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Creating Sustainable Competitive Advantage: the Toyota Philosophy and Its Effects

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Creating Sustainable Competitive Advantage: The Toyota Philosophy and Its Effects

What is Toyota Philosophy

Toyota is Japan's biggest car company and the second largest in the world after General Motors. The fundamental reason for Toyota's success in the global marketplace comes from their corporate philosophy, the set of rules and attitudes that govern the use of its resources. The Toyota philosophy is often called as the Toyota Production System. The system depends in part on a human resources management policy that stimulates employee creativity and loyalty but also, on a highly efficient network of suppliers and components manufacturers. Much of Toyota's success in the world markets can be attributed directly to the synergistic …show more content…

Toyota's success includes:
EA world-class network of suppliers in both Japan and, more recently, in the US.
EA highly efficient and effective just-in-time (JIT) inventory system that is heavily dependent upon the co-ordination of its supplier network.
EA state-of-the-art assembly system incorporating the latest robotic technology. Toyota plants in Japan and North America have both won the World-wide Platinum Plant Quality Award.
EAn effective and efficient human resources management system.
As a result of all this great strategies that Toyota has been mastering into the perfection, the company's success can be shown in the next table.

Table 1
Output of measures of productivity for lean versus non-lean automotive companies 1993-1999 (units per employee per year)

Non-Lean Companies Lean Companies
Year GM Ford Renault Volkswagen Toyota Nissan Honda
1999 13.61 9.6 12.42 25.71 23.59 17.3 19.49
1998 9.05 9.7 14.05 15.13 20.73 17.89 14.67
1997 9.15 10.33 11.65 9.99 24.59 16.07 21.02
1996 8.51 10.38 10.81 10.63 24.53 20.22 13.67
1995 7.97 15.72 10.85 8.87 22.95 15.47 16.32
1994 7.94 11.92 11.62 9.1 22.95 13.91 16.32
1993 7.55 11.71 10.8 8.3 31.29 15.54 17.24

Toyota has find its success by learning how to reduce the industry average of problems per 100 vehicles, increasing the safety of its vehicles such as its truck Tundra which had a better ranking that many other national, an excellent dealership

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