Analysis of Toyota Australia in Peril - Case Study Example

TOYOTA AUSTRALIA IN PERIL CASE STUDY Student’s Name Course Proffesor Univesity Date Introduction and Summary of case study The Toyota Australia in Peril is a case study of the situation that the Toyota Australia subsidiary company is facing. The automotive industry in Australia was facing a hard time in production and sell of their products. The other players in the automotive industry in Australia included General Motors Holden (Holden) and Ford Motors Company of Australia. All the three automotive companies in Australia were subsidiaries of other big international countries that operated in other countries. After the announcement by the General Motors Company Holden (Holden) in December 2013 that it was going to be out of the car manufacturing industry by the end of the year 2017, Toyota Australia also expressed the fear it had that it was in Peril. Toyota Australia has had a long glorious history of production in Australia. It is a subsidiary company owned by Toyota Motor Corporation Japan. The company has been in operation in Australia since 1958 with it first vehicle assembly in 1963 in Australian Motor Industries at the Melbourne factory. The company went through a series of producing different models starting with the Corona. The company begun exporting for the first time in 1986. Toyota's local operations were unified in 1988 to form Toyota Motor Corporation Australia. In 1991, Toyota emerged as the market leader for the first time. The company remained the overall market leader for the next subsequent 11 years. The company also had success in the export market exporting two-thirds of its production. According to Readers Digest (2013), Toyota was the automotive company in Australia that was most trusted . Toyota together with the other players in the automotive industry in Australia was operating in an increasingly adverse environment. The market structure was competitive and fragmented. Australia had low tariff barriers and a trading environment that was highly open which allowed importation of other vehicles. This brought about a lot of competition in the Australian Market which made the market highly competitive and fragmented. The market also experienced structural changes and decline in demand of the automobiles. The global financial crisis resulted to the demand of automobiles by the developed countries remaining constant. The demand of cars also changed to cars that used little fuel that countered the kind of cars manufactured by Toyota. The company experienced small-scale operations, higher cost of manufacturing and underutilization of capacity. Australia was a small player in the global sphere of automobile production. The three Australian players had their production below the global optimal operation scale; this made the cost of production to go high. There was also higher labor costs and other costs. Government policies and declining protection were also the other factor that was affecting the automotive industry in Australia. Quantitative restrictions were removed by the government and tariffs brought down. Free trade agreement and trading environments that are unbalanced affected the automotive industry in Australia. Toyota faced a huge problem exporting its cars to the other countries that greatly affected the total export it was making. The adverse currency developments like in the year 2001 when the Australian dollar grew stronger against the US dollar significantly reduced the profitability of the Toyota exports. Toyota had to make efforts to counter the adverse external developments. The company started working on a policy of having steady improvements and reducing the cost of production in its operations. The company came up with a plan called Toyota Australia Future Business Transformation. It aimed at improving efficiency, reducing the cost of manufacturing cars, improving, organizational and manufacturing efficiencies and improving sales of the domestically built models. The project brought about radical changes to the business practices of Toyota Australia. Explanation and Justification of Criteria Toyota Australia is at a situation when it is facing increasing adverse environment. The adverse environment affecting the automotive industry has forced one of the key players in the automobile industry General Motors Holden (Holden) to make an announcement regarding its decision to quit the automotive industry by the year 2017. The decision by the General Motors Holden in December 2013 to be quitting the industry by 2017 made the Toyota Australia Company to express its fears that it was in peril. Toyota released a statement that said it would put unprecedented pressure on their local supplier network and their ability to manufacture cars in Australia. The fears by the Toyota Australia company shows that there is actually a great risk of the company going out of business. This gives the best criteria that can be used to evaluate the case to be understanding what the company has to do to remain relevant in the market and not to run out of the business like the other company. Understanding what needs to be done so as the Toyota Australia company to remain in business is important since the company has been the biggest player in the industry for over decades, and there is need of it maintaining the status. The company is the biggest exporter of automobiles in Australia, and the best criteria that can be used is understanding what needs to be done to help the company maintain its status. Evaluation The case of the Toyota Australia being in peril needs to be looked in the way that it would be solved to avoid the consequences that may occur in the case of a closure of the company. The company was being faced by several adverse environments that threatened its existence. Evaluating each of the adverse environments that the industry was facing is important in trying to understand what can be done to salvage the company from following the course of the General Motors Holden (Holden). The adverse environments that faced the automotive industry in Australia and threatened the survival of the Toyota Australia company include: Competitive Fragmented Market Structure, Structural Changes and Declining Demand, Small Scale of Operations, Higher Cost of Manufacturing and Underutilization of capacity, Government Policy and Declining Protection, Free Trade Agreements and Unbalanced Trading Environment, and adverse currency developments. These environments need to be critically evaluated in trying to come up with the solution of the exact actions that can be taken in trying to prevent the environments from forcing the company out of business. The Toyota Australia is a company that offers a lot of employment across its production and marketing activities. The company has a lot of employees that work within its plant who deal with the manufacture and production of the automobiles. Apart from the employees that deal with the manufacturing and production process, the supply chain of the company’s product to the final consumer has a lot of intermediaries involved who provide the marketing services. All this people have their livelihood depending on the existence of the company. The impact of the company falling out of business would greatly impact negatively on the lives of this. Recommendations Australia was offering a low market for Toyota products. This implied that the demand in Australia was low. The conditions that surrounded the automotive industry in Australia, on the other hand, were quite adverse that the survival of the company seemed unrealistic. But should the company do the same as the General Motors Holden and quit the industry? This should not be the case, the company has to come up with the ways in which it can prevent such scenario happening. As evaluated earlier, the consequences of the closure of the company are not good for the employees of the company as well as those involved in its supply chain. The following are some of the steps the company can take to be able to survive the hardship it is facing in the industry. First the company should ensure full implementation of the project it had come up with. Ensuring implementation of the project would buy the company. Taking the move of retaining the teenage offenders and calling in their parents is a good step. This ensures the parents get to know exactly what their kids engage in when they are lone. Parents may know or may be able to help in coming up with ideas of what should be done to the kids. Some parents may feel their children have been engaging in such behaviors continuously and may suggest for the children to be punished or even be taken to court. Some parents may feel there kids just have bad influence and under good supervision they will be responsible. Coming up with the hypothesis in business at trying to come up with a new product will first need asking questions. The questions will include, who are the target customers? What exactly do they need? One possible hypothesis is; Women between the age of 18 and 35 years would prefer to have their perfumes packaged in classy red bottles. After developing this hypothesis, there is a need for it to be tested. A simple survey could be carried out, or depending on feasibility, an idea could be developed and presented to beta testers. Testing the hypothesis could also be done by running several campaigns to find out the best. Also as one of the main platform of collecting data on the hypothesis will be social media. These will include posting research questions on social media platforms and following the comments and reaction of the people If such incidence of uncooperativeness is to occur, the police will have to change how he will handle the status offense case. A decision will have to be made of handling the case more seriously than just as a petty crime. The minors might have to be taken to the station to write a status and even await a juvenile court ruling. Conclusion Despite the adverse situation facing the automotive industry, Toyota stills believe it can do something to remain in the market. The company openly confesses to having fear of the situation; it is important that the company does everything possible within its capabilities to deal with the hard situation. There is some exception to this general rule that protect the employees from illegal discrimination that is based on categories such as race, gender, color, national origin, age, religion, marital status or disability. Other examples of employment-at-will exceptions include laws that protect employees from being terminated or retaliated for filing workers compensational claims, employees trying to enforce rights to receive the minimum wage, employees asserting rights to work in a workplace that is safe and healthy, employees refusing to commit acts that are criminal, employees reporting for a military duty or jury duty. Terminating an employee for any one of these reasons constitutes a violation of the state or federal law that is applicable. For an example, Mark was hired by a firm as a custodian. He worked for six hours each day. The state of Maryland provides that employees are entitled to a minimum wage of $8.25 per hour. The firm, however, used to pay Mark $7 per hour. Mark chose to raise this issue and complained to the employer, he wanted a pay increase as per the minimum wages required by the state. The employer was not pleased by Mark’s actions and fired him saying that he had a right to fire him as the state allows employment-at-will doctrine. Mark did not give up and went to court. The court ruled in favor of Mark, and he was taken back to his work and his payments increased. What comes out of the example is that the employer has the right to act according to the employment-at-will doctrine, but he did not consider the exceptions of the doctrine. This illustrates the important of employees understanding all that the employment-at-will entails before they try exercising it. The state of Maryland applies the employment-at-will doctrine. It means where there is no an express contract, agreement or policy to the contrary, an employee can be hired or can be fired for any reason whether it is fair or not , or for no reason all. Reference list Readers Digest, (2013). Reader's Digest Australia - Inspiring Articles, Useful Tips and Great Prizes to Win | Home. [online] Available at: http://www.readersdigest.com.au/ [Accessed 30 Sep. 2015]. Read More