Session 4 Toyota_resources capabilities - 557F\/557K Principles of Strategy Resources Capabilities Toyota Motor Corporation 1 Roadmap PART 1 Basic

Session 4 Toyota_resources capabilities - 557F/557K...

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557F/557K: Principles of Strategy 1 Resources & Capabilities Toyota Motor Corporation
2 Roadmap … Business Model Business Model Advantage from industry structure and position Advantage from unique resources and capabilities Five Forces Value-curves VRIN Who/What/How PART 1: Basic Toolkit for business strategy
3 Industry Analysis: Roadmap … - Competition decreases margins (Econ 547) - Competition comes from rivals, suppliers, buyers, entrants, and substitutes (Session 1) - Account for changes in industry structure (Session 2) Competitive positioning (Session 3) - Competitive advantage is the ability to generate and capture value in an industry - This requires reducing industry competition by doing different things than rivals, either by: - increasing willingness-to-pay ( differentiation strategy) - decreasing costs ( cost strategy) - both ( dual strategy)
4 Today … Business Model Business Model Advantage from industry structure and position Advantage from unique resources and capabilities Five Forces Value-curves VRIN Who/What/How How do you do something different and/or unique? OR What enables you to do something different? Different Resources is one important way!
5 How long is the journey between Tokyo and Nagoya (Toyota City)? Hiroshi Okuda Should Toyota be the pioneer in hybrid passenger cars?
6 What is the value (likely to be) added by the Prius? Hybrid Traditional Price Safety Reliability Innovation Fuel Economy Emissions Performance Traditional Hybrid
7 What is the value (likely to be) added by the Prius?
8 What is the value (likely to be) added by the Prius?
9 What is the value (likely to be) added by the Prius?
10 What is the value (likely to be) added by the Prius?
11 What is the value (likely to be) added by the Prius?
12 What is the value (likely to be) added by the Prius?
13 What is the value (likely to be) added by the Prius?
14 How much of this value is likely to be captured by Toyota?
15 Buyers: Rivalry: Entry: Substitutes: Suppliers: How much of this value is likely to be captured by Toyota?
16 Buyers: ‘early adopters’, care about emissions, fuel economy - LOW to NEUTRAL Rivalry: differentiated product, not many rivals (yet) - LOW Entry: economies of scale: R&D, production $ 1-3 billion, IP protection – LOW (threat) Substitutes: diesel, electric, hydrogen - HIGH Suppliers: specialized suppliers - HIGH How much of this value is likely to be captured by Toyota?
17 Buyers: ‘early adopters’, care about emissions, fuel economy - LOW to NEUTRAL Rivalry: differentiated product, not many rivals (yet) - LOW Entry: economies of scale: R&D, production $ 1-3 billion, IP protection – LOW (threat) Substitutes: diesel, electric, hydrogen - HIGH Suppliers: specialized suppliers - HIGH Hybrid Traditional Compact cars How much of this value is likely to be captured by Toyota?
18 Buyers: ‘early adopters’, care about emissions, more price sensitive - HIGH fuel economy - LOW to NEUTRAL Rivalry: differentiated product, more producers, more differentiated not many rivals (yet) – LOW aggressive response - HIGH Entry: economies of scale: R&D, production economies of scale, CAPEX – LOW (threat)

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