Toyota Value Chain Analysis
The evolving value chain of the car industry
The automotive industry is one of the most progressive and forward-thinking industries. It confronts a number of trends that create new challenges while also providing opportunities for growth. One of the major trends is the demands of operating in a “connected” world.
For more than 100 years the automotive industry has created competitive advantage mainly through engineering excellence. Moving forward, this will no longer be sufficient. Automotive manufacturers need to decide how to respond strategically to digital disruption when new digital technologies affect their business (see exhibit 3 - Digital disruption challenges in the future).
The auto industry is now on its way to change and alter these …show more content…
It succeeded in integrating a socio-technical system (Toyota production system - TPS) that comprises its management philosophy and practices. The TPS organizes manufacturing and logistics for the automobile manufacturer, including interaction with suppliers and customers. The system applies two main pillars, Just-in-time (JIT) and Jidoka. JIT means making only what is needed, only when it is needed, and only in the amount that is needed. While Jidoka means building quality into the production process11. The system was one of the major reasons for Toyota to lead the car industry as the most valuable car brand value. Moreover, by applying VRIO analysis to Toyota’s TPS system, the company succeeded to be competitive in the four capability criteria (see exhibit 10 - VRIO criteria in Toyota TPS …show more content…
They are continuously developing seven functional areas: Autonomous driving, Safety, Entertainment, Well-being, Vehicle management, Mobility management and Home integration. They defined the increased availability of high-speed wireless networks and cloud-based data services around the world, and the development of application programming interfaces (APIs) needed to create connected car software as the main drivers of near-future growth. Hence, growing awareness of digital safety features and entertainment options will spur sales. This, in turn, will encourage investment in connected car services, and give rise to aftermarket demand for connectivity equipment from owners of cars
The automotive industry is one of the most progressive and forward-thinking industries. It confronts a number of trends that create new challenges while also providing opportunities for growth. One of the major trends is the demands of operating in a “connected” world.
For more than 100 years the automotive industry has created competitive advantage mainly through engineering excellence. Moving forward, this will no longer be sufficient. Automotive manufacturers need to decide how to respond strategically to digital disruption when new digital technologies affect their business (see exhibit 3 - Digital disruption challenges in the future).
The auto industry is now on its way to change and alter these …show more content…
It succeeded in integrating a socio-technical system (Toyota production system - TPS) that comprises its management philosophy and practices. The TPS organizes manufacturing and logistics for the automobile manufacturer, including interaction with suppliers and customers. The system applies two main pillars, Just-in-time (JIT) and Jidoka. JIT means making only what is needed, only when it is needed, and only in the amount that is needed. While Jidoka means building quality into the production process11. The system was one of the major reasons for Toyota to lead the car industry as the most valuable car brand value. Moreover, by applying VRIO analysis to Toyota’s TPS system, the company succeeded to be competitive in the four capability criteria (see exhibit 10 - VRIO criteria in Toyota TPS …show more content…
They are continuously developing seven functional areas: Autonomous driving, Safety, Entertainment, Well-being, Vehicle management, Mobility management and Home integration. They defined the increased availability of high-speed wireless networks and cloud-based data services around the world, and the development of application programming interfaces (APIs) needed to create connected car software as the main drivers of near-future growth. Hence, growing awareness of digital safety features and entertainment options will spur sales. This, in turn, will encourage investment in connected car services, and give rise to aftermarket demand for connectivity equipment from owners of cars