Toyota's Integrated Differentiated Strategy example essay topic

Business Models one of the leading automobile manufacturers in the world, Toyota ranks within the top three worldwide. Due to their unique business model, they are now have a market share of 14% in the first four months of this year. That is an astonishing 2.3% jump from the previous year. According to Autodata. com, the Toyota City based automaker ranks fourth in United States sales.

We have determined that their business model is an Integrated Low Cost - Differentiated Strategy. It involves finding the lowest operational cost along with a unique niche or strategy that separates them from the competition. Toyota's new statement "Moving Forward", reflects their plans and expectations for the future. This includes the known and the unknown factors that a business must face. In 2000, Toyota launched a new cost effective strategy called 21 (Construction of Cost Competitiveness for the 21st century), for Low Cost operational expenses. With this aspect Toyota plans to advance such initiatives globally, based on its policy of purchasing the world's best parts at the lowest cost with the shortest lead times.

According to Toyota, they have undertaken a manufacturing revolution that has fundamentally changed established practices; all the way back to the product development and design. They have done this by integrating four areas: design, production engineering, procurement, and component supply. They have achieved higher quality at lower costs by creating standardized, multipurpose components. Also the reduction in cost has heightened the value and fortifies the competitiveness of product. To do this, Toyota has required intensive coordination with its suppliers. Another factor of their Integrated Low Cost is that Toyota steadily feeds cost improvements back into the product to raise their value along with the fact that four Toyota's seven corporate auditors are outside corporate auditors.

Toyota's Integrated Differentiated Strategy is very unique to the automotive industry. Its main focus, according to the president of Toyota, is that Toyota is not trying to rival other automakers; Toyota is trying to conquer customers with great products and service to obtain high customer satisfaction. Also, the business model is based off of incremental sales to insure that the unforeseen will not be detrimental to the business structure. As Toyota grows in market shares, the company realizes the fluctuations in currency exchange rates, particularly with respect to the value of the Japanese yen, the U. S dollars, and the euro British pound.

This makes them one of the top automakers in the world.