Much has been written and speculated about the crisis at Toyota due to its foot pedal malfunction, and its slow and underwhelming public response to the problem.
Despite the magnitude of the crisis, we suspect that Toyota will come out on top in the long run – stronger as a company and a brand.
1. Although every company’s defective product crisis is different, just two years after it recalled 6.5 million tires, and was the poster child for crisis MIS-management, Bridgestone returned to profitability and infused its brand with renewed vitality.
2. While no one likes recalls, consumers know that they do happen to all automotive companies. Toyota has built up enormous brand equity in the areas of quality and reliability. While these equities will be temporarily strained, overtime, as the company reinvests in product quality and safety and marketing, they will return. Consumers have short memories.
3. Toyota has a huge war chest of $24 billion in cash. Investing some of this back into product quality and image improvement marketing will go a long way.
4. The company is learning, albeit slowly, how to be more open and forthcoming with the public about its performance problems. Although it hasn’t been easy for them, Toyota has learned the hard way how to admit errors, apologize and rectify the problem.