Toyota-america best car company

Assignment Help Business Management
Reference no: EM133048802

Toyota: "America's Best Car Company"

Two-tiny sedans left the port of Yokohama in August 1957, bound for California-the first exports from Toyota. The four-door clunkers flopped. The car, which looked like a brick with a roof on top, was prone to overheating and vibrated at speeds of more than 60 miles per hour. By late 1960, Toyota realized it had made a mistake and pulled the Toyopet Crown off the market. A less determined company might never have returned after this humiliation. But Toyota came back a few years later with a better car and has gone from strength to strength ever since.

The world's most profitable automaker-and soon to be its biggest-now has a 15% market share in the U.S., where it sold 2.5 million cars and trucks . . . [in 2006]. Because Toyota is already bigger than Chrysler in the U.S. and is about to pass Ford, Automotive News, the industry bible, has retired the "Big Three" moniker; GM, Ford, and Chrysler will henceforth be known as the Detroit Three. Toyota's presence in the U.S. is now so routine that the 3,322 business leaders Fortune surveyed named Toyota one of America's Most Admired Companies for the second year in a row-boosting it to third place overall, behind two American perennials, General Electric and Starbucks. Toyota has returned the compliment, making an entrance into that most American of sports-we're talking NASCAR-and introducing a full-sized, Texas-built pick-up truck, the Tundra.As the story of the tarnished Crown hints, nothing was inevitable about Toyota's success. It has managed to survive discriminatory taxes, import restraints, and the occasional xenophobic hissy fit-U.S. workers taking sledgehammers to imported cars-to become something of a model citizen. There's no question that coming fresh, Toyota had some advantages over Detroit: It was unburdened by retiree obligations, union contracts that had been bid up over decades, and brands like Oldsmobile that refused to make money (or die). And yes, it was lucky to have small cars ready to sell when the first oil shocks hit in the 1970s. But the most important reason that Toyota became America's most prestigious automaker is that this quintessentially Japanese company has been better than Detroit at reading the American car psyche. Toyota has never been a style leader. It has never created a car as iconic as, say, the Ford Mustang. But it discerned correctly that many car buyers don't need hot thing. They just want a trouble-free product that looks fine-and they will pay a premium for it.

One way Toyota reads the public mind is the think tank at Toyota Motor Sales in Torrance, Calif., where a research department staffed by 116 people monitors the industry and keeps tabs on demographic and economic developments. Its mission: to predict consumer trends and creates an lineup of cars and trucks to capitalize on them. Each professional is expected to spend time out in the field talking to car buyers. The Japanese have a name for it: genchi genbutsu-go to the scene and confirm the actual happenings.Most big companies have something like it; what distinguishes Toyota is that its executives actually listen and have turned those insights into profits. When researchers found in the mid-1990s that Toyota was losing young buyers to hipper brands like VW, its marketers dreamed up the hugely successful Scion. Another case: GM was fooling around with electric cars as far back as the 1980s, but it was Toyota that tapped into the appeal of the green revolution with hybrid-powered Prius. The Prius accounts for less than 5% of US sales, but Toyota has won a fortune in good publicity. . . .

Beginning in 1988, when it started production in its first assembly plant in Georgetown, Ky., Toyota has been careful to locate each new assembly plant in a different state, partly to maximize congressional clout. "It is better to be spread as broadly as we can be spread," says Josephine Cooper, who runs Toyota's Washington, D.C., office. Toyota has no political action committee, but it has built an effective lobbying operation. "Toyota is a public relations case study-a masterpiece of managing the message," says marketing consultant George Peterson of AutoPacific. "People refer to it as the Teflon car company." In 1989, for example, when the new Lexus had to be recalled to fix the high mounted brake light, Toyota still emerged with its new-car smell unsullied when it returned the cars fixed, washed, and with a full tank of gas.

Toyota has sunk deep roots in the U.S., especially in the middle of the country, where it has built parts and assembly plants and technical centers in a north-south corridor stretching along 1-75. The latest, a $1.3 billion assembly plant in Mississippi to make the Highlander SUV, is due to open in 2010, Toyota employs 34,600 Americans directly and 400,00 more indirectly at suppliers and dealers. Every year, Toyota buys $28.5 in parts and materials from U.S. suppliers, most of which goes into the 1.2 million cars and trucks that it builds here-about half the total it sells domestically. And when it is time to clear inventory, Toyota can be as brassy as any Yank.

In this sense Toyota can look as American as baseball, hot dogs, apple pie-and yes, Chevrolet. But in terms of how it's managed, that is not quite the case. Every U.S. function-sales and marketing, R&D, manufacturing-reports to Japan. U.S. managers sometimes endure 20-hour roundtrip flight to attend a single meeting. Japanese "coordinators" in the U.S. shadow each operation and make their own reports to headquarters. Organizationally it looks like a nightmare, but somehow the two- language, two-culture hybrid works.

Source: Excerpted from Alex Taylor III, "America's Best Car Company," Fortune (March 19, 2007): 98-104 c2007 Time Inc. All rights reserved.

QUESTIONS:

1. What evidence can you identify, in this case, of Toyota's being open system?

2. Which approach, mechanistic or organic, would be better for a company like Toyota that designs, manufactures, and sells technically sophisticated products such as cars and trucks?
Explain.

3. What evidence of centralization or decentralization can find in this case?

4. From the standpoint of Toyota's culture, what does the story of the failed Toyopet Crown symbolically say to both new and long-term employees?

Reference no: EM133048802

Questions Cloud

Describe the concept of risk tolerance : Briefly describe the concept of risk tolerance and identify 3 different kinds of investment risk.
Explain the team effective : What were some of the things that made your team effective at what it did, and what were some of the things that made it ineffective?
Explanations about magnetic disk access speeds : To simplify our explanations about magnetic disk access speeds, in this chapter, we use rotation speeds of 3,600 rpm and sustained data transfer rates
Analyzing the risks posed by the job of miners : (1) A list of potential hazards that exist on the job of miners in the mining industry.
Toyota-america best car company : Two-tiny sedans left the port of Yokohama in August 1957, bound for California-the first exports from Toyota. The four-door clunkers flopped.
What is the share price after taking the investment : If the firm faces an investment opportunity with a cost of $6,875,000, it is expected to provide an NPV of $3,125,000. What is the share price
Perspective of customer relationship management : Imagine that you are selling retail products (You can choose any product). You deliver the product using the expensive delivery partner but is is a reputable co
What is the beta if debt is used as a source of financing : J Motors has 50 Million in assets and are all currently financed by equity. Current beta is .85, and tax rate is 30%. What is the beta
MBA601 Fundamentals of Entrepreneurship Assignment : MBA601 Fundamentals of Entrepreneurship Assignment Help and Solution, Kaplan University - Assessment Writing Service

Reviews

Write a Review

Business Management Questions & Answers

  Caselet on michael porter’s value chain management

The assignment in management is a two part assignment dealing 1.Theory of function of management. 2. Operations and Controlling.

  Mountain man brewing company

Mountain Man Brewing, a family owned business where Chris Prangel, the son of the president joins. Due to increase in the preference for light beer drinkers, Chris Prangel wants to introduce light beer version in Mountain Man. An analysis into the la..

  Mountain man brewing company

Mountain Man Brewing, a family owned business where Chris Prangel, the son of the president joins. An analysis into the launch of Mountain Man Light over the present Mountain Man Lager.

  Analysis of the case using the doing ethics technique

Analysis of the case using the Doing Ethics Technique (DET). Analysis of the ethical issue(s) from the perspective of an ICT professional, using the ACS Code of  Conduct and properly relating clauses from the ACS Code of Conduct to the ethical issue.

  Affiliations and partnerships

Affiliations and partnerships are frequently used to reach a larger local audience? Which options stand to avail for the Hotel manager and what problems do these pose.

  Innovation-friendly regulations

What influence (if any) can organizations exercise to encourage ‘innovation-friendly' regulations?

  Effect of regional and corporate cultural issues

Present your findings as a group powerpoint with an audio file. In addition individually write up your own conclusions as to the effects of regional cultural issues on the corporate organisational culture of this multinational company as it conducts ..

  Structure of business plan

This assignment shows a structure of business plan. The task is to write a business plane about a Diet Shop.

  Identify the purposes of different types of organisations

Identify the purposes of different types of organisations.

  Entrepreneur case study for analysis

Entrepreneur Case Study for Analysis. Analyze Robin Wolaner's suitability to be an entrepreneur

  Forecasting and business analysis

This problem requires you to apply your cross-sectional analysis skills to a real cross-sectional data set with the goal of answering a specific research question.

  Educational instructional leadership

Prepare a major handout on the key principles of instructional leadership

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd