Toyota Strategy for International Business Context

Topics: Toyota Production System, Toyota, Lexus Pages: 8 (2583 words) Published: April 15, 2013
Before the 1970s, in the kingdom of automobile industry, America is accepted the only magnate without any doubt. Detroit auto standard was highly praised and strictly abided by in the global automobile industry at one time, Ford and General Motors are paragons among them. Toyota cannot even be mentioned in the same breath with them at that time. However, decades of years past, Toyota Motor Corporation is no longer what it was before. Since 2008, Toyota has gradually replaced the position of GE and become the first rank among automobile manufacturer worldwide. We cannot ignore the unique and high-efficiency business strategy that was adopted by Toyota, as a leading enterprise in the industry, in its fast-developing progress. This text will briefly introduce Toyota Motors Corporation, use PEST method to analyze its international business environments and the impacts on Toyota. Meanwhile, it will provide key capabilities of Toyota which help to overcome its weaknesses and threats analyzed by SWOT analysis and Porter’s Five Forces analysis.

International business environments and impacts on Toyota
Toyota Motor Corporation was established by its founder Kiichiro Toyoda in 1937 with more than 300 staffs and twelve million yen as initial capital. By the end of March 31ST this year, Toyota’s capital was 397.05 billion yen and the number of employees in affiliated companies was totally 325,905. Toyota's famous subordinate brands include Crown, CORONA, COROLLA. Its luxury automobile brands like Cressida and Lexus have a good reputation in recent years. As of the end of March 2012, Toyota conducts its business worldwide with 50 overseas manufacturing companies in 27 countries and regions. Toyota’s vehicles are sold in more than 160 countries and regions. Macro environment is the foundation which enterprises rely on to survive. Grasping PEST analysis correctly will have positive impact on enterprises and even lead them to seize accurate strategy to gown up. According to appendix 4, U.S. market is one of the most principal markets that have made Toyota on the peak of automotive industry. Therefore, PEST analysis in political, economic, social and technological on U.S. market is necessary to discuss. America is the country on the wheels. The popularizing rate of automobile is the highest in the world. 100 Americans own about 80 automobiles on average. There are more than one hundred million cars are travelling now and about 14 million new vehicles are sold every year in America. So these make America become the biggest market, the most important and competitive place for automobile industry. It is essential for enterprises to have a favorable political environment, and Toyota have made a good choice at this point. America is one of the most stable in political countries worldwide. It provides Toyota of good environment to enter American market and sustainable development. 1950s to 1970s, this period is the most important development period for automobiles. Oil crisis has been erupted twice in 1970s. Fuel-efficient Toyota cars won prodigious market space with these two backgrounds. According to Demographic Yearbook provided by United Nations, the population of America was about 203.21 million in 1970s, and city population reached 140 million. The huge city population makes American automobile market size enormous. Although America is the most powerful economic entity, there are still plenty of Americans cannot get the most essential medical care services. As a result of the enlargement of the gap between rich and poor, together with the big three, GE, Ford and Chrysler, aiming at the middle and high-end market, Toyota took advantages in its high quality and proper price to occupy moderate and low-income citizens. North American Free Trade Area is made up by America, Canada and Mexico. North American Free Trade Agreement has been being effective since 1994. It is the opportunity for Toyota to enter other market in North...

References: Hill, C.W.L. 2009, International Business: Competing In the Global Marketplace, 7ed, New York: McGraw-Hill International
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