By the end of 1993 the development team had determined that higher oil prices and a growing middle class around the world would require the new car to be both roomy and fuel-efficient. Other than that, they were given no guidance. “I was trying to come up with the future direction of the company,” says Watanabe, who headed corporate planning at the time. “I didn’t have a very specific idea about the vehicle.”
Investing in innovation is risky. If successful, the benefits can build a competitive advantage that is difficult for others to eliminate. However, others will try and if you fail to execute as well in the future those benefits can disappear quickly. Toyota shows few signs of letting others catch up though.
continue reading: Innovation at Toyota in Developing the Prius