Alternatives:
Toyota has done a great job at keeping its costs low, however it is a problem that could arise. With the macroeconomic forces that Toyota can’t control, what can they do to keep the costs lower? First they need to focus on achieving superior efficiency. Something they could do is to continue research and development to achieve a greater efficiency and a lower cost structure. Also training the employees and ensuring they are productive will help keep costs lower. The next solution to keep costs lower is total quality management. Improving quality will lower costs because there is less rework, fewer delays, fewer errors and mistakes, it increases the use of time and materials.(p.127) As long as Toyota can keep their efficiency up and quality up, they should have continue success with lower costs.
Today Toyota faces a problem with competitive advantage. Many other companies are closing in the gaps on how efficient they are in making a car by how many hours it takes to make a car and how many employees it takes to make a car. In order for Toyota to stay on top of the market for efficiency with a competitive advantage they need to achieve superior efficiency. They need to again focus on research and development to achieve greater efficiency and lower cost structure. They also need to stay on top of errors and mistakes to save time, money, and materials. The next solution for competitive advantage is to achieve superior customer responsiveness. Toyota’s customers base has been aging and it is a concern for them. In order to appeal to the younger generations they need to send out surveys and look around to see what is important to consumers today. It is important to listen to what their consumers needs are and satisfy those needs. They can make models targeted to different generations.
Evaluate the alternatives you identified above. What are the pros and cons of each? Does one offer an advantage over the other? Make sure you describe the key steps for implementing each alternative. For example, achieving superior efficiency may require significant investment in robotics which may strain the company’s capital reserves. On the other hand, a functional strategy that achieves superior quality may require the lower cost alternative of finding very competent suppliers to make particular components. Be aware that any of the company’s functional areas are fair game.