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April 17, 2007 | Andrew Winston | Jump to: Comments (2) | Post A Comment

All the Right Moves: Toyota vs. Honda

I’ve been thinking a lot lately about what really makes a company a green leader. Take the car business. Many green business pundits (including me) have been crowing about Toyota. But the somewhat shameful performance of the auto CEOs in D.C. recently (see related posts here and here) bothered me. There was Toyota sitting with Detroit and fighting any increase in fuel efficiency standards (which, as I’ve said, is partly mystifying to me given Toyota’s higher-than-average fuel economy. Tangent: here’s a possible explanation: Toyota desperately does not want Ford or GM to go bankrupt and incur a backlash against its own rise in the U.S., so it sides with Detroit against regulations that could cost them money).

So take some points away from Toyota. After all, Honda has cars that are just as fuel-efficient, and in some cases more so. It has hybrid gas-electric vehicles which its owners enjoy (maybe not as rabidly as Prius owners, but the Civic hybrid has its devotees). So given the anti-environmental lobbying of Toyota, shouldn’t Honda be crowned the green leader?

Yes, but only if we define green leadership to include only the environmental actions. Yes, the lobbying deducts from Toyota’s green bona fides, but the commercial success of the Prius is an overriding factor. Toyota won the marketing battle in a big way. Honda’s “Enviromentology” campaign is fairly awful — hard word to say and unappealing print ads without a clear point. Toyota managed to position the Prius perfectly (good luck other car companies when the world’s best manufacturer gets good at design and then marketing — it’s not a pretty competitive picture — see previous post).

My point is this: green success cannot just be about being green and creating good eco-products that find a niche. Points have to go to those who can market the best and play somewhat rough with the competition. For decades, Coke was generally seen as a better company than Pepsi (in lists of “most admired” companies, or in “Built to Last”-type books on the best companies, for example). Why? Because they created mythic levels of brand value by marketing the heck out of a drink that many taste tests say customers didn’t prefer. Coke’s victory came from better marketing and likely better distribution as well. Like Coke, Toyota got all the “blocking and tackling” needed to launch and nurture a new product — the “execution” in modern business parlance — very right.

In the end, competing on green isn’t all that different from just plain competing.



On April 18, 2007, Mike said:

It may also just have to do with building a usable hybrid vs a not-so-usable hybrid. Despite the Insight getting better fuel economy and getting there first, it was still a two-seater with limited usability. So, the Prius took off while the Insight never really got out of the gate.

Also, the Prius differentiates itself by being a hybrid-only car. So, there’s no easy comparison to be made to the gas-only version, as with the Civic.

On April 22, 2007, jeanG@ said:

For a vehicle to be “green”, Toyota must concentrate on its Toyota exhaust system and other parts involved therein. Other automakers like Mercedes and Volkswagen continuously seeking for the most efficient ways to improve its vehicle’s fuel efficiency and lessen toxin emissions to pass the emmissions standards required by the government.


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