Toyota
Critically evaluate Toyota’s strategic development since the 1980’s using the suitability, feasibility and acceptability criteria. Pay particular attention to the most strategic developments.
After 71 years since its foundation Toyota Motor is one of the leading car manufacturers in the world, having overtaken GM and Ford in terms of production volume in 2007 (OICA,2008). Toyota has in fact successfully penetrated global markets and established a world-wide presence by exploiting its productivity, its highly synergistic performances as well its policies in supply chain.
Since its starts Toyota has always pursued an aggressive cost leadership strategy, which has allowed a small company to sustain competitive advantage against large competitors.
Toyota’s seed of success can be traced back to the second post world-war when the company started to experiment new ways to improve production, reduce costs and increase quality.
Clearly the automotive industry is an industry where economies of scale and scope are fundamental therefore volumes of sales are important to reduce unit costs. The problem with Toyota was that it was a small company competing with large competitors. Is in this situation that Toyota started to build and create basis for competition. Toyota found new flexible production methods to achieve mass production efficiencies with small production volumes.
The Toyota Production System which is a pillar of the “Toyota Way” has enabled Toyota to become the largest car manufacturer in 2007 (Reed, 2008). The company’s meticulous attention to details and to eliminate inconsistencies and waste at each stage of production was an important step in cost reduction. Toyota is in fact able to reduce lead time cost while improving quality. Particularly relevant to their cost leadership strategy JIT inventory and the pull system allowed the company to improve returns on investments by reducing inventories and producing only the required amount, avoiding
After 71 years since its foundation Toyota Motor is one of the leading car manufacturers in the world, having overtaken GM and Ford in terms of production volume in 2007 (OICA,2008). Toyota has in fact successfully penetrated global markets and established a world-wide presence by exploiting its productivity, its highly synergistic performances as well its policies in supply chain.
Since its starts Toyota has always pursued an aggressive cost leadership strategy, which has allowed a small company to sustain competitive advantage against large competitors.
Toyota’s seed of success can be traced back to the second post world-war when the company started to experiment new ways to improve production, reduce costs and increase quality.
Clearly the automotive industry is an industry where economies of scale and scope are fundamental therefore volumes of sales are important to reduce unit costs. The problem with Toyota was that it was a small company competing with large competitors. Is in this situation that Toyota started to build and create basis for competition. Toyota found new flexible production methods to achieve mass production efficiencies with small production volumes.
The Toyota Production System which is a pillar of the “Toyota Way” has enabled Toyota to become the largest car manufacturer in 2007 (Reed, 2008). The company’s meticulous attention to details and to eliminate inconsistencies and waste at each stage of production was an important step in cost reduction. Toyota is in fact able to reduce lead time cost while improving quality. Particularly relevant to their cost leadership strategy JIT inventory and the pull system allowed the company to improve returns on investments by reducing inventories and producing only the required amount, avoiding
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