2000 Reports

Automobiles: Toyota Motor Corporation: Gaining and sustaining long-term advantage through information technology

Rapp, William V.

This case for a large automobile producer, together with other cases, support an initial research hypothesis that leading software users in the U.S. and Japan are very sophisticated in the ways they have integrated software into their business strategies. They use IT to institutionalize organizational strengths and capture tacit knowledge on an iterative basis. In Japan this strategy has involved heavy reliance on customized and semi-customized software but is changing towards a more selective use of package software managed via customized systems. This case is illustrated by Toyota's development of its system to automate its traditional "just-in-time" (JIT) ordering from suppliers, its new intelligent transportation system (ITS) and its new smart cars. Conversely, U.S. firms, such as Merck, who have often relied more on packaged software, are now customizing more. This is especially true for the systems needed to integrate software packages into something more closely linked with a firm's business strategies, markets, and organizational structure.