Toyota Motor Company - International Business - Case Study Example

International Business xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Name xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Course xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Lecturer xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Date Toyota Motor Company A multinational company is a company that has its operations in many countries but has its parent head office in one country. Multinational companies operate as subsidiaries of the parent office that is the headquarters of their operations. A multinational company also controls operations and production activities within the country of operations but target customers both locally and internationally with the aim of increasing sales and expanding their operations. Toyota Company in the USA is a multinational company because it operates globally and has the same headquarters with other Toyota companies based in other countries. The overall headquarters of Toyota Company are in Japan but for the operations in the USA, they have management from the office located in Torrance. It has a license to operate in the USA and thus has its operations managed and directed by the office in the USA. Toyota Company is in the automobile industry, it provides car brands and other automobile services to its customers. It is a multinational corporation since it has branches across the world dealing in the same operations but with control within each nation. The company aims at ensuring safety and quality in the transportation sectors both in the USA and internationally by targeting international market for their car brands. As it is with multinational companies Toyota Company in the US is large and has assets worth many millions and it operates globally with branches in many nations of the world with each Branch being in charge of its own operations. Toyota Company in the USA is also a multinational company since its target market is international with its automobile products and services. The company has a global vision that is to enhance mobility by providing quality automobile products and services through increased innovation and aiming at consumer satisfaction. Being a multinational company Toyota shares its global mission and vision but has objectives that are specific to the USA branch to ensure they are achievable and in line with management’s decisions. This is important in ensuring that as a multinational company it has objectives that based on the operations carried out within the specific country of focus that in this case is the USA. The major focus of the company is to enhance customer satisfaction by ensuring they avail to them quality products. The company is committed to innovation and research to improve approach to their operations as well as promote technological advancement in the industry that will facilitate growth in the branch and enhance their profitability. The business is international due to its ability to serve customers both locally and internationally as well as targeting employees from USA and from other countries. The company’s objectives aims at upholding cultural diversity in customer satisfaction and by enhancing proper relationships within the company so that all their operations are focused on enhancing international standards for the business. This paper focuses on the internationalization process of Toyota motor corporation in the US and how it has affected the business from an international perspective by relating the process to theories in place that drive internationalization of businesses. Toyota Company was founded in Japan, with time the business has expanded its operations into a multinational company. This has facilitated internationalisation of the business to incorporate international strategies in their operation and thus expand the market. This will promote increase in profitability due to increased sales revenue and cost management, as business will utilize resources available in the country that the business is expands to creating a competitive advantage strategy for the business. Internationalization process of a business facilitates access to the international market so that a business expands their target market and will facilitate the performance of the business in global competitiveness. Internalization of The Internationalisation Process Internalisation is an inevitable strategy not only for Toyota but also for any company to penetrate the modern market. It was always the Toyota Company’s intention to expand to the international market and it did not take long for it to invade the international automobile market. One of the biggest motives to venture in the international market was to compensate and hedge against the local challenges that the company has experienced in the 20th century. The home market challenges and hard times lead to the company opening up to the international markets so that it could be able to sell more automobiles in the foreign markets. Or else, there was more internal competition from local players in the Japanese market; it was getting more and more severe. This did not only raise the quality of the automobiles but increased costs and reduced profits considerably. It became difficult to meet the needs and expectations of the customers because of overproduction while at the same time the company was laying off some of its work force in a redundancy process. The future prospects of the home market were the major reason behind Toyota venturing in the international market (Cavaleri 2011). To achieve its internalization dream, Toyota laid down three milestone or targets. These milestones were the company's ways of internalizing itself. The first milestone was “Global Business Plan” and it was a short-term plan for enhancing localisation of production as well as foreign imports by way of coordinating with other automakers in foreign countries, it was set for three years from 1995 to 1998. The company had an objective of manufacturing more than two million automobiles by year 1998. It expanded the existing manufacturing facilities and set up new manufacturing facilities by adopting localisation of production. The focus of this milestone was to expand the company's manufacturing capacity in the foreign markets. The second milestone was “Global Vision 2005” the purpose of this milestone was to help the company achieve a competitive advantage in terms of technology in the international market while at the same time maintaining market leadership in the Japanese market. This milestone was able to reinforce the company's localisation strategy. As the chief executive of the company asserted, “To provide customers with what they need and where they need the products”. The focus was to strengthen and expand manufacture and sales centres in individual countries or regions. This also included development and design as well. As such, the company manufactured its products according to the taste and preference of the region. The last milestone was “2010 Global Vision” and this was to achieve fifteen percent (15%) of the global automobile market by the beginning of year 2010, this was supposed to beat off the market leader General Motors. The focus of this milestone was innovation in the company products. As such, the company set up to produce automobiles with recycling based society, global scale development of automobiles, information technology and diverse society. The company was able to set up and manufacture fuel efficiency engines. By embracing technology, the company was also able to restructure the decision procedures in order to allow flexibility in regional operations. This allowed for creativity and was a fundamental element in the success of the company in the US market. Innovation and creativity were crucial in strengthening the company’s competitive advantage in the US market given the competitiveness of the market. As a way of localisation, the company decided to Americanize its products. This later became an important trend in the company management as it now sells more automobiles in US than it sells in Japan. The company allows American design of their products that has proved to be a huge success in the US market. For instance, the Toyota managers allowed American designers to manufacture models such as V8 pickup truck as well as redesign of hybrid car, Prius purposely for the American market. These two marques later turned out to be huge success in the US and later the global market. The company management also allows American managers in the top management as way of allowing flexibility and localisation in United States. There are new ideas about marketing, design and innovation and they permeate the company upper levels thereby seeping down to the management. This is one of the significant contributors to the company's internationalisation process in the United States market. The arrangements of the milestones were in such a way that the next milestone depended on the success of the later milestone. The first milestone of production localisation was extremely important to the company, as failure in the stage would have directly impeded the future developments. According to the Toyota company, the localisation I globalization of its production bases and the objective of the action was to manufacture automobile where there is demand or where demanded. There were quality challenges in implementation of the localisation process as the mass overseas production plants could easily neglect qualitative attributes of the company products. To ensure that the customers could not question the quality of the products, the company put label of “Made by TOYOTA” in all their products instead of “made in US”. This made the company to maintain quality in all its production facilities as it manufactured the products itself. The US market is one of the biggest single markets in the world. All automobile companies in the world have committed huge investments in the US market thereby making competition to be fierce. Toyota Company has been able to establish itself in the market due to application of fluid and appropriate network entry. In addition, the milestones made Toyota company to strengthen as well as increase their relationship with its different parts of the business net work. The company became engaged in joint ventures with several local firms in export, sales and marketing, distributor agreements. These helped the company to get access to local resources and markets. Essentially, those were the actions that Toyota Company set up to internationalise itself, the impacts of the actions to the organization itself and the impacts on the broader community. Experience/Lessons Learned About International Business in the Contemporary Context I have learned various things and aspects of international business. It is not a wonder that there a plenty of international companies and foreign brands spread all over a country. This is purely because of international business and its great demand in the world. I have come to learn that different companies take their chance to expand as well as to share their products to others beyond their territorial borders. In fact, there is give and take scenario among many countries and this opens new opportunities, companies need work force in running the business and therefore they create employment opportunities for local people. There is utilization of resources by sharing; companies take their products and services to places where they are not plenty and therefore help local people. I have come to learn that although there are many different products serving the same purpose, they provide different quality. Every company has its own unique way of producing their products; the consumers choose the best according to their taste and preferences. Carrying out business beyond the national or territorial borders brings technology in certain region without the same technology. As such, there is transfer of technology, creativity and innovation in different regions. I have come to learn that international business is the most essential and preferable phenomena in the modern world. It is very important for the prosperity of the word as there would be no prosperity without business. There is no one country or person that is self sufficient and therefore international business brings resources, products and services at reach of consumers. Every person benefits from the significance and necessity of international business in different ways as i have experienced. In one way, it satisfies me while in another way it satisfies another person. I have learnt that international business helps countries to earn foreign exchange. Investors import and export resources, products and services and this makes a country to earn foreign exchange thereby making the economic status of a country stable and healthy. This is especially important to persons who need assistance by governments. Lastly, I have come to learn and witness the infrastructure because of international business. Governments invest in infrastructure to attract international business. These infrastructures are for communication and transport and they open developments to the public. References Cavaleri, S, 2011, toward a more pragmatic knowledge management: Toyota's experiences in advancing innovation, technological, Managerial and Organizational Core Competencies: Dynamic Innovation and Sustainable Advantage. Read More