Competition has gone global and the market and industry dynamics have necessitated the need for companies to make concerted efforts streamlined towards ensuring that high-quality goods and services are offered in the market at competitive prices. This has necessitated the need to analyze the opportunities that exist in the market.
A number of opportunities present themselves for exploitation by the Toyota Motor Corporation. These have been precipitated by the changing demographics in the car manufacturing industry. One opportunity that has presented itself to Toyota is the exploitation of the US market industry that has been hit by the recent economic crunch. A credit crunch has been used to refer to the situation in an economy where there is a decline in the supply of credit because, although the banks are less willing to lend, lending rates do not rise. The spiral effect is that the interest rates become infinitely high for the majority of the borrowers, which in effect makes it more difficult to fund investment decisions, which conversely slows down the economy, making it even harder for lenders to lend. This has negatively hit the US giant automaker – GM – thus leaving a rare opportunity for Toyota to avail its products at competitive prices.
The second opportunity that is available for Toyota is the adoption of high-tech technology in its manufacturing practices. This can be exploited through the availing of green cars at competitive prices. In competitive advantage, technology can enhance customer satisfaction. Due to stiff competition in the motor industry, products must be availed to the customer not only in high quality but also at the right price. Toyota has effectively achieved a balance between the right price and high quality in customer satisfaction by adopting new and innovative technologies (Ulusoy, Özgür, Bilgiç, Payzin, and Kayla, 1998). Low production costs are products of innovative technologies that remain the driving factors behind Toyota’s wide presence in the motor industry market. This competitive advantage is well put by Jackson (2005) in stating that “The global body line meets Toyota’s acid test for new technology—lean, simple, and speedy in hat it has resulted in 50% fewer processes to weld the body together, 70% less investment to change over the line for a new vehicle, and 75% less time to go from launch to meeting Toyota’s high-quality targets”.
This can easily be attained by the combination of active involvement in the managers in the whole process of technological adoption. “Operational changes alone do not yield expected benefits without a bundle which includes structural, managerial and cultural changes” (Macduffie, 1997). An organizational culture that ignores the positive role of the manager and the entire organization remains the main source of difficulty in conversion to new technologies. “Organizational culture is also considered a major obstacle in sustaining the potential benefits of lean production.” (Macduffie, 1997). Research suggests that the adoption of standardized frameworks can help firms align their practices towards effective and innovative technologies (Macduffie, 1997).
There is a need for close integration of strategy formulation with managerial improvements and a keen focus on a range of contingent processes involved in technological adoption and implementation. Experienced, highly trained and skilled human resource is central to the achievement of set goals behind the adoption of new technologies. Toyota retains one of the best groups of managers and staff committed to the overall realization of the set objectives. The role of managers in the adoption of new technology within any organization cannot be overlooked. Technological shifts come with a number of challenges that reduce the percentage of uptime and as such must be closely and gradually monitored. The path to the achievement of effective technological shifts or adoption must take with it the central consideration of the positive contribution of the manager.
Whereas Toyota remains the world’s best automaker and controls not only the largest markets share in the United States but in the rest of the world as well, it is faced by a number of threats. This company has managed to achieve this feat because of its lean manufacturing techniques and adoption of innovative and new technologies. Founded in 1937 by Kiichiro Toyoda, Toyota Motor Corporation has effectively managed to turn technological management into a competitive weapon. However, other competitors such as Honda are posing threats to its traditional position as the global leader in the automobile industry. The competition for the Japanese market is getting very stiff and Toyota is losing its traditional home market to Nissan and Honda.
This is because of the challenges that the company faces due to large scale production in comparison to its competitors. The recent mass recall by Toyota is demonstration of how mass production has the capacity to inflict a devastating blow on a company because of the large volumes of products involved. In addition to the above, Toyota faces the biggest threat from its competitors who have realized the need for technological advances and lean manufacturing practices. These strategies have not only ensured better production practices but have also enabled these companies to preset their products at competitive prices. This illustrates that while the US market can still be captured; there is competition for it from other car manufacturers.
In the midst of these challenges, Toyota has continued to remain the dominant force in the auto industry. This has been achieved through a number of strategies that has enabled to neutralize its threats and capitalize on its strengths. One strategy that has traditionally been used by Toyota to remain competitive is the adoption of lean principles in its manufacturing process. It refers to the manufacturing systems and philosophy that was first developed by Toyotas Company when they adopted the key production principles as developed by Henry Ford. This new venture culminated into a great success story, what with pronounced increments in the levels and quality of service and cost reductions. The most recent evolution of lean is towards a lean value system. This lean value system encompasses “a value-adding network of operations across companies, with the goal of providing a series of contingent value proposition to individual final consumers” (Aberdeen, 2006). This strategy has enabled Toyota to avail its products to the consumers at competitive prices.
Other strategies that have been employed by Toyota in its push for continued dominance in the auto industry is include better understanding of the US consumers, ability to develop and sustain long time plans and the development of hydrogen fuel car that is geared towards green technology. In conclusion, it can be discerned that Toyota whereas the auto mobile industry is characterized by competition, Toyota has effectively managed to develop and initiate cross cutting measures that has ensured the maintenance of its position as the global leader in the auto industry.
References
Aberdeen, (2006). Critical Success Factors for Lean Implementation. Journal of Manufacturing Technology Management, Vol. 17, Issue 4. England: Cardiff Business School.
Jackson, D. (2005). The role of technology-Adapting it appropriately. Web.
Macduffie, J. (1997). New industry specific quality certification. Quality Progress, Vol. 35, Issue 6.
Ulusoy, G, Özgür, A, Bilgiç, T, Payzin, E, and Kayla, A, R, 1998. Development Management in the Part and Component Suppliers Industry in Turkey, TUSIAD Publications, Istanbul.