Japanese company Toyota Motor Corporation recalled 6.4 million vehicles worldwide in efforts for quality control. It is according to an article from the Wall Street Journal by Hiroyuki Kachi. Twenty seven models were recalled in this big blow to the company’s quality control. This event happened after it was discovered that there were defects in some of the Toyota Models. The defects include problems with the steering wheel, air bags, peddlers, and the engine starters (Kachi). Two vehicles in Japan caught fire due to defects on the airbags. The business strategy of the company to report, and recall vehicles that are faulty can be viewed from different perspectives. It can show that the company cares about the safety of the public and that is why they have recalled their vehicles. It means that the company is trying to portray itself as caring and concerned about safety. The other view to their business strategy is that their vehicles are of low standard compared to their competitors. Toyota, just like many other companies, seeks to expand their business. Toyota’s business strategy to expand has been hindered by this recall, but the move to recall the vehicles can also be viewed as a positive business strategy.
According to the article from the Wall Street Journal, vehicle models that were recalled include the Matrix, Corolla, Highlander and RAV4. 3.5 million Vehicles had a problem with the air bags, 2.32 million vehicles had problems with seat rail, and the rest had problems with the engine starter (Kachi). It is a large number of vehicles that will lead to considerable setbacks and losses. In addition, customers of the Toyota brand would now find it difficult to purchase their products that have the reputation of being faulty. The article by Kachi explains that the Toyota Company has a policy that requires it to report about faulty products. It is a requirement of the law that companies have to report safety related issues. It can also be viewed as a business strategy where the company assures honesty with the public. It can lead to trust from the prospective and loyal customers and they can be assured that their products are safe. The customers will also receive compensation if the products develop any faults.
The article from the Wall Street Journal describes a time when the Toyota Company failed to report about faults in their products. The company was doing this with the attempt to maximize their profits even on faulty vehicles. The Toyota Company continued to sell vehicles, even after they discovered some safety concerns. According to Kachi, the Toyota vehicles accelerated uncontrollably hence leading to accidents. The U.S Justice Department found Toyota guilty of not reporting the faults in their vehicles, and the case led to a 1.2 million dollar settlement. Toyota wanted to expand their market and improve on their revenue, but the safety problems in their vehicles were an impediment to their success. Therefore, they decided to hide the truth from the public in order to see through their business strategies. However, the business strategy failed, and they lost a lot of money in settlement and with it their customers.
Business strategies are normally with the aim of using as little input with the objective of maximizing profits. The strategy has to factor in a lot of environmental concerns, such as the market, they are venturing into, the competitors, and internal and external economies. The article by Kachi in the Wall Street Journal describes the situation where Toyota had to recall 6.4 million of their vehicles. The company is always in the dilemma of whether to hide their safety concerns or report on any important issue with their products. The correct approach as a business strategy is always to remain truthful with the public. It leads to good business ethics and loyalty that eventually reflects in increased profits.
Kachi, Hiroyuki. Toyota Recalls 6.4 Million Vehicles. The Wall Street Journal. Accessed on