Toyota's Globalization Strategies
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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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Introduction Contd...
The other major markets in which the company was fast
strengthening its presence were South America, Southwest Asia, Southeast Asia
and Africa.3 Back home in Japan, it enjoyed a market share of over 43%. Analysts attributed Toyota's growing sales across the world to its aggressive globalization efforts that began in the mid-1990s.
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The company constantly strived to ensure that each of its market segments - Japan, North America, and Europe and other markets - generated one-third of the annual sales (See Exhibits II and III for revenues and revenue growth data in its core markets). This goal was at the heart of Toyota's three globalization programs - New Global Business Plan (1995-1998), Global Vision 2005 (1996-2005) and Global Vision 2010 (2002-2010). In the light of Toyota's intensifying globalization efforts, Toyota's competitors themselves stated that Toyota could not be taken lightly. GM's Chairman, John F. Smith Jr., said, "I would not say they will not make it. Toyota is an excellent company. They are very focused on what they do and they do it well, and that is what makes them great."4
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Background Note
Toyota's history dates back to 1897, when Japan's Sakichi Toyoda (Sakichi) diversified from his traditional family business of carpentry into handloom machinery. He founded Toyoda Automatic Loom Works (TALW) in 1926 for manufacturing automatic looms. Sakichi invented a loom that stopped automatically when any of the threads snapped.
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This concept (designing equipment to stop so that defects could be fixed immediately) formed the basis of the Toyota Production System (TPS) and later became a major factor in the company's success. In 1933, Sakichi established an automobile department within TALW and the first passenger car prototype was developed in 1935. Sakichi's son, Kiichiro Toyoda (Kiichiro), convinced him to enter the automobile business, and this led to the establishment of Toyota in 1937. During a visit to Ford to study the US automotive industry, Kiichiro saw that an average US worker's production was nine times that of an average Japanese worker. He realized that to compete globally, the Japanese automobile industry's productivity had to be increased... |
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