The company’s leadership and management strategies have been considered to be one of the best in the automotive industry, which has explained why the company has been very successful. For a company to be successful, there have to be strong leaders who have a personal drive and are focused. This is because the leaders are the main decision makers of the company and they have to come up with good strategies and also come up with ways of formulating these strategies into action, which are aimed at the customer satisfaction, and the profit maximization of the company.
Toyota Company adapted the Porter’s 4 generic strategies; the differentiation strategy, the cost leadership strategy, the differentiation focus strategy, and the cost focus strategy (Quickmba.com, 2010). Toyota used the differentiation strategy to come up with new products and brands through the use of the new technology and its unique channels, where the company only charged a price, which was premium for the product. The company also used the cost leadership strategy to become one of the automotive industry’s lowest-cost producers. Toyota used the differentiated focus strategy to ensure customer satisfaction to all the different consumer needs like the production of the Lexus, which is a luxurious car for the consumers with the luxurious needs. In the cost focus strategy, the company aimed at seeking a lower-cost advantage.
Toyota’s combination of strategies has changed drastically over the years. This is because the company had to adapt new strategies, which would have been aimed to consumer satisfaction. The consumer’s tastes and preferences are also changing with the time, which showed that the model of car, which was in high demand in the early 1940s, is not the same car, which is in high demand in the 21st century.
Toyota had to come up with innovative strategies so as to be able to come up with new car models through the maximization of the company’s opportunities, which include the presence of an advanced technology and the employees of the company, which has enabled the company to increase its levels of productivity and reliability. This is evident, when the company made the Toyopet, which was a very famous car in 1947; in 1955, the Crown was produced, which was a luxury car. The Crown cannot be compared to the Lexus of the 1980s; although both cars are luxurious cars, the Lexus is more advanced in technology showing that the company has evolved over the years.
Toyota’s strategy fits with the automobile industry’s environment. Environmental issues have been recently reported to be a main issue, which is affected the automotive industry. This is where the environmental damage, caused by the automobile industry, was considered to be very high and where the company had to come up with a strategy of the production of fuel efficient cars, which are more environmentally friendly. Toyota’s innovative strategy made the use of hybrid cars, which adapted the dominance of the internal combustion engine on the basis of the social and technological forces. The adaption of hybrid cars by the executives of Toyota Company was through the use of the latest technology, which is evolving at a very fast rate (Melosi, 2010).
This adaption of hybrid vehicles was a very good strategic move by the executives of the Toyota Company. It was a great success because the introduction of the Prius by Toyota instigated the use of hybrid technologies by other companies as well. The continuous growth in prices increases awareness about the environmental contingencies. These hybrid cars are very friendly to the environment since they produce less pollution and the demand for them is very high, which is a great opportunity for the company (Toyoland.com, 2010).
The internal resources of Toyota Company are what the company possesses, including all the assets, the people and the brand name value. The resources in a company represent all the inputs, which are put towards the production process of the company. They are further divided into tangible resources, which include the financial, physical and technological resources; and the intangible resources, which include the human resources, innovative and the reputational resources. Toyota’s strategy fits with the competences and the core resources of the firm. Toyota has the ability to continuously come up with revolutionary innovations, which help to boost the company’s sales and also widen the profit margins. This shows that Toyota has great and substantial innovation resources, which are very hard to be imitated by the company’s close competitors and they are very valuable to the company.
With effective human resource management, the company is able to provide skills through training of employees, which would equip them with necessary knowledge and skills, required to produce a better output. The motivation of employees in a company is very vital, since it contributes to the profitability of the company in terms of an increase in the output levels, since the motivated employees are willing to work and produce more. Through its reputational resources, Toyota can be able to differentiate itself from its close competitors. Toyota was recognized as the largest automotive company and it plays an important role in car industry.
The competences of Toyota are the capabilities that actually serve as a competitive advantage over the close competitors like Toyota, Honda, and Isuzu. Competitive advantage is a strategic advantage that a company or business has over its close and rival businesses in the competitive industry, and the company’s competitive advantage makes it stronger in the business environment. The core competency of Toyota is the brand management and the supply chain management. Toyota has valuable capabilities, which help the company to neutralize all the threats and also to exploit the opportunities. These are examples of rare capabilities, which are not usually available to other close competitors of Toyota. This is because they are actually very hard to imitate because the competitors of Toyota cannot be able to develop them very easily because they are invisible to the competitors and are unique.
These core competences in Toyota usually emerge over a period of time, which is done through the company’s organizational process, aimed at the accumulation and the learning of how the company can deploy the different capabilities and resources at its disposal. The value chain analysis and the criteria for judging the sustainability of Toyota’s competitive advantage are the two core concepts, which are used for the identification and the building of the core competencies in the company.
The recommendation to the executives of Toyota Corporation
My recommendation to the executives of Toyota Company is that they should come up with leadership management strategies since as the leaders of the company they should be able to come up with good decisions, concerning the company, since they have management responsibilities, in which they have to ensure that the company is a success. The main aim of the executives of Toyota Company is to move the organization into attaining a high performance through the operational planning and making it a global visionary company.
The management responsibilities of the executives in the Toyota Company include activities like training and management of staff performance, customer interface management, risk reduction in the company, and the engagement of the stakeholders of the company. These executives of Toyota Company should act like role models and be aimed towards the achievement of the goals and objectives of the company. In the majority of cases, the company has been accused of being the largest in the consumer fraud cases, which has been associated with the executives of the company. This builds a very bad name for the company, thus, calls for good leadership qualities of the executives, which include practicing good communication skills, being honest to the stakeholders of the company, being visionary, not being self-centered, be quick in taking actions in the protection of the stakeholders of the company, and motivating.
My learning outcome is that competition in the automotive industry is very high and has been noted to increase each day because it has no limitations to new entrants into the market. The increasing competitiveness of the automotive industry has posed a very great threat to the company. Therefore, for the company to be able to survive in the competitive industry, it is important to come up with good strategies, which can sustain the competitive advantage of the company. A combination of strategies can make a company to soar into great heights since they will be consumer friendly and will be mostly aimed at the satisfaction of the needs of the consumers so as to increase the total annual sales of the company.
The internal strengths, the core resources, and the competences of Toyota are the core strong points of the company. When the Toyota Company knows its strengths, the available resources, its competencies, it helps the company to state its aims and objectives, because the internal strengths are crucial to the company and if they are maximized, the company can be able to attain its goals, which are the profit maximization and customer satisfaction. These elements are very useful for the company since they can enable the company to summarize and clarify all the major key issues that face the company. These issues may include the strong competition in the automotive industry among others. They can also help the company to spot new business opportunities and fully use them. The unique resources and the competencies of Toyota have enabled the company to attain a sustainable competitive environment