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In 1935, Toyota AAA cars a successful trial, the second year of the formal establishment of Automotive Industry Corporation. Through the introduction of European and American technology under the guidance of the U. S. Automotive technical experts and management experts, and soon mastered the art of automobile production and management techniques, and in accordance with the characteristics of the Japanese nation, created the famous the total production of 10 million. Toyota Motor Corporation, the sass and sass Japan’s self-growth period, after the sass, and began it fully into the world of international strategy.
It worked in the United States, Britain and Southeast Asia to establish wholly-owned or Joint ventures, and automotive research and development centre Jointly built by the local implementation of the internationalization strategy of the local research and development of design and production. Toyota Motor Corporation has a strong technical development capabilities, and attaches great importance to study customer demand for cars in motor production and sales industry. The first driving forces to be discussed is regional economic agreement.
There exist five different categories of economic integration which are free trade area, common market, custom union, economic union and preferential trade agreement. A number of multilateral trade agreement have accelerated the pace of global integration. NONFAT is already expanding trade among the USA, Canada, and Mexico. The general agreement on tariffs and trade, which was ratified by more than 120 nations intended to encourage trade activities through multilateral trade negotiations based on three main principle which are non-discrimination, elimination non-tariffs trade barriers and discussion.
This will affect Toyota in marketing their product to other countries. For example, if Malaysia cut an import tax from 50 percent to 20 percent for Toast’s cars and cause any Toast’s cars exported to other GATE countries must be given the same tax cut. The problem with this regional trade agreement is about the existence of freeloaders or free rider nations, which are countries that are in active in trade negotiations but keep benefiting from others. This will cause Toyota facing higher difficulties in internationalist’s their business to international market as this incurred high marketing cost.
Next, we are going to discuss about the second driving forces which is converging market needs and wants the information revolution. Discovery of cultural universal as difference could be found whenever a person studying markets around the world. The common elements in human nature provide an understanding basis for the opportunity to create and serve global markets. The world is created deliberate. The majority of global markets does not arise spontaneously. Marketing efforts must create them.
Let’s take Malaysia automotive as this case of study, no one will need a higher priced vehicle produced by Toyota since Malaysia do have their national car manufacturers which are Proton and Proud with a lower selling price in Malaysia. However, as of today, needs for a Japanese car such as Toyota is getting higher than before. Marketing has driven this change in consumer behavior, and today, the automotive industry is a truly global one. Evidence is mounting that consumer needs and wants around the world are converging today as never before.
This creates an opportunity for Toyota to conduct global marketing. Toyota as a multinational companies pursuing strategies of product adoption run the risk of falling victim to global competitors that have recognized opportunities to serve global consumers. In regional markets such as Europe and Asian, the increasing overlap of advertising across national boundaries and mobility f consumers have created opportunities for marketers to pursue pan-regional product positioning. The third driving forces to be discuss is technological changes.
Technology is a powerful driving force of globalization. Technological breakthrough are substantially increasing the scale economies and the market required to breakable. Several, technological developments become compelling reasons for initialization. Thomas Friedman has said that globalization is farther, faster, cheaper and deeper. Advanced information technology have transformed our economic life as well as in business sector since developed new tools to cope new opportunities, including faster and more informed analyses of economic trends around the world and communication with partners.
The internet is an even stronger driving force. For example, When Toyota establishes a site on the internet, it the world to reach out, buying and selling a virtually unlimited assortment of products and services. Technology is truly stateless, there are no cultural boundaries limiting its application. Once a technology is developed, it soon becomes available everywhere in the world. This phenomenon supports Toast’s prediction concerning the emergence of global markets for standardized products.
In one of the Toyota article, Toyota has been anticipated the communication revolution that has, in fact, become a driving force behind internationalization. In regional markets, such as Asia Pacific, the increasing overlap of advertising across national boundaries and the mobility of consumers have created opportunities for marketers to pursue Asia product positioning. Next we are going to discuss about the fourth driving force which is improvements in transportation and communication technology.
Communication is faster and more convenient due to improvement in technology. For example, Toyota global business can communicate with each other regardless of egging through telephone, e-mail, 36 video conferencing easily, also satellite allows messages send out and receive at the same time. Advanced communication technology such as internet allowed customer get information for new Toast’s product and services easily. Besides, failing communication costs allow information move quickly and inexpensive. For example, Toyota Oracle-based vehicle ordering system.
This has transformed how distributor work, communicate and boost globalization due to the efficiency of communication technology, allowing Toyota Corporation to control and monitor their worldwide business activities easily. Improvement in transportation technology in air, sea and rail systems to accelerate the internationalization activities. Also, decline in transportation costs and less time needed to travel from one place to another. High-tech transportation has reduced the traveling time and increase efficiency of transferring goods, thus boost internationalization.
For example, Toyota use steam engine for transport during 19th century but they are using larger going vessels and centralization during 20th century. Internationalization world in the same aspect of increase mobility of people and goods over the world. For example, a manager work in Toyota Japan who has a morning meeting in Singapore can arrive at Thailand in the evening by air. Global economic growth is the fifth driving force to be discussed in the next section. There are three reason why economic growth has been a driving force in the expansion of he international economy and the growth of global marketing.
First, growth has created market opportunities that provided a major incentive for Toyota to expand globally. At the same time, slow growth in a company’s domestic market can signal the need to look abroad for opportunities in nations or regions with high rates of growth. Secondly, economic growth has reduced resistance that might otherwise have developed in response to the entry of foreign firms into domestic economies. Let’s take Japan as an example, when Japan is growing rapidly, policy makers are likely to look favorably on outsides.
A growing country means growing markets, there is often plenty of opportunity for everyone. It is possible for a foreign company to enter a domestic economy and to establish itself without taking business away from local firms. Without economic growth, Toyota may take business away from domestic ones. Domestic businesses are more likely to seek governmental intervention to issued is opportunities for leverage. A global company such as Toyota possesses the unique opportunity to develop leverage.
Leverage is simply some type of advantage that a company enjoys by virtue of the fact that it conduct business in more than one country. Four important types of leverage are experience transfers, scale economies, resource utilization and global strategy. A company can leverage its experience in any market in the world where Toast’s management practices, strategies, products, advertising appeals, or sales or promotional ideas that have been tested in actual markets and apply them in other comparable markets.
Toyota Corporation can take advantage of its greater vehicle manufacturing volume to obtain traditional scale advantages within a single factory. Also, finished products can be produced by combining components manufactured in scale efficient plans in different countries. A major strength of the global company is its ability to scan the entire world to identify people, money and raw materials that will enable it it compete most effectively in world markets. The greatest single advantage can be enjoyed by Toyota would be its global strategy.
Information system that scans the oral business environment to identify opportunities, trends, threats and resources is use to build up a global strategy. The global company must adheres to the three principles identified earlier when opportunities are identified which are its leverage skills and focuses its resources to create superior perceived value for customers and achieve competitive advantage. International strategy is a design to create a winning offering on a global scale. This takes great discipline, much creativity and constant effort.
Most significant driving forces Six different driving forces had been identified at the earlier section where there cost significant driving forces for Toyota to go international is market needs and wants. For example, as of today, not every country have their own national car production like in Japan or Germany. Consumer stay inside those countries without car manufacturer will also need a car for them as for different usage. We could Justify that Toyota need to expand their business to those countries as to compete with other car manufacturer which will also market their product to those area as to fulfill markets demand.
Market needs and wants is the main motivator for any manufacturing companies as to internationalist their product for serving a global rake and fulfill market needs. Based on above statement, we can come out with a second Justification that a company like Toyota will only expand their business to international stage when there is a needs for a specific market, example like Singapore where there isn’t any car manufacturer located in Singapore, but the market is big and there exist high demand of car.
Due to Toast’s vehicle outstanding performance and low fuel consumption, consumer from all over the world are demanding for their vehicle as for daily usage such as transportation to work and this force that Toyota Motor Corporation to setup different main office in different egging as well as their production plant as to ensure that they can serve that particular market well and fulfill all demand. Strategies implemented by Toyota to international The first counter measure that Toyota conducted to overcome the hard time to internationalist their business is to adjust its target.
Only the suitable and too low, it becomes meaningless and even distracts the organizational development. In addition to the sales target adjustment, Toyota also adjusted its target of customers. Given the saturation of Japanese market, Toyota switched its focus to the out because of their increasing demand at that time. However, merely adjusting the sales target and potential customer target were not enough to save this company out of the crisis. What really helped the organization was its emphasis on dealers.
Due to the extreme importance of dealers in the whole process from design, manufacturing to selling, its CEO Gouda proposed new initiatives to motivate and lure dealers to work even harder to promote Toyota cars in the domestic market: Higher commission fees to encourage sales; Avoiding the price competition between dealers by stop supplying similar models to lose region dealers; More strictly established sales target and punishment for unsatisfactory dealers; Help dealers to attract more young customers.
Last but not least, it is without doubt that heavy investments in commercials also helped to improve the company’s sales figures during that period. Nevertheless, apart from all these measures that can be easily spotted by the public, the most fundamental contributor that pulled Toyota through difficulties in the beginning of 20th century was its continuous efforts to improve R capability. The innovation is the key to enable the firm to differentiate itself from other competitors and attain its nominative advantage, which either from the improvement of Toyota car’s hardware qualities such as engines and motors or creation new looks.
All in all, this factor plays an unparalleled role in the Toast’s success in the world market. The internationalization is an inevitable way for the majority companies to strive in the modern world. Even though trying to expand overseas was not a new topic any more when Toyota announced its intentions to evade into the international automobile markets, the rationale behind this decision was mainly from the difficulties that Toyota experienced in the Japanese market during the 20th century as discussed above.
The hard time that Toyota had in its home market lead the organization to open other countries’ markets so as to be able to sell more products overseas. Otherwise, there would be another crisis waiting for Toyota since it is more difficult to sell Toyota vehicles in Japan as competition among existing players was getting more and more severe and the Japanese customers’ needs were difficult to meet, and its overproduction would make the situation worse, not to mention the redundancies in the organization.
In other words, Toast’s establishing geographically different plants as the result of the management’s concern of the future of the home market. In addition to its global expansion, young generation also attracted Toast’s attention. Toyota declared to target youngsters as the major potential customers in the core market. Similar to its internationalization decision, there was another external factor that contributed to this strategy.
Until the late of 20th century, Toyota realized that, it was losing the market share among young people to Honda and BMW because they could provide more “attitude” in their vehicle looks. What is more serious, “Toyota legalized that by losing its young customers to other companies, it ran the risk of losing its future market as well” (author, year; peg. 346). If this situation continued, Toast’s aggressive internationalization dream will become a nightmare, and soon it Therefore, Toyota could not afford to lose young customers.
Conclusion Today’s world is organized by accelerating globalization, Which is strengthening the dominance of a world capitalist economic system , supplanting the primacy of the nation state with transnational corporations and organizations, and eroding local cultures and traditions through a global culture’ (Keller, 1989). There exist of six different driving forces for Toyota Motor Corporation to go international stage which are market needs and wants, global economic growth, opportunity for leverage, regional economic agreement, technology changes, transportation and communication technology.
The most significant driving forces for Toyota to internationalist their business to different region is due to market needs and wants. Product export to those countries as to fulfill the market demand and increase corporate profit. Globalization today is being driven by market and corporate expansion, opening national borders to trade, advanced information technology and remonstration systems.