The success of Toyota is incredible today, and the company is showing astonishing financial results when most of Japanese companies are in the doldrums. It is the biggest of the heavyweight competitor in the car industry. General Motors and Ford, whose market shares are falling in favor of Toyota, are only selling 10% of the global cars. This car manufacturer is an example to follow, but also a mystery that is not so easy to understand. The reasons for its success are numerous and come from a clear policy, which is shared in factories and headquarters all around the world: the search for excellence. Several key strengths are fueling this policy, which are flexibility, speed and productivity. Toyota managed to create a global and integrated manufacturing system to increase its productivity and guarantee perfect market responses.
[...] They keep on focusing on best-seller models, which do not always respond to consumers' expectations today. Problems of Toyota's competitors However, having demonstrated the key to success by Toyota, we begin to wonder why its competitors do not follow the same strategy. The problem with the main competitors like GM, Ford or Chrysler is that they do not have enough resources today to change without jeopardizing their existence. As mentioned, Toyota's margins allow the firm to innovate without taking too many risks. This is the key point that Toyota's competitors lack. [...]
[...] This attitude reveals itself in different segments of the process. Obsession for details First of all, Cho always wants to be the best, and always acts to compete with the best rival. When Nissan cut its costs in half, Cho knew Toyota could do better. Then he began to slash costs everywhere he could, and focused on expensive details. He first began with deleting waste: he set up a cost per copy to discourage the overuse of the photocopy machines, for example. [...]
[...] This innovation leads to another interest: Toyota can now build a car in only 20 hours. This constant search for the best led to the highest level of productivity for Toyota. Even if some competitors still have some absolute competitive advantages, Toyota today owns all the relative competitive advantages of the car industry, since the company tries to beat each competitor in its own area of experience. Marketing strategy Toyota is an example of innovation and productivity, but this is not a matter for consumers. [...]
[...] Management of risks We can not deny that Toyota is the example to follow in the car industry today, and that the firm has many lessons to teach to its competitors. First of all, Toyota knows how to take calculated risks. The firm does not stay with what it knows, but always wants to innovate or surprise, and knows risks are part of innovation. However, Toyota manages its cash well and keeps enough margins behind it to be sure not to jeopardize its position. [...]
[...] First of all, Toyota's policy is to target everyone. The company does not focus on particular segments of consumers, but proposes models for all. All countries, all needs, all budgets, this shows that Toyota adopted a risky policy, but was nevertheless successful. Toyota builds cars for all geographical markets, adapting the design and the characteristics of the cars to the market. But the firm also wants to surprise the consumer, and proposes models that were not likely to be launched in particular markets. [...]
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