One of the benefits also include the access to the wide market when Toyota manufactures and assembles in these countries and the access to the market is cheaper as compared to the situation where Toyota manufacture in Japan and export it. The cost effectiveness for Toyota by manufacturing and assembling outside Japan is one of the major reason as the manufacturing cost in Japan is much higher than other countries and especially from developing countries. Toyota is considering to setup the manufacturing and assembly operations in under developed countries where the costs are cheap and is much beneficial for the company. Competing against General Motors in North America and with high financial stability along with the target of covering most of the markets it is beneficial for Toyota to get advantage from every opportunity that seams feasible and cut down costs and cover most of the markets. Solution 2 Toyota has been known for its quality control that it has thrived to provide keeping low costs for its products and its target customers. Like every large company it has made efforts to expand its operations and shown the great presence in markets like US. The basic purpose of expansion is to capture the market and increase its share it has always been strategic decision for the corporates as they ample opportunities for growth. However along with the opportunities management also has to focus on the risks that they might face that would have the potential to undermine their current status. Toyota has focused on TQM (total quality management) and along with processes have been sharp that enable just in time inventory. At overseas the quality of production facility might not be as that Toyota requires along with that it is would be burden and challenge for management while in headquarters in Japan to ensure the standards of facility and production raw material that they receive. Toyota’s policy of learn local might not prevail in every region that they plan to operate as initial access would be to local markets that might not provide quality material. It’s design and technology that really matters in the automobile industry and in overseas it becomes even harder for company to ensure secrecy of its designs. Every region has different culture, requirements and most important of all government regulations that create a huge risk. Being a multinational Toyota always faces a threat regarding the foreign exchange. Solution 3 The recommended plant citation within North America is in the United States because as per the clause when 62% of the cost is covered in United States then the company shall be allowed to the free movement of its products within United States, Canada and Mexico. Toyota should consider the market conditions as to what type of facility should be considered best whether manufacturing or assembly and the demand of its products that is within the United States, Canada and Mexico as this will give Toyota the access to the markets of these three countries as they are the members of North American Free Trade Agreement. The environmental and legal laws should be considered as Toyota has to comply with the legislations of United States in order to be operative. The cost that Toyota will bear should be less than the other
Table of Contents Solution 1 2 Solution 2 2 Solution 3 3 Solution 4 4 Solution 5 5 REFERENCES 8 Solution 1 Toyota is manufacturing its products in Japan but it is aggressively expanding its manufacturing outside Japan so as to minimize its cost. It is the most useful technique that Toyota is following as transferring its manufacturing outside Japan as the cost of labor is cheap and Toyota faces many of the tax benefits as well…
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