STRATEGIES USED BY TOYOTA TO TURN IT INTO A POWERHOUSE:
Apart from this the management of Toyota from the beginning has been focusing on the cost leadership strategy. For this purpose the company is taking advantage of the lower wage rates at emerging countries. Apart from this, in order to target the emerging markets and economies Toyota uses the strategy of cost leadership and comes up with low cost cars and vehicles (Funaru, 2010). Hence it can be said that the strategies of low cost leadership and ‘going global but acting local’ have helped Toyota Motors to turn into a powerhouse. Toyota has been able to enter and operate in several international markets successfully because of these two strategies.
CHANGES IN THE STRATEGIES USED BY TOYOTA OVER THE YEARS:
More or less the strategies adopted and used by Toyota have been same over the years. The company is still focusing on the cost leadership and ‘go global act local’ strategies. The success of Toyota all over the world is because of the reason that the company understands the different needs and preferences of the customers all over the world and focuses on the production of high quality and innovative vehicles. At the same time, the company has also been considerate about the changing environment and consumption needs. As a result the company has a large diversified portfolio and has customized vehicles for different international markets. The company has been focusing on entering different international markets slowly by remaining stable and making sure to succeed (Funaru, 2010). Although the company has been focusing on low cost leadership strategy the company has also included the luxury cars and vehicles in its portfolio. In the seventies and eighties the brand image of Toyota Motors in the region of United States was that of reliable and low cost automobile company but the introduction of Lexus in the nineties changed the overall image (Laterman, 2005).
The company is still focusing on the changing needs and demands of the customers all over the world and indulges in extensive market research before coming up with the final product. This has allowed the company to come up with more customized and localized vehicles at low cost.
FIT OF TOYOTA’S STRATEGIES WITH THE ENVIRONMENT OF THE AUTOMOBILE INDUSTRY:
The overall automobile industry is highly competitive and there are different companies and brands operating in the industry. In order to remain in the industry and grab considerable market share it is important to understand the specific needs of the customers and come up with the innovative vehicles. The strategy of low cost leadership of Toyota Motors has allowed the company to target different markets all over the world. At the same time, the strategies of localization and extensive research and development have allowed the company to come up with the vehicles which are able to fulfill and satisfy the changing needs and demands of the customers. Apart from this, the localization strategy has also allowed the company to build strong relationships with the suppliers. The company has also been considerate about the environment and Toyota has come up with environment friendly vehicles as well. Hence, the strategies adopted by the Toyota totally ‘fit’ with the environment of the automobile industry as they allow the company to tackle competition, build strong relationships with customers and suppliers, and reducing the negative impacts on the environment and society.
FIT OF TOYOTA’S STRATEGIES WITH THE INTERNAL RESOURCES AND COMPETENCIES:
The management principles of Toyota are believed to be one of the most successful management principles. From the very start the company has been focusing on the strategy of Kaizen i.e. continuous improvement. This demands ongoing changes and innovations and at the same time minimizing or eliminating the wastages in the production process. Apart from this, the company has implemented the strategy of ‘just in time’ production. The concept of ‘just in time’ production is that there is no need of stocking the raw material and other related things and getting things as they are required (Liker, 2004). This on one hand requires good relationships with the suppliers and the other hand reduces the wastages and overall cost of production.
The market expansion strategy of the Toyota by focusing on localization of the production and design supports the production strategy of Kaizen and ‘just in time. With the help of the local production units and plants in different regions of the world the company is able to build strong relationships with the suppliers and hence improve the overall supply chain to support the concept of the ‘just in time’. At the same time the extensive market research for understanding the local preferences and demands make it easier for the company to continuously improve the vehicles on the basis of the changing needs and demands of the customers. Apart from this, the strategy of localization also allows the company to build good relationships with the local employees and hence improve their overall productivity and performance. Hence, it can be said that the strategies adopted by the Toyota Motors are completely ‘fit’ with the internal resources and competencies of the firm.
RECOMMENDATIONS FOR THE EXECUTIVES OF TOYOTA CORPORATION:
The executives of Toyota Corporation should keep on focusing on the strategy of continuous improvement with the help of the extensive research and development and localizing the products. Apart from this, the company should also adapt to the changing environment needs. The executives should keep on focusing on high quality products with continuous research and development, adopting different technological innovations, and also keeping in mind the changing needs and demands of the customers. This has allowed the company to succeed all over the world and this will allow the company to success in the future also. The company should not only focus on the changing preferences of the customers but should also keep in consideration the changing environment requirements. This is in lined with the overall commitment of the Toyota i.e. (Toyoland.com, 2011):
Contributing in the development of green society and environment
Chasing and using different environmental technologies
Taking voluntary actions
Building co-operation and collaboration with the society
All these commitments with the strategy of localization and low cost leadership will allow the company to grab more market share all over the world.
EVALUATION OF THE MODULE 4 CASE ASSIGNMENT:
The case assignment has helped to build the understanding of the strategies adopted by the successful automobile company. It has also enabled the evaluation and analysis of the relationship of the business strategies with the internal and external environment and associated factors. This in turn emphasize on the fact that it is important to consider the internal and external environment before coming up with overall business strategies. It is important for the organizations to come up with effective and efficient business strategies keeping in mind the different needs and demands of the market and should build on these strategies on consistent basis to be successful and acquire larger market share.
Funaru, M. (2010). Toyota’s Business Strategies in International Markets. Retrieved from http://feaa.ucv.ro/annals/v3_2010/0038v3-004.pdf
Laterman, K. (2005). The Secrets of Lexus’ Success: How Toyota Motor went from zero to sixty in the luxury car market. New York: Center on Japanese Economy and Business, Columbia Business School
Liker, J. (2004). The Toyota Way: 14 Management Principles from the World’s Greatest Manufacturer. New York: McGraw-Hill.
Toyoland.com. (2011). Toyota history: corporate and automotive. Retrieved from http://www.toyoland.com/history.html