Business Strategies of Toyota Motor Company

This essay discusses the business strategies of Toyota Motor Company, a global car manufacturing company. It covers the company's market coverage, internationalisation, philosophy of Kaizen, and corporate social responsibility. The essay also highlights the company's strategies for different markets like the US, Europe, and developing nations.

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The aim of this essay is to discuss the business strategies of one of the most important car
manufacturing companies of the world namely Toyota Motor Company. The business strategies
of this company have different facets which have helped it to become the winner of the industry.
Toyota has an important market share in the continents like Africa, Europe and United States.
Along with this, it is the market leader in the Australian market. Internationalisation has
promoted the process of liberalisation which has created advantages to motivate the development
of the productive forces and the economic interactions among the nations. This had a positive
impact on this company as it expanded globally in no time. However, the company does not only
focus on the profit making but ascribes with the suitability goals laid by the international
organisations and support the sustainable growth.
The type of market in which the business operates has an international coverage.
Toyota Motor corporation is a global company which produces trucks, buses, cars and robots.
The headquarter of this company is in Toyota City, Japan. It is the largest car manufacturer in
Asia and second largest car manufacturer in the world (Toyota-global.com 2019). Toyota is one
of the three most important Asian car manufacturing companies which compete in the Global
market with mainly the manufacturers based on the USA. The other two companies are Honda
motor and Nissan Motors. Toyota motor company also provides Financial Service through
Toyota financial services and subsidiaries. It also works in other fields like medical assistance
rather than only manufacturing of cars. The automotive products which this company sells in the
Global market are under the name of Toyota, Lexus and Scion.
This company has factories in all over the world where it would use as well assembles the
vehicles for the local markets. This company has assembling and manufacturing plants in Japan,
Canada, Poland, Turkey, France, India, Brazil, United Kingdom, Mexico, China, Malaysia,

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United Kingdom, South Africa, Indonesia and most recently in the developing countries like
Venezuela, Argentina and Pakistan (Toyota-global.com 2019). The first Toyota car
manufactured outside Japan was in Brazil in 1959. The main factor of the products of Toyota
motor company is its high-quality products. The Japanese trust on their ability to make such
goods which cannot be improved anymore therefore they keep on struggling for increasing the
quality of everything they make. The philosophy of Kaizen which means constant improvement
has been used by Toyota motor company for years and leading its growth (Kato and Smaley
2012).
This particular car manufacturing company has gained a huge exposure after the
globalisation hit the business of the countries. The role played by internationalisation in
building Toyota’s profile overseas is hugely important. Internationalisation of the business has
positively supported the growth of business in all over the world and Toyota was not an
exception. This process had affected not only the trade but also the manufacturing, finance,
services, investments in one hand and socio-cultural and environmental factors on the other in
different forms and levels. The economic globalisation on internationalisation has promoted
close relationships, rapid interactions among the international economies and interdependence
among one another (Gillespie and Hennessey, 2011). Therefore, the companies like Toyota
gained comparative advantages in the participated in the process of internationalisation and
grown indispensable trend in this integrated global economy.
As mentioned before the philosophy of Kaizen followed by Toyota Motor Company has
supported it to focus on the Global Quality Assurance policy (Kato and Smalley 2012). It has
localised its manufacturing process as well as its assembly segment in such a way so that
internationalisation do not affect negatively in the business of the company. Since 1957 when the

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first car of Toyota motor company was exported to the United States, it has expanded
opportunity of automobile sales across the globe (Toyota-global.com 2019). In last 50 years the
company has found its way to cover 170 countries as well as regions throughout this world. The
exports have continued and developed gradually so also the localisation of the production has
supported its expansion. In response to internationalisation Toyota motor company has built 51
bases in 26 different countries where it designs and researchers so that localisation of the
products can be achieved. These has supported the demand of the Toyota motor company that
they start from development and designing steel production as well as service and sales, it has
achieved consistent localisation as well as globalisation (Gillespie and Hennessey 2011).
It was inevitable that the company would face different type of issues due to
internationalisation and cultural differences between that of Japan and other countries but the
company only focused on the quality assurance which requires that where were the vehicles of
this company is made, it will have the same high quality as well as Assurance of the brand. It
also responded to the internationalisation of trading by eliminating support from its home
country and spread the manufacturing philosophy of Toyota way in all the overseas bases
(Coetze et al. 2016).
In order to keep pace in the highly competitive world after globalisation, Toyota had
brought changes in the operation and made strategies to match with the different needs of the
different market. Therefore, the US market strategies of Toyota Motor company does not have
any connection of with that of the Europe (Collins, Muthusamy and Carr 2015). The business
goes about developing brands for differing market types. There are four types of market
present in the world which include market for perfect competition, monopolistic competition,
oligopoly and monopoly.

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The European market, Toyota has monopolistic market situation as the Japanese investors
turned to Europe and considered its market to be vital not only for their products but also having
the capacity of providing them support to be the leading Global player. The motor now is the
second Global car manufacturer which initiated the strength and started at factories in the UK,
France, Turkey, Poland and the Czech Republic. This market became one important chain for
research and development to Toyota based on which they could understand the demand of the
Other Western countries (Barron, Pereda and Stacey 2017). This European market has still
important due to its strength and having unique industrial base. However, this market has
different competitors noteworthy to hamper the growth of Toyota in the European market but the
UK Government as benefit from the total Japanese Investments it gives advantage to this
Japanese company for lowering which costs and having more flexible markets in the European
Union member countries. The same to have a stable, growing and secured markets Toyota has
flourished competitive and recorded increase in sale from year to year.
In the case of US market, this Japanese automatic as well as components have proved to
be highly profitable. This Asian brand important 100% in the 1982 the US market as the number
of American car manufacturers where much less. However, after the case of Pearl Harbour
attack, the Japanese import was reduced in the US market but again aroused when globalisation
after world war took place. The Japanese company had invested hugely in the US production
sites and they overcome its competitors like Ford and General Motors. On the basis of high
adaptability of the cars manufactured by Toyota Motor Company it gained competitive
advantage in the USA market. Despite the fact that there is lack of culture of domestic products
among the American citizens but the company proved that high quality and adaptability can win
any market of the world (Collins, Muthusamy and Carr 2015). Since 2007, Ford Motors has been

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suppressed by Toyota Motor Company in the cells and gradually it also managed to become the
world leader in car sales by servicing the growth of General Motors (Ma and Lu 2017). In this
Perfect competition market of the USA, this particular Japanese car manufacturing company
proved itself highly attractive as it quenched the demand of fuel-efficient cars. Toyota as
mentioned before focused on continuous improvement and invested heavily on the research and
development purposes that helped it to suppress any growth of General Motors and Ford to grow
in the market of the US (Collins, Muthusamy and Carr 2015).
In the case of other markets like the developing nations of Brazil, India, China and Russia
the main strategy of Toyota operation is the low-cost car. Till 2000 in this Japanese car
manufacture giant hold 15% of the Global auto market (Nguyen 2017). After the envisage of
expanding itself in the emerging markets like Brazil India and China Toyota has counted the
elasticity of those markets which were the key to success for increasing the car sales
significantly. The main focus of this company has been capturing the Chinese Market as this is
one of the most important growing economy of the world and the Automotive segment of this
market records a large expansion (Ma and Lu 2017). The neighbour country India also has a
growing economic Trend which is enhancing demand for cars. Therefore, Toyota is in hurry to
capture this to emerging markets for completing the segment of Asian markets. As mentioned
before the Australian market provides huge support for Toyota. In this market the company
chooses the production of hybrid cars which is powered by electricity as well as gas (Collins,
Muthusamy and Carr 2015). Toyota in Australian market has become the first manufacturer
making mass production of hybrid cars and still counting the demand of hybrid propulsion due to
increasing fuel price and rise in the world temperatures due to pollution from carbon emission.

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Along with the business expansion in the different continent of the world, the business
adheres to the principles of corporate social responsibility. As mentioned before Toyota is
one of the leading car manufacturing industries of the world. In order to grow faster and keep
pace with the other competitors and maintain position as well as reputation in the business, the
company has always practiced the corporate social responsibilities. This CSR policy always
seems to contribution towards sustainable development. With this particular policy Toyota
concentrates in maximizing the profit margin and contribute to take care of the society as well as
environment. In the recent global situation, most of the customers are highly educated and aware
of environmental issues. Therefore, they aim to be connected with such a company that works
for sustainability. They are demanding something more than just a manufacturing of high-quality
products or reasonable price outcomes (Toyota-global.com 2019). This is the reason why Toyota
has balanced up the needs of the consumers as well as the society. Beside manufacturing high
quality vehicles, it has also made sure that every branch of the company responds to the
environmental problems that may occur though its actions in future.
The CSR of Toyota Motor Company has a form of sustainable approach with which the
customers, employees, business partners, shareholders and global communities are associated.
The company along with its subsidiaries contributes to the harmonised and sustainable
development of society as well as the earth through all business activities carried out in each
country and region based on the guiding principles. The company complies with the local,
national as well as International regulations and laws along with the spirit. It conducts its
business operations with integrity and honesty. It can in the world to maintain sound relationship
with stakeholders true fair and open communication and expect the business partners to support
these initiatives as well as acts in accordance (Rauch, Dallasega and Matt 2016). Each of the

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subsidiaries and branches of Toyota implement the philosophy of respecting people by
honouring their customs, culture, history and laws. It aims to grow in harmony with the
environment through seeking to minimise all the environmental impact of the business
operations. The company operates on the climate change and biodiversity and strive to establish,
develop and promote the technologies which it can affect the environment as well as economy
coexist harmoniously (Toyota-global.com 2019). The company perfectly lines up with the
internationally agreed standers like Paris Agreement, SDGs or Sustainable Development Goals
and the UN guiding principles on the Business and Human rights (Toyota-global.com 2019).
This has helped the company to be close and develop a cooperative relationship with individuals
as well as the organisations involved in the environmental preservation.
With mandating the suitability approach, Toyota has become successful at employing
the practices of sustainability in an attempt to develop and maintain good stakeholder
relationships. In this recent business context of the automobile industry along with social
environment are changing rapidly. With the changing world, the company needs to make sure
that it can balance Expectations of the customers all types of facilities stakeholders. To identify
the substance which are based on the importance of the business as well as Expectations of the
stakeholders for be trusted company. By implying the philosophy of putting the customers first,
the company provides high quality products as well as services to meet wide variety of customer
demand and in which the lives of people. For the employees the company has created score for
personal development. It respects the employees and provide equal opportunities in the case of
employment by fulfilling diversity and inclusion without discriminating on the basis of race, sex
and religion (Gao and Low 2015). It maintains a safe and healthy environment for work so that it
can order the human rights of the people and do not tolerate call support any type of child or

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forced labour. The business partners of Toyota like the suppliers and dealers maintain a long-
term relationship by realising mutual growth based on the mutual trust.
In order to expand and grow business opportunities, the company do not discriminate its
business partners on the basis of nationality and size party wear with them for their overall
strengths. the shareholders are provided with a timely as well as fair disclosure on the operation
results of financial conditions so that a long-term growth for their benefits can be achieved.
Finally, the company also works for supporting the factor of promoting and engaging the
community where it is operating (Toyota-global.com 2019). Thus, the growth of Toyota has been
assured by balancing its operation with the demands as well as needs of the region.
Therefore, it can be concluded that the global manufacturing company named Toyota has
been following different strategies to survive the global competition in the market. After
globalisation, the company has been affected like all its competitors but it faced this blow in an
effective way. The localisation and standardization method in maintaining high quality of the
products offered by Toyota has become the only path to become the largest car manufacturing
company in the Asian countries and second largest in the world. The company has applied
different strategies in different continents based on its people and their demands but kept the
standard of their offerings same in every part of the country. The company follows the norms of
sustainable growth so that the stakeholders continue to support them every time.

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