Case Study Analysis

Out of the companies depicted in the case study, Toyota demonstrated characteristics of an innovation-driven company and the innovative leader in the electric vehicle industry. Analysis of the study shows that Toyota’s products and services are positively compared to the competitors’ products in terms of their innovativeness. Firstly, the company was among the first car manufacturers to develop and market electric-powered vehicle (EV). Toyota was willing to take the risk and introduce the first widely adopted hybrid electric vehicle (HEV) to Japanese market in 1990s, although, there were doubts about the potential of HEV market. Secondly, Toyota maintains the leadership positions in producing and marketing of HEV. Although the company experienced competition, it does not seem to be threatened much by other firm’s innovations, since Toyota remains leader of innovative technologies in EV industry. Innovations along the lines of different ‘green’ technologies, such as ‘clean diesel’ or ‘hydrogen fuel’, do not seem efficient and widespread enough to threaten Toyota’s leadership positions in EV market.

Nevertheless, the company appears to be well prepared for responding to threats of its technologies substitution. For example, it markets its HEV successfully in comparison with other HEV manufacturers. The company repeatedly redesigned its previously successful model Prius in order to make it more appealing for the customers by improving fuel efficiency and achieving lower emissions. Also, when the company employed the same technology as other HEP and PHEV manufacturers, Toyota strived to deliver improved features and performance, as well as competitive prices in comparison with other competitors.

Currently, the company should simultaneously develop several innovations. Firstly, considering the Obama’s administration initiative to encourage the development of EVs and make significant investments in EV industry, the company should pursue production of plugged-in HEVs (PHEVs). In the US, Toyota should invest in innovations that are supported or backed by governments through subsidies, rebates, investments or stimulus plans. In Europe, the company should consider investing into improved diesel engines. Additionally, the company should consider investing into hydrogen fuel research and design of fuel cell vehicles (FCVs). Moreover, in accordance with McKinsey’s advice, the company should invest into battery customization, in order to boost consumer interest and reduce the cost of EVs operation.

Toyota should exploit following opportunities for innovation. Firstly, the car manufacturer should develop new line of HEVs and PHEVs of its premium SUVs and Lexus-brand cars, in order to target high-end consumers. The company should show that environmentalism and high performance can coexist. Secondly, Toyota should tap into a large untouched market of big HEVs by introducing larger hybrid electric-powered vehicles, such as hybrid minivans at a reasonable price level. Thirdly, the company should exploit the opportunity to develop the next generation of HEVs, such as Prius that account for record sales in PHEV/HEV sector. Lastly, Toyota should invest into infrastructure that makes usage of PHEVs easy and convenient for customers and lobby for government interventions and regulations that support transition to HEVs/PHEVs.

The company should evaluate opportunities from the vantage point of view, taking into consideration that the world oil reserves are depleting and the transition to electric-powered transportation is just a matter of time. The more options of vehicles the company will be able to offer to its customers, including HEVs/PHEVs models, the greater the company’s chances for success are. Toyota has been among the first movers (together with General Motors) in research, design and development of EVs, and this practice ensured the company’s leadership positions in sales on the EVs market. Therefore, it is in company’s interests to maintain positions of EVs industry leader. The way to ensure that the company will be able to appropriate innovations it develops is to continue monitoring and analyzing EVs market, its trends, tendencies and perspectives.