This automaker shows why the best companies don’t put ALL of their eggs in one basket…
| Hi! I hope you’re doing well. I’m excited to share another useful insight for today’s “Return Driven Strategy (RDS)!” For those of you who may not know, RDS is a pyramid-shaped framework with 11 tenets and 3 foundations. When applied properly, these principles help businesses and individuals attain high levels of success. Today, we will talk about an automotive giant that has attained success by adopting an “all-of-the-above” approach to its business strategy. Curious? Keep reading below! |
Today, we will talk about an automotive giant that has attained success by adopting an “all-of-the-above” approach to its business strategy. Curious? Keep reading below! The auto industry has transformed over the past decade, and the biggest disruptor has been the development and proliferation of electric vehicle (EV) technology. For more than a century, the internal combustion engine ruled the road, and carmakers built their entire business around it. Then, EV technology arrived and advanced rapidly, with carbon-reduction regulations giving it an extra push in terms of adoption. As a result, industry insiders began asking whether the combustion engine’s days were numbered. Not so fast, though. Gas-powered vehicles haven’t faded into obscurity. Roughly 240 million vehicles on U.S. roads still run on gas . No matter which way the industry goes, one carmaker has positioned itself to thrive. Be it gas, hybrid, or electric, this Japanese carmaker sells them all… and its name is Toyota.
Toyota is one of the biggest automakers in the world. The Japanese carmaker sold over 11 million vehicles globally in 2025, outperforming German rival Volkswagen Group, which sold nearly 9 million cars. Toyota has had a long history of being an innovative company. In the 1960s, it took the Japanese car market by storm with the creation of the highly popular Toyota Corolla. By 1986, the automaker managed to become the first import automaker that sold over 1 million vehicles in the U.S. in a single year. Three years later, Lexus, the company’s luxury vehicle division was founded. Over the past several decades, Toyota established itself as one of the leaders of the global automotive industry. It has done this partly by expanding its product portfolio to include the following:
According to early 2026 data, Toyota, alongside Hyundai and Honda, control 86% of the hybrid vehicle market in the U.S. Toyota controls half of that market, and even managed to sell 600,000 hybrids in the first half of 2026. This is proof that Toyota’s investments in various vehicle propulsion technologies has enabled it to stay flexible in an evolving automotive market. Said another way, Toyota, instead of relying on a single, high-risk bet, diversified its investments into multiple technologies. Regardless of which automotive technology performs well, the carmaker would always have a slice of that market. Conversely, it’s insulated from industry-wide disruptions due to its diversification. Take fully-electric vehicles for example: When EV adoption mandates were clawed back in 2025, the prices of EVs soared dramatically, shrinking customer demand. Toyota’s EV segment was exposed… but whatever it lost in that segment was cushioned by the sales it generated in other product categories. Today, the Japanese carmaker continues to move forward with its “multi-pathway” approach, committing to using different sources of energies for its cars rather than focusing on one form of propulsion technology. An “All of the Above” Approach Toyota’s approach to its business is best explained through the lens of Return Driven Strategy ’s (RDS) tenth tenet: Balance Focus and Options. According to Professor Joel Litman and Dr. Mark L. Frigo in the book, “Driven,” high-performance businesses “leverage uncertainty in order to succeed.” Said another way, instead of committing to one approach in a fast-moving industry, Toyota adopted an “all of the above” approach to remain competitive. Toyota’s success also imparts valuable lessons to leaders, managers, business owners, and professionals:
The bottom line? Toyota’s success in the automotive industry didn’t just revolve around designing and selling great cars; it also adopted a strategy that enabled it to thrive amidst uncertainty and constant change. — If you’re looking to gain a better understanding of Return Driven Strategy and Career Driven Strategy, we highly recommend checking out “Driven” by Professor Litman and Dr. Frigo. Click here to get your copy and learn how this framework can help you in your business strategies and ultimately, in ethically maximizing wealth for your firm. Hope you found this week’s insights interesting and helpful. Stay tuned for next Tuesday’s Return Driven Strategy! Imagine a company adored by millions—customers rave, media gushes, and everyone seems to think it’s a runaway success. Learn more about Southwest Airlines through the lens of RDS’s Tenet 2 in next week’s article! |
Miles Everson
CEO of MBO Partners and former Global Advisory and Consulting CEO at PwC, Everson has worked with many of the world's largest and most prominent organizations, specializing in executive management. He helps companies balance growth, reduce risk, maximize return, and excel in strategic business priorities.
He is a sought-after public speaker and contributor and has been a case study for success from Harvard Business School.
Everson is a Certified Public Accountant, a member of the American Institute of Certified Public Accountants and Minnesota Society of Certified Public Accountants. He graduated from St. Cloud State University with a B.S. in Accounting.
