University of Maryland
February 17, 2012
Instructor: Dr. Ben Thompson
2237 Gateway Blvd
Baltimore, MD 21202
Abstract: Toyota is faced with an Accelerator crisis after allegedly faulty accelerator pedals in some of their vehicles caused the pedals to depress get stuck or cause them to accelerate. This lead to a massive recall and lead to penalties and fines from the US government and consumer confidence diminished. There are several processes that can be identified that will benefit Toyota and lead to improvement which is what will be discussed in this paper.
Toyota Motor Corporation was founded by Kiichiro Toyoda. Its headquarters is in Japan and was established in …show more content…
The desired outcome from working on the issue of their current network of suppliers would bring them a comfort level of knowing they built solid relationships with a network that is invested in quality as much as they are. The competitive advantage it will yield would be to have suppliers of the components that are put in their vehicles being built with the same standards of quality that Toyota was known for. Another con is with having a smaller network is their competitors can produce more parts and thus sell more vehicles at a faster pace. On the other side as a pro, they will be able to offer their customer a greater value by ensuring the quality of the components being used. According to Porter (1996), “The arithmetic of superior profitability then follows: delivering greater value allows a company to charge higher average unit prices; greater efficiency results in lower average unit costs” (p. 62). Toyota has already tried the strategy of growing quickly to gain global market share and was met with disastrous results. Although they may not be able to produce as much as they were when they were pursuing the growth strategy they will be able to keep current customers and gain new one’s whom value quality.
The problem that needs to be improved is the process of approving and evaluating parts and designs by