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    Competitive Advantage The Toyota Way

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    ALI SHER Haidri
    For a firm to achieve sustained competitive advantage, it must invest in human resources and deploy its scarce assets in areas that provide the foundation for long-term advantage. Toyota Motor Corporation is held up as a prime example of a company that has done this well. The article discusses how Toyota adapted successfully to global competitive forces after World War 2 through a combination of democratic government, free markets, and the rule of law in Japan. Surveys consistently ranked Toyota as the most admired car manufacturer in the world for its high standards of performance.

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    Competitive Advantage The Toyota Way

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    ALI SHER Haidri
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    For a firm to achieve sustained competitive advantage, it must invest in human resources and deploy its scarce assets in areas that provide the foundation for long-term advantage. Toyota Motor Corporation is held up as a prime example of a company that has done this well. The article discusses how Toyota adapted successfully to global competitive forces after World War 2 through a combination of democratic government, free markets, and the rule of law in Japan. Surveys consistently ranked Toyota as the most admired car manufacturer in the world for its high standards of performance.

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    For a firm to achieve sustained competitive advantage, it must invest in human resources and deploy its scarce assets in areas that provide the foundation for long-term advantage. Toyota Motor Corporation is held up as a prime example of a company that has done this well. The article discusses how Toyota adapted successfully to global competitive forces after World War 2 through a combination of democratic government, free markets, and the rule of law in Japan. Surveys consistently ranked Toyota as the most admired car manufacturer in the world for its high standards of performance.

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    19 views3 pages

    Competitive Advantage The Toyota Way

    Uploaded by

    ALI SHER Haidri
    For a firm to achieve sustained competitive advantage, it must invest in human resources and deploy its scarce assets in areas that provide the foundation for long-term advantage. Toyota Motor Corporation is held up as a prime example of a company that has done this well. The article discusses how Toyota adapted successfully to global competitive forces after World War 2 through a combination of democratic government, free markets, and the rule of law in Japan. Surveys consistently ranked Toyota as the most admired car manufacturer in the world for its high standards of performance.

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      Faculty and Research
     
      London Business School Review
     
     Competitive advantage the Toyota way
    Competitive advantage the Toyota way
    For a firm to experience long-term sustained competitive advantage it must invest
    in human resources and deploy its scarce assets in the ...

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    By Dr Gary R Fane , M. Reza Vaghefi , Cheryl Van Deusen and Louis A.


    Woods 01 December 2003

    Strategy Strategic alignment Corporate innovation

    For a firm to experience long-term sustained competitive advantage it must invest


    in human resources and deploy its scarce assets in the core areas that can most
    effectively provide the underpinning of a sustained competitive advantage.
    Gary R Fane, M Reza Vaghefi, Cheryl Van Deusen and Louis A Woods say that
    Japanese car maker Toyota is a supreme example of a company that has done just
    that.

    A firm’s external environment involves both geographic factors and cultural


    elements. Location and resources are crucial geographic factors influencing both
    national and corporate success, with population characteristics and institutional
    arrangements making up the most meaningful components of the cultural elements
    affecting both the success of firms and of nations.

    Resources, population and institutional factors are dynamic, manifesting a number


    of feedback loops. For example, institutional incentives stimulate technological
    discoveries, which, in turn, enable firms to pursue resourcesubstitution policies,
    thereby modifying production possibilities.

    During the period after the second world war, at least through the 1980s, Japan and
    Japanese firms seemed to have successfully adapted themselves to the competitive
    forces of emerging global markets. In spite of a poor natural resource base, a
    dramatically altered set of institutional arrangements (a combination of democratic
    government, free-markets and the rule of law) created a propitious atmosphere for
    innovative behaviour.

    Nowhere were adaptations to this altered environment more apparent than in the
    Japanese automobile and semiconductor industries and no firm was more
    successful, admired and emulated than Toyota Motor Corporation.

    Indicative of these changes is a Fortune magazine article, published several years


    ago, which provided a popular assessment of the successes of Toyota. It reported
    that Toyota was named the most admired motor vehicle manufacturer in the world
    in 1997, 1998 and 1999 as well as being ranked 11th among the world’s most
    admired companies in 1998 alongside firms that have been recognised for setting
    world-class standards of performance in a wide variety of industrial groups
    (General Electric, Coca-Cola, Microsoft, Disney and so on). More recently,
    Fortune ranked Toyota as top automobile manufacturer in the world. A total of 14
    international automobile manufacturing firms were included in Fortune’s
    evaluation of the global motor vehicle industry, including Ford Motor Company
    and General Motors.

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