Toyota Revs Up U.S. Sales

Case Study: Toyota Revs Up U.S. Sales

Summary

Toyota Motor Corporation of Japan ran full speed since 1990 to meet its global corporate objectives into becoming the leader in the world’s automobile industry. However, it did not meet expectations due to the unperceived slow growth of the European and Southeast Asian markets. Competition in their homeland has also been so tight and sales are being grabbed by Nissan and Honda. The company’s last resort is the North American market.

Americans have shown their appreciation for the company’s products by giving the No.2 lead position in the market – a seat that has been occupied only by General Motors (Ford) and Chevrolet for the past one hundred years.

Through good business strategies like cultural adaptation, good factory locations that help in controlling high costs of importation and good public relations, the company has earned the trust of its American market – overtaking General Motors and Chevrolet in their own territory.

Questions

1. List the threats and opportunities that Toyota is facing in its environment. Then list the

 strengths and weaknesses of Toyota.

Threats

1) The Japanese market is tight with Honda and Nissan as rivals.

2)The Southeast Asian and European economies are slowing down.

Opportunities

1)The American market is very welcoming because it has given Toyota the number 2 spot in car sales – a spot that has been enjoyed by Ford for a century.

2) New products like its emission-free car can be very attractive to an environment-concerned race.

Strengths

1) American designers are working to make sure the company understands the American

consumer demand

2) Toyota relies on its US based factories to produce 2/3 of their cars for distribution in the American market so costs are controlled and prices are competitive.

3) Local governments, where Toyota factories are located, are pleased with Toyota’s maintenance of their good employment rates. Toyota has been able to revitalize communities in the American South and Appalachia.

Weaknesses

1)      Toyota’s high level managers lack understanding of American preferences.

2)      There are traditionalists within the company’s ranks that are not happy to change the “Toyota Way” which emphasizes decision-making through consensus, cost-cutting, quality and customer satisfaction.

2. Consider Toyota’s U.S. auto business.  What business-level strategy is the firm using?  What factors did you rely on in making your decision?

Cultural Adaptation

Toyota is trying to Americanize their products to meet the demands of the market. I believe this to be true because Toyota has increase its hiring of local American managers and commissioned American designers to make their products more attractive to the market.

Control of Production Costs

Toyota has successfully maintained its price competitiveness because it has good control of production costs. One factor to make me conclude this is the point that 2/3 of Toyota’s car products targeting the American market are produced in the U.S. and this reduces import taxes and currency risks.

Good Public Relations

The company has successfully charmed the market. This was done by revitalizing many communities in the American South and Appalachia areas through the 123,000 additional jobs in their factories. Environmentalists are also smiling at their new product: the emission-free car that runs on hydrogen fuel cells.

3. In your opinion, is Toyota’s corporate-level strategy )to focus on the U.S. Market) likely to be effective over the next ten years?  Why or Why not?

I believe that Toyota has a great chance in achieving its goals through the U.S. market because it is a normal trend that if something clicks in the United States, it will almost be just as successful in the rest of the world.  Also, Toyota’s perseverance not just to capture but take the lead in the American automobile industry, will prove its worth to the international market.