Advantages Of Toyota Competitive Advantage

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1. What is the basis of Toyota’s competitive advantage? Ans: Toyota, one of the leading manufacturer in automobile industry was founded by Toyoda Kiichiro. When Toyota started as an automobile company it initially focused on mass production to gain economies of scale. But according to Ohno Taiichi, a mechanical engineer who joined Toyota at that time claimed that mass production creates huge inventories that are to be stored in the warehouse which in turns increases the warehouse maintenance cost as a huge amount of capital is associated with these inventories. Secondly there is a possibility of a number of defects if in the very beginning the machine is not set up in a proper way. Moreover in a mass production system a single task is assigned to the assembly line workers which makes their job very monotonous and they were least interested about the quality of the resources and in minimizing the defects and further the mass production system could customize the products as per the preference of the consumers. Apart from all these the Japanese market being a small domestic one and shortage of capital made the mass production model for Toyota unsuitable. In order to overcome these constraints, Ohno took new measures that could also act as a competitive advantage for the company: • Ohno focused on manufacturing small auto body parts in batches economically and in order to do this work Ohno started using rollers to speed up the time it requires to change dies in stamping

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