The Enigma of Toyota's Competitive Advantage: Is Denso the Missing Link in the Academic Literature?

Abstract

This paper analyses the reasons for the competitiveness of Toyota. It focuses on the companys unique relationship with one partner supplier Denso where contingency loss potential is the greatest. A literature review reveals some gaps between the English and Japanese literature. The author uses resource based view literature, game theory literature, transaction cost literature and the concept of positive external economy to explain Toyotas success. She also identifies a future research question: might Toyotas domestic success have arisen partly because its competitors did not understand the way it worked?

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