Paste your essay in here… Vy Tran
Professor Sheppard
Section J
November 17th, 2016
Toyota – Elite from the land of the rising sun
Toyota Motor Corporation is a transnational corporation headquartered in Japan, is the largest automaker company in the world by revenue. Toyota is considered as the image and prestige of Japan. The outstanding success of Toyota stems from a perfect combination of the production system and the traditional cultural identity of Japanese people.
The founder of Toyota is Sakichi Toyoda (1867-1930). Right from the early years of the decade of 30 in the last century, Sakichi Toyoda has realized the importance and prospects of the auto industry in the future. He sold some of his inventions to foreign companies and then invested into the automobile manufacturing industry. In 1935, the first trucks GG, and the car A1 was built right in his textile factory. In August, 28th 1937, the Toyota Motors Corporation was founded.
Since 1957, the Crown ( a Toyota car line) was initially exported to the United States, opened a new era of Toyota. In 1984, the factory Toyota-General Motor in the US, called New United Motor Manufacturing, Inc., started to go into production. Four years later, the factory Toyota Motor Manufacturing in Kentucky, USA, delivered the first cars. In June 1995, Toyota declared the 'New Global Business Plan,' went for propelling limitation of production and expanding imports (through co-operating with foreign companies). This plan marked a significant progress of Toyota in the process of globalization. A noteworthy goal of this arrangement was to expand Toyota's offshore production ability to 2 million units by 1998. As a feature of the efforts, Toyota concentrated on increasing overseas production by opening new factories and improving the capacity of the existing plants. In 2001, Toyota began production at Sichuan factory in Sichuan, China. In 2002, Toyota signed a cooperation agreement with FAW Car Corporation of China to increase production here. In 2007, Toyota beat General Motors to temporarily become the largest automobile manufacturer in the world. In 2015, Toyota has 53 oversea manufacturing companies in 28 countries and regions. Toyota’s vehicles are sold in 170 countries around the world. Toyota's success is not what easily achieved in a short time, which is the result of over 70 years of effort and struggles.
In the process of globalization, transnational corporation Toyota has some strengths which prove their position in the global market. Firstly, the secret Toyota’s “key” to success is the production system and the advanced management approach called “The Toyota Way." In essence, it is a business philosophy towards highest quality and meets the best, the most complete and the timeliest needs of customers (Ono). They have always been looking for creative methods to improve the production processes and consumption, from the first stage to the finished product, from the factory to the customer care service, maintenance, and warranty products. Among the hurdles that this globalization of production has to overcome, the most important are quality assurance, which requires that "no matter where Toyota vehicles are made, they must have the same high level of quality”(TOYOTA). Besides, Toyota Production System (TPS) is the heart of Toyota’s success. TPS is widely used in all Toyota’s factories and affiliates around the world. TPS experts define production systems in terms of “activities,” “pathways,” and “connections”(Jayanth). To be more specific, TPS’s elite is that errors in the production process and the risk of poor quality products are prevented from the outset to ensure consistent quality and minimize the work, the cost and time for work to fix these bugs produce and substandard later. As a result, the company has built a fast and flexible process to give customers what they want, with the highest quality and most reasonable price. TPS also includes the business culture characteristics. Toyota strongly focuses on the human resource by encouraging employees to stick with the group, wholeheartedly work with passion and desire. As a result, it ensures all activities of the production process, creates business efficiency and stability, and makes the big corporation worked in sync, harmonization, uniform as a clock. The entrepreneurial culture within Toyota is also the brand identity, the face of Toyota. Workers are guaranteed jobs, but to work hard as diligent as possible, labor discipline and rules of behavior within the group is like in the military. The relationship between workers and employers are very open and frank with each other, trust and mutual respect. Last but not least is the business strategy. The Toyota Technological Institute (TTI) was opened in April 1981 with a broader mission: to train and educate young developmental engineers and scientists for service to the nation (Eiji). The genuine business strategy has driven Toyota to the outstanding success of commerce as well as the notable development of technology. Toyota doesn’t possess many inventions such as General Motors or Ford Motor Company, however, the quality of products bearing the brand Toyota is always guaranteed with the highest degree of ownership by Toyota engineers, leading experts in the field of world auto technology.
Along with the strengths, Toyota also has some weaknesses. First, Toyota’s competitiveness is limited. Currently, the competitive market exists many manufacturers having a reputation for high quality as Volkswagen, Mercedes-Benz, BMW, Audi, Hyundai, etc. Despite the fact that the companies have been significantly affected by the influence of the global recession, the stimulus packages of governments and policy makers improve the automobile market and make it more active. The economic downturn makes the market competition getting more and more intense. In the US, where it used to bring high revenue for automakers, also declined markedly. Toyota’s revenue has decreased down to 25% in 2009 (Toyota). Recently, the automobile companies consistently offer new products to compete in each model, product details, warranty, distribution, customer care services, and ensuring the safety of the vehicle. Apparently, the improvement of these companies becomes a large barrier for Toyota. The pace of rapid global growth is one of the main causes that leads to problems in Toyota product quality recently. Secondly, Toyota has specific restrictions related to human resources. The aging population of Japan causes difficulty to create momentum mutations. Toyota factories have a lot of old workers driving heavy trucks. The skillful and diligent workers born during the baby boom have begun retiring in 2007 (Coffey). Thus, Toyota has been "bleeding talent,” especially is the one who has been bonded with the firm since the first day.
Globalization has opened many significant opportunities for Toyota. Toyota has a large market including Asia, North America, and Europe. The market here includes consumption market and market of raw materials. In the commercial exchange, a huge market brings many opportunities for Toyota to increase and gain revenues from the sale, exchange of commodities and services with other markets in the world. In the past, Toyota limited their operation in Japan. But now Toyota is pursuing an ambitious global campaign. From 20 factories in 14 countries, the company currently has 53 plants in 28 countries, excluding Japan. With the strong development of information technology, Toyota has chances to connect customers around the world and understand their needs. Toyota uses social networks as a tool to promote their brand. For example, the US Toyota Facebook page has more than three million “likes.” The social networks allow Toyota to listen to the customer’s voice and thereby, can immediately provide what the customers need. In the era of market economy, the rapid ejection is unavoidable if the firm is unable to meet the needs of consumers, or fails to keep up the trend, and the speedy development of technology. Toyota is fully aware of this, and the birth of the hybrid line (half gas-half electricity car to protect the environment) is a convincing proof for the wise investment of Toyota. However, globalization is a “double-edged sword,” it can bring both chances and challenges. First, is the changes in policy, the financial situation of the countries cooperated with Toyota. The general difficulty is policy changes. The cold or fever of automobile market for many years was influenced greatly by the adjusting policies, by tax adjustments, etc. of each manufacturing country. Besides, to protect the environment, many cities are trying to reduce automobile such as Milan, Helsinki, Chengdu, Paris, Madrid, etc.(Peter). This creates a big concern for the future of Toyota in specific, and for the automobile industry in general. Yet, Toyota and other carmaker companies need to focus more on the environment issue because gas emission from car is partly responsible for global warming and climate changes. Second, tariff barriers also challenge Toyota. But, as I stated above, globalization and free trade can solve the problem for Toyota. In 2013, The United States gradually scrapped auto tariffs on Japanese vehicles under a Trans-Pacific Partnership (TPP) free trade (Whitman). Since Japan joined TPP, Toyota gains many benefits from the countries within TPP such as Australia, Canada, New Zealand, Singapore, Vietnam, etc. Another challenge is the rise of domestic companies such as Nissan, Honda, etc. and the foreign enterprises in the same region as Hyundai, Kia of Korea, not to mention the giant automaker companies of US, Germany, etc. that steadily increase the competitiveness within the market. Significantly, Toyota has been through the financial crisis that peaked globally in 2008 and affected the global economy. Toyota had to make the largest car recall ever. It occurred at the end of 2009 and the start of 2010. The total worldwide number of vehicles recalled by Toyota stood at 9 million. Toyota has already reduced more than 6,000 jobs at its Japanese factories since the global economic crisis. But this does not mean that Toyota lost its confidence. With an effective management system, with TPS, with “the Toyota Way,” and with the high quality and reasonable price vehicle, Toyota has overcome the crisis and back into to the race.
Brief, Toyota has achieved the goal to become a global automobile manufacturer. Toyota, after 70 years, introduces to the world a corporation with the global efficient production system, one of a kind business culture, strong financial condition, and the capacity to build up a product range that met the needs and desires of clients in various countries and regions in the world. After all, Toyota is deserved to be the elite from Japan – the country of the rising sun.