The Toyota Motor Company

The Toyota Motor Company was originally the idea of Toyoda Sakichi who was initially interested in the textile industry, but later developed an interest in automobiles after a visit to the United States. Toyoda Kiichiro, his son later took up the vision following a deathbed request from his father. He was able to get permission to start the company in 1933. Toyota has since grown to become the third largest automobile company in the world.

One of the characteristics valued by the customers and as a result provided the company with a competitive advantage is the production of a wider range of models. This translates that the company is able to produce greater product variety than its competitors. “In 1990, Toyota was offering customers around the world roughly as many products as General motors.” These were about 150.

Closely tied to the wide range of models is the fact that these varieties are available at a lower cost e.g. when compared to General Motors. This specifically came in handy in serving the small car market in the United States, which was then poorly served by the country’s automobile companies (C219). These fuel-efficient varieties were especially preferred after 1973 following an increase in the oil prices.

Toyota’s product development ideas were also geared towards customer satisfaction. This is exemplified in the production of V8 pickup trucks that specifically targeted certain Americans; upon realization that they saw them as more than a commercial vehicle (C220). Toyota Tundra for instance became a best seller after it was customized to meet customer needs. In line with this, the company also produced mid-range and luxury cars. Americans for example opted for inexpensive Toyotas in their early twenties and later traded them with expensive models (C221). This need was addressed through the production of the Lexus. Toyota also sought to find out why the introduction of the minivan flopped. The “company dispatched product planners and design engineers to show rooms (C221)” and from the feedback, the vehicles were redesigned and reintroduced and this had a tremendous impact.

Several operational strategies have been employed to favor Toyota’s operations. The company is known to establish long-term partnerships with their suppliers. Associations of this kind facilitated sharing of information regarding new manufacturing designs, materials as well as management techniques. This and other incentives developed by Toyota encouraged the suppliers to focus on realizing improvements (C217). The eventuality of this was Toyota outsourcing most of its services and this proved to be a cheaper and effective mode of production.

Formation of Toyota Motor Sales to handle distribution and sales was yet anther strategy. This provided sales and service training for the dealership personnel (C218) and it was targeted towards involving customers in the process of design and production. The company managed a huge database of customer preferences for styling, model types, colors, prices and other features (C219) this was directly fed into the design process. Overseas exportation resulting from the research department at Toyota Motor Sale became another key strategy. Toyota was able to predict that growth in domestic sales would decline in the 1970s and exportation guaranteed continued production.

Imitation of Toyota’s products by rivals has proved difficult. This is partly because Toyota offers superior quality automobiles at lower prices. Toyota builds vehicles with more consistent quality than any other manufacturer (C212). It held the top spot in seven of sixteen vehicle segments looked by J.D. Power. Utilization of the best available skills has also been a great boost. Through outsourcing of most of its services, Toyota experiences a decline in the number of defects per car compared to other automobile dealers. It is therefore able to meet the demands its market without straining much. Frequent expanding markets also gives Toyota a better understanding of customer needs and as a result they can easily ascertain the market demands and respond accordingly. These characteristics and strategies, among others; by all means prove that Toyota’s dominance in the automobile industry is here to stay.

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