Strategic Management Master Case Study Example | Topics and Well Written Essays - 3500 words

Strategic Management Master - Case Study Example The history of Toyota is indeed remarkable in that it has ventured into manufacturing of small cars in a big way. It has introduced new car making technology by mass producing hybrid gas electric vehicles with a capacity of 1 million globally. During the year 2005, Toyota has produced 8.5 Million vehicles and has a large market share. Toyota now claims to be the 8th largest car manufacturing company in the world. However one of the fact remains that it has not been able to make much inroads in the European markets. The success story of Toyota lies in its use of scientific systems and procedures for car making .Through the use of Kaisen, which entails efficiency and optimum work effort, and is basically designed for improving efficiency. Lean management which is based on developing managers who are problem solvers is based on serving customers and heightened level of performance attainment. Lean Management is a total holistic concept which is designed to attain efficiencies in all spheres of car making through the use of waste elimination. The basic theme of Toyota Production System (TPS) is to achieve operational excellence and instil an organisational culture that values and respects people and nurture and develop their creative abilities. The stage is set for small cars, to come in a big way, in the international arena, fuelled by mounting fuel costs and strong pollution laws. It is widely believed that in the next 5 years, the global demand for small cars would grow by nearly 30%, averaging nearly 18 Million (Schifferes 2007). The major players who manufacture and sell small cars are Indian brands like Tata, Maruthi, Renault, Fiat, Peugot, Daewoo (GM), Hyundai and Daihatsu. The fact remains that the almost prohibitive costs of fossil fuels and stringent pollution norms have become a severe deterrent for automakers. It has therefore become essential to seek ways and means for finding out cheaper and clean, fuel efficient alternatives. Toyota could rightly claim to have established brand leadership in hybrid cars and has surged ahead of even Ford and General Motors (GM). However, the spread of alternative technology involves large investments and technological barriers. However, the full scale development and product implementation of advanced fuel alternatives is an expensive and time-consuming matter and may take around a decade for its final development. "But in the long run, no major car company doubts that ethanol, diesel, electric, hybrid and even hydrogen-powered vehicles will become more important in the future." (Schifferes 2007). The present day automotive industry is going through a total and thorough change in its production methods. It has now become necessary for scientific techniques, principally based on lean management, aimed at reducing the costs of making small cars, and also making it easier for automakers to shift their production patterns to match customer preferences and tastes over a period of time. This is also one of the principle reasons why Toyota has overtaken GM as the most powerful automaker in the higher efficient production system (Globalization). During the middle of the 20th Century, the American automaker GM dominated the US car markets with 100 % share. But now, at the beginning of the 21st century, its market share has come down to 52% with Japanese and European carmakers at 43% and 5% respectively.