Analysis of strategy of Toyota Motor Corporation operating in Vietnam Part 1: Background of Toyota Motor Corporation’s road to Internationalization 1 1.A brief history of TMC.. 1 2. Toyota’s major sectors of operation. 2 2.1 Electric technology. 2 2.2 Cars. 3 3. Results of Toyota Motor Corporation’s business activities.3 4. An analysis of the choice of foreign markets. 4 Part 2: Business strategies of the TMC in Vietnam.. 5 1. Toyota Motor Viet Nam (TMV)5 2. External analysis. 6 2.1. Macro environment analysis (PESTLE analysis)6 2.2. Industry analysis. 8 3. Analysis of strategic issues of TMC in Vietnam.. 11 3.1. International strategies of TMC in Vietnam.. 11 3.2. Business strategies of TMC in Vietnam.. 15 3.2.1. Corporate-level strategy. 15 3.2.2. Business-level strategy. 17 3.3. Organizational structure of TNC in Vietnam.. 21 3.4. Modes of market entry.22 3.5. Performance. 23 Part 3: Conclusion and recommendation. 26 1. General assessment26 2. Recommendation. 26 References 27Part 1: Background of Toyota Motor Corporation’s road to Internationalization The Toyota Motor Corporation was founded in 1937 by Kiichiro Toyoda. It originally started as a subsidiary of his father’s company Toyoda Industries. The first vehicle, the Toyota AA, was produced in 1936 whilst the company was still associated with Toyoda. The brand as we know it became established as an independent company in 1937 and changed their name to Toyota. The name change was implemented to signify a separation of work and home, to simplify the pronunciation and because it only took 8 brush strokes (which is considered lucky) to write in Japanese. Toyota opened their first factory in 1938 but it had to be cease production during World War II. In 1950 the Toyota Motor Sales Company was established and the company began production on the BJ Toyota Jeep, the BX truck and the SG small truck. In 1956 the Toyopet chain was established. The first vehicle to be sold under this name was the Toyopet SA. The product line was discontinued in the 1960s due to negative connotations with the words toy and pet. During the 1960s Toyota opened a new research and development facility as well as establishing a prominent presence in Thailand. During this time Toyota also celebrated the production of its 10 millionth model. In 1982 the Toyota Motor Sales and Toyota Motor Company formed a merger to become one company, the Toyota Motor Corporation. Following this the company entered into a joint venture with General Motors called the New United Motor Manufacturing Incorporated or NUMMI. Toyota operated a manufacturing plant in Fremont, California as part of the deal. In 1989 Toyota launched their new luxury product line Lexus. Toyota then followed this by focusing more on luxury vehicles throughout the 1990s, adding vehicles such as the Camry sport, Scion, Prius and Tundra to their product line. Toyota are currently one of the largest corporations developing hybrid vehicles for the commercial market. The company have also been involved in many cutting edge technological developments involving aerospace research and robotics. Toyota have also been involved in many educational philanthropy projects over the years including running the Toyota Technological Institute since 1981, which offers scholarships to high school students. Currently the company are working on the Prius plug-in hybrid which will be a fully electric vehicle that uses lithium-ion batteries to extend its driving range. A few statistics reveal the scale of Toyota’s operations, 75 years on from the AA: - Worldwide production of Toyota vehicles (including sub-brands such as Lexus and Daihatsu) was 6.9 million in 2011. - It has 50 overseas manufacturing companies, in 27 countries and regions worldwide. - Toyota vehicles are sold in more than 160 countries and regions. - In the 2012 financial year Toyota Motor Corporation’s net income was 283.5 billion yen – approximately £2.24 billion. 2.1 Electric technology - Hybrid electric vehicle (HEV) - Plug-in hybrids - All-electric vehicles - Hydrogen fuel-cell 2.2 Cars As of 2009, Toyota officially lists approximately 70 different models sold under its namesake brand, including sedans, coupes, vans, trucks, hybrids, and crossovers. Many of these models are produced as passenger sedans, which range from the subcompact Toyota Yaris, to compact Corolla, to mid-size Camry, and full-size Avalon Vans include the Previa/Estima, Sienna, and others. Several small cars, such as the xB and tC, are sold under the Scion brand - SUVs and crossovers - Pickup trucks - Luxury-type vehicles As of 2009, the company sold nine luxury-branded models under its Lexus division, ranging from the LS sedan to RX crossover and LX SUV. Luxury-type sedans produced under the Toyota brand included the Century, Toyota Crown, and Toyota Crown Majesta. A limited-edition model produced for the Emperor of Japan was the Century Royal. Any ambitious enterprise that is going to achieve and sustain profitability and profit growth, no question, would have to expand business abroad, to gain extra market and sales, and profit in result, by employing benefit of location and large scale economies, experience and learning sharing effects. Therefore, US market with its economic conditions is one of the most attractive environment for any firm to expand foreign market. Toyota Motor Corporation operates both automotive, under the brand Toyota,Lexus,Hino and Daihatsu, and non-automotive and can be seen as one of the best known automobile manufacturers. According to Japan Corporate News network, in 2007, the firm sold over 8.5 million vehicles in more than 170 countries. Based on Toyota Motor Global News, the major Consolidated Subsidiaries of Toyota Corporation across the world mainly locates in North America, Latin America, Europe, and Asia/Oceania. Toyota’s early way into market was quite struggling. In 1957, Toyota tried to enter the US market, by establishing a subsidiary in California. Later, it proven to be a nightmare; the Toyota cars performed poorly in road tests on US highway. Obviously, Toyota people had not did enough homework on the basic local conditions in US market, simplyhow Americans used cars. Due to lack of local responsiveness, Toyota closed down its subsidiary and withdrew from market. Back home, the company started to study the feedback from American consumer surveys and US road tests, redesigned several of its models accordingly, and reshaped its market reputation considerably in US market late 1960s, selling well with welcomed product characteristics and consistently falling prosuction cost retail prices.Thanks to the oil price following the Israeli/Arab conflict, US consumer shifted to small fuel-efficient cars in droves. Toyota was among the main beneficiaries. Though this desire for small fuel-efficient cars in US market happened without Toyota’s prediction, it comformed to the traditional demand for this nature due to the lack of natural resource at home, in Japan. However, market changes. In early 1980s, imoport quotas imposed by United Stated over Toyota stagnated export growth substantially. To cope with this problem, Toyota’s first overseas operation, NUMMI, was born. Toyota established a 50/50 joint venture named New United Motor Manufacturing, Inc with General Motor in USA in 1983. Part 2: Business strategies of the TMC in Vietnam Company name: Toyota Motor Company Vietnam Date of establishment: September 5, 1995(officially went into operation 10/1996) Total investment: 89.6 million dollar. v Main areas of activity: - Installation, producing the kind of cars and auto parts. - Provide warranty service and repair cars. - Order processing and purchase from the supplier Vietnam, including business processing, automotive spare parts for processing, packaging and export. - Perform the import of cars - Imports of automotive parts and equipment, specialized machinery Toyota standards. - Consulting, training, support and implementation of internal business development, and maintenance services for the products Toyota Toyota Group companies, agents, candidate agents and the service station authorized Toyota. v Products: - Manufactured and assembled in VN: Camry, Corolla Altis, Innova, Vios and Fortuner - Sales of imported vehicles: Land Cruiser, Hilux, Yaris, Land Cruiser Prado, Toyota Hiace and 86. v Capacity:36,500 units/year/2 shifts vPartners: Toyota Motor Company Vietnam (TMV) is a joint venturebetween 3 partners: - Toyota Motor Corporation Japan (70%) - Machine Dynamics Corporation and Vietnam agricultural machinery (20%) - KUO Singapore Ltd. (10%) v Employees: More than 1600 people (including seasonal workers) v Board of Directors: - General Manager: Mr. Yoshihisa Maruta - Vice General Manager: Ms. Dang Phan Thu Huong 1. 2. 2.1. Macro environment analysis (PESTLE analysis) According to Viet Nam Registry Department, the use of cars in Vietnam are skyrocketing, at the end of August 2007, there were nearly 722,000 cars in circulation, more than 66,000 units compared to end of 2006. Assess trends related to globalization, Vietnam is being recognized as a member of WTO which will stimulate growth in the domestic automobile market, thus affecting the growth of this industry. Professional production and strengthening the sales network are two main directions to the car manufacturing companies to improve their competitiveness when Vietnam joins the WTO. According to the general assessment of the experts, in 2008 car’s price will be lower than in 2007 due to financial markets’- real estate’s fluctuation, the plant and boost domestic production capacity, competitive with current imported cars.The level of overall growth is expected to remain at about 10-20% in 2008 - an attractive growth. v Socio- Economic Factors However, the auto market after the Lunar New Year in 2008 is significantly lower temperatures. Stock slump, real estate freezes, bank loans are harder before made many people hesitate when buying cars. In many salons as well as imported cars new cars, but vehicle for many buyers, car fairly quiet place. The numbers as 2 months of 2008, Vietnam population nearly $ 400 million spent entered car, motorcycle sales are a member of the Association of Vietnam Automobile Manufacturers (VAMA) 1/2008 was 12084 vehicles , an increase of 156% compared to the same period in 2007. Download : thuvien24/analysis-of-strategy-of-toyota-motor-corporation-operating-in-vietnam-91323.html
Posted on: Sat, 20 Jul 2013 12:04:46 +0000
Trending Topics
Recently Viewed Topics
© 2015