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International Business Strategy

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The mode of undertaking business across the globe has been undergoing various dynamisms with respect to the changing market forces. Furthermore, the companies have been engaging in thorough market research which has been a vital tool in enhancing their placement in the market relative to their immediate competitors. As a matter of facts, many firms have increasingly involved various mechanisms that help them in the achievement of the laid down strategies meant to revamp their competitive advantage. Indeed, the two interplaying forces namely: demand and supply has been changing due to change in the tastes and preferences. This paper focuses on the Toyota Motor Company with regard to its strategies within the global context. Toyota is one of the companies enrolled in the London Stock Exchange.

Toyota Company is one of the companies that have been in active market placement in the vehicle industry for a long time. The company traces its history over the recent past in 1867 when it was unveiled by the co-founder Sakichi Toyota. However, since then, the company has been undergoing various changes with respect to the technological advances that have seen the improvement of the company’s level of output as well as the quality of their output. Currently, Toyota Company engages in the industrial manufacture of a wide variety of vehicles with a worldwide target market. Indeed, the company is renowned for its strategic management philosophy as well as the first ever mass-market hybrids in the world. In particular, the company thrives through a strategic move to create distinctive and environmentally friendly products in order to spark out sustainable growth[1]. Towards this fateful achievement, the company aims at full compliance with laws and cultural values of the entire global precinct. Consequently, this makes the company’s competitive advantage to rise relative to its competitors.

To analyze the strategic placement of this company, this essay seeks to describe the marketing strategies of the company as far as the global market is concerned. In this regard, this paper explains the various measures that the company puts in place in order to maintain its competitive face in the motor vehicle industry. In order to evaluate the performance of the company within the shield of the London stock market, the FTSE UK index series has been developed in order to represent the performance of the companies within UK. Consequently, this provides the prospective investors with the requisite information that offers wide-ranging set of indices which are vital in gauging capital performance of industry and capital segmentation respect to the equity market of the UK[2]. Besides the trade in automobiles, the company also engages in other businesses such as housing, e-TOYOTA as well as the biotechnology. As additional activity, the company further embarks in environmental protection activities aimed at boosting the performance of the environment and minimizing pollution resulting from the automobile production. Such activities include afforestation and installation of catalytic converters on the exhaust pipes of the vehicles.

In order to understand the company’s strategic placement in the world market, this essay undertakes a comprehensive SWOT analysis of the Toyota Company. Indeed, Toyota is one of the most renowned and leading automobile company in the world covering more than 170 companies in the world. However, the company identifies with particular prime market for its automobile products. These markets include: Asia, Japan, Europe and North America. The company has a large pool of employees with a total of 316, 121 people as at the beginning 2008.

Toyota Company has been highly endowed with various strengths that make it well acquitted with the automobile industry. In particular, the company experiences a conducive marketing environment due to its ability to manipulate factors of production in the region thus putting it as a competitive company in the Asian region. Indeed, the company boasts of a very strong financial base. This enables the company to employ the requisite production technology that results in improved productivity and a consequential better placement in the entire industry with respect to its competitors[3]. Due to a renowned brand name, the company incurs a reduced advertisement cost that makes it possible to invest in other parts of production. Furthermore, the presence of a strong brand name enhances sales due to the trust already developed by clients worldwide.

In addition to the company’s ability to capture the automobile industry, the company further engages in the production line which is discretely research-aided investments. Such research is very important to the company as it helps the company to undertake comprehensive market segmentation which results in the establishment of viable market bases[4]. In the past, the company had been basing its market on the Asian and European regions. This formed a smaller segment of market and minimal profits as a result. However, with the recent research on the automobile industry as well as other investment viable sectors, the company has been able to upgrade its market scope and therefore expand its market coverage in the entire world.

As a matter of facts, Toyota Company has a rigorous and competent production system branded as the Toyota Production System (TPS). TPS is a clients-oriented philosophy. It implies flexible procedures of production laid down by the company in order to provide a discrete production system. The system represents a set of principles that the company identifies with through its daily businesses. These principles however extend to the global market of the company through its widened market coverage. TPS is based on three basic objectives which act as the guidelines in the production of the automobiles by Toyota Corporation. These are: provision of the highest possible quality vehicles to their clients; enhancement of good working conditions and job security characterized with satisfaction in order to realize full potential of the employees as well as giving the company an opportunity to respond to market dynamics in a more flexible manner. These objectives have a common target of enhancing cost reduction production strategies[5]. TPS is built on the base of standardization.

The Toyota Company production system has adopted a system improvement procedure through the Kaizen strategy. This strategic engagement is an important tool in ensuring that the company would standardization and efficiency in order to attain full quality as desired. Apart from the Kaizen production strategy, the company also engages in ‘just in time’ approach to production. With time, this approach has gradually gained momentum and international acceptance and incorporated into the world automobile manufacturing industry. All these measures have been the pillars under which the company’s specific marketing has been revamped to realize increased returns.

Indeed, the customers’ demands are viewed as a key driver that shapes up the vehicle production and stimulate production process with respect to actual production and supply of the various parts of the automobiles. Other strategies include Jidoka which is a Japanese term for automation. At the Toyota Company, the term refers to ‘automation with human touch’. For instance, the first automation loom was identified by the founder Sakichi Toyoda in 1902. Jidoka has been a key designing tool in the production process at the Toyota Company. Indeed, the company is able to undertake such investments due to its extensive and viable financial performance.

Besides the immense potential of internal strengths of the company, Toyota also boasts of a number of opportunities in its market placement. To begin with, the company has been experiencing an expansion in the Asian market which has been an important aspect of generating more revenue for the company due to improved production capacity as described steered by rising demand for the automobile products from the local and international settings[6]. In the recent past, there has also been increased demand for hybrid electric vehicles which has further boosted the company’s performance in the global automobile market. Furthermore, the company has been undertaking mass production of new models which has seen a warm reception in the global market. This has exclusively led to the success of the company relative to its competitors.

On the other hand, the company experiences a pool of challenges that acts to shutter the progress of the company as far as its dominance in the automobile industry is concerned. In particular, the company faces threats such as rising trend in the appreciation of the Japanese yen respect to the dollars. This results in the in declining aggregate returns. In addition, due to the slowed economic performance around the globe, Toyota has also been experiencing hazardous effects on the demand for automobiles as far as the entire industrial performance is concerned. Indeed, the poor performance of the global economy resulting from environmental effects and social implication of the prospective clients across the divide have had a negative implication on the sales volumes of the company due to rising bargaining power and declining purchasing power worldwide.

Furthermore, due to extensive pollution of the environment, there have been various developments aimed at reducing environmental pollution through carbon emission among other wastes resulting from immediate and recurrent production process. Consequently, there have been increased costs of cutting down the wastes for the company. This has therefore cut down the profit margin of the company and tends to continuously limit the level of production that the company aspires to achieve. The company has therefore engaged in rigorous research exercises on the most viable production processes that would result in reduced overhead costs. Over the recent past, the company has also been in a tough competition with other automobile companies that forms a major competition block for the company such as FORD. The company further experiences high cost of pensions on its retired employees due to its employees’ friendly policies.

The company also boasts of a large pool of internally developed facilities, chattels, other profitable resources as well as other internal competences.  In particular, the company has developed a profitable employees’ rapport which boosts the performance of the individuals and minimizes losses from employees’ reluctance to offer the maximum out of their ability. The company has also developed a programme that offers integrated services to its esteemed customers besides the automobile products. In particular, the company offers housing services to its esteemed customers. This is undertaken through the project dabbed ‘Toyota Home- building a comfort and luxurious 21st century houses in the in Japan. The company synchronizes the knowledge and technology from Toyota group into the housing market in order to capture a wider perspective of clients. This project is a function of ‘Skeleton and Infill’ strategy. Indeed, the implementation of this project is based on the in-depth contemplation of the client’s state of lifestyle. This enables the company to tap customers with other necessities besides the automobile products that other companies in the industry may not offer.

Besides housing facilities, the company also offers financial services to automobile clients. This service is offered with respect to purchases and leases of the cars covering more than 30 states worldwide. This business is based on one of the Toyota’s subsidiaries, Toyota Financial Services Corporation (TFS) which assumes an overall responsibility on subsidiaries of financial services globally. Such services provide incentives for the buyers and lures more prospective buyers from the countries within the limit and the primary clients in particular which comprises the 30 states. However, the financial services for the company have not working well for the company at times due to default payment among other minor challenges which hurts the general performance of the company. This therefore necessitates prior planning on the execution of the project in order to reap the intended profits as far as the creation of large customer base is concerned[7].

Additionally, the company has been in extensive technological advances. Of late, the company has set forth towards the unveiling of the E-Toyota project. This move is intended to develop a web-based automobile information network as well as onboard terminal and telemetries while at the same time integrating IT systems into the automobile industry. In this regard, the company further projects towards developing an e-Toyota business operations which aims at offering additional comfort to their esteemed customers through the actual integration of IT into the automobile products of the company. For instance, the company has had developed an automobile portal site known as GAZOO which offers an particular members an extension towards a three-dimensional city called the GAZOO METAPOLIS besides installing other important services. As a matter of facts, the company has further demonstrated its indulgence in technologically advanced products particularly in the field of telematics through the development of the G-BOOK which acts as an information relaying service within the onboard terminals which has been first released in China before the same is relayed to other prospective destinations.

Due to the current market forces in the automobile industry, Toyota Company has been engaging various mechanisms that prove more profitable and feasible through adoption of new-fangled processes, technologies and external systems particularly outside the company. There has been an increasing initiative to outsource by the management. Indeed, in the contemporary period, the imitations are becoming more invaluable and taken like innovations within the company in order to gather competitive significance. The Toyota company has there been undergoing the institutionalization of the conceptualized distinctive capabilities. However, the company maintains specificity of their immediate products to avoid the incurrence of negative impacts of the variedness of brands.

Other than the above ventures, Toyota Company has further invested in Biotechnology sectors as well as active engagement in environmental protection. As a matter of facts, the company has been upgrading its activities in this field through commercial flower business venture and gradually migrating to greenification of roofs of houses and restoration of lost vegetation cover as a way of combating pollution resulting from carbon emissions. This comes as the company branches out into competitive biotechnological firms. As a result, the company has been able to develop automobiles that inject very little if any pollution to the environment. Indeed, this saw the development of the electric automobiles that consumes environmentally friendly sources of power that least pollute the environment.

The company’s investment in biotechnology has been a viable move to combat pollution through the department of Biotechnology and Afforestation which has continuously engaged in rigorous research operations. Indeed, the Biotechnology laboratory of the company ha established a firm research framework as well as expediting Toyota’s Biotechnological venture. In essence, the company has been named as the only outstanding automobile company that has given maximum attention to the environment which has further enhanced its credibility. In summation all these activities has been one on the most important engagements that Toyota Company has engaged in and resulted in the Universal acceptance of the company as a global automobile company through the immense returns to the society. Indeed this forms a huge pillar and a competitive advantage over its competitor.

The main competitors of the company include: Ford Motor Company, General Motors Company and the Honda Motor Companies. Toyota Company boasts of a large pool of experienced employees. Unlike Toyota, Honda has a relatively smaller number of employees amounting to 35,908 by end of the year 2009. However, Toyota Company faces a relatively tough competition from its competitors, particularly the Honda which assumes very concrete market segmentation. As a matter of facts, Honda segments its market into various categories such as Automobiles, Motor Cycles as well as Power Products, prior to the geographical segmentation. However, Toyota is able to maintain its market coverage and dominance due to other services that it offers besides the specific offers on automobile products. This makes Honda assume a relatively high competitive advantage. However, due to the well established and concrete production layout, Toyota is able to withstand the prevailing competition through the resultant market dynamics resulting from advances in its immediate competitors and its capacity to convince its prospective clients through integrated approach towards pollution and environmental concerns in particular.

On the other hand, Toyota Company also faces considerable competition from General Motors and Ford Motor Companies which perhaps forms even a closer and immediate competitor than Honda. Indeed, the two companies are well acquitted with the automobile industry as far as the production is concerned. Indeed, the company has remained a stronghold of the motor industry due to the failure by its immediate competitors in undertaking viable market segmentation. In particular, the General Motors Company failed to conduct constructive market segmentation through establishment of too many brands as well as variations leading to its failure to attain its regarded share of the market. Consequently this was advantageous to the Toyota Company could establish a viable market segmentation that enabled it to expand its market scope to other regions of the world[8].

In conclusion, the success of a global enterprise can be credited with the successful market segmentation and the consequent concern on clients’ lifestyle in general in order has maximum satisfaction of the customers’ taste and preferences. Toyota Company has therefore been one of the most successful companies in the automobile industry that has been able to squarely segment its market in a way that promotes its profitability. In particular, the company has been able to offer other facilities and services besides the main products that its customers may need to supplement the demand for the automobiles. As a result, despite the presence of many competitors within the automobile industry, the company has remained highly competitive in the field due to its irrefutable returns to the society through environmental concerns among others.

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