Cola in Inida

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1. What were the drivers of Toyota´s accelerators crisis? Why was Toyota facing a recall crisis? The drivers of Toyota crisis were Strategic, structural and cultural issues. At the strategic level, the cost reduction strategy added with the increasing of the output volume strategy caused a decrease in quality. Furthermore, the structure of Toyota (HQs in Japan and not in the U.S) impacted Toyota’s response to customer’s claims, taking a long time to address Toyota consumer’s concerns, and in fact was one of the most criticized issues during the crisis. In other words, the company took a considerable time before recalling units that meant life losses and significant economic impacts. At the cultural managerial level, there were difficulties driven by how Japanese address the situation vs. how Americans deal with the problems. The company lost its original philosophy due to different cultural orientations between Japanese headquarters and North American subsidiaries. The fact that Toyota was recovering from its last unit’s recall (due to motors leaking oil) plus the beginning of the global financial crisis, ended up yielding a deviation of the original long term plan to look after the U.S subsidiary´s financial performance, triggering a swap in the three main pillars of Toyota (Safety, Quality and Volume). 2. Michael Porter claims that “operational effectiveness” is not a strategy. Why was operational effectiveness such a focus at Toyota? What are the downsides of “lean manufacturing”? Operational focus was one of Toyota’s main competitive advantages by delivering high quality products on a disciplined operational system. Decades before the accelerator crisis, it was imperative to improve production efficiency in order to counter the effect of a cash shortage. However, this only focused on short-term delivery meaning that “operational effectiveness” became a tactic rather than a strategy. Given that TPS became public in the car manufacturing industry spotlight, it...
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