Evaluation of Toyota, Honda, and BMW

Toyota, Ford, BMW, Volkswagen, Hyundai, and Honda are considered as leading producers and distributors of cars across the globe. They all are famous for their innovative strategies for setting up adequate features in their cars (De Wit & Meyer, 2014). They have met the requirements of the people through serving them with expected features. BMW and Toyota’s cars are leading the automotive market as they are very good at their innovative skills. With the changing time, they have adopted a number of policies through which organization has made changes in their products. Such as BMW is leading the market through inventing the models like i8 and i3 with e-mobility sub-brand and Toyota is working to invent a model with the fuel cell, called as Mirai. Both these organizations are known for their innovative skills and they are assumed at the same position till 2025 as per recent survey report. Apart from these features, they are also linked to development of automotive industry and other companies like Ford, Honda, etc. are also playing their supportive role through meeting up the general requirements of the public. Auto-driving mode, airbags, etc. are some attractive features invented in recent years which have increased the interest of the public in attracting towards them (De Wit & Meyer, 2010).

The competitive landscape is the term used to define the position of the firm in relevance to its competitors through analyzing the internal and external factors. As per this scenario, Toyota’s competitive landscape will be considered in relevance to the competitors present in the automotive sector. While Toyota is on the second position in terms of producing innovative technologies and BMW is in the first position (Johnson, Scholes & Whittington, 2005).

Evaluation of Toyota, Honda and BMW:

Porter’s Five Forces of Automotive Industry

Threat of new Entrants (Weak Severity)

• The Huge amount of capital required; (Mintzberg, Ahlstrand & Lampel, 1998).
• If new organizations will come with innovative technologies and attractive features, existing companies may face some issues;
• Legal considerations not fulfilled by new entries save existing firms for tough competition;
• Existing firms have effective goodwill in automotive market than new entries;
• Vehicles could be segregated on the basis of design and performance;
• Suppliers and distributors will also assess to new entrants;
• Automotive industry is not a place for small scale enterprises because this industry requires huge capitalization as well as huge human capital;
• Political parties introduce high taxes on imports to save their local automotive market.

Threat of Substitutes (Weak Severity)

• Types of transportation medium available such as bikes, bicycle, trains, buses, and airbuses;
• Comfort, services, convenience offered by  car manufacturing companies could not be gained from any other mode of transportation;
• Substitutes do not affect the environment in a manner than cars do.

Supplier Power (Weak Severity)

• In automotive industry, huge number of suppliers are available;
• Suppliers have also setup their brand image, hence; new or small supplier’s needs to work hard to get adequate opportunities; (KPMG, 2012).
• Every company uses the different type of parts. For instance, one company is using metal parts while others are using plastic based materials; (Joshi, et. al., 2013).

Buyer Power (Strong Severity)

• Number of buyers are very large;
• While purchasing the car by a family person, generally one or two cars are purchased. Whereas when organizations, and government purchases cars for their business purpose, existence of bargaining will be found;
• Buyers can switch on other brand’s cars or different mode of transportation;
• They have a great choice to select the best as per their budget, requirements;
• Vehicle cost plays the major role in purchasing car from the buyers’ perception;

Consumer behavior is changed at a rapid growth rate and this behavior has increased huge competition between the car manufacturers. Connectivity, autonomous vehicles, etc. have been introduced in cars on customer’s demand. They are expecting secure and reliable ride along with error-free car and if any error occurred, it should be removed as soon as possible. They are expecting the new features and versions as their smartphones are updated after a certain period. Expectations and demand of customers are forcing the automotive manufacturers to apply Six Sigma in their working procedure to provide them innovation with flexibility and easiness (Contractor, et. al., 2010).

Categories

Disruptive innovation is a term used to refer the development of a new market using innovative technologies and ideas which could obtain greater results in comparison to an old market network. IN this scenario, consumers’ demand is increasing day by day in terms of connectivity while driving and advanced features which could experience them comfort, ease, and enjoyment. Across the globe, these requirements are trending and for the same, automotive industry’s big players like Toyota, BMW, Volkswagen, Ford, Honda, and Hyundai are performing to apply disruptive innovation in the market so that consumers’ expectations could be matched. Using this technique for turning the automobile market in another way could create various opportunities such as the increase in the demand for cars, fulfillment of customers’ needs, etc. Apart from these achievements, application of disruptive innovation requires huge investment as well as an adequate amount of capital as well as human resources. Along with the investments, an implication of any new feature requires adequate testing because consumers’ wants to be connected digitally from their vehicles only. And if any lope hole founded in feature invented, consumers’ crucial information, their data could be stolen and misused.  Hence, adequate measures should be adopted before fitting them in the cars for customers’ use (Wad & Govindaraju, 2011).

The technology world is incomplete without innovation and disruption. And combination these two terms invents the most appropriate way to perform the activities to fulfill the public’s needs and demands. The automobile industry is also a part of the technology world, hence; innovation is the general step for this industry which has been taken so many times. Innovation has helped the automobile industry to set up its effective image in the world. Initially, cars were launched with a view to cover the distance with ease. Driver and persons traveling through car do not get affected by the environmental conditions such as winters, rain, etc. (Thun & Müller, 2010).

Consumers are the crucial part of automobile industry because their requirements help the car producers to invent attractive features which could fulfill those requirements. For instance, after reviewing the accidents through cars, manufacturers got the idea of inventing seat belts which can hold the driver and chances of life-saving rises. Later on, airbags invented which increases the chances of saving the life of car drivers and passengers at maximum. These are connected with sensors and these are activated automatically when car met with a major accident and it helps the people boarded in the car to through covering with these airbags. Chances of injuries, deaths in car accidents have been reduced after the invention of airbags. Still, this feature is not compulsory in most countries and for saving a small amount, people buy cars without these safety measures and compromises with their lives (Grandori, 2012).

Innovation

Consumer’s priority has been changed in recent years from product driven culture to services oriented as well as total cost ownership of the product. It means consumers want cars with appropriate features inside and along with those features, appropriate services like after sale service of cars, maintenance, etc. should be provided by car manufacturers and for all these services, they are ready to pay. As per the recent survey report, a major disruptive innovation is being implemented in the automobile industry in consideration to the consumers’ objective. They are demanding digitalization and connectivity in cars so that they could be connected with their friends, relatives, family members, and crucial work could not be interrupted due to driving. This facility will be provided in cars till 2025, as per information gathered from manufacturers of cars. Recently a major change has been adopted by automobile industry which is auto drive mode. This feature is inspired by the feature available in airplanes but this feature has severe side effects. Firstly, a driver is not able to concentrate on the road as he will not be active enough when the car will be auto driven. Chances of accidents increases, it is suitable in the air because there are no routes, no signals, no traffic. Hence, it could fly through that mode (Bergek, et. al., 2013).

Impact of Disruptive Technologies over current model of automotive manufacturers

• All disruptive innovation could not obtain positive results. For instance, auto drive mode was invented to provide ease and comfort to drivers while driving the car. But this invention leads to negative aspects as a number of accidents was recorded due to auto driven mode as the driver lost their interest in driving when the car is auto driven (Un, Cuervo?Cazurra & Asakawa, 2010).
• Digitalization and connectivity are another sensitive factors because these are the factors which divert the human’s mind and road accidents’ major reason is the lack of consciousness.
• The current model of automotive sector is filled with adequate features which are necessary as per the today’s living standard. Infect some companies are providing some advanced features which are not usable today but they will definitely be used in coming future (Ray & Ray, 2011).
• As per the survey, the legislation also plays an important role because since the failure of auto driven mode has been detected, governments of various countries have asked the leading car manufacturers to submit the valid reason and impact of the innovation implemented (Zapata & Nieuwenhuis, 2010).
• Rules and regulations are imposed to control the accidents which are conducted due to human efforts. It is proven if a person will drive any vehicle with comfort and ease, chances of nap and snooze arises more. Whereas driving with putting efforts helps the person to stay awake and concentrate on a road (Christensen, 2013).

Trait theory of leadership describes that higher the experience gained by a leader, his skills, and talent for performing as a leader will improve. This leadership style explains that to perform well and for a long run, an adaptation of CSR policy is must (Capaldi, 2013). Till the time, corporate social responsibilities will not be fulfilled and especially for the automotive sector, an organization would be failing in achieving success. A behavioural theory of leadership also supports the adaptation of CSR policy is required by an organization to perform in an adequate manner. In terms of business management theories such as administrative theory, scientific theory, and human relations theory also supports to adopt the CSR policy to a betterment of the organization. Corporate social responsibility refers to the efforts taken by the organization towards the environmental and social welfare. Certain rules and regulations are formed by different authorized groups and departments of governments to save the environment and societies so that any bad impact could not be imposed on them. For instance, while producing cars, engines, design, etc., it is possible that environment gets affected due to pollution extracts from the production area. Hence, CSR policy should be implemented in every organization to reduce the environmental effects. Traditionally CSR policies were not implemented in the organization because of usage of machinery, oil spoils chemical disposition, etc. All these have the great impact on the climate change and this also leads to the sustainable management aspect of organization (Yang, et. al., 2010). Sustainable management includes meeting environmental needs, an involvement of current and future generations and economy. Due to non-fulfilment of environmental needs, automotive sector’s sustainable management could be failed in near future because climate is changing at the high rate.

Competitive Advantage

As per the abilities of Akio Toyoda, president of Toyota Motor corporation has adopted certain strategies through which Toyota has successfully fulfilled the social reasonability as well as standards by manufacturing adequate cars which could fulfil the customers’ requirements as well as they are also not affecting the environment in huge manner (Boons & Lüdeke-Freund, 2013).

Following are some of the abilities of Akio Toyoda discussed which fulfills the Toyota’s social responsibilities and safety standards through manufacturing cars:

• Toyota has improved their cars regularly by adopting effective and efficient technologies such as self-driven mode which has developed a relationship between cars and people. Using artificial intelligence, Toyota has proved their abilities to be innovative and effective in the automobile industry (Toyota, 2016).
• Apart from artificial intelligence, Toyota Motor Corporation’s president has adopted the features of safety and reliability through adopting the in-house innovating approach. Technologies used by Toyota are tested and approved as per the legislations.
• The research institute of Toyota (Toyota Research Institute) has promised the society to develop the rich society through effective artificial intelligence (Loureiro, Sardinha & Reijnders, 2012).
• For improving the scope of mobility, research is conducted on the basis of developing the area under which people and machine could work together.
• Safety measures such as airbags, seatbelts, etc. were invented in Toyota Research Institute which has helped them to improve the relationship between the people and car through delivering them a safe and reliable drive (Gold, Seuring & Beske, 2010).
• In 2015, Toyota invented a demo of the automated driven car with adequate highway teammate functions. These functions are effective enough to locate the best possible and safe way to reach the destination. It means, when people will drive their vehicle under this mode, the technology loaded in the car helps the person to reach their destination through short and reliable road. This feature is specially built for highway roads.
• To help the people with the same feature as Highway Teammate, Urban Teammate has also invented in TRI to provide their consumers a demo through giving them on-road and off-road driving maps.
• In most countries, driving and talking on mobile phones are banned and this is the correct decision to reduce the chances of accidents. While Toyota has developed the feature of fitting the mic for mobile phone connectivity in the music systems through people does not need to take their phone in hand.
• Connectivity and digitalization in cars are expected till 2025 and this will be a great step towards the disruptive innovation.
• Toyota has increased the comfort level in their cars to provide its customers a luxurious feel.
• Apart from these features, an organization has invented various alternatives for their techniques which will result in eco-friendly.
• Toyota has also started the campaign of appointing and providing great opportunities to local people with better employment opportunities.
• Toyota has also concentrated on improving the designs of their cars to look them more attractive. As customers have various choices in terms of selecting a car amongst the various companies. Reviewing this aspect, Toyota has adopted the unique techniques through which effective innovation could be adopted to attract the customers towards them.
• As per the strategies adopted by the president of Toyota Motor Corporation in 2015, Toyota’s impact on the environment will be positive and effective. They have adopted the techniques for manufacturing the engines via environmental friendly policies (Morhardt, 2010).

References

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