Word count – excluding executive summary and headings – 2448
Table of Contents
Toyota Motor Corporation
Globalisation and Toyota
Analysing the Environment
The Tax Effect
Government Imposed Issues
Response of Toyota Lanka
Conclusion & Recommendations
Table of Figures
Sri Lanka’s automobile industry is a very volatile market space where the countries’ political situation and the government policy changes will drastically affect the operations of the automobile industry. This document is a comprehensive study on how the multinational automobile giant Toyota operates in Sri Lanka, what made Toyota globalize, the problems faced by the Toyota Lanka due to Sri Lanka Government influence on its activities, the strategies to face those Government issues and the future threats to its business in Sri Lanka and recommendations on how they should face these future threats. Toyota Motor Corporation
Toyota started its humble beginning in the automated loom machine business, started by a young Japanese entrepreneur named Sakichi Toyoda in 1924, eventually Sakichi Toyoda’s son started working on a gasoline powered engine which gave birth to the Toyota Motor Company (TMC) in 1937 (Toyota Global). Toyota started building affordable motor vehicles for the masses and created a huge demand within Japan for its automobile product line. Toyota did many acquisitions, including Daihatsu, and expanded its horizons further (Toyota Global). Toyota not only perfected its craftsmanship on building superior quality affordable automobiles, they created methods and processes that will improve the quality of mass production. Toyota created its unique production system and named it as the Toyota Production System (TPS). At the time Toyota started its automobile manufacturing, Ford Motor Company introduced the first assembly line which started industrial mass production. Toyota quickly picked up the assembly line manufacturing process and incorporated it into the TPS. Toyota started operating with the Just-In-Time philosophy to meet the demands of their customers and lower the production cost of an automobile. These factors all together created a competitive advantage over their competitors. Further, with the increase in global demand for quality affordable automobiles Toyota started seeking global ventures (Toyota Global).
Globalisation and Toyota
“Globalisation refers to the shift toward a more integrated and interdependent world economy” (Hill, 2008, p. 07). Internationalization and globalisation are related to the readiness of companies in expanding their operations to other regions in the world. Not all companies have the capability to globalise because even though they think globally they might not have the resource strength required to support the increase in competition (Sarrazin, 2011). According to Leontiades (1984) (cited by Sarrazin, 2011) the willingness or necessity to think globally lies in the; * demand homogeneity – standardisation of a product
* capital market liberalisation – more legal aspects facilitating globalisation Sarrazin further mentions that there is also a huge concentration of customers that could significantly improve the financial situation of the company and also improve the distribution structure. Several key factors should be evaluated when a company plans its operations globally, for example; * The Political stability of the host country.
* Exchange rate stability between the currencies in the host and home country. * Trade restriction and tariffs.
* Legal barriers (legislations affecting transportation of mechanical goods due to security reasons). * Economy and the standard of living of host country.
* Mutual understanding between the governments of the host and home country.
Figure 1 – Porter’s Diamond Theory (12Manage)
References: 12Manage. (n.d.). Diamond Model and Clusters. Retrieved July 30, 2013, from http://www.12manage.com/methods_porter_diamond_model.html
Central Bank of Sri Lanka
Funaru, M. (n.d.). Retrieved August 29, 2013, from TOYOTA’S BUSINESS STRATEGIES IN INTERNATIONAL MARKETS: http://feaa.ucv.ro/AUCSSE/0038v3-004.pdf
Hollenson, S. (2007). Global Marketing 4th Edition. London: FT Prentice Hall.
Johnson, G., Scholes, K., & Whittington, R. (2008). Exploring Corporate Strategy. Italy: FT Prentice Hall.
Kotler, P., Armstrong, G., Agnihotri, P. Y., & Haque, E. u. (2010). Principles of Marketing 13th Edition. Manipal: Dorling Kindersley (India) Pvt. Ltd.
Nadeeshan. (2013, August 23). (P. Rajalingam, Interviewer)
Sarrazin, M. (2011, November 22). Toyota and Its Global Strategy. Retrieved August 29, 2013, from http://www.slideshare.net/merylsarrazin/toyota-and-its-global-strategy
Toyota Lanka. (n.d.). Retrieved August 30, 2013, from Toyota Lanka: http://www.toyota.lk/#
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