Free Essay

Roadmap to the Development Process of Toyota Prius

In: Business and Management

Submitted By AnnB
Words 1053
Pages 5
Toyota Hybrid cars.
Toyota Motor Corporation is a famous Japanese multinational corporation, and is considered the world’s second largest automaker of automobiles, trucks, buses, robots, and providing financial services.
When Toyota and other Japanese carmakers entered the American market, they were not considered as a threat to the American auto industry because it was believed their cars had no appeal to American consumers
However, in the 1970s, due to several problems like environmental regulations, and quality control issues with American cars, a good number of American car owners began searching for alternatives to poorly made American cars. In response to these changes, Toyota and other Japanese carmakers aggressively marketed their cars to Americans as being fuel-efficient, environmentally friendly, and having better build quality than American cars. In addition, Toyota marketed their cars with commercials involving young Toyota drivers jumping in the air. As a result, the Japanese’s marketing campaign along with continuing problems from the Big Three auto manufacturers, allowed import cars to make up about 20 percent of the US car market by 1980.
Stage1
General Motors, Ford and Daimler-Chrysler focused in the late 1990s on mergers and acquisitions for improving their business positions to meet future challenges. Toyota, meanwhile, centered its business strategy on technological innovation and persistent environmental product development.
The price of oil was not especially high during the 1990s when Toyota started its hybrid car program. Oil prices were below US $20 barrel in 1994 and were to fall to a 50-year low around 1997 when the Toyota Prius was first sold in Japan. Clearly something else was driving Toyota and other Japanese companies to invest so heavily in hybrid car development.

There are three probable reasons:
1 .High petrol taxes in Japan, due to the Japanese government wanting to reduce the dependence of Japan on imported oil. While this would have certainly driven the Japanese development of hybrid cars, petrol was cheap in the key US market at this time.
2) The potential to gain a market advantage by developing the key technologies required to successfully commercialize hybrid cars, and then owning these developments via patents.
3) The expectation that ownership of these key fuel savings technologies would become very valuable when world oil prices rise from the lows of the mid-1990s, which was a fair long-term assumption to make during this period.
Stage2:
Decision Making Process:
In 1994, the executive team acknowledged the potential threat of depleting oil reserves and climate change and change their strategy or products to meet the needs of future customers.
Course of Action:
Toyota set up a group tasked with meeting the challenge of creating a vehicle for the 21st century, which would work within the parameters of natural resource constraints and environmental issues.
Commitment to course of action: Toyota pioneered the concept of Hybrid (petrol/electric) technology to mass produce the world’s first eco-efficient vehicle, the Toyota Prius.

Evaluation of decision/re-engineering: The first prototype of the car had even faced starting problem. It took almost six months to roll the car. Finally, when the car started, it moved for a few yards only. It was hard to imagine that Toyota, which was known for its efficient production systems, was facing such trouble. Initially it felt that ‘Prius’ was a case of technological problems, impossible demands and multiple miscalculations. It proved how a great company could overcome obstacles and turn a dream into reality. Though ‘Prius’ represented only a small fraction of the nine million cars and trucks that the Japanese company planned to produce in 2006, it would be the first vehicle to provide a serious alternative to internal combustion engines, designed for a world of scarce oil and was branded as ‘The car for the future’.

Stage3:
Toyota carefully studied the US market and sees there is a growing oil crisis and foresees a need for change in the structure for cars, converting their needs to oil saving cars. While American car manufactures lacked producing such cars, then Toyota caught that opportunity and tried to occupy this niche market.
By 2002, it was being sold in North America, Japan, Europe, Hong Kong, Australia and Singapore. Analysts opined that the demand for hybrid cars would rise because of the unstable oil prices and the growing need for environment friendly products.
Post Evaluation
By examining the external environment and acknowledging the potential threats of depleting resources and increased concern over environmental issues, Toyota have turned a threat into a business opportunity, boosting their reputation both as an environmentally conscious and as technological innovators and established themselves as leaders in this growing market. The car industry faces many complex issues, but the introduction of the Prius provided Toyota with a competitive advantage.

RoadMap to the development Process of Toyota Prius

Stage1 | Stage2 | Stage3 | Executive level | 1 Expressed concern about the future of the automobile2.Embarked a new project called G21 to the team3.Communicated the vision and priorities to the team | 1.The executive team acknowledged the potential threat of depleting oil2.Challenged the team for the innovation of new model using new technology | 1. Toyota unveiled the Prius in Japan in October 1997, two months ahead of schedule.2.Made strategy plans for introducing cars to US and other prospective continents | Management and Team level | 1.Engaged in improving the existing internal combustion engine technology2.Started making refinements to the existing technology | 1. Team committed to the course of action using hybrid technology.2. Came up with around 80 alternatives.3. Identified numerous problems -- heat, reliability, noise, and cost.4. Narrowed the list to four models.5. After endless fussing and tweaking, the team finally reached 66 miles per gallon -- the 100% mileage improvement. | 1. Team has started putting efforts towards with second and third generation Prius.2. Redesigned the model for making it more appealing to the consumers. | Marketing /Sales Team | 1. Identification of the growing oil prices.2. Identification of Growing middle class around the world. | 1. Raised the concern that Premium price for the hybrid would make it impossible to sell.2. Challenged with building consumer technology awareness. | 1. Devised new marketing ways to cut down dealership costs in US.2.Devised new ways to boost the sales through internet, relied on grass-roots marketing, and public relations events |

Similar Documents

Premium Essay

Toyota Process Improvement

...Process Improvement – Toyota Sharron Rose Capella University Unit 2 Assignment 1 Problem statement: What exactly is the problem? With globalization comes an inevitable strain or tension between global and local forces. Toyota grew into such a large company at record speed that it could not transplant its culture to foreign markets readily. Further, because their organizational structure was centralized, key decision-making came only from Japan impairing the company’s ability to prevent the burgeoning safety problems before they reached the crisis stage. Decentralized control must take place for better communication, greater consistency, and ultimately better quality and safety for customers worldwide. Background of the issue: How long has it been occurring and other relevant historical data (costs, impacts, and implications to the organization)? Toyota was basically organized the same way it was half-a-century ago when it first began selling cars in the United States. None of its operations are functionally integrated – and all report back to Japan. It’s a caricature of a chimneyed company with vertical structures and no coordination (Taylor, 2010). While Toyota’s structure may have suited them when they were a much smaller company a generation ago, it no longer does. It’s presence in the U.S. has grown significantly and its regional engineers and executives have endured frustrating amounts of bureaucratic red tape and time-consuming sign-offs and......

Words: 858 - Pages: 4

Premium Essay

Process Identification Plan for Toyota

...The Case for Change at Toyota Motor Corporation Process Identification and Improvement Plan ______________________________________________________________________________ Unit 1 Assignment 1 MBA 6022 Lynette D. Capella University Abstract This Process Identification and Improvement Plan will begin with a summary of the Toyota Motor Corporation and core commitment to safety, quality and volume. It will also refer to the case study review titled “Toyota: The Accelerator Crisis (2010), by Greto, Schotter, and Teagarden for a synopsis of the accelerator and automobile recall crisis that affected the company’s reputation, image and near financial collapse. It also identifies two distinct process areas have been targeted for improvement, Toyota’s HR management systems and TPS/Lean Production System which need to be integrated. Furthermore, this plan will further discuss areas of development, positive impact and benefits to the company— and demonstrate how if a process change does occur how it will negatively impact this particular industry/ areas for improvement or innovation and then discussing the specific opportunities including impact and benefits. Introduction Toyota Summary: According to Greto, (2010), in 1933, Toyota Motor Corporation was originally founded as a division of Toyoda Automatic Loom Works; which was dedicated to the production of vehicles under the guidance of Kiichiro Toyoda. The company’s first automobiles were the A1 passenger......

Words: 3876 - Pages: 16

Premium Essay

Prius Case Study

...Toyota Prius Case Study Background Information Introduction The Toyota Prius is a full hybrid electric mid-size hatchback, formerly a compact sedan developed and manufactured by the Toyota Motor Corporation. The EPA and California Air Resources Board (CARB) rate the Prius as among the cleanest vehicles sold in the United States based on smog-forming emissions. The Prius first went on sale in Japan only in 1997, making it the first mass-produced hybrid vehicle. It was a "shakedown" model. Toyota like to extensively test any new technology on their own market, "close to home", to try and iron out any problems before they release it internationally. This is one of the reasons Toyota have the reputation of being the most reliable car maker in the world. There was about 70,000 Toyota Prius Generation 1 sold in Japan. A small number of these, significant by Toyota's standards, had problems with the battery pack. It was subsequently introduced worldwide in 2001. The Prius is sold in more than 70 countries and regions, with its largest markets being those of Japan and North America. In May 2008, global cumulative Prius sales reached the milestone 1 million vehicle mark, and in March 2011, the Prius reached worldwide cumulative sales of 3 million units. The U.S. is the largest market, with 1 million Priuses sold by early April 2011, and Japan reached the 1 million mark in August 2011. Since its launch in 2009, the third-generation model has sold more than 1 million units......

Words: 6012 - Pages: 25

Premium Essay

Chidlhood Development Process

...modeling, it means to imitate something. It is thought that most language development comes from what is said and heard from others. Reinforcement comes in where a child says something and then an adult encourages the child to say it again and again. This process is done when the child is an infant and continues as the child grows older. Neither modeling nor reinforcement sufficiently explains how children eventually acquire an adult-like form of their native language (McDevitt and Ormrod, 2013). | Nativism | The theory of nativism is known as a theoretical perspective which proposes that little knowledge is biologically built in and begins at birth or not too long after. Nativism focuses more on syntactic development. | Information Processing Theory | This theory has a diverse choice of operations used by children to make out the language barrier. This theory consists of one main necessity which is attention. Cognitive processes must be sufficiently flexible that they allow children to acquire language despite the varied ways in which adults support their language learning ( McDevitt and Ormrod, 2013). Cognitive process theory focuses more on semantic development. | Sociocultural | Sociocultural theory is how the language develops through social interaction. This theory consists of language socialization which involves more communicating and the proper linguistic behaviors. Another important process to this theory would be intersubjectivity which is where two or more......

Words: 422 - Pages: 2

Free Essay

Prius

...Study Prius: Leading a Wave of Hybrids Micro-environmental Factors | Factors | How Toyota dealt with these factors | Company | Toyota first generation of Prius was small compacts car with unattractive exterior. Therefore they had to coordinate with other departments within the company such as Research and Development and marketing to introduce a new generation of Prius that could be more attractive to buyers (Gen II). | Suppliers | Following the successful launch of the Prius. It was in Toyotas best interest to coordinate with their strategic partners like suppliers to introduce a type of batteries that could be cheaper and result in lower prices, and consequently increase the demand. | Marketing Intermeddlers | Toyota was facing a shortage of the Prius which led to issues with the dealers who wanted more cars to sell. Toyota had to prepare some materials for the dealers and their sales person in order to sell the Prius, They also had to educate buyers how to drive the cars to obtain maximum fuel efficiency. | Customer | The case study shows that Toyota thoroughly studied the market for consumer and adjusted its marketing according to it. Toyota predicted that the purchasers of their cars would be techies. It was very evident that Toyota was absolutely right in its prediction. For this reason Toyota emphasized on the technology of the car and used the internet, therefore, promoting the environmental part. As for the second generation of the Prius,......

Words: 543 - Pages: 3

Premium Essay

Development Process & Risk Analysis

...MET CS 682 – Module 2 Assignment 2 Development Process & Risk Analysis Date of Submission: January 29, 2014 Table of Contents Introduction 3 Scenario 4 Part I. Selection of a Suitable Development Process 5 Waterfall Approach 5 Iterative Approach 5 Agile Approach 6 Development Process for MallKiosk Development 6 Part II. Risk Analysis 8 Identification of Risk 8 Risk Analysis 9 Risk Management 10 Appendices 12 Appendix 1: Waterfall Approach 12 Appendix 2: Agile Approach 12 Appendix 3: Risk Management 13 References 14 Introduction This week’s assignment focus on the processes of system development and risk involved. For someone like me who never was part of the full design phase of the development process, I never knew the full concept of how the projects or applications were built from initiation. This assignment will allow me to have a high level understanding of the processes involved in system development, thereby allowing me to get a full grip of Project Management involved in the entire system development lifecycle. The 1st part of the assignment will allow me to identify and differentiate the 3 different development processes; waterfall, iterative and agile. I am hoping that after completing this part, I will somehow be able to identify the appropriate process for a particular application development. Among the 3 types of development approaches, the only one that I am familiar of is the waterfall approach. The 2nd...

Words: 3617 - Pages: 15

Premium Essay

Who Is the Target Market for Each of the Following Cars? a)Toyota Prius B)Toyota Proda

...The Toyota Prius is a hybrid electric car which is one of the first of its kind to be mass produced and marketed. The unique feature of the Prius is its Hybrid Synergy Drive which makes use of both the traditional petrol driven engine and an electric motor. This electric motor allows the Prius to switch off its petrol engine when stationary; and recharge the electric motor using the kinetic energy produced when braking. This not only conserves a lot of energy and petrol, and also allows for a smoother drive in the city areas which tend to have greater road congestion. Toyota’s largest target market would be educated working adults in developed urbanised countries especially in the West where there is a subculture of environmental concerns and issues which are relatively more active compared with the rest of the world. Thus the educated working class in these countries would be attracted to the Prius’ energy and fuel savings, and automatic battery recharging which would not only be a lot more environmentally friendly, but would ensure a more smoothly-powered ride to work in a congested city morning. Furthermore, the affordability of the Prius as compared to other Toyota vehicles coupled with even greater cost savings on fuel – cuts fuel consumption by 40% - is an added incentive for these environmentally conscious consumers as they might worry that specially designed green technology might be expensive One of the factors that could motivate these consumers to purchase......

Words: 347 - Pages: 2

Premium Essay

New-Product-Development-Process

...• 6. Discuss the steps in the new product development process. • Step 1: Idea Generation – Begin from many sources: suggestions from customers, the sales force, R&D specialist, competing products, suppliers, retailers, and independent inventors. • Step 2: Screening – Separate ideas with commercial potential from those that cannot meet company objectives. – Some organizations maintain checklists of development standards in determining whether a project should be abandoned or considered further. – These checklists typically include factors such as product uniqueness, availability of raw materials, and the proposed product’s compatibility with current product offerings, existing facilities, and present capabilities. • Step 3: Business Analysis – A product idea that survives the initial screening must then pass a thorough business analysis. – This stage consists of accessing the new product’s potential market, growth rate, and likely competitive strengths. • Step 4: Development – Financial outlays increase substantially as a firm converts an idea into a visible product. – The conversion process is the joint responsibility of firm's development engineers, who turn the original concept into a product, – and its marketers, who provide feedbacks on consumer reactions to the product design, package, color, and other physical features. • Step 5: Test Marketing – Many firms test market their new-product offerings to gauge consumer reaction. – The purpose is to verify that......

Words: 261 - Pages: 2

Premium Essay

Philippine Development Process

...INTRODUCTION The Philippines is an archipelago consisting of more than 7000 islands. It is the 12th most populated country in the world which poses as a difficult challenge for good governance and development other than smaller countries. The Philippines is mostly mountainous. The citizens can speak several languages. Not to mention, the country is very close to the Pacific Ring of Fire which makes it more prone to frequent natural disasters. There is a 95.8 million in population. It also has a GDP of $424.4 billion with a 6.6% growth in 2012 and it has a five year annual growth of 4.7% with a $4,430 per capita. The Philippines also have a 7% unemployment rate and a 3.1% inflation rate. These are some of the quick facts of the Philippines as of September 2013. When President Benigno Aquino III took office back in 2010, he addressed the most important concern in the Philippine which is corruption. He instantaneously launched massive investigations from the administration he replaced and how they abused their power. The economy of the Philippines has been developing on the average of 5 percent annually over the past two decades. The most important increase in our Gross Domestic Product is the remittances which is more than 10% of the GDP. The distribution of the benefits to the less privileged has been an ongoing challenge in spite of the growth we had in the economy. Also, the Philippines is currently undergoing from extensive poverty and has a massive problem with......

Words: 8782 - Pages: 36

Premium Essay

Toyota Process Identification and Improvement

...Identifying Process improve Toyota Process Improvement Abstract This paper will address the identification of processed used by Toyota Corporation during the accelerator crisis. It will identify the process used and the core problems with the process. In part A of the paper the paper addresses the issues that began with sticky gas pedals, floor mats, and pedal entrapment and braking issues on some models of Toyotas vehicles. The quality of the vehicle was the issue. In part B of the paper the issue was safety and this lead to drivers dying because of safety issues. In part C of the paper Toyota has a lean process established that had no buy in from employees or Leadership which contributed to issues with their product. Toyota thought they had implemented a learn culture that consist of problem solving, teamwork, and a continuous improvement culture to sustain lean. Toyota Process Improvement Toyota is considered a global leader in the automobile business. Toyota has dominated the market with accolades from several organizations endorsing the Lexus as well as the Camry on a top ten list of best cars to own. Toyota had the market share of 12.8 percent. Toyota was based in Japan in 1933 and was introduced to the United States of American in 1957. Toyota made a name for them for producing reliable vehicles with superb quality. This paper will identify several processes for improvement that Toyota has researched, developed, or incorporated due to the crisis of......

Words: 1251 - Pages: 6

Premium Essay

Toyota Prius Marketing Plan

...Toyota Prius Marketing Plan Market Research Assignment Adam Dunphy Rachel MacKenzie Maura Woodman Kyle Wotton Professor BhaskerMukerji BSAD: 231 November 29, 2011 Toyota, the largest automotive manufacture in the world needed to take a leadership role in developing a more sustainable method of transportation. Toyota has a leadership role in quality control by bringinglean practices to the manufacturing process. The term lean was coined by Toyota to create flow in the workplace and the work environment (Wikipedia-Lean Manufacturing, 2013).Toyota is focused on making a product that will help the natural environment and cut down on waste. Our new line of Hybrids shows our corporate commitment to innovation and environmental sustainability. The following marketing programs outlines the ways in which Toyota will evaluate the macro-environment, determine a target market for the Hybrid line, as well as our plans for the product its self, a pricing strategy, our placement of the product as well as promotion efforts. One of the big questions is why? Why did we create this product; well it is simply because there was a massive demand for it. Oil prices are through the roof, and consumers do not want to spend their paychecks at the pumps. In 2008, there was a huge spike in the oil prices. This spike has temporarily decreased but oil prices are predicted to rise again soon. Both consumer households and government are demanding us to create a new......

Words: 6270 - Pages: 26

Free Essay

Toyota Prius

...Toyota Prius Introduction Toyota Prius was first introduced in Japan in 1997 as the world's first mass-produced gas/eclectic hybrid vehicle. The Prius combines electric and gas to supply maximum fuel efficiency and to advertise a clean environment. Prius went global in late 2000, and has been very successful. Geographic Segmentation A private buyer or business buyer is more likely to purchase a Prius. Toyota Prius is available in more than 70 countries and regions and the customer can be from any part of the world. But, consumer targets most likely lives in urban, high populated, and hot temperature areas. Demographic Segmentation Toyota has found that the average consumer is geographically diverse. The consumer's age is between 25-60. They could be either male or female. The income level of the consumers are $100,000 a year vs $85,000 a year for the average buyer, therefore they are in the upper middle class and have well paid occupations. They are not only seeking an environment friendly car, but are also willing to pay more for comfort and future cost saving from the car. In fact, 42% of hybrid owners make $100,000 or more per year. Even though many diverse ethnicities are interested today in purchasing a Prius, Japanese people are the ones that own the most Priuses. The family lifecycle is that they are likely to be married with children (3-5 people). Psychographic Segmentation There are three types of potential buyers; early adopters......

Words: 455 - Pages: 2

Premium Essay

Toyota Prius Case Study

...Toyota Case Toyota Motor Corp. (TMC) Should the new Toyota president accelerate the launch scheduled for the Toyota Prius? The plan to introduce the car “at the end of 1998 with expected production of 1000 units per month…” (Reinhardt, Yao & Egawa, 2006) is an extremely aggressive and ambitious goal; but, is it in TMC’s best interest to speed up the planned launch? There is no doubt that the new president (Hiroshi Okuda) is under extreme pressure to compete in a global market, he believes the company should radically alter its image to attract new customers and gain a competitive advantage while systematically facilitating environmentally-socially responsible practices. It may very well be that TMC should push for a faster launch; but, there are a few things we must take into consideration before we encourage our Toyota team to make any hasty changes. The auto mobile industry faces many challenges (as most industries do) however; this industry is unique in its own way. The industries high barriers to entry, high capital cost, and unique manufacturing facilities make managerial mistakes extremely costly (complete failure is not easily corrected, much less when you change the economies of scale platform). Before making any drastic changes to the manufacturing process, TMC must first analyze its: competition, market, government regulations, facility capabilities, management practices and overall responsibilities (responsibilities include anything from: reaching......

Words: 2699 - Pages: 11

Premium Essay

Training and Development Process

...require training for the same. Development is defined as “Learning that goes beyond today’s job and has a more long-term focus.” It prepares every employee to keep pace with the organization’s pace of growth. In today’s world, where customer focus and changing customer needs are the key drivers for growth, development plays a pivotal role. It looks towards enhancing or adapting the skills of an individual to the changing dynamics of the industry. Also, the individual needs of the employees are taken care of through development initiatives which provide the opportunity for the individual to grow within the organization Objective of the Term Paper: Every research work is conducted to achieve some objectives. . The main objective of the term paper is to know about the Training and development process. Specific Objectives: * To know about the training and development process. * To know about the Training need Assessment tool(s). * To know about the training methods. * To know about the employees’ development process. * To be familiar with the Training process evaluation model. Scope of Study The scope of this paper is firmly bounded by the topic given “Training and development process”. The purpose of this paper is to understand training procedure at different stages involved and training involvement of training materials Limitations Human Resource Management: Human resource Management is a managerial process which ensures the......

Words: 1330 - Pages: 6

Premium Essay

Toyota

...The idea for the creation of Toyota Motor Company began back in 1924 when Sakichi Toyoda invented and patented the Toyoda Model G Automatic Loom. A loom is an apparatus for making fabric by weaving yarn and thread. The Model G Automatic Loom was the first of its kind to use the Jidoka principle, which is where a machine stops itself once a problem occurs. The Jidoka principle and the money made off of the sale of the Toyoda Model G Automatic Loom were used to begin what we now know as the Toyota Motor Company. The Toyota Motor Company was founded in 1937 by Kiichiro Toyoda, Sakichi Toyoda’s son. The original name for Toyota Motors was Toyoda Industries. The first engine for Toyota’s vehicle line was the Type A engine, created 3 years earlier in 1934. The actual vehicle, the Toyoda AA, was created just one year before they officially opened. The Toyoda AA sales price was 3,350 yen, which was 41 U.S. dollars. This was about 5 dollars less then Ford and GM cars, which in 1936 was a lot of money. In August of 1937, Toyoda ran a public competition for a new logo and decided to change its name to Toyota Motor Company. This was easier for their customers to pronounce and it took eight brush strokes to write in Japanese. The significance of eight strokes is that it is a lucky number in the Japanese culture. Starting in September 1947, Toyota’s small-sized vehicles were sold under the name of Toyopet. Other Vehicles sold by Toyota were Toyopet SA, Toyopet SB light truck...

Words: 2750 - Pages: 11