Toyotas Decision to Develop the Prius - Research Paper Example

Toyota’s Decision to Develop the Prius Abstract This report will give detailed information about the evaluation and decision making process of Toyota in order to make its new hybrid car. Our life is more about making decisions and choices and buyers of traditionally fuel consuming vehicles have reported that they considered quality and performance as the most important determinants of choice. They rated as least important, the image they derive from driving a particular car and social influence Why Do People Buy Hybrid Cars? A large number of consumers are now in buying more efficient and environmentally friendly cars, such as Hybrid cars in order to depict their concern towards the environment and its sustenance (Maynard). More and more, a majority of these consumers choose to purchase petrol-electric vehicles by keeping in view the high prices of petrol. In 2009-10 Japan was the only best seller of cars and it was occupying an important share in the capital market for automobile trends (Mick). Recently, a report has declared Prius as bestselling car with all its well-publicised quality and leisure it gives (Toyota). The Decision‐Making Process of Toyota At Toyota, managers have made a very deep evaluation to decide the method of solving increased petrol prices. On this matter, decision making and problem solving processes are the most important evaluation systems and Toyota is considering alternatives to solve this problem and making choices, and following them up with the necessary actions. Sometimes, decision making process is shorter for a product, but for another product, it can be lengthy. Toyota followed following steps in this evaluation (Toyota). The decision-making process involves the following steps (Monahan 38): 1. Problem Identification and Identify limiting factors. 2. Developing, Analyzing and choosing potential alternatives. 3. Implement the decision and establish a control and evaluation system. 1- Problem identification and Identify limiting factors It is the very first step to start any decision making process. To find out the main root cause, need and reason for developing an alternative of a specific product. It is an important way that helps a manager in determining the true problem of a specific matter or situation from its symptoms (Monahan 51). Any organization can solve its problem related to any of its product with the help of this step in its decisions making process. Following table is showing the reason about “Why Toyota decided to make a Hybrid Car”?  TABLE 1.1 Symptoms and Their effective Causes Leading Reason Underlying Problem Less profit and sales of vehicles Poor market research and evaluation Increasing costs Poor technology to make an impressive design; less experienced staff Less confidence and acceptance from customers Less comfortable communication between high and low level employees Workers turnover increased Less payout; job specification not suitable Absenteeism rate increased Employees think company is not giving value to them. 2- Developing, Analyzing and Selecting alternative: No doubt that all the directors and managers of a company want to choose the best decisions for their product, and to do this they are required to have the ideal and best resources, most accurate information, sufficient time, talented personnel, latest technological equipment, and experienced supplies. Managers also need to identify the limiting factors, if any. Before launching Prius in the market for sale, at Toyota managers followed all the wanted steps to give best to its customer (Bamberg 26). Technique is not that necessary, as group decision making is also better than an individual’s decision. At the start, only Prius hatchback was the available model of Toyota Prius, but now, there are many other models too which came in to existence after deep and effective research done by Toyota at its Research and Development department. For developing a new model, Toyota has made following step to develop, analyze and select another alternative for their product. The purpose of this specific step is to decide all the related qualities of each idea. Managers firstly should identify all the advantages and related disadvantages of each of alternative in order to make a final decision and implement that decision. There are numerous ways to evaluate the alternatives. Here are some potential: Determine the negative and positive points of each alternative. Conduct a cost-benefit analysis. Weight each alternative’s factors’ that are important in the decision making process and rank each alternative after weighting them which are related to its ability. Regardless of the method used, manager’s team is required to evaluate each alternative in terms of its Feasibility — is it doable? Effectiveness — How well does it will able to solve the problem? Consequences — what will be its costs and its effects on the organization? After managers has developed and analyzed all the related factors and all the alternatives, they must choose the best one. The best alternative is the one that produces the most advantages and the fewest serious disadvantages. The main factor and elements of Prius is its capacity to minimize the fuel expenses and Toyota gas mainly focused on this element to give most efficient car of the time to its customers and they more decide to add some other features like, SUV compact, LED hand lamp, touch screen and much more alternative then other cars which will attract customers to buy this car (Toyota). 3- Implement the decision and establish a control and evaluation system After finalizing the decision, it is the duty of managers to implement that decision as managers are hired and paid to make decisions, but not only for decision making as they are also get paid for giving positive results from these decisions. Positive results must follow decisions. Everyone involved in the process of decision making is supposed to know his or her responsibility and position to ensure a most successful outcome and positive feedback from customers. Toyota has been at the top at the in the list of vehicle manufacturing companies but before launching Prius, it was declining a bit (Maynard). Ongoing actions need to be monitored. And an evaluation system is for providing feedback on how well the decision has being implemented, what the results are?, and what adjustments are necessary to get the more effective results that were intended when the alternatives were chosen? All these points are as important for a manager as they have helped a manager to evaluate his decision; manager also needs to gather needed information to show its efficiency. The high barriers of industries to have an acceptable entry include: high capital cost, and unique manufacturing facilities that make managerial mistakes extremely expenses. And if a manager's decision is not able to resolve the problem, he needs to figure out what went wrong (Mick). A manager may accomplish this by asking the following questions: Was the wrong alternative selected?  Was the correct alternative selected, but implemented improperly?  Was the original problem identified incorrectly?  Has the implemented alternative been given enough time to be successful?  Conclusion Toyota first responsibility, of course, is to provide customers around the world with the attractive and appealing cars they truly want. The auto mobile industry is today facing a large number of challenges to compete, however; this industry is unique in its own way. This report gave detailed information about the evaluation and decision making process of Toyota in order to make its new hybrid car. More and more, a majority of consumers choose to purchase petrol-electric vehicles by keeping in view the high prices of petrol and Toyota’s Prius has become their first choice to purchase. Works Cited Toyota. Toyota Motor Corporation Australia Limited, 2012. Web. 20 October 2012. Bamberg, S. "How does environment concern influence specific environmentally related behaviours? A new answer to an old question." Journal of Environment Psychology 1 (2003): 21-32. Print. Maynard, M. Say ‘Hybrid’ and Many People will Hear ‘Prius’. The New York Times. 4 July 2007. Web. 20 October 2012. Mick, J. "Toyota Prius Was Top-Selling Vehicle in Japan for 2009. ." DailyTech. 11 January 2010. Web. 21 October 2012. . Monahan, G. Management Decision Making. Cambridge: Cambridge University Press, 2000. Print. Read More