Toyota Case Study
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Deck I made for my group's presentation of Toyota's hybrid technology and its management of disruptive technology.
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Toyota Case Study
- 1. Toyota The future is .
- 2. Q1 Is Toyota developing a “Disruptive Technology”?
- 3. disruptive technology [dis-ruhp-tiv tek-nol-uh-jee] n. Introduction to a set of very different package of attributes from the ones mainstream customers historically value, and they are often perform far worse along one or two dimensions that are particularly important to those customers (Bower & Christensen, 1995, p. 45).
- 4. disruptive technology radically performs different worse from what in what mainstream mainstream customers customers want want
- 6. Characteristic #1 Simpler, cheaper, lower performance
- 7. Characteristic #2 Generally promise lower margins, not higher profits
- 8. Characteristic #3 Does not appeal/cater to the most profitable customers
- 9. Characteristic #4 First commercialized in emerging or insignificant markets
- 10. Characteristic #5 Tends to be rejected by mainstream players
- 11. Characteristic #6 Performance attributes that existing customers do value improve at such a rapid rate that the new technology can later invade those established markets
- 12. Characteristic #7 Any market research on the technology is likely to be incorrect
- 13. Simpler rapid rate incorrect lower margins rejected not most profitable customers later invade insignificant markets
- 14. B. Characteristics of Toyota’s Technology
- 15. Characteristic #1 Simpler, cheaper, lower performance
- 16. Characteristic #1 Simpler, cheaper, lower performance o Shortened product cycle time. 30% faster than its competitors x Federal tax incentive + potential savings on gas o 2004 Prius 100 miles/hr 0 to 60mph in 12s Competitors do 0-60mph in 10s
- 17. Characteristic #2 Generally promise lower margins, not higher profits
- 18. Characteristic #2 Lower margins Initial losses: US$20,000/car Normal cars: 8% profit margin
- 19. Characteristic #3 Does not appeal/cater to the most profitable customers
- 20. Characteristic profitable Does not appeal/cater to the most #3 customers Niche market Single Geeky 51 year old Female
- 21. Characteristic #4 First commercialized in emerging or insignificant markets
- 22. Characteristic #4 First commercialized in insignificant markets Eco-consumers
- 23. Characteristic #5 Tends to be rejected by mainstream players
- 24. Characteristic #5 Tends to be rejected by mainstream players + v.
- 25. Characteristic #6 Performance attributes that existing customers do value improve at such a rapid rate that the new technology can later invade those established markets
- 26. Characteristic #6 Performance attributes that existing customers do value improve at such a rapid rate that the new technology can later invade those established markets
- 27. Characteristic #7 Any market research on the technology is likely to be incorrect
- 28. Characteristic #7 Any market research on the technology is likely to be incorrect No clue about the market Tendency to focus on the mainstream market Hitting wrong target
- 29. Q1 Is Toyota developing a “Disruptive Technology”?
- 30. Q1 Yup.
- 31. Do you agree with Toyota’s commercialization approach? Q2
- 32. #1 Marketing
- 33. Market Research trends: laws + consumer market environmental movement
- 34. Advertising $50m budget Saatchi & Saatchi campaign focused on fetched Oscar celebs early adopters media exposure spread virally
- 35. #2 Culture
- 36. Just-in-time production system Smaller factories Quick response to changing market demands flexible and fast
- 38. Trained technicians Warranty 3 years of standard coverage + 8 years of hybrid-related component coverage Quality assurance Liberty to stop production as necessary
- 39. Do you agree with Toyota’s commercialization approach? Q2
- 40. Yeah. Q2
- 41. Food for thought To exploit disruptive technology, focus on customers’ future needs, not current desires.
- 42. Group Dominic 5 Michelle Michael
- 43. Bibliography Boberg, E. (2004). Common Sense Not Required. Retrieved September 7, 2010, from http:// www.angelfire.com/mech/evbo/prius.html Christensen, C. M. (2000). The Innovator's Dilemma. Harvard Business School Press. Danneels, E. (2004). Disruptive Technology Reconsidered: A Critique and Research Agenda. The Journal of Product Innovation Management, 246-258. LaMonica, M. (2008, May 20). Electric cars: iPhones of the auto industry? Retrieved September 7, 2010, from CNet News: http://news.cnet.com/8301-11128_3-9945899-54.html Masaru Yarime, H. S. (2008). The strategies of the Japanese auto industry in developing hybrid and fuel-cell vehicles. Making choices about hydrogen: Transport issues for developing countries, pp. 193-217. O'Donnell, P. (2010, January 14). A surge in electric cars. Retrieved September 7, 2010, from EuropeanVoice.com: http://www.europeanvoice.com/article/imported/a-surge-in-electric-cars/66868.aspx Pollack, A. (2000, November 19). BEHIND THE WHEEL/Toyota Prius; It's Easier to Be Green. Retrieved September 7, 2010, from New York Times: http://www.nytimes.com/2000/11/19/automobiles/behind-the- wheel-toyota-prius-it-s-easier-to-be-green.html Wright Investors' Services. (2008). A Wright Investors' Service Research Report: Toyota Motor Corporation. CT: Wright Investors' Services.