Leraning by Doing

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Toyota (Chapter 1)
Overview. This case concerns the systems used by Toyota to become the third largest automobile manufacturer in the world. The case illustrates how this organization strives to serve customers and achieve a profit. The case intentionally emphasizes features of Toyota's manufacturing system, rather than its marketing strategies per se, to show how the whole organization is focused on serving customer wants and needs, not just the marketing department. Suggestions for Discussion Questions 1. In what ways is Toyota's new-product development system designed to serve customers? There are a number of features to this system that make it customer oriented.   The Toyota system responds more quickly than competitors, allowing the company to correct any mistakes and react to market trends faster than competitors. The system has a chief engineer responsible for the product from design to marketing. This may allow consumer research to function as a direct input into engineering specifications rather than become a secondary concern after the product is designed. Since the corporate philosophy is to serve customers, consumer inputs are more likely to be used develop better new products.



2. In what ways is Toyota's manufacturing system designed to serve customers? There are a number of features in Toyota's manufacturing systems that are designed to serve customers, including the following features.  Employees, even on the assembly line, are trained to consider their output as a product that should satisfy the next employee (the "customer") who receives it. If everyone in the company is satisfied with the quality of the work received from others, it is more likely that the ultimate consumer will be satisfied with the final product. Toyota's manufacturing system has close relationships with suppliers and demands high-quality products from them. Toyota is a very efficient company that keeps costs down and continuously strives to push cost down further without sacrificing product quality. Toyota's manufacturing system constantly strives to improve the quality of its automobiles through employee input in quality circles. Toyota uses a just-in-time inventory system to keep inventory costs low.

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3. How does Toyota personalize its cars and trucks to meet individual consumer needs? Toyota's manufacturing system allows consumers to order a vehicle and have it built with the features they want. What is remarkable about this system is the response time--a customer can receive the car in seven to ten days--even though cars are a very complicated product. Few companies can produce even much simpler custom-made products in such a short period. Although not stated in the case, Toyota produces a full line of basic sizes (including mini, subcompact, compact, midsize, and full-size cars) with several variations of each (two-door, four-door, three- and fivedoor hatchbacks). Thus, Toyota produces a broad product line while still offering individually tailored vehicles to meet the needs and wants of unique consumers.

4. In its price ranges, how do you think the Toyota cars stack up against the competition? This question is designed to get students to think about and discuss their preferences for automobiles in these price ranges. It may be useful to ask students whether any of them own or have driven a Toyota.. Students could be asked about the prices, features, dependability and service for the cars they or their parents own. It may be useful to bring Consumer Reports or other vehicle ratings to class to make comparisons between Toyota's products and those of other manufacturer's. This may be useful for documenting the quality levels of different brands. The discussion could be steered toward how a company can find out about consumer preferences and product perceptions. Students could be asked about any surveys, personalized letters or ads, or other contacts with the manufacturer or other evidence that the...
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