Toyota in the path of Globalisation - Dissertation Example

?Toyota in the path of Globalisation Contents Introduction 3 Company Overview 3 Q 4 Marketing Mix of Toyota: 4 Jidoka: 5 Just-in-Time: 7 Conclusion: 8 Q.2. 8 Internationalisation Process Theory (IPT): 8 Challenges faced 9 Conclusion: 10 Success Achieved 10 Reference 12 Introduction As the senior marketing consultant of Toyota’s global marketing I have found out some issues regarding its marketing mix and internalisation process theory over its competitor. And those facts are giving huge competitive advantage to Toyota over its rival’s automobile manufacturer in domestic market as well as global market. Globalisation in today’s world is more effective than anything else in the world. Globalisation means doing business all over the world. Not only business means goods and services but also it is an exchange of cultures, thoughts, ideas and views of the people of one location with the people of other locations. As more and more organisations are following that path so business is getting more competitive in everyday. Several strategies were included in the production line of Toyota to be more effective on the way of globalisation and to be more competitive in world market. Company Overview In 1937 Toyota was founded. It is a manufacturer of automobiles, headquarter is in Toyota, Aichi, Japan. In 1957 Toyota entered into United States market at first. In last seventy six years it introduced itself in one hundred and seventy countries all over the globe. Most promising markets of Asia and developed markets of North America and Europe, Toyota made its presence. As export grown heavily firm made its production bases in several regions according to that regions demand. This policy is widely known as "producing vehicles where the demand exists" (toyota-global.com). Currently Toyota has fifty one manufacturing base in twenty six different locations of the world. Not only manufacturing units all over the globe, but also Toyota now have nine different research and development bases all over the globe and developing "from development and design to production, as well as sales and service, Toyota has now achieved consistent globalization and localization" (toyota-global.com). Q.1. Marketing Mix of Toyota: To make its business global Toyota had several hurdle in developing that system. First thing that come up in the process is assurance in quality. Toyota achieved that by introducing one statement in its manufacturing unit that is “no matter where Toyota vehicles are made, they must have the same high level of quality." This company does not put any ‘Made in USA’ or ’Made in Japan’ tag over its cars. They only put one statement in their vehicles, which is ‘Made by Toyota’. This is a ‘Toyota Way’ kind of promotion in its every product throughout the globe. They do not bring highly educated or qualified or skilled labours or employees for production but they trained their own manufacturing people by themselves to enhance their level of skill. Just for that reason Toyota in 2003 opened a Global Production Centre (GPC) in its Toyota city inside of its Motomachi Plant. In 2006 to increase its presence in Asia Pacific, Europe and North America Toyota opened more Global Production centre in United Kingdom, Thailand and United States. Below diagram is showing the Toyota’s research and development units and manufacturing units in several locations of the world- Source: http://www.toyota-global.com/company/profile/in_the_world/ There are two major principles on which Toyota’s manufacturing process is depending on; they are continuity in improvement and proper respect and remuneration to its employees. The main slogan in Toyota’s manufacturing system is ‘making thing’ and that is followed by a most innovative and productive process that is "lean manufacturing system" or it can be called as "Just-in-Time (JIT) system”. Constant improvement system is followed in production units to achieve "making the vehicles ordered by customers in the quickest and most efficient way, in order to deliver the vehicles as quickly as possible."  There are two models in the production process of the organization. They are like- Jidoka: In this process whenever a defect or problem arise in production line, the whole process just stops at that time. This is an automatic and programmed process. This process is operating successfully in all Toyota production units with the help of machines and human touch effectively. ‘Jiodoka’ is a superb effective technological advancement in Toyota’s supply line. It is known fact that Japanese are very good at state of the art technology and automation. In Toyotas supply line each assembler has an emergency switch in their workplace. When an employee find out a fault in the assembly line or having some trouble to assemble some unit then that employee is allowed to press that button. And by pressing that button whole assembly line or production line will stop and siren will start in the whole manufacturing unit and that signal will reach to the office of production manager, quality control team and even all the top level executives regarding production so that they all get informed about the problem in production line. This technological advancement gives the Toyota to continue with its inevitable quality and standard of the automobiles in all over the world. As long as that problem is not solved the siren and light will continue making chaos. Only higher authority has the power to stop the panic button. After the fault is repaired and problem is solved then production line can starts again and all other employees can work. By implementing this kind of process very less fault can by pass in the production line and reach to the customer. This can assure the quality standard of Toyota’s product to the international customer. That is why for last eleven years Toyota Camry is standing at the most sold car in a fierce competitive market like United States by beating their home manufactured like General Motors, Ford Motors, Chrysler etc. And for last consecutive five years in luxury segment Lexus got the most positive feedback from United States market by beating other luxury models of Ford and general Motors. Just-in-Time: In this method each and every process is dependent on their previous process. In another word in every process a parts is manufactured which will be useable in next process. So next process starting time is heavily depend on previous process ending time. That is how each and every process are synchronised with each other. ‘Just-in-Time’ is a very effective way of manufacturing and delivering goods. To incorporate this way of delivery and manufacturing, better understanding with the supplier is necessary. If synchronisation with the supplier is not present then it is impossible to maintain a ‘Just in Time’ delivery system. In this system when company receives a order that order circulate among all the departments and because of super tie up with the supplier, supplier agree to deliver raw materials at that time and car been manufactured with no time losses. That is only possible when a known supplier is working with the organization or supplier and manufacturer have a long term working relationship. A lot of risks involved in the system like if because of some natural calamities or act of God reasons supply get hampered then whole production line will stop. So commitment from supplier is a must needed thing to continue with this kind of services. To overcome the above said problem supplier have to be local to the manufacturing unit. That means supplier and manufacturer have to be present as close as possible and delivery method or cycle have to be so effective that no issue should arise after an order is taken. This thing gets more difficult when manufacturer go global and start producing in global market cause all the supplier does not want to be in that type of contract with manufacturer. So only two options remain in that condition that old supplier need to bring in new manufacturing site or find out a new supplier who is ready go through with that kind of contract and deliver raw materials that efficiently. Conclusion: By these two processes Toyota is delivering its product to its customers without a little delay. These two processes allowed Toyota to manufacture its product with least manufacturing cost and within the delivery schedule without the fear of over productions. Because of over production several issues can arise including job cut and production cut. If over produced goods are not sold in the market then those extra product remained for next financial year sale then company have to put a reduction bar in its production because over produced cars are liability for any company. To avoid this Just in Time approach is the best possible outcome. But it is very difficult to copy by other competitors as here super synchronization with the supplier is mandatory and a hundred percent committed supplier is not someone is easily available. So those two method ‘just in time’ and ‘jidoka’ are very helpful for any organization in modern century as competition is getting fierce and market is going more volatile. Q.2. Internationalisation Process Theory (IPT): Main objective of Toyota is to meet the entire customer’s demand and maintain its high standard of quality within it. It also maintains its CSR (Corporate Social Responsibility) by its eco friendly cars which seats are made by polyurethane available from soy-oil (webpage.pace.edu). There are four objectives of Toyota in its production systems like- 1. Maintaining its outstanding quality and services for its customer. 2. Implementing mutual trust and co-operation among the employees to enhance potential of each and every employee. 3. By waste elimination process encourage to decrease the cost of production. 4. As per the market demands, develop an effective production standard. Challenges faced Scrap: After inputting equal amount of raw materials, using all the machineries, methods and labours by skilled employees, if a defective product made then that is a scrap product. Scraps are very harmful for any organisation because these do not give any value addition to the companies finance book. On the other hand several amount of resources been waste to make it. Overproduction: This means producing products more than actual demand of the market. When an organisation wrongly forecast the demand for its product in the market and produce more than the market demand and those extra products are not sell in the market, which is a very stressful situation for any organisation. Also producing product before the time can be call as overproduction. If any stocks get blocked in the inventory room that means rise of the cost for maintenance. That also can be taken as overproduction. Waiting: If organisation cannot deliver its product to the customer in time then there will be some difficulty regarding waiting issues. This can arise due to the last minute change in orders, very bad layout, breakdown during transport and some natural calamities or act of god etc. Conclusion: One fault from Toyota’s end was that they did not expand their manufacturing units outside Japan during 1980’s and 1990’s but other competitor of Toyota like Nissan, Honda already made their presence in the international soil. On that time between Japan and United States and Japan and European Union a trade dispute was going on that also affected the business environment of Toyota. Success Achieved For last 11 years, Toyota Camry standing at the first place of America’s most selling car. In J.D. Power Initial Quality Survey 2013, Toyota Camry is been ranked as the best midsized car of the year. In 2013 by J.D. Power and Associates Initial Quality Study (IQS), the Lexus LS flagship luxury sedan made by Toyota got the highest position by having only 59 problems among the 100 cars from all the same model in United States market (PP100). For the consecutive fifth year in J.D. Power and Associates 2013 Customer Service Index Lexus got the highest positive response from consumer end among the luxury brand. When Japan starts exporting automobiles at very high rate then a trade gap raised (WADA, n.d., pp.1-3). Then foreign countries started to ban import from Japan. To tackle this crisis the managing director of Toyota, Mr. Fujio Cho announced in a press club of the Federation of Economic Organisations about a “new international business plan”. According to it the plan was to set up manufacturing unit in overseas market. That is how a new era of international production system started and concept of globalized production system rose. This decision from managing director of Toyota motor was a game changer for Toyota. Because of that decision now Toyota is one of the leading brands in all the market of the world and have significant amount of market share in all the prospective market of the world. Reference toyota-global.com. "Made by TOYOTA" - Aiming for Global Quality Assurance. Globalizing and Localizing Manufacturing. Retrieved from http://www.toyota-global.com webpage.pace.edu. sustainability practices. Toyota Sustainability. Retrieved from http://webpage.pace.edu WADA, K. Why did Toyota respond less quickly to globalization? Retrieved from https://www.google.co.in Read More