Introduction and Summary of case study
Toyota Australia, the leader in Australia automotive industry, immediately expressed its fear that facing unpredictable pressure and they would continue with their transformation plan after General Motors Holden announced to exit car manufacturing in Australia. It is true that Toyota is considering whether leave Australia automotive market but it is not decided. However, David Smith, secretary from the Australian Manufacturing Workers Union, said it was almost be true that Toyota would leave Australia. Toyota Australia, the best-selling and most trusted brand in Australia, has a splendid history of more than 50 years in Australia. In 1986, Toyota started exporting and in 1991 Toyota emerged as the industry
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To what extent does the macro-environment affect Toyota Australia?
The adverse macro-environment including the fiercer competition in local market due to Australia’s low-tariff barriers, the demanded vehicles of emerging markets in developing countries was counter to the types of Toyota manufactured, the small scale of operations limited by Australian market and population, the unbalanced free trade agreements and the adverse currency development. This would have significant effect on Toyota Australia’s decision of whether leave Australia or not.
2. What can Toyota Australia do as an industry leader when the whole industry is facing challenge?
The whole automobile industry is facing a problem that the market is declining, especially to the main automobile manufacturers. As it was shown in exhibit 3, the market share of main automobile manufacturers, such as Toyota, Holden, Ford and Mitsubishi were all decreasing in last 14 years. Meanwhile, the market share of other brand increased from 19% to 32%. The threat of other brand, new entrants and other reasons are forcing Toyota to an unimaginable situation.
3. To what extent could Toyota Australia reduce the cost and avoid the ethical problem at the same
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For the macro-environment level, the political, legal and environmental aspects are not involved in this case. For the economic aspect, the leaving of Toyota would reduce the tax income of Australia government and also reduce the government support expense, so there would not be much influence in economic aspect. For the socio-cultural aspect, there are 4200 direct employees in Toyota. If Toyota exit Australia, considering the indirect employees and other jobs related to Toyota cars, it would bring severe unemployment. According to Andrew, Yannis and Peter (2001), both current unemployment and past unemployment would decrease the life satisfaction and bring other psychological impact. Hence Toyota’s leaving would seriously impact the psychological impact. For the technological aspect, although Toyota has some sophisticated techniques, there is still many other manufacturers which all have some sophisticated techniques, there would be no distinct effect in this aspect. In addition, there are also adverse situation that impact Toyota’s profit. The first is the small scale of operations. As a large country with small population, Australia’s automobile’s sales accounted for only 1% of the global market. This limited
Holden has not focused on export as a component of its strategy, unlike Toyota, and the high Australian dollar did not make the Holden grow. Mitsubishi and Ford had demonstrated that auto manufacturing in Australia was not productive, which created pressure on Holden and Toyota and others in the supply chain.
(5) Liker, Jeffrey K. The Toyota Way: 14 Management Principles from the World's Greatest Manufacturer. New York: McGraw-Hill, 2004. Print.
Toyota, the last standing Australian manufacturer, has announced that they will cease producing cars in Australia in 2017 (Toyota Australia Announces Future Plan For Local Manufacturing, 2014). The coalition government made it clear that it was not prepared to further assist the Australian car manufacturers and consequently Holden and Ford closed their doors. Toyota followed suit as manufacturing in Australia was no longer sustainable due to the unfavorably high Australian dollar, high labor costs, highly competitive domestic market and overseas competition. (Australian Government Productivity Commision, 2014). Manufacturing has been a great source of pride for Australians over the many years and so this is a solemn time for the industry.
Toyota Motor Corporation is a Japan based company, whose headquarters are located in Aichi Prefecture. The company was founded by Kiichiri Toyoda in 1937. Currently the company’s CEO is Akio Toyoda. Toyota is basically into cars and it is one of the top players in the world in this industry. Toyota also owns two other brands namely Lexus and Scion, which gives the company a lot of advantage over it’s other competitors. Toyota manufactures sedans, saloons, suvs, muvs, pick-up trucks and buses. During the year 2013 Toyota had approximately 333,498 employees, who were working globally. In March 2013, Toyota was ranked as the thirteenth biggest organization globally in terms of its revenue. In the following table we can see the financial report of Toyota Motor Corporation in the year 2013-
For over fifty years, Toyota has established over 50 bases in 26 different countries and regions. Their automobiles have found their way into over 170 countries across the entire globe. In addition, Toyota has design and R&D bases in nine locations overseas, with this they prove that they have achieved consistent globalization as well as localization. The most important part in any Toyota base is the quality assurance. They don’t stamp their product with “Made in the USA” or “Made in Japan”, but instead opt for one label for all: “Made by TOYOTA.” This shows that the product is made in the “Toyota Way.” To achieve this, the company minimized support that comes from Japan to let each of their foreign locations become self-reliant. For example, a Toyota plant recently began production in Texas has made maximum use of its sibling’s experience in Kentucky which has been cultivated over the past 20 years. Toyota believes that in order to reach their goals is through educating people. Multiple Global Production Centers have been built within Motomachi Plant in Toyota City, in United States, the United Kingdom, and Thailand to carry our corresponding activities in the Asia-Pacific, European, and North American regions. To promote the “Toyota Way”, the Toyota Institute established an internal human resources development organization in North America, Europe, Asia, Africa and Oceania. As you can see the pros of the globalization of Toyota are endless. This company alone has created millions of jobs across the world. Winners are not only the workers, but also the buyers, without globalization Toyota automobiles would only be available in Japan. Many people, including me, see globalization of this kind as a beneficial and advantageous result. Toyota companies have not only created jobs for thousands if not millions of people, but their
We have determined that their business model is an Integrated Low Cost – Differentiated Strategy. It involves finding the lowest operational cost along with a unique niche or strategy that separates them from the competition. Toyota’s new statement “Moving Forward”, reflects their plans and expectations for the future. This includes the known and the unknown factors that a business must face. In 2000, Toyota launched a new cost effective strategy called CCC21 (Construction of Cost Competitiveness for the 21st century), for Low Cost operational expenses. With this aspect Toyota plans to advance such initiatives globally, based on its policy of purchasing the world’s best parts at the lowest cost with the shortest lead times.
Toyota can make positive contribution to French economy by supplying capital, technology, and management resources that would otherwise not be available and thus boost French?fs economic growth rate.
Thurlow, R. 2013, Auto Makers Struggle in Australia; Industry Battles Cheaper Imports, Rise in Australian Dollar, New York, N.Y.
All employees of Toyota are satisfied with lower level needs, they make great wages, they have job stability, and the job sites are full of safety initiatives and well planned (Liker, 2004, p.210). Toyota also provides family benefits to help with raising children and the wellbeing and health while at work, with all these benefits employees are content and can focus on big picture ideas. Toyota promotes a strong team mood and a sense
The nonmanufacturing companies can learn and apply from Toyota’s philosophy and practices as listed below:
The Major OB related issues that should be of concern to Aussieco are issues relating to: Individual Lack of employee commitment and work quality, Lack of training, Motivation, job security, job satisfaction Management Management effectiveness, traits , Leadership style, Conflict problem, control, reward Process Human Resource Management Problems (staffing, training, motivating) Policies problems, Rules and procedures Group Group problems Structure Organisational Structural factors, Hierarchical problems, Abuse of corporate power for personal gain Context Economic, Social status, Technology Huczynski A and Buchaman D(2007) pg 11-12 Communication Communication problems Production Factors Quality problems, Customer loyalty, Status problems, Survival problems Networking Socialising/politicking These factors can be described under the following topics below:
Toyota’s uses both differentiation and low cost as generic strategies to try and gain a competitive advantage over their competitors in the automotive industry. The market scope that Toyota uses is a broad one that encompasses nearly every type of customer that is in the market to purchase an automobile. Toyota is able to target such a large market because they have something for everyone. Toyota has four wheel drive trucks and SUVs for the outdoor types or those who live in areas that face severe weather conditions, hybrid models like the Prius for the eco-friendly customers that are interested in saving the environment, along with the standard cars for general, everyday use. Additionally, Toyota provides vehicles for all price ranges.
Toyota Motor Corporation is one of the largest automakers in the world. At its annual conference in Tokyo on May 8, 2008, the company announced that activities through March 2008 generated a sales figure of $252.7 billion, a new record for the company. However, the company is lowering expectations for the coming year due to a stronger yen, a slowing American economy, and the rising cost of raw materials (Rowley, 2008). If Toyota is to continue increasing its revenue, it must examine its business practice and determine on a course of action to maximize its profit.
Toyota has adopted an expansion strategy aimed at increasing the company’s market share through sustainable growth. This will be done based on the delivery of high quality, and safe cars, at an affordable price. As the company seeks to expand to new markets, focus will be on maintaining an organizational culture that allows optimum efficiency in the ever dynamic global market.
Toyota Motor Corporation is a very successful automobile manufacturer that is recognized globally. They have continued to obtain and retain a competitive advantage over their counterparts, despite recalls over many years. Regardless of recalls, Toyota has been quick to rectify their shortcomings and continue to lead within the automotive industry with their innovative measures. In this essay, I will discuss key internal factors for Toyota. Within those factors will include Toyota’s core competencies, which are what they do really well in comparison to their competition, three of their strength’s, which will include their posture within the automobile market and their heavy focus on research and development, and two of their