Ans 1:

Toyota had been following a very centralized approach in the US. The keiretsu
structure and Toyotas supply chain in the US had an adverse effect in the country
since all decision making was centralized and Toyota, under the keiretsu structure
believed in building long-term relationships with its suppliers, thus forming a
conglomerate.
As mentioned in the case, the perusal of an aggressive global growth strategy
led to the situation in which the supply chain became dangerously stretched. Toyota
started to rely on suppliers from outside Japan, thus, the conglomerate was distilled
and the keiretsu model was no longer present in its true spirit. This led to the fact that
Toyota started to rely on suppliers with whom it had little prior working experience
and in cases, only one supplier was supplying a range of parts for different models.
Since a global move like this required delegation of authority and a
decentralized approach, which Toyota, based on the Japanese culture, failed to
establish, had an adverse effect on the supply chain management. Had a decentralized
approach been employed and had Toyota relied more on localized management, the
results would have been quite different; the Accelerator crisis could have been
avoided.
As mentioned in the case, Japanese have a culture of conflict avoidance, which
led to the issue being ignored till there was no other choice. There were cases in
which the local body was bypassed completely and was never informed about the
issues, rather the information regarding the accelerator crisis was directly being
communicated to the Head Office in Japan for senior managements consideration.
Thus, keiretsu structure had lost its essence in the US and failure of Toyota to
adopt Western supply chain models led to such a disaster and their reputation took the
toll.
Another mistake that Toyota committed was to rely on a single supplier for
certain input, to achieve economies of scale, this model works if you have
transparency and close interaction with your supply base.

Ans 2:
As the case suggests, Toyota was engaged in aggressive global expansion
strategy and a cost leadership strategy at the same time. So, I partially disagree with
the statement that Porter had Toyota in his mind when he said that Japanese firms
rarely have strategies.
Toyota had a clear vision under its founding leadership, it was following the
Toyota Way, the first and foremost focus of Toyota Way was to plan ahead, for the
longer run (which is the essence of strategy), highlighting problems instead of hiding
them, and instilling a self-critical culture that ensured continuous improvement
(Toyota Way urged improvement, not only in operations, but in all areas of the
business).
The point on which I agree with the comment regarding Porter is that the
current non-family members of management had stirred away from the Toyota Way.
Their focus had shifted from providing long-term customer value to increasing
operational effectiveness and gaining short term profits by cutting costs whenever and
wherever possible.
Rather than making it a small, yet, highly productive part of their overall
globalization strategy, they had put too much attention on operational effectiveness as
an end rather than, as means to a holistic end, i.e. successful implementation of
globalization strategy without compromising on key philosophy of delivering Safety,
Quality and Volume to the end customers.
Under the non-family members, Toyota had joined the bandwagon of the
Japanese companies that had no strategy and focused mainly on increasing
operational effectiveness, they had started to introduce Vision after Vision, just to
break new grounds in operational effectiveness and cost cutting, just for the sake of
higher profits and eventually they suffered the consequences. They were hit with
lawsuits after lawsuits and learned their lesson the hard way.
Thats the reason why the new CEO, Mr. Toyoda wanted to go back to the
basics, revitalize the Toyota Way and get the company back on track and to restore its
former glory.

Ans 3:
Operational Innovation: Toyota has a long history of operational innovations. The
best of them was the Toyota Production System, commonly referred to as Just-inTime approach. This approach shifted the balance of operational power and made
Toyota into what it is today, a market leader by giving Toyota a lasting competitive
edge. The only drawback of this approach was that it could not be reproduced in the
same manner in every country on the globe. They tried to apply it in the US and as a
result, faced two crises that brought the company to its knees with recalls.
Operational Excellence: The non-family members in Toyota were mainly focused on
Operational Excellence, and the first and foremost benefit of these was increased
economies of scale, the second benefit that stemmed from the first was cost
reduction, which eventually led to higher profits. Yet the drawback was that
although they didnt mean to compromise on quality, the failure of keiretsu model in
the US led to compromised supply chain and which, inevitably led to inferior
quality products and the pursuit of Operational Excellence was a major culprit in the
Accelerator crisis as mentioned in earlier answers.
Strategy: The main focus should have been on the pursuing a strategy guided by the
Toyota Way philosophy, which would have resulted in increased customer
satisfaction and lasting/long-term profitability. The aggressive globalization
strategy and cost reduction strategy pursued by Toyota helped in gaining a global
presence while ensuring that the costs remained low, yet that meant that the
management had to make compromises. Firstly, Toyotas pace of expansion was
too fast, it distilled their corporate culture. Thus, the company expanded, yet the
values were not clearly and completely transferred to the host country. The
compromises were made in keiretsu and supply chain management; suppliers were
engaged from the host countries with whom Toyota had no prior experience. The
centralized management approach didnt help either and rather than delegating
authority, decisions were made in Japan.