Toyota Car Strategy

Author: Yang Liu
Publisher:
Publish Date: 2005-01-01
Features: This book focuses on Toyota's production strategies, meticulously analyzing the Toyota Motor Corporation's comprehensive and well-organized production system, technological innovation, operational management strategies, and production operations management. Lean production is the second major revolution in improving corporate processes after Henry Ford's invention of mass production. It is also a powerful "engine" for Toyota's rise to the world stage. The Toyota Production System (TPS) is a successful and effective attempt to seek a new business model in a situation where traditional methods of expanding production scale and increasing output have become outdated—namely, achieving profits through cost reduction and opening up product markets with small batches and a diverse range of products. Toyota is known for being "frugal." It believes in "squeezing every last drop from a towel," and it perfectly embodies Toyota's spirit of thorough rationalization. "Just-in-Time" (JIT) is the core of Toyota's lean production system. The term "JIT" refers to "supplying the required parts to each process at the required time in the required quantity, ensuring that what is needed is provided promptly, delivered on time, and given in the exact amount needed." Toyota Motor Corporation has always insisted on building its entire production system based on demand. The company's sales personnel hold the view that demand refers to market demand, and everything depends on market trends. For the production floor, demand is clearly a given quantity and cannot be arbitrarily increased or decreased. Therefore, to eliminate the waste of overproduction and reduce costs, production volume must be aligned with demand.
In the early stages of a new industry, there are often hundreds of competitors. Then, after fierce market competition and multiple reorganizations, the industry is eventually dominated by a few giants. If an industry becomes globalized, or when it begins to globalize, the result is inevitable turbulence. The global market will inevitably form colossal industry giants, such as the global fast-food giant McDonald's, the global retail giants Walmart and Carrefour, and so on. Prominent American management scholar Jagdish and Lakshandra, after long-term observation of industrial development, found that in most industries, there are always a few companies that are both the strongest and the most efficient, controlling 70–90% of the market share. The reason for conducting long-term observation and specialized research on these industry pioneers is not just because of their individual commercial success but also because, against the backdrop of industry development and corporate growth, we can explore how these giants have gradually grown from small to large in specific industries, how they have innovated in specific areas, and how they have gained greater advantages than their competitors, and so on.
Before the 20th century, the automotive century was the American century, and the standards set by Detroit cars once represented global standards. Among them, Ford Motor Company and General Motors were the most renowned models in the automotive industry at the time. The former pioneered the "mass production model," while the latter was a prime example of expansion through scale. At that time, Toyota, a tiny country in Japan, was simply unable to compete with Ford and General Motors in terms of technology or scale. However, as the Chinese proverb goes, "Fortunes favor the bold." Today, Toyota shines brightly, with its market value now at $137 billion, surpassing the combined total of General Motors, Ford, Daimler-Chrysler, Renault, and Volkswagen, having risen to become the world's second-largest automaker and hailed as the "most successful automaker in the world." Automotive industry analysts estimate that if the current trend continues, Toyota Motor will eventually surpass General Motors in terms of production scale, overall profitability, and brand value, becoming the world's largest automaker.
If we want to analyze the true reasons behind Toyota's brilliant success, we cannot overlook at least the following aspects:
1. Continuous improvement
2. Winning with products
3. Lean production
4. Successful promotion
5. Internationalization and localization
This book uses concise and vivid language to detail how Toyota has risen from a small company to the world-renowned multinational brand it is today, highlighting its unique success experiences in production methods, product development, marketing strategies, cost control, management models, talent strategies, innovation methods, and global expansion. To help readers gain a more authentic understanding of Toyota's operational management, the book also extensively uses slides designed by the author specifically for training, combining Toyota's development at different stages to vividly narrate its rapid growth and remarkable success.