Category: Business Essay

That the Toyota Motor Corporation has cut a niche for itself within the automobile industry is a fact. Founded in the year 1937, the Japan-based automobile company has indeed grown to be a market leader in the production and sales of automobiles across the globe. A look into its profile reveals that it has a global workforce of about 320,080 which has been very instrumental towards its emergence to be a large multinational. Its steady rise saw the displacement of General Motors two years in addition to maintaining its status as the world’s most profitable organization since 2006. There is consensus within the automobile sector that Toyota’s success is attributed to its efficiency in the sales and production in all its global market segments, including the U.S.A. Against this backdrop, this research paper seeks to examine the stated company’s strategy in the context of its global operations with particular emphasis on the Lexus Strategic Business Unit.

Positioning for Greater Global Competitiveness

In the wake of heightened competition amongst various market players, the importance of an organization positioning itself for greater global competitiveness cannot be overlooked. This strategy is important since it enables an organization to expand its market development, reduce costs, venture into new businesses, and realize the advantages of scope and scale due to the overall impact of increasing the market penetration. Nonetheless, the concept of creating greater competitiveness globally is multifaceted and thus takes on board various organizational strategies. It is not only the drive for increased profitability that has culminated the increased motivation amongst organizations to be globally competitive. Other factors gravitate on the increasing need by companies to operate globally, as well as, fast changes in the marketplace. Hence, one of the ways through which the Toyota Company has developed its global competitiveness is through the development of a top-notch production system in all its markets along with the putting in place a strong financial resource base. According to external observers, the company has embraced the concept of best practices for its entire production system. Cumulatively, these practices have seen the company build a reputation for having quality automobile products and services under the auspices of flexibility and efficiency.

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Other than having a strong financial resource base, the creation of a unique production system by Toyota is anchored by its own management philosophy as is evidenced by its own culture. External business observers have attributed the establishment of the so-called Toyota way or philosophy to a number of guiding strategies internalized by this multinational corporation. Such strategies are especially important since they provide a platform for the company to create a favorable business environment across its expansive yet diverse international market. One of these strategies is captured in terms of being able to use long-term philosophy to base its management decisions. Creation of a continuous flow process as a tool for bringing problems unto the surface is the second strategy. The third strategy of the top-class production system at Toyota is presented through the use of the pull systems as a means of avoiding overproduction. A detailed analysis of the company’s organizational culture shows that it has a level workload strategy. Fifth and equally important production guiding strategy is the use of standardized tasks which in turn allows for employee empowerment and continuous improvement.

Additionally, Toyota’s production system is premised on the strategy of the complete elimination of fixing problems, but rather getting the right quality for the first time. The importance of a competent and dedicated workforce is very fundamental to global competitiveness. In this regard, Toyota’s seventh strategy is in terms of the development of exceptional teams and individuals who are committed to its philosophy. Operating in the global arena calls for mutual respect for the suppliers and extended partner networks by both helping and challenging. Therefore, it is no doubt that Toyota Motor Corporation is guided by this strategy as explicitly shown by its production system in all its market areas. This multinational’s quality production system is given the much-needed impetus through the incorporation of technology. The ability to make decisions slowly through consensus building while considering all available options followed by fast implementation of the same is the other guiding strategy for this company’s production system. For instance, in the wake of quality concerns in its American market, several cars were recalled having been found to be faulty. This strategy is complemented by its philosophy of always having fast hand information of the situation as is captured in its genchi genbutsu (go and see) philosophy upon which such critical decisions are based.