HomeResearch & Knowledgeback to HomeStrategyback to Research & KnowledgeToyota’s strategy and initiatives in Europe: The launch of the Aygoback to Strategy

Case Study

Toyota's strategy and initiatives in Europe: The launch of the Aygo

By Kazuo Ichijo and George Rädler

24 pages

June 2006

Order this case study

Reference: IMD-3-1673

Toyota is one the most successful car companies in the world. The company set the ambitious growth goal of a 15% share of the global markets by 2010 (up from 11% in 2005). For this, the European market is becoming of strategic importance. The case outlines Toyota’s global strategy before focusing on the European market in particular. Sales in Europe increased by over 50% between 2000 and 2005. In the process, Toyota’s European manufacturing capacities more than tripled to over 600,000 units over the same period.

Although Toyota was on the growth path, the launch of the Aygo posed many challenges. The segment was very price-sensitive and production cost had to be tightly controlled. Toyota decided to enter a joint venture with PSA, the maker of Peugeot/ Citroën. The case shows how cost reduction was the overriding principle and explains how both companies worked together. But selling a car with 93% parts commonality also posed many challenges on the marketing side: Toyota wanted to target younger customers in order to lower the average age of customers. Toyota had no experience in this segment and hence had to go new ways. The case takes readers through the various steps Toyota took in order to promote the Aygo.

Learning Objective

Toyota is a latecomer to the European minicar segment. The case analyzes how Toyota changed the business system in order to deal with the various intricacies of this segment. On the manufacturing side, Toyota entered a joint venture with Peugeot/Citroën and built a new plant in the Czech Republic. The cars rolling off this assembly line had a parts commonality of 93%. But the innovations did not stop at the factory gate. Toyota invested in a massive Internet presence, meeting potential customers at locations of their preference and sponsorship of concerts etc. The case is a good platform for discussing Toyota’s changes to the existing business system, both upstream and downstream.

Keywords

Joint Venture, Viral Marketing, Generation Y, Automotive

Settings

Europe
Toyota
2000-2005

Type

Field Research

Available Languages

English

Related material

Teaching note, Video

IMD case studies are distributed through case clearing houses. In order to browse the collection and purchase copies please visit the links below.

The Case Centre

Cranfield University

Wharley End Beds MK43 0JR, UK
Tel +44 (0)1234 750903
Email [email protected]

Harvard Business School Publishing

60 Harvard Way, Boston MA 02163, USA
Tel (800) 545-7685 Tel (617)-783-7600
Fax (617) 783-7666
Email [email protected]

Asia Pacific Case Center

NUCB Business School

1-3-1 Nishiki Naka
Nagoya Aichi, Japan 460-0003
Tel +81 52 20 38 111
Email [email protected]

IMD retains all proprietary interests in its case studies and notes. Without prior written permission, IMD cases and notes may not be reproduced, used, translated, included in books or other publications, distributed in any form or by any means, stored in a database or in other retrieval systems. For additional copyright information related to case studies, please contact Case Services.

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Keep reading

Case Study

Nestlé Health Science: Building a healthy future towards 2030

Strategy General Management Global Business

By Niccolò Pisani, Elham Pazirandeh-Micol, Karine Richard, Liudmila Ost and Quentin de Rham

Article

How to master the 6 skills of strategic thinking

Are you struggling to lead successfully in the face of relentless disruption and uncertainty? Now’s the time to master the art of strategic thinking, starting with these six key skills.

Strategy Disruption

By Michael D. Watkins

in I by IMD Brain Circuits

4 February 2025

Article

Are stakeholders making or breaking your strategy?

An easy-to-use tool can help executives assess and manage the impact of stakeholders on the creation and destruction of value.

Stakeholder Management Strategy

By Paul Strebel, Angeliki Papasava and Patrick Reinmoeller

in I by IMD

Article

Navigating Luxury’s New Reality - Krug - Manuel Reman

Manuel Reman combines Krug’s tradition with innovation, prioritizing authenticity and sustainability to keep the champagne house relevant in evolving times.

Leadership Luxury Strategy Sustainability

By Stéphane J. G. Girod

in I by IMD

Article

Do you know the four As of cultivating strategic thinking?

Being able to think strategically is key to addressing the ever-increasing demands on leaders – but it's easier said than done. Here are four key capabilities that will help you succeed in turbulent times.

Strategy

By Tania Lennon

in I by IMD Brain Circuits

28 January 2025

Case Study

China Resources Beer: Becoming future ready

China Digital Human Resources Strategy Diversity and Equity and Inclusion

By Mark J. Greeven and Wei Wei

Case Study

DIDA: Becoming a world leader in IT infrastructure

Strategy General Management Digital Disruption

By Patrick Reinmoeller

Article

Honda and Nissan need more than a $58bn merger to compete with Chinese EVs

Honda and Nissan's $58bn merger aims to compete with China's EV dominance, but risks include cultural clashes, overlapping markets, and uncertain innovation outcomes.

Business Transformation China Innovation Mergers and Acquisitions Strategy

By Patrick Reinmoeller

in I by IMD

Article

Trump Policy - Navigating The Fog - A Near Term Guide

Navigate Trump's policy shifts with a clear framework to assess business risks, plan contingencies, and stay ahead in uncertain times. Prepare for what’s next.

Strategy

By David Bach, Richard Baldwin and Simon J. Evenett

in I by IMD

Nestlé Health Science: Building a healthy future towards 2030

By Niccolò Pisani Elham Pazirandeh-Micol Karine Richard Liudmila Ost and Quentin de Rham
Case reference: IMD-7-2636 ©2025

Summary

The board of Nestlé S.A. announced that Anna Mohl would become the CEO of Nestlé Health Science (NHSc) — a global leader in nutritional science — on 1 January 2024. She was delighted to hear about her new position but knew there was little time to celebrate. The pressure was on her to make timely strategic decisions to navigate some operating challenges while future-proofing the business for years to come. As Anna sat at her desk and looked out the large window, she began reflecting on how NHSc had grown under her predecessor, Greg Behar, who was instrumental in expanding it into new markets and establishing it as a well-known player in nutritional health solutions. Anna’s dilemmas boiled down to four main questions: Should the company choose organic or inorganic growth? What about market expansion and exploring potential outside North America? How to ensure continued product innovation via research and development (R&D) and potential acquisitions? Finally, how best to align sustainability goals with financial performance? And, of course, expectations were high and a lot was at stake. Anna was aware that the journey ahead would not be easy, but she was ready to tackle the challenges head-on, steering the company towards long-term success.

Reference IMD-7-2636

Organization Nestlé Health Science

Industry Healthcare, Health and Medical Services;Healthcare, Pharmaceuticals

Available Languages English

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Related topics

Strategy

General Management

Global Business

Browse all topics

Navigating Luxury’s New Reality - Krug - Manuel Reman

By Stéphane J. G. Girod
in I by IMD

Summary

Manuel Reman combines Krug’s tradition with innovation, prioritizing authenticity and sustainability to keep the champagne house relevant in evolving times.

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Related topics

Leadership

Luxury

Strategy

Sustainability

Browse all topics

China Resources Beer: Becoming future ready

By Mark J. Greeven and Wei Wei
Case reference: IMD-7-2538 ©2024

Summary

The China Resources Beer (CR Beer) case study is a compelling narrative of the world’s largest beer producer by volume under the leadership of CEO Hou Xiaohai. In 2016 CR Beer embarked on a pivotal transformation journey. This case study offers critical insights that particularly resonate with Chinese corporations navigating similar challenges in an era marking the end of China’s rapid economic growth. Faced with industry saturation, changing consumer behaviors, the rise of digital technology and the imperative shift from expansive to high-quality growth, CR Beer’s story mirrors the predicament in which many Chinese companies find themselves today. The case delves into CR Beer’s strategic overhaul, how it optimized its vast 60,000-employee structure, streamlined operations and embraced digital transformation to remain competitive. CR Beer’s transformation was characterized by tackling “three mountains” – operational inefficiency due to numerous small factories with high costs and low-capacity utilization, weak brand presence in the high-end beer market and an underutilized and mismatched workforce. The study also highlights the company’s innovative approach to rebranding for younger consumers, integrating consumer insights into product development and exploring new business models. It underscores the importance of internal cultural shifts to support these external changes and the role of leadership in guiding transformation. CR Beer’s journey from traditional efficiency to future-readiness offers valuable lessons in managing large-scale organizational change, strategic management and business innovation. It provides essential insights for understanding the complexities of transformation in a rapidly evolving industry, making it a crucial read for those interested in organizational change, particularly in the context of the Chinese market and its unique challenges and opportunities.

Reference IMD-7-2538

Organization China Resources Beer

Industry Consumer Goods, Food and Beverage

Available Languages English

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Related topics

China

Digital

Human Resources

Strategy

Diversity and Equity and Inclusion

Browse all topics

DIDA: Becoming a world leader in IT infrastructure

By Patrick Reinmoeller
Case reference: IMD-7-2547 ©2024

Summary

Five friends created DIDA in 1983 and turned it into a global provider of IT infrastructure and services. Riding the wave of rapid growth of communication networks and increasingly global business relationships of corporations, DIDA established its brand through its strong alignment with dominant infrastructure companies such as Cisco and Microsoft. Navigating the end of the internet bubble, DIDA served as a major reseller of these companies’ products, adding value with its integration services by increasing its clients’ efficiency and enabling collaboration within corporate networks. By 2005 DIDA had resumed rapid growth through partnerships, equity-based alliances and, most prominently, acquisitions, which led to a network of subsidiaries in more than 50 countries and six continents. By the end of 2009, DIDA had shown its critics that it could grow and integrate. However, its revenue was growing faster than its profits and it was not poised to help corporations move to the next generation of internet technology which would require new capabilities for installing and managing large data centers for computing as a service (CaaS) and cloud computing. The case ends with DIDA’s CEO reviewing the prospects of shrinking core markets and displacement by technological disruption. He acknowledges the need to make choices and get ahead of technological trends again in a changing IT infrastructure landscape. DIDA could seek to further grow its core business or internalize new capabilities to get ready for a CaaS future. Should DIDA seek more profitable growth organically or through acquisitions?

Reference IMD-7-2547

Organization DIDA (Disguised)

Industry Services, Telecommunications

Available Languages English

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Related topics

Strategy

General Management

Digital

Disruption

Browse all topics