Another important assumption of the model is that what add value are structural barriers to entry into the industry. Again, this is not something that can be applied completely to the automobile industry.Toyotahas been successfully able to develop the new Hybrid car technology and launch its Prius model which has allowed it to access a section of the market that other manufacturers can not until they develop similar technology.
However, this is again challenged asToyotahas transferred this technology on to Ford and can do so to other manufacturers which can allow them to catch up. There is a bit of validation of this assumption as well since Toyota has been able to develop technology for Hybrid cars and can operate in a segment which others cannot access without the technology, thus providing value to Toyota Motors. However, this technology is being sold to Ford company as well as others which makes sure that the technology will spread out soon, requiring additional innovation from the company. This is also made sure by competition regulators around the world which take a strong stand on refusal to deal by market leaders such as Toyota.
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