1.
Toyota
The future
is .

2.
Q1
Is Toyota developing
a “Disruptive
Technology”?

3.
disruptive technology
[dis-ruhp-tiv tek-nol-uh-jee] n.
Introduction to a set of very different package of
attributes from the ones mainstream customers
historically value, and they are often perform far
worse along one or two dimensions that are
particularly important to those customers (Bower &
Christensen, 1995, p. 45).

4.
disruptive technology
radically performs
different worse
from what in what
mainstream mainstream
customers customers
want want

5.
A.
Characteristics
of
Disruptive
Technology

6.
Characteristic #1
Simpler, cheaper,
lower performance

7.
Characteristic #2
Generally promise
lower margins, not
higher profits

8.
Characteristic #3
Does not appeal/cater
to the most profitable
customers

9.
Characteristic #4
First commercialized
in emerging or
insignificant markets

10.
Characteristic #5
Tends to be rejected
by mainstream
players

11.
Characteristic #6
Performance attributes that
existing customers do value
improve at such a rapid rate
that the new technology
can later invade those
established markets

12.
Characteristic #7
Any market research on
the technology is likely to
be incorrect

13.
Simpler rapid rate
incorrect lower margins
rejected
not most profitable customers
later invade
insignificant markets

14.
B.
Characteristics of
Toyota’s Technology

15.
Characteristic #1
Simpler, cheaper,
lower performance

16.
Characteristic #1
Simpler, cheaper, lower performance
o Shortened product cycle time.
30% faster than its competitors
x Federal tax incentive + potential savings on gas
o 2004 Prius
100 miles/hr
0 to 60mph in 12s
Competitors do 0-60mph in 10s

17.
Characteristic #2
Generally promise
lower margins, not
higher profits

18.
Characteristic #2
Lower margins
Initial losses:
US$20,000/car
Normal cars: 8% profit margin

19.
Characteristic #3
Does not appeal/cater
to the most profitable
customers

20.
Characteristic profitable
Does not appeal/cater to the most
#3
customers
Niche market
Single
Geeky
51 year old
Female

21.
Characteristic #4
First commercialized
in emerging or
insignificant markets

22.
Characteristic #4
First commercialized in insignificant markets
Eco-consumers

23.
Characteristic #5
Tends to be rejected
by mainstream
players

24.
Characteristic #5
Tends to be rejected by mainstream players
+ v.

25.
Characteristic #6
Performance attributes that
existing customers do value
improve at such a rapid rate
that the new technology
can later invade those
established markets

26.
Characteristic #6
Performance attributes that existing customers do value improve
at such a rapid rate that the new technology can later invade
those established markets

27.
Characteristic #7
Any market research on
the technology is likely to
be incorrect

28.
Characteristic #7
Any market research on the
technology is likely to be incorrect
No clue about the market
Tendency to focus on the mainstream
market
Hitting wrong target

29.
Q1
Is Toyota developing
a “Disruptive
Technology”?

30.
Q1
Yup.

31.
Do you agree with Toyota’s
commercialization
approach?
Q2

32.
#1
Marketing

33.
Market Research
trends:
laws +
consumer market
environmental
movement

34.
Advertising
$50m budget
Saatchi & Saatchi
campaign focused on
fetched Oscar celebs
early adopters
media exposure
spread virally

35.
#2
Culture

36.
Just-in-time production system
Smaller factories
Quick response to
changing market
demands
flexible and fast

37.
#3
Support
Infrastructure

38.
Trained technicians
Warranty
3 years of standard coverage
+ 8 years of hybrid-related component coverage
Quality assurance
Liberty to stop production as necessary

39.
Do you agree with Toyota’s
commercialization
approach?
Q2

40.
Yeah.
Q2

41.
Food for
thought
To exploit disruptive technology,
focus on customers’ future needs, not
current desires.

42.
Group Dominic
5
Michelle
Michael

43.
Bibliography
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