Quick case analysis – What should Toyota do? | MarquisParker.com // Executive, Advisor, and Speaker

If you’ve been paying attention to the news for the past few months, you’ll know that Toyota is not having a good 2010. First, the company announced a recall of many of its models due to a gas pedal problem that caused cars to accelerate randomly (http://www.cnn.com/SPECIALS/2010/toyota.recall/) and has been blamed for over 50 deaths so far. Next, the U.S. government held a hearing to probe into the recall problem and obtained evidence that Toyota had been aware of safety issues and chose to hide those issues (http://money.cnn.com/2010/02/26/autos/congress_oversight_letter_biller/index.htm). Then, word comes out that Toyota has been probed by U.S. safety agencies since 2006 for a range of problems with brakes, acceleration, and gas pedals (http://www.cnn.com/2010/US/02/10/timeline.toyota/index.html?hpt=C2) and that customers had been complaining of throttles in their cars surging since 2002 (http://www.cnn.com/2010/US/03/22/toyota.throttle.warning/index.html).

After all of this, I’d already decided that I would never buy a Toyota because I wouldn’t feel safe in it, but things got even worse for them earlier this week when Consumer Reports issued a “Don’t Buy: Safety Risk” alert on the 2010 Lexus GX 460 SUV (http://blogs.consumerreports.org/cars/2010/04/consumer-reports-2010-lexus-gx-dont-buy-safety-risk.html). When I heard about this latest issue, all I could think was “Wow, Toyota can’t stop taking L’s in 2010…this is going to be bad for them”. Fortunately, Toyota did the right thing and asked dealers to stop selling the GX 640 until they implement a fix for the rollover problem (http://news.yahoo.com/s/ap/20100413/ap_on_bi_ge/us_toyota_consumer_reports) and are testing all of its SUVs for rollover risk (http://www.cnn.com/2010/BUSINESS/04/15/toyota.suspension/index.html?hpt=T2), but the impact of this latest news is a killer. Plus, the local news here in Chicago has said that Lexus dealers around here are treating current owners of the GX 460 who have questions and concerns pretty badly and, if the same thing is happening elsewhere, Toyota has another public relations nightmare to add to its worries.

As I thought about the hole that Toyota is in, I realized that this would make a GREAT consulting case interview question. In fact, I am 99% sure that people at the consulting firms are developing interview cases that will be remarkably similar to what we see unfolding in front of our eyes in the Toyota situation. So, I started thinking about how I would structure a response to the question of what Toyota should do to repair its image and decided to map out my thoughts in a new blog entry. I figured that talking through how I’d tackle this might be helpful to those of you who will be applying to consulting firms or other strategy roles in the future. I’m not saying that this is THE ONLY way or THE BEST way to address this question, but it is a structured approach that I would use if I were asked the question in an interview setting. It was a fun exercise thinking through this, so I will likely do more of these in the future. 🙂

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Case Study – Toyota and its product/brand issues

Case question: What should Toyota do to repair its image after the negative revelations of the past few months?

Marquis’ approach to answering the question: