Main investment idea: Sustainable competitive advantage

Since firms and investors base their choices on the likelihood that they will continue to be relevant to their customers over the long term, sustainable competitive advantage is a key concept in investment (Porter, 2008). As a result, businesses use a variety of business models to make sure their organization grows and beats its rivals. The cost leadership approach is one of the tactics used by companies like Toyota, which are industry giants (Reitsperger et al., 1993). According to this strategy, Toyota offers its clients cars that are suitable for their needs at fair pricing. corporation to continually increase operational efficiency, which allows it to provide the cars at reduced pricing improved through the lean management of the supply chain. Besides, Toyota has developed into a large business which allows them to utilize economies of scale since they buy in bulk. Hence, Toyota is in a position to offer promotional opportunities and stock options to their customers which keep their customers loyal to the company.

Furthermore, with the changes in technology, businesses that seek to outperform their competitors have to embrace innovation in the manufacturing and marketing of their products (Porter, 2008). At leading companies like Toyota, production is being focused on innovating cars that are customizable through technology so that they can keep the customers interested in their products. The manufacturing processes have been streamlined through technology so that it is possible to produce cars that are controlled wirelessly through Bluetooth and Wi-Fi connections. Through this innovation, the company retains their customers who might be interested in the changing dynamics. Moreover, to attract more customers, companies need to be vibrant and diverse in the provision of products and services (Porter, 2008). For instance, Toyota has moved from producing Toyopet that was among the earlier cars manufactured by the company to a wider range of vehicles including Toyota Prado, Lexus among others. Dynamism keeps the customers in anticipation for the next product by the corporation, and therefore the company remains competitive (Porter, 2008).

The focus of the company is another model that businesses utilize in an attempt to grow and beat their competitors at the same time. Understanding the target market allows the company to understand the needs of the target and how they can best be attained (West Ford, & Ibrahim, 2015). For Toyota, the company targets markets in regions like Africa, China, and Latin America where the customers seek to purchase cars at a lower cost that can be maintained easily. As a result, the company produces more cars for middle and low-income consumers such that their customers are at liberty to choose from the range of products offered (West Ford, & Ibrahim, 2015). However, the company also produces luxury cars that are purchased by the high-income earners so that it maintains its market in such regions as the United States, Europe and other parts of Asia.

Competitors are usually in a position to copy and mimic what other businesses do (Su et al., 2014). Companies use differentiation regarding quality, relationship with the customers, or innovation (Su et al., 2014). For Toyota, the company provides their clients with innovative experiences as the cars being manufactured by the corporation are allowing wireless monitoring and control of the cars. Also, the company offers unique customer service through engaging with them in the social media for live support.

References

Porter, M. E. (2008). Competitive advantage: Creating and sustaining superior performance. Simon and Schuster.

Reitsperger, W. D., Daniel, S. J., Tallman, S. B., & Chismar, W. G. (1993). Product quality and cost leadership: compatible strategies?. MIR: Management International Review, 7-21.

Su, H. C., Linderman, K., Schroeder, R. G., & Van de Ven, A. H. (2014). A comparative case study of sustaining quality as a competitive advantage. Journal of Operations Management, 32(7), 429-445.

West, D. C., Ford, J., & Ibrahim, E. (2015). Strategic marketing: creating competitive advantage. Oxford University Press.