Toyota has been one of the most admired companies in the world. Toyota has become a modern industry giant primarily because they have had a long history of being a global innovator in manufacturing. Apart from the company's revolutionary manufacturing technics that were developed internally, the company has also upheld a customer oriented approach to product development. After a series of quality issues began to manifest, these issues have become a primary priority for Toyota. The company's responses to these issues include a quality system that can quickly identify issues as well as new investment in training employees. However, controlling quality is just one piece of the equation for Toyota.
Toyota Strategic Management
For decades, Toyota has been one of the most admired companies in the world. They were able to turn their image in the 1960's and 70's from cheap Japanese import to the car of choice for millions of consumers worldwide. Toyota's strategy has varied significantly over the years. The company began by primarily imitating many of its competitor's designs and even used some of its components. Much of the early strategy of Toyota was focused on becoming the low cost leader in the market niches they worked to carve out. However, in the late eighties the company added a luxury fleet to its product lineup under the brand name Lexus. Toyota has always been tremendously market driven; the company has constantly redefined themselves in terms of a changing market. This has been the company's primary strength over the years.
Toyota's Strategy and Current Strategic Fit
Today, Toyota is one of the world's largest manufacturers of automobiles in both unit sales and in net sales (Toyoland, N.d.). Toyota has become a modern industry giant primarily because they have had a long history of being a global innovator in manufacturing. Apart from the company's revolutionary manufacturing technics that were developed internally, the company has also upheld a customer oriented approach to product development. Toyota is constantly scanning the external environment and tailoring its approach to meet evolving consumer expectations in regard to quality, value, and innovations through engineering (Hauser, 1988).
Toyota has developed a large number of consumer niche segments over the years. One of the best examples of a recent niche that Toyota has worked to develop is the hybrid market. Toyota's breakthrough model, the Prius, was driven by revolutionary gains fuel efficiency which exemplifies the company's dedication to innovation through engineering. Toyota has recently announced plans to further develop this market by rolling out 21 new or redesigned gasoline-electric powered vehicles by the end of 2015 and playing down the near-term outlook for other alternative-fuel technologies such as all-electric vehicles (Dawson, 2012).
The Toyota Prius is an innovative vehicle that has focused on the needs of the environmentally aware consumers. Not only has the Prius made significant gains in regard to fuel economy in the hybrid segment, but the car line's popularity was also fueled by an effective marketing campaign. The marketing message that promoted the Prius worked to start a social revolution in the environmentally conscious market segment (Newell, 2011). As a result of Toyota's engineering and the marketing campaign, the Prius was able to capture a premium in the market place. Toyota has been able to successfully be the industry leader in hybrid technology while other manufactures such as Nissan and GM have concentrated on electric vehicles such as the Leaf and the Volt (Bullis, 2010).
Toyota's successful growth record it has achieved in its history has been a result of the company's dedication to identify and adapting to the needs of the consumers in the market since the external landscape is continuously changing, Toyota has had to reinvent itself of the years. The global recession in 2008 and the rising fuel prices have represented the basis for the most recent evolution. Toyota was well positioned for this environment due to the fact that the company has focused on consumer value and as a result the company went through a great deal of expansionary efforts after the global recession stabilized.
However, this expansion has also caused Toyota many growing pains. Although Toyota has maintained a dedication in manufacturing with regard to quality, in the last few years Toyota has been the subject of a lot of negative publicity that has erupted from a serious safety problems related to several of their vehicle models. Some of the quality problems have included defects related to brakes failing and accelerators becoming stuck when operating the vehicles. As a result of the safety problems many of Toyota's vehicles have had to be recalled and repaired. For example, one product recall was due to a defective throttle control system that in some cases caused the cars to idle, turn off during operation, or even accelerate uncontrollably (Toyota, 2012).
Recommendations for a Better Strategic Fit
The quality issues have been a primary priority for Toyota. After a series of quality issues began to manifest, Toyota immediately created a "Special Committee for Global Quality (SCGQ)" (Toyoda, 2010). The purpose of the committee was to take a holistic approach to improving quality across the entire international organization. Furthermore, Toyota has also introduced a new quality response network that will allow to be more responsive if quality issues do arise. The objectives of the response system include responding to any quality incident within twenty four hours of it being reported which can help the company identify if the problem was an issue that arose in the manufacturing process that could affect other models as well. After a quality problem identified a specialist will then try to determine a specific root cause for the problem.
Toyota has also realized the need to improve its human resource capabilities in regard to effectively manage its growth. The company realized that some of the quality problems are a result of inadequately trained managers which was one of the findings of the quality committee's initial investigation. The committee stated publicly that "human resources are essential to ensuring reliable quality, which is the lifeline of our company (Sasaki, 2010). Training employees more effectively as well as provide ongoing education to the production teams is one essential component of supporting the company's future growth strategy. In order to meet this objective, the company has developed a number of training facilities which will provide specialized training to new and experienced employees.
Toyota's strategy has evolved many times over the years; however they have always focused on creating value for consumers by being focused on their needs. The need external environment can be defined by high fuel costs and an economic downturn. However, Toyota's position was well suited for this environment and the company was able to perform much better than its competitors in many regards. This was due to the fact that Toyota has a high value proposition and manufactures some of the most fuel efficient vehicles in the industry. However, the quality issues that have arisen over the course of the last few years indicate that the company must continue to refine its strategy to meet its new challenges. The company must once again redefine itself in a way that is consistent with its roots of being a world class manufacture.
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