Business Model
As one of the leading automobile manufacturers in the world, Toyota ranks within the top
three worldwide. Due to their unique business model, they are now have a market share of
14% in the first four months of this year. That is an astonishing 2.3% jump from the
previous year. According to Autodata.com, the Toyota City based automaker ranks fourth
in United States sales.
We have determined that their business model is an Integrated Low Cost Differentiated
Strategy. It involves finding the lowest operational cost along with a unique niche or
strategy that separates them from the competition. Toyotas new statement “Moving
Forward”, reflects their plans and expectations for the future. This includes the known and
the unknown factors that a business must face. In 2000, Toyota launched a new cost
effective strategy called CCC21 (Construction of Cost Competitiveness for the 21st
century), for Low Cost operational expenses. With this aspect Toyota plans to advance
such initiatives globally, based on its policy of purchasing the worlds best parts at the
lowest cost with the shortest lead times.
According to Toyota, they have undertaken a manufacturing revolution that has
fundamentally changed established practices; all the way back to the product development
and design. They have done this by integrating four areas: design, production engineering,
procurement, and component supply. They have achieved higher quality at lower costs by
creating standardized, multipurpose components. Also the reduction in cost has heightened
the value and fortifies the competitiveness of product. To do this, Toyota has required