Toyota's Globalization Strategies
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ICMR HOME | Case Studies Collection
Case Details:
Case Code : BSTR094
Case Length : 20 Pages
Period : 1995 - 2003
Organization : Toyota Motor Corporation
Pub Date : 2004
Teaching Note :Not Available
Countries : Japan
Industry : Automobile & Automotive
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Please note:
This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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EXCERPTS Contd...
The Second Phase of Globalization
Cho decided to focus more on localization - he believed that by doing so, Toyota would be able to provide its customers with the products they needed, where they needed them. This was expected to help build mutually benefiting, long-term relationships with local suppliers and fulfill Toyota's commitments to local labor and communities. Cho defined globalization as 'global localization.' Therefore, besides focusing on increasing the number of manufacturing centers and expanding the sales networks worldwide, Toyota also focused on localizing design, development and purchasing in every region and country...
The 2010 Global Vision
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In April 2002, Toyota announced another corporate strategy to boost its globalization efforts.
This initiative, termed the '2010 Global Vision' was aimed at achieving a 15% market share (from the prevailing 10%) of the global automobile market by early 2010, exceeding the 14.2% market share held by the leader GM.
The theme of the new vision was 'Innovation into the Future,' which focused on four key components: Recycling Based Society; Age of Information Technology; Development of Motorization on a Global Sale; and Diverse Society (See Table III)...
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The Globalization Pay-Off
By mid-2003, Toyota was present in almost all the major segments of the automobile market that included small cars, luxury sedans, full-sized pickup trucks, SUVs, small trucks and crossover vehicles. According to reports, while global vehicle production increased by 3.3 times since the early 1960s, Toyota's production had increased by 38 times. As a result of its localization initiatives, Toyota had 45 manufacturing plants in 26 countries and regions by this time, and sold vehicles in 160 countries (See Exhibit IV and V for Toyota's worldwide manufacturing operations and production details)...
Which Way to Drive From Here?
By the end
of 2003, Toyota seemed to be well on its way to achieving its
globalization goals - worldwide sales of 6.57 million units in fiscal
2004; sales of 2.12 million units in North America by 2004; a 5% market
share (800,000 units sales) in Europe by 2004; a 15% market share in the
global market and a 10% market share in China by 2010.
Analysts felt that the following factors were helping the company in its
quest to become a truly global automobile major: strong financial
condition, globally efficient production system, unique corporate
culture, and the ability to develop a product range that met the unique
needs and desires of customers in different regions...
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Exhibits
Exhibit I: Toyota - Financial Highlights
Exhibit II: Toyota - Revenues by Core Markets (Fiscal 2003)
Exhibit III: Toyota - Revenue Growth in Core Markets
Exhibit IV: Toyota - Worldwide Operations (Manufacturing)
Exhibit V: Toyota - Production Figures (By Region)*
Exhibit VI: Toyota - Overseas Sales (By Region)*
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