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Deck I made for my group's presentation of Toyota's hybrid technology and its management of disruptive technology.
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ToyotaThe future is .
Q1Is Toyota developing
a “Disruptive Technology”?
disruptive technology[dis-ruhp-tiv tek-nol-uh-jee] n.
Introduction to a set of very different package of attributes from the ones mainstream customers historically value, and they are often perform far worse along one or two dimensions that are particularly important to those customers (Bower & Christensen, 1995, p. 45).
disruptive technology
radically different
from what mainstream customers
want
performsworsein whatmainstreamcustomerswant
Characteristicsof DisruptiveTechnology
A.
Simpler, cheaper, lower performance
Characteristic #1
Generally promise lower margins, not higher profits
Characteristic #2
Characteristic #3
Does not appeal/cater to the most profitable customers
First commercialized in emerging or insignificant markets
Characteristic #4
Characteristic #5
Tends to be rejected by mainstream players
Performance attributes that existing customers do value improve at such a rapid rate that the new technology can later invade those established markets
Characteristic #6
Any market research on the technology is likely to be incorrect
Characteristic #7
rejectedSimpler
lower margins
not most profitable customers
insignificant marketslater invade
incorrect
rapid rate
B.Characteristics of
Toyota’s Technology
Simpler, cheaper, lower performance
Characteristic #1
Simpler, cheaper, lower performanceCharacteristic #1
Shortened product cycle time.30% faster than its competitors
Federal tax incentive + potential savings on gas
2004 Prius100 miles/hr0 to 60mph in 12sCompetitors do 0-60mph in 10s
o
ox
Generally promise lower margins, not higher profits
Characteristic #2
Lower marginsCharacteristic #2
Initial losses: US$20,000/carNormal cars: 8% profit margin
Does not appeal/cater to the most profitable customers
Characteristic #3
Does not appeal/cater to the most profitable customers
Characteristic #3
Niche market
SingleGeeky 51 year old Female
First commercialized in emerging or insignificant markets
Characteristic #4
First commercialized in insignificant marketsCharacteristic #4
Eco-consumers
Characteristic #5
Tends to be rejected by mainstream players
Characteristic #5 Tends to be rejected by mainstream players
v.+
Performance attributes that existing customers do value improve at such a rapid rate that the new technology can later invade those established markets
Characteristic #6
Performance attributes that existing customers do value improve at such a rapid rate that the new technology can later invade those established markets
Characteristic #6
Any market research on the technology is likely to be incorrect
Characteristic #7
Any market research on the technology is likely to be incorrect
Characteristic #7
No clue about the market
Tendency to focus on the mainstream market
Hitting wrong target
Q1Is Toyota developing
a “Disruptive Technology”?
Q1Yup.
Q2
Do you agree with Toyota’s commercialization
approach?
Marketing
#1
trends:laws +
environmental movement
consumer market
Market Research
$50m budgetSaatchi & Saatchi
Advertising
campaign focused on early adopters fetched Oscar celebs
spread virally
media exposure
Culture
#2
flexible and fast
Quick response to changing market
demands
Smaller factories
Just-in-time production system
Infrastructure
#3
Support
Warranty
3 years of standard coverage + 8 years of hybrid-related component coverage
Trained technicians
Quality assurance Liberty to stop production as necessary
Q2
Do you agree with Toyota’s commercialization
approach?
Q2
Yeah.
To exploit disruptive technology, focus on customers’ future needs, not current desires.
Food for thought
Group
5DominicMichelleMichael
Boberg, E. (2004). Common Sense Not Required. Retrieved September 7, 2010, from http://www.angelfire.com/mech/evbo/prius.html
Christensen, C. M. (2000). The Innovator's Dilemma. Harvard Business School Press.Danneels, E. (2004). Disruptive Technology Reconsidered: A Critique and Research Agenda. The Journal of Product Innovation Management, 246-258.
LaMonica, M. (2008, May 20). Electric cars: iPhones of the auto industry? Retrieved September 7, 2010, from CNet News: http://news.cnet.com/8301-11128_3-9945899-54.html
Masaru Yarime, H. S. (2008). The strategies of the Japanese auto industry in developing hybrid and fuel-cell vehicles. Making choices about hydrogen: Transport issues for developing countries, pp. 193-217.
O'Donnell, P. (2010, January 14). A surge in electric cars. Retrieved September 7, 2010, from EuropeanVoice.com: http://www.europeanvoice.com/article/imported/a-surge-in-electric-cars/66868.aspx
Pollack, A. (2000, November 19). BEHIND THE WHEEL/Toyota Prius; It's Easier to Be Green. Retrieved September 7, 2010, from New York Times: http://www.nytimes.com/2000/11/19/automobiles/behind-the-wheel-toyota-prius-it-s-easier-to-be-green.html
Wright Investors' Services. (2008). A Wright Investors' Service Research Report: Toyota Motor Corporation. CT: Wright Investors' Services.
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