Overall, Toyota has done an excellent job following Porter's five forces model for gaining a competitive advantage. By using is Hybrid Synergy Drive in their revolutionary hybrid vehicles, they have cornered the market on hybrids and gained a significant advantage that boosts sales. Also, Toyota's addition of the Highlander SUV to the hybrid drive market has successfully maintained their advantage. Moreover, the use of smaller businesses as suppliers allows Toyota to protect themselves from pricing shifts. These factors have all led to Toyota successfully using their information systems to gain a competitive advantage.
Toyota has a unique business model and the way it approaches the automobile production, with its inherent quality controls, revolutionized the industry. Toyota's "just-in-time" supply-chain concept has become a model for manufacturers around the world, and not just for automakers. The Toyota Production System (TPS) calls for the end product to be pulled through the system. This means the right parts reach the assembly line at the right place, just as they are needed, and with no excess. This approach represented a radical departure from conventional manufacturing systems, which require large inventories in order to push as much product as possible through production lines, regardless of actual demand. The idea of TPS, on the contrary, is to produce only the products required in the precise
quantities desired at a given point in time. This creates a 'pull' production system as opposed to a 'push' system. By basing production on demand rather than simply on capacity, Toyota manages to keep inventories, of both parts and of finished goods, to a strict minimum. But this is only one of the more obvious advantages of Toyota's unconventional approach.
By focusing on smaller production lots and producing only what customers require when they require it, Toyota has developed a flexibility and responsiveness that continues...