Toyota are renowned for producing very dependable and high value cars. Extremely popular in their own domestic, Japanese market they are also popular in Asia, Europe and the US. Toyota manufacture millions of cars per year. It seems like they have been successful forever…..
However, this was not always the case. Founded in the 1930s as part of an existing family business, Toyota started to produce cars for the Japanese was effort in China. During WWII they concentrated on the production of trucks. After the second World War, they were on the verge of bankruptcy, had shoddy work practices and effectively were just not selling cars. In 1950 they only produced 300 trucks and were about to go out of business. Only loans from a group of banks kept them going but as part of that effective bailout they had to restructure and their CEO at the time was forced to resign, and sales were effectively outsourced. It was only with the advent of the Korean war, and an order from the US army for 5,000 trucks provided with enough sales and revenue to build their company, survive, and ultimately thrive.
So, what does this story tell us? Well firstly it shows that many companies have humble beginnings, and it is not all plain sailing in business. In fact, it is a lot of hard work and there are many bumps in the road. Secondly, sometimes a change in direction or a change in management is required for a company to survive. Also, not all the skills to run a company may be internal in a company at a point in time and, perhaps, outsourcing key activities like sales, marketing or credit control maybe the way to go. Finally, luck is always an important part of life and business. Who would have known a few short years after the end of the war another conflict would break out near Japan that would lead to the order that would save Toyota? The key point here is they didn’t leave the chance pass them by and the rest as they say is history.