The 21st century opened with corporate groups engaged in fierce competition. To respond to this harsh competitive environment, TMC embarked on the CCC21 (Construction of Cost Competitiveness 21) cost reduction initiative from July 2000, and Chairman Hiroshi Okuda appealed to employees in his 2001 New Year's address to "break through" the current Toyota way of doing business, giving the following explanation.

I want each and every one of you to work to bring about reform by thinking from the perspective of an entrepreneur or a manager and considering how we can break through the current Toyota model. Our biggest enemy is complacence. We cannot let the opportunity and the need for reform pass us by. I want you to be constantly aware that it is you who must change Toyota.

Toyota's results had soared with the expansion outside Japan and growth in the U.S. automotive market from the mid-1990s. Okuda's words were born from a sense of crisis that the company's strong results were leading to misplaced pride and delaying necessary reform.

With the awareness that immediate self-reform-one that covered corporate culture and management-was necessary, the initiative commonly referred to as BT2 kicked off in 2002. BT2 stood for "Break Through Toyota" and was led by an executive vice president, with the Corporate Planning Division and Research Division serving as the secretariat. The initiative was deployed over a two-year period.

The project began, with the general managers of the planning divisions of various company functions serving as members, by benchmarking against rival automakers to identify problems and topics that needed addressing. The topics selected as a result were "building a system for creating attractive products", "reforming the product decision-making process", "strengthening competitiveness of in-house production", and "reform of fixed costs". The BT2 initiative was positioned as a key project for achieving company policy.