Toyota Management Strategic Choices - Essay Example

Great encouragement arose from the Japanese government that needed domestically produced vehicles. Toyota Motor Company was established in 1937 as a stand alone and separate company. The name of the company was changed because it was believed by the Japanese that Toyota, eight is believed a luckier number(Black & Miller, 2008). Moreover, the first car and truck by the company was produced in 1935, the model A1 and G1 respectively. An era of rapid expansion overtook the Toyota Company in 1945 when the company was permitted to sell to the United States military.

At the post war times, the company made trucks for war to the military and in 1947 it made the model SA, Toyopet. The car was designed to be cheap and handle the rough terrain of postwar Japan. In the preceding two years, an SD model was successfully made and the Toyopet SF became the first popular Toyota car. In 1955, Toyota Company made the RH model with a 48 horse power and during that time, a year round closure of 8,400 cars was produced (Liker, 2004). In addition, Toyota started producing the Land cruiser, a civilian truck, in the same year.

The start of Toyota international sales was characterized by the philosophy of making the production and designs of its products local, building the vehicles in the destined countries to adapt them and also stem up the long term relationships with local labor and local suppliers (Magee, 2008). The company produced the Corona, that had a relatively large interior space and extremely comfortable and had a low price and improved quality however rust was a serious drawback In business there are a category of schemes developed to analyze, maintain, and achieve competitive advantage.

Two fundamental decisions accrue: to start with is whether to primarily compete on price, cost, or provide distinctive features that justify higher prices. Secondly, how broad the competitive scope or the market target is.(Pearlson & Saunders, 2010) To commence, the price (cost) leadership strategy was used, has been used and will be used in times to come for Toyota Company to obtain a competitive advantage over its rivals or competitors as Honda Motor Company and General Motors Company Limited to mention a few while maintaining profits in its business operations.

The strategy advocates for the vehicles produced by the Toyota Company to always appeal to a broad section of the market at a lower cost. For instance, the Corona was lowly priced to suit the needs of the market and cover a range of customers ( Hoch, 1998) In an attempt to implement this strategy successfully, the company used exceptional efforts to reduce costs without an exclusion of features considered essential by buyers. This was by an establishment of Greenfield operations in the new countries.

However, a critical cost advantage method was designed to ensure that the vehicles were so hard a task for the competitor to copy and match what Toyota Company produced. This strategy has a number of benchmarks: the marketplace is always dominated by forms of price competition and very high sensitive buyers, there are many buyers and the bargaining power is in their reach, there is a low switching cost for customers, there are few ways to achieve product differentiation that has more value to consumers and the product in the industry is the same by all sellers.

(Pearlson & Saunde