Many leaders struggle with the term strategy and trying to figure out how to create one. They understand the importance of strategy but when it comes down to the actual step-by-step planning of a strategy, leaders often get bogged down. This is related to the confusion of what a business strategy actually is. It is not the plug and play of another company’s strategy plopped into your organization. Strategy refers to the plan or process to achieve predetermined goals and objectives. A strategy is not a mission. The mission is what the organization wants you to accomplish. A strategy is a detailed plan to achieve success and unique position in your organization. It helps your organization find out it’s competitive advantage in an industry and refers to a firm’s ability to compete with and outperform the competitors in the market. (Gulati et al., 2017; Watkins, 2017)
Toyota’s production system is based on the philosophy of using the most efficient methods in order to eliminate all waste. Toyota’s production system is sometimes referred to as “Just-in-time (JIT) system” which is how it is referred to worldwide. This production system was created based on many years of research and continuous improvements, with the objective of making vehicles ordered by customers in the most efficient way and to deliver the vehicle as swiftly as possible. (Corporation., 2021)
Toyota has created a production system (TPS) that is difficult to replicate. Not only would a company need to copy the process that Toyota has created, they also would need to create a new organizational culture which is very hard to make happen. Toyota’s production system uses bottoms-approach through which lower level employees are given the ability to make decisions and to implement improvements. This has failed with other companies due to a lack of trust among employees and lack of communication. The company also implements a continuous improvement plan. This allows the employees to make mistakes. They are encouraged to improve their ideas and present them to management. All employees, from front-line workers to managers, have knowledge of the process and are able to avoid wrong decisions from management because they themselves are involved. (Corporation., 2021; Gulati et al., 2017)
It is difficult to just “plug and play” so called best practices from one company to another. One reason this is difficult is the company needs to copy the whole organizational culture and processes, not just the bits and pieces that they find most appealing. Also, there could be hidden reasons why a company is so successful with a certain practice that other companies cannot see and therefore, cannot imitate. This culture each company creates is unique to this particular company so it is difficult to emulate. Each organization has a way of developing and building relationships and networks with their stakeholders which makes it difficult to plug and play the best practices of another company. (Gulati et al., 2017)
Competitive advantage itself refers to the unique and hard to imitate ability of the organization to produce superior value from its competitors. This is why it is difficult to take one company’s strategy and use it as your company’s strategy.
Corporation., T. M. (2021, August 2). Toyota Production System | Vision & Philosophy | Company. Toyota Motor Corporation Official Global Website. https://global.toyota/en/company/vision-and-philosophy/production-system/
Gulati, R., Mayo, A., & Nohria, N. (2017). MindTap – Cengage Learning. Cengage.Com. https://ng.cengage.com/static/nb/ui/evo/index.html?deploymentId=557615113112872025758405199&eISBN=9781305643673&nbId=2485825&snapshotId=2485825&dockAppUid=16&
Watkins, M. (2017, March 21). Demystifying Strategy: The What, Who, How, and Why. Harvard Business Review. https://hbr.org/2007/09/demystifying-strategy-the-what