Case Study Analysis Using VIPI " Toyota Prius (Hybrid)

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Case Study Analysis Using VIPI – Toyota Prius (Hybrid)   

Module Coordinator  Dr Myfanwy Trueman

Title of Degree: MBA Full-time 08/09

Module Title: Product Innovation

Group: A

UB Number: 08001589, 08009719, 08011972, 08024268

We certify that this assignment is the result of our own work and does not exceed the word count noted below.

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Date: 16 March 2009

TABLE OF CONTENTS

3.2.1        AC2ID TESTTM        

3.2.2        AC2ID TESTTM SURVEY        

3.2.3        REDS2 TM        


LIST OF FIGURES

FIGURE 1: UK MOBILE OPERATOR MARKET SHARE 1Q08. SUBSCRIBERS        9

FIGURE 2: PORTERS FIVE FORCES MODEL        13

FIGURE 3: UK MOBILE OPERATORS 4Q6 – 1Q08 (MILLIONS)        16

FIGURE 4: 3’S PRODUCT STRATEGY        18

FIGURE 5: SWOT CHART        20

FIGURE 6: 3’S PRODUCT LIFE CYCLE (2003 – 2007)        23

FIGURE 7: 3’S STRATEGIC THRUST APPROACH        24

FIGURE 8: MARKETING EXPENDITURE FOR 2009        28

FIGURE 9:ADVERTISING EXPENDITURE FOR 2009        29

FIGURE 10: IMPLEMENTATION SCHEDULE        31

LIST OF TABLES

TABLE 1: UK MOBILE PHONE USERS        9

TABLE 2: THE DECIDING FACTORS WHEN CHOOSING A MOBILE-TELEPHONE NETWORK

                   (%   OF ADULTS), JUNE 2007        10

TABLE 3: OWNERSHIP AND USE OF EXTRA FEATURES ON MOBILE TELEPHONES (% OF  

                  ADULTS), JUNE 2007        11

TABLE 4: PENETRATION OF MOBILE PHONES BY CONTRACT TYPE AND AGE        12

TABLE 5: KEY FINANCIAL FIGURES IN ‘000 GBP (2003 -2007)        17

TABLE 6:  MARKETING BUDGET BREAKDOWN        28

TABLE 7:  ADVERTISING EXPENDITURE BREAKDOWN        29


  1. EXECUTIVE SUMMARY


  1. INTRODUCTION

Evidence of global warming continues to increase with data showing that most of the warming in recent decades is attributed to human activities (Joint Science Academies’ Statement 2005). CO2 is the main man-made contributor to global warming, accounting for about 85 per cent of the UK’s greenhouse gas emissions in 2007. Though the UK has seen a reduction in CO2 emission from 590 to 544 million tonnes from 1990 to 2007, CO2 emissions from transportation has increased from 110 to 122 million tonnes within the same period (DEFRA 2009). 

The need to reduce CO2 emissions from vehicles lead car manufacturers to invest in R&D with the aim of manufacturing environmentally friendly vehicles. Toyota pioneered the move with the launch of the first Prius in 1997 in Japan, the same year in which the Kyoto Protocol which is an international agreement linked to the United Nations Framework Convention on Climate Change (UNFCCC) (EE Times, UNFCCC 2009) was adopted. Since then several car manufacturers have produced competitors to the Prius, just as there has been acceptance and skepticism about the Prius and other Hybrid cars.

Thus the aim of this report is to find out how successful or not Toyota Corporation through the launch of the Prius has been in taking global warming into account. This would be done through:

  • The use of the VIPI framework developed by Trueman et al (1998).
  • An investigation and analysis of the current product innovation strategy.
  • A review of the stage of the Prius in its product lifecycle
  • A comparison with the Honda Insight which is the closest competitor to the Prius.
  • A SWOT analysis.

Future strategy and recommendations would be made based on the analysis and investigation carried out. These would recommend ways in which the Toyota Prius through innovation could improve “green” qualities while still remaining a leader in the Hybrid car market.


  1. COMPANY AND PRODUCT BACKGROUND

Toyota operates in Japan, North America, Europe and Asia and is engaged in the manufacturing and selling of automobiles, materials handling equipment and other services (Toyota Industries Corporation, 2008). Figure 1 shows Toyota with a leading share of 12.8% of the global automobiles industry. Table 1 and Figure 1 show growth in revenue for Toyota over the past five years. Profit margins have fluctuated around 6.5%. (Global Automobiles, 2008).

Toyota has five brands of hybrid cars with one of them being the Prius which was released in Japan in October 1997 (EE Times, 2009). It is a four-door saloon car which has a roomy interior and a large sized boot (CBS Interactive Inc, 2009).

        

 

        

                

                Table1. Key Financials                                         Source: Global Automobiles (2008)

                                 

                

                Figure 2: Revenues                                         Source: Global Automobiles (2008)

                        

                Figure 3: Profitability                                        Source: Global Automobiles (2008)


  1. VIPI FRAMEWORK

  1. VALUE

Consumer auto perceptions have moved from the traditional strong, fuel guzzling, environmentally unfriendly, speedy high performance and power car trends, to more fuel efficient, eco-friendly cars at a reasonably affordable price. Toyota Prius, a Hybrid Gas electric car, is the pioneer and market leader of this concept with their first design in 1997 (UNEP 2009).

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Value is based on the perception of usefulness in the eye of the user in regards to the product or service. Toyota Prius customer base consists of private and corporate buyers who in the long run, attach value in the ideal combination of fuel efficiency and low maintenance at a reasonably affordable price that is environmentally friendly (Andidas,2003).

Toyota use print and electronic media, advertising, experts, celebrities, opinion leaders and opinion formers, to lay product benefit claims in an attempt to manipulate perception and communicate the valuable aspects of the Prius as well as differentiate it from competitors. ...

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