Toyota Case Study Example | Topics and Well Written Essays - 750 words

Toyota - Case Study Example The instability serves to make fuel efficiency a more significant decision factor for vehicle consumers, increasing the desirability of the plug in hybrid. Certain consumers may see purchasing a plug in hybrid as a move that reduces dependence on foreign oil and one that serves to bolster US independence while reducing the bargaining power in adversarial governments. The entry level and middle level market segments are very sensitive to price and vehicle durability. Toyota has been able to translate its cost advantage into vehicles with higher, more attractive content and longer life than GM. He further adds that Toyota's Camry and Corolla, and derivatives of those cars have been able to dominate their market spaces they set the standard others must follow and they establish the price thresholds. Professor Peter Morici, School of Business at the University of Maryland and former Chief Economist at the US International Trade Commission remarks that Toyota enjoys much lower labor costs in the US and benefits from an undervalued yen for cars made in Japan. In the US, this comes to about $2500 per vehicle (Rossiter, 1998). In 2008 and 2009, a series of shocking economic events hit the world and Toyota. Toyota had been sprinting toward Vision 2010 of 15% market share, adding new products, building plants, deploying trainers from Japan, and focusing o n how to feed growth. To add insult to injury, the Japanese yen strengthened by 15% from July to December of 2008, and so every car shipped from Japan to the US cost 15% more. Ultimately, this led to the first loss in over 50 years of over $5 bn (Toyota Motor Corporation, 1997) Social Factors Also, Toyota has to overcome a string of problems. They include: ensuring quality and managing a sprawling network of manufacturing and sales. In spite of them Toyota plans to set-up its plants in the US, where it has to deal with labor-related issues, which its rivals are facing (Yadin, 1994). The American patriotic feeling may put the Japanese company into troubles. The US native slogan 'Wake Up America and Buy American'. Challenges the company sales in US market. Toyota, however, has taken great pains to identify itself as an American company by building plants in the south. Toyota had already earned the trust of their existing American customers (Rosen, 2000). Technological Factors Toyota is producing dominant cars from its highly efficient production system led by an efficient assembly line. It has built a reputation for technological leadership as well, most notably with the hybrid and fuel-efficient cars, such as the Corolla and Yaris and gas-electric hybrid Prius, which became big hits because of surging gas prices (The Telegraph, n. d.). Armed with cost and quality, Toyota is proud to say that its Toyota Production System (TPS)' is the key for its success. Prof. Jim Matheson of Stanford University says "The process needs low-cost and quality, and Toyota is a role model example of how to use cost and quality to get on the playing field" (Fitzgerald, 2000). Its success has been helped by