American car owners began searching for alternatives to poorly made American cars. In response to these changes, Toyota and other Japanese carmakers aggressively marketed their cars to Americans as being fuel-efficient, environmentally friendly, and having better build quality than American cars. In addition, Toyota marketed their cars with commercials involving young Toyota drivers Jumping In the air _ As a result, the Japanese’s marketing campaign along with continuing problems from the Big Three auto manufacturers, allowed import cars to make up about 20 percent of the US car market by 1980.
Stages General Motors, Ford and Daimler-Chrysler focused In the late sass on mergers and acquisitions for improving their business positions to meet future challenges. Toyota, meanwhile, centered its business strategy on technological innovation and persistent environmental product development. The price of oil was not especially high during the sass when Toyota started Its hybrid car program. 011 prices were below US $20 barrel In 1994 and were to fall to a 50;year low around 1997 when the Toyota Pries was first sold in Japan.
Clearly something else was driving Toyota and other Japanese impasses to invest so heavily in hybrid car development. There are three probable reasons: 1 . High petrol taxes in Japan, due to the Japanese government wanting to reduce the dependence of Japan on imported oil. While this would have certainly driven the Japanese development of hybrid cars, petrol was cheap in the key US market at this time. 2) The potential to gain a market advantage by developing the key technologies required to successfully commercialism hybrid cars, and then owning these developments via patents. ) The expectation that ownership of these key fuel paving technologies would become very valuable when world oil prices rise from the lows of the mid-sass, which was a fair long-term assumption to make during this period. Stages: Decision Making Process: In 1994, the executive team acknowledged the potential threat of depleting oil reserves and climate change and change their strategy or products to meet the needs of future customers. Course of Action: Toyota set up a group tasked with meeting the challenge of creating a vehicle for the 1 OFF constraints and environmental issues.
Commitment to course of action: Toyota mirrored the concept of Hybrid (petrol/electric) technology to mass produce the world’s first CEO-efficient vehicle, the Toyota Pries. Evaluation of decision/re-engineering: The first prototype of the car had even faced starting problem. It took almost six months to roll the car. Finally, when the car started, it moved for a few yards only. It was hard to imagine that Toyota, which was known for its efficient production systems, was facing such trouble.
Initially it felt that ‘Pries’ was a case of technological problems, impossible demands and multiple miscalculations. It proved how a great company could overcome obstacles and turn a dream into reality. Though ‘Pries’ represented only a small fraction of the nine million cars and trucks that the Japanese company planned to produce in 2006, it would be the first vehicle to provide a serious alternative to internal combustion engines, designed for a world of scarce oil and was branded as ‘The car for the future’.
Stages: Toyota carefully studied the US market and sees there is a growing oil crisis and foresees a need for change in the structure for cars, converting their needs to oil saving cars. While American car manufactures lacked producing such cars, then Toyota caught that opportunity and tried to occupy this niche market. By 2002, it was being sold in North America, Japan, Europe, Hong Kong, Australia and Singapore. Analysts opined that the demand for hybrid cars would rise because of the unstable oil prices and the growing need for environment friendly products.
Post Evaluation By examining the external environment and acknowledging the potential threats of depleting resources and increased concern over environmental issues, Toyota have turned a threat into a business opportunity, boosting their reputation both as an environmentally conscious and as technological innovators and established themselves as leaders in this growing market. The car industry faces many complex issues, but the introduction of the Pries provided Toyota with a competitive advantage.