Toyota Case Study

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Toyota Motors Corporation, known as the world’s leading auto manufacturer was founded in 1937 by Kiichiro Toyoda. In 1950, Toyota Motor Sales Co., LTD was established in Japan and seven years later Toyota made its presence in the United States. In 1972, the company began manufacturing operations in the United States. In 1989, it launched Lexus as its luxury line. In 2000 with the rising cost of fuel, Toyota released the Toyota Prius, the first hybrid car in the United States. In 2008, the company became the number one selling automotive brand in America when it outsold General Motors by 614,000 more cars and trucks sold. Despite its success, Toyota’s inventory was depleted due to the recent earthquake and tsunami in Japan giving GM and Ford the opportunity to increase their sales by 11 percent. Production came to an halt as vital suppliers were affected by the disasters. The brand’s image was also tarnished due to safety issues with failing brakes and uncontrollable self-accelerating gas pedals. This paper will focus on the cost leadership differentiation strategy that Toyota employed to its success and what new strategies it can exploit to gain a competitive advantage. Toyota lead the way in effective process design. The company implemented an efficient production system called “lean production” to produce quality vehicles efficiently at a quick rate. The objective of the system was to minimize waste in the production process to avoid excess inventory, unnecessary processing steps and defective products, thus improving productivity. Its process “The Toyota Way” was so effective that Japanese companies implemented in their production process. With the adoption of its system, it created a culture where its employees contributed continuously to the improvement of the process. Toyota employees were empowered to making suggestions. Toyota’s business strategy is to be a cost leader in producing high quality vehicles at a low price. Toyota purchases its...
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