This global manufacturer spent heavily to break into the higher-priced segment of its industry, well outside its brand’s sweet spot. On the other end of the spectrum, a misguided strategy led one of the “wasters” to overinvest in capex and R&D.
The company also minimized its product development costs by jointly developing certain vehicles with Toyota. This helped Subaru achieve a Net Promoter Score℠ of 76 in the US this year, one of the highest among automakers. For example, it concentrated R&D and capex spending on signature features, such as all-wheel drive, that strengthened vehicles’ durability, reliability and safety. The company has kept its product lineup small and geared its investments toward capabilities that differentiated the brand in customers’ eyes. Toyota’s capex spending as a percentage of revenue is among the lowest in the sector, yet it’s also an innovation leader in areas such as plug-in hybrid vehicles.įocus was the key for Subaru, another Japanese automaker and efficiency hero. The Japanese automaker accomplished this by sticking to its pioneering lean manufacturing principles, including strict reuse of factory equipment across different products and extensive use of carryover parts from one platform generation to the next. The “efficiency heroes” provide some vital insights into how to apply capex and R&D to create the most value for the business using fewer resources.Ĭonsider Toyota, one of the efficiency heroes in the Bain analysis. Other factors influence company performance, of course, but ensuring that capex and R&D continue to feed the strategic priorities of the business will have an outsized effect on which companies accelerate as winners out of the downturn and which are left behind.
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