toyota faced in dealing with these recalls. Toyota was able to survive these problems
because they had such a long and proven track record of &uality and superior. !nother,
area that Toyota differentiates is in technology. Toyota was the first successful mass
produce the hybrid car on the market when it released the Prius in '((). *eing the first
to get their hybrid on the market allowed Toyota to gain a large portion of the market
share in the area of hybrid cars.
!long with differentiation Toyota also uses low cost to try and gain a competitive
advantage in the automotive industry. +Toyota is ,or was at the time- the low cost
producer in the industry. Toyota achieves its cost leadership strategy by adopting lean
production, careful choice and control of suppliers, efficient distribution, and low
servicing costs from a &uality product..,/ichael 0. Porter- This &uote from /ichael
Porter sums up how Toyota achieves this low cost strategy. Through research, it is
evident that Toyota is still the low cost leader in the automotive industry.
Toyota’s current grand strategies are product development and offensive1strategies for
industry leaders. Product development is very important for Toyota due to the fact that
they must come out with new fresh ideas every year in the automotive industry. 2f you
don’t develop a new design on your products, you will be left behind very &uickly. !lso,
Toyota is an industry leader and has a lot of power because of this. Toyota stays on the
offensive to keep its market share and defends against others in the industry from taking
their market share. Toyota always stays on the offensive looking for ways to be better
than their competitors. Toyota wants to stay in front of its competitors and take
advantage of any weaknesses they may show and capitali3e on them to gain any
advantage they can.
!s mentioned previously in the paper Toyota is the low cost leader in their industry.
4ecent events have suggested that Toyota has focused too much on low cost, losing
market share and their market positioning of superior design and &uality, which
historically they have used a differentiation strategy. "or Toyota, the biggest thing they
need to do is make sure that their low cost strategy does not compromise their superior
design and &uality.
5hen looking at Toyota’s grand strategy, they have been successful at product
development. *y '(6' Toyota is planning to have more then '( models that use batteries
to e$tend fuel economy 7ust like their Prius ,8rolicki-. !lthough they have not been as
aggressive in the electric car market recently, like their competitors, they are planning to
release a rechargeable version of their Prius by 9une '(6' ,8rolicki-. This rechargeable
version will position Toyota to attempt to take over as a low cost leader of hybrid
technologies within the market, which supports Toyota’s overall strategy of low cost
,8rolicki-.
:ue to changes in government policies and the competiveness of the industry, Toyota was
forced to take an offensive strategy. 5ith a series of damaging safety recalls, Toyota has
had to evaluate their current track of superior design which caused them to temporarily
loose track of their former offensive strategy of &uality ,8rolicki-. 4ecently, they have
been had to work e$tra hard to get back to their offensive strategy and back to being the
industry leader ,8rolicki-.
:ue to the recent safety recalls Toyota has been temporarily derailed from their strategy.
They need to get back on track and refocused and make sure that they concentrate on
what made them uni&ue. 2n order to make this happen, managers of Toyota are going to
have to focus on company communication and bringing back its former foundation of
making &uality cars that are dependable and reliable in addition to modern. The company
found its weak spot when it came to the way the company responded to the recalls. 2n the
beginning of the recall era, Toyota was very slow in its response. "inally, Toyota
e$ecutives made the call to recall more than five million of its own vehicles due to
numerous different issues. !t the same time, it was decided to halt all sales of Toyota
vehicles as well until the problem could be addressed. "or a car company, this is a huge
deal and one that will affect the balance sheets for years to come. ;owever, Toyota
seemed slow in finding a solution to its largest problem in company history ,and in the
industry’s history-. 5ith a huge recall and halt in sales, one would assume that
management would be pushing for day and night research, product development, and
problem solving in order to get their product back on the market. 2nstead, it took Toyota a
little over a week ,kbb.com 1 +Toyota 4ecall and Sales "ree3e.- to find a fi$ and even
longer to get it out to dealers and Toyota mechanics. The terrible communication within
the company was shown when dealers had no idea or word from the company as to what
the game plans were and when the United States called in several Toyota e$ecutives to
congressional hearings where finger pointing began.
The Toyota product development system is known as %ean /anufacturing. 2ts ob7ective
is to integrate people, process, and technology. Toytoa’s product development procedure
is essentially different from a manufacturing process. 2ts backbone is not visible, but
knowledge and information which are untouchable. The product development’s cycle
time is much longer than hours. 2t usually takes weeks or even months. The production
chains are nonlinear and multidirectional. 5orkers are no longer manufacturing workers
but specialists with high diverse technology. This product development strategy is viable
for Toyota. This is because this strategy does help Toyota to prolong the life cycle of
current product. "or instance, Toyota #amry is a very successful current product which is
prolonged its life. #amry has been made since 6<=(s. #amry is set at an middlehigh
level of family veichle. !fter )( years development, #amry is still very famous all over
the world. This cannot be separeted by Toyota’s successful product development strategy.
>ne of the key features of the Toyota product development system is functional
engineering managers. They are primarily teachers in the Toyota system, who are the
most technically competent engineers, with the highest levels of e$perience. Toyota’s
management group is consist of high educated e$perts. They were all engineers and their
technical e$cellence is very famous. *ut recently, Toyota’s product development system
does not work very well. 2n recent years, more and more recall issues happened and that
hurt Toyota’s reputation very much. /ost of these recalls are related to Toyota’s technical
problem. ?as padel is one of the ma7or aspects which leaded to many serious car
accidents. This hurts Toyota’s reputation and brand name very much. ;owever, news
from #@@ still says that Toyota announced that they have no responsibility for gas padel
problems and those car accidents. This is really bad for Toyota. Under product
development strategy, what Toyota is supposed to do is to improve its product &uality and
technology. *esides, they also need to make sure their products are safety.
*reaking out of the bo$ seems like a viable way for Toyota nowadays. Since '((),
Toyota Secondarygeneration Prius officially unveiled to the press for the first time.
Toyota Prius have been one of the best sale cars for more than A years. 0ven was the
number one selling ;ybrid in !merica with around 6B(,((( sold 7ust in '((< when the
auto market with depression. !lthough, the performance of Toyota Prius was e$cellent in
the past. Toyota still needs to stronger its advantage by a innovation to receive a
renaissance from all the recall issues. "or the '(6( Prius hybrid automobile, the company
redesigned many aspects of the car to standout from the fuel economy. "or achieving the
best possible fuel economy, the '(6( Prius has e$tensive aerodynamic features which
includes most parts of the car. They are all designed to minimi3e draginducing air
turbulence. To reduce fuelgu33ling weight, Toyota made the battery an integral structural
part of the car rather than a bolton bo$. Specifically, there are even three performance
modes for the new '(6( Prius, which are 0V/ode, Power /ode and 0co /ode. *y all
the changes, Toyota is on his way to receive revive by the innovation strategy.
"urthermore, the innovation of Prius reveals the innovation of using new technology and
new energy.
doc_279350300.doc
Toyota’s uses both differentiation and low cost as generic strategies to try and gain a competitive advantage over their competitors in the automotive industry. The market scope that Toyota uses is a broad one that encompasses nearly every type of customer that is in the market to purchase an automobile. Toyota is able to target such a large market because they have something for everyone. Toyota has four wheel drive trucks and SUVs for the outdoor types or those who live in areas that face severe weather conditions, hybrid models like the Prius for the eco-friendly customers that are interested in saving the environment, along with the standard cars for general, everyday use.
Toyota’s uses both differentiation and low cost as generic strategies to try and gain a
competitive advantage over their competitors in the automotive industry. The market
scope that Toyota uses is a broad one that encompasses nearly every type of customer that
is in the market to purchase an automobile. Toyota is able to target such a large market
because they have something for everyone. Toyota has four wheel drive trucks and SUVs
for the outdoor types or those who live in areas that face severe weather conditions,
hybrid models like the Prius for the ecofriendly customers that are interested in saving
the environment, along with the standard cars for general, everyday use. !dditionally,
Toyota provides vehicles for all price ranges. "rom the low price Toyota #orolla line of
cars to the high priced lu$ury line of cars and SUVs with %e$us, Toyota has something
for everyone.
Toyota differentiates on several levels form their competitors. "irst of all, Toyota has
been very successful in differentiating on the basis of superior design and &uality. This
has led to Toyota being able to create a brand image that is very strong and one that
brings to mind &uality, long lasting cars when a potential customer sees it. The strength
of Toyota’s brand image has been seen in recent years with the recalls and problems
Toyota faced in dealing with these recalls. Toyota was able to survive these problems
because they had such a long and proven track record of &uality and superior. !nother,
area that Toyota differentiates is in technology. Toyota was the first successful mass
produce the hybrid car on the market when it released the Prius in '((). *eing the first
to get their hybrid on the market allowed Toyota to gain a large portion of the market
share in the area of hybrid cars.
!long with differentiation Toyota also uses low cost to try and gain a competitive
advantage in the automotive industry. +Toyota is ,or was at the time- the low cost
producer in the industry. Toyota achieves its cost leadership strategy by adopting lean
production, careful choice and control of suppliers, efficient distribution, and low
servicing costs from a &uality product..,/ichael 0. Porter- This &uote from /ichael
Porter sums up how Toyota achieves this low cost strategy. Through research, it is
evident that Toyota is still the low cost leader in the automotive industry.
Toyota’s current grand strategies are product development and offensive1strategies for
industry leaders. Product development is very important for Toyota due to the fact that
they must come out with new fresh ideas every year in the automotive industry. 2f you
don’t develop a new design on your products, you will be left behind very &uickly. !lso,
Toyota is an industry leader and has a lot of power because of this. Toyota stays on the
offensive to keep its market share and defends against others in the industry from taking
their market share. Toyota always stays on the offensive looking for ways to be better
than their competitors. Toyota wants to stay in front of its competitors and take
advantage of any weaknesses they may show and capitali3e on them to gain any
advantage they can.
!s mentioned previously in the paper Toyota is the low cost leader in their industry.
4ecent events have suggested that Toyota has focused too much on low cost, losing
market share and their market positioning of superior design and &uality, which
historically they have used a differentiation strategy. "or Toyota, the biggest thing they
need to do is make sure that their low cost strategy does not compromise their superior
design and &uality.
5hen looking at Toyota’s grand strategy, they have been successful at product
development. *y '(6' Toyota is planning to have more then '( models that use batteries
to e$tend fuel economy 7ust like their Prius ,8rolicki-. !lthough they have not been as
aggressive in the electric car market recently, like their competitors, they are planning to
release a rechargeable version of their Prius by 9une '(6' ,8rolicki-. This rechargeable
version will position Toyota to attempt to take over as a low cost leader of hybrid
technologies within the market, which supports Toyota’s overall strategy of low cost
,8rolicki-.
:ue to changes in government policies and the competiveness of the industry, Toyota was
forced to take an offensive strategy. 5ith a series of damaging safety recalls, Toyota has
had to evaluate their current track of superior design which caused them to temporarily
loose track of their former offensive strategy of &uality ,8rolicki-. 4ecently, they have
been had to work e$tra hard to get back to their offensive strategy and back to being the
industry leader ,8rolicki-.
:ue to the recent safety recalls Toyota has been temporarily derailed from their strategy.
They need to get back on track and refocused and make sure that they concentrate on
what made them uni&ue. 2n order to make this happen, managers of Toyota are going to
have to focus on company communication and bringing back its former foundation of
making &uality cars that are dependable and reliable in addition to modern. The company
found its weak spot when it came to the way the company responded to the recalls. 2n the
beginning of the recall era, Toyota was very slow in its response. "inally, Toyota
e$ecutives made the call to recall more than five million of its own vehicles due to
numerous different issues. !t the same time, it was decided to halt all sales of Toyota
vehicles as well until the problem could be addressed. "or a car company, this is a huge
deal and one that will affect the balance sheets for years to come. ;owever, Toyota
seemed slow in finding a solution to its largest problem in company history ,and in the
industry’s history-. 5ith a huge recall and halt in sales, one would assume that
management would be pushing for day and night research, product development, and
problem solving in order to get their product back on the market. 2nstead, it took Toyota a
little over a week ,kbb.com 1 +Toyota 4ecall and Sales "ree3e.- to find a fi$ and even
longer to get it out to dealers and Toyota mechanics. The terrible communication within
the company was shown when dealers had no idea or word from the company as to what
the game plans were and when the United States called in several Toyota e$ecutives to
congressional hearings where finger pointing began.
The Toyota product development system is known as %ean /anufacturing. 2ts ob7ective
is to integrate people, process, and technology. Toytoa’s product development procedure
is essentially different from a manufacturing process. 2ts backbone is not visible, but
knowledge and information which are untouchable. The product development’s cycle
time is much longer than hours. 2t usually takes weeks or even months. The production
chains are nonlinear and multidirectional. 5orkers are no longer manufacturing workers
but specialists with high diverse technology. This product development strategy is viable
for Toyota. This is because this strategy does help Toyota to prolong the life cycle of
current product. "or instance, Toyota #amry is a very successful current product which is
prolonged its life. #amry has been made since 6<=(s. #amry is set at an middlehigh
level of family veichle. !fter )( years development, #amry is still very famous all over
the world. This cannot be separeted by Toyota’s successful product development strategy.
>ne of the key features of the Toyota product development system is functional
engineering managers. They are primarily teachers in the Toyota system, who are the
most technically competent engineers, with the highest levels of e$perience. Toyota’s
management group is consist of high educated e$perts. They were all engineers and their
technical e$cellence is very famous. *ut recently, Toyota’s product development system
does not work very well. 2n recent years, more and more recall issues happened and that
hurt Toyota’s reputation very much. /ost of these recalls are related to Toyota’s technical
problem. ?as padel is one of the ma7or aspects which leaded to many serious car
accidents. This hurts Toyota’s reputation and brand name very much. ;owever, news
from #@@ still says that Toyota announced that they have no responsibility for gas padel
problems and those car accidents. This is really bad for Toyota. Under product
development strategy, what Toyota is supposed to do is to improve its product &uality and
technology. *esides, they also need to make sure their products are safety.
*reaking out of the bo$ seems like a viable way for Toyota nowadays. Since '((),
Toyota Secondarygeneration Prius officially unveiled to the press for the first time.
Toyota Prius have been one of the best sale cars for more than A years. 0ven was the
number one selling ;ybrid in !merica with around 6B(,((( sold 7ust in '((< when the
auto market with depression. !lthough, the performance of Toyota Prius was e$cellent in
the past. Toyota still needs to stronger its advantage by a innovation to receive a
renaissance from all the recall issues. "or the '(6( Prius hybrid automobile, the company
redesigned many aspects of the car to standout from the fuel economy. "or achieving the
best possible fuel economy, the '(6( Prius has e$tensive aerodynamic features which
includes most parts of the car. They are all designed to minimi3e draginducing air
turbulence. To reduce fuelgu33ling weight, Toyota made the battery an integral structural
part of the car rather than a bolton bo$. Specifically, there are even three performance
modes for the new '(6( Prius, which are 0V/ode, Power /ode and 0co /ode. *y all
the changes, Toyota is on his way to receive revive by the innovation strategy.
"urthermore, the innovation of Prius reveals the innovation of using new technology and
new energy.
doc_279350300.doc