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Running head:IMPORTANCE OF INNOVATION IN TOYOTAImportance of Innovation in ToyotaImportance of Innovation in Toyota(Name)(Instructor’s Name)(Institutional Affiliation)29 Jun. 14Table of Contents
IMPORTANCE OF INNOVATION IN TOYOTAExecutive SummaryCompanies are increasingly focusing on innovation in the present time, it leads to competitive advantage, and it creates profits. The innovation in Toyota is the source of competitive advantage and for the purpose of study, the FCV vehicle has been evaluated in this paper. The FCV is a concept car that runs with the chemical reaction of Hydrogen, and it results in clean driving that does not harm the environment; this car is also fuel-efficient and provides alternate fuel solution over the conventional fuels such as petrol and gasoline. Toyota has derivedits commercial success from continual innovation and improvement and making the products thatare beneficial to the society. Toyota utilizes almost 3.8% of the sales on Research and development purpose to drive innovation. For measuring the customers’ response on innovation, 2
IMPORTANCE OF INNOVATION IN TOYOTAToyota regularly evaluates customer perspective for its innovative products, whereas the financial perspective is also considered for its operational activities. IntroductionInnovation is now a days extremely focused by the companies because it gives competitive advantage to firms over others by creating value and profit, developing sustainable competitiveness, lively and vibrant work places, increasing market share and attracting productive & creative staff to get in. Innovation is not only talks about to convert scientific ideas to a product or services but involves a vast combination of ideas either technological, organizational, financial or business activities which leads towards commercial introduction of anew product or service or to improve existing. Innovation is consciously defined as extraction of ideas to be implemented on a product or service to attain economic benefit (Gakkai, 1988). The company that has been selected for this paper is Toyota, and upcoming models of Toyota are under consideration in this paper. Toyota has chosen innovation to become more and more progressive in automotive industry. This is the reason why Toyota came up with certain sortof innovation in every new model launching, trending changes in the global world. It was also the part of innovation in customer services when a year ago Toyota started customer services awareness program within staff to well aware them what customer will face if any small defect pass out to customer. As per survey conducted by Boston consulting group, Toyota is at number 5 around the globe practicing innovation, they are spending 3.8% of the sales on innovation, which is estimated to $7765 millions (Mobbs, 2010).