In its early years, Toyota core competencies was that they focused on suiting the Japanese market by adapting the Ford Production System. They then adapted these systems later to become which took the automobile industry market by storm and allowed the company to come out with innovative models in a cost efficient way. Rather than focusing on larger cars like their competitors they focused on producing smaller cars. They also had lines to suit people on different budgets. They had more affordable lines as well as more luxury lines such as Lexus. Toyota had a major innovation with their Pruis, a gasoline-electric car that was the world’s first mass produced hybrid car. In April 2002, Toyota had announced a new global strategy which was the ‘2010 Global Vision’ to achieve a 15% market share of the automobile market by early 2010 and by 2003 they had a major presence in all the major automobile segments.
Internally, Akio Toyoda proposed for the company to adopt a ‘back to basics’ approach to revive the company. Toyoda had planned to produce small, fuel efficient and competitively priced cars that people could afford, to cut costs and establish a strong presence in emerging markets. He had also volunteered to take a 30% cut and other managers also accepted cuts. The management was to place priority on meeting the needs of the individual regions market by watching for any changes and provide a customized strategy based on the individual markets. Toyota had kept to their original values but made a few changes; ‘so while preserving our DNA, I would like to have the courage to change some things if those things have to be changed.’
To return to profitability, Akio Toyoda needs to cut as many costs as possible and focus on the strengths of the business. Toyoda has already taken a pay cut of 30% and has also cut the wages of other staff and management. He had also cut down on the company’s operations so that the company would be profitable using just 70% of its production capacity with the aim of saving $85 billion in 2009. He did not close any plants or cut any full time jobs as he visioned that Toyota would return to profitability and would then need these staff and plants to ensure they can meet demand. This shows that Akio believes and is confident in his self and his plans for the future.
Toyoda should return to their original values in producing small…