Comparative Analysis: Toyota and NatWest Expansion Strategies

This report provides a comprehensive analysis of the expansion strategies employed by two major international corporations: Toyota and NatWest. The report begins with an introduction to the importance of market expansion in maximizing sales and profitability, highlighting the role of global expansion and competitive advantage. The paper then delves into the specific expansion strategies of Toyota, focusing on its approach to navigating global markets, managing exchange rate fluctuations, and addressing competition, including its strategies of continuous improvement, joint ventures, and global supply chains. The report also discusses Toyota's focus on local production, export promotion, and collaborations, such as with Mazda. Following this, the report examines NatWest's expansion strategy, including its entry into the securities market, the formation of merchant banking subsidiaries, and the establishment of home loans and advertising campaigns. It also details NatWest's international expansion through the formation of various international banks and its use of mergers and acquisitions, including the challenges and strategic unions it has undertaken. The report concludes with a comparison of the two companies' approaches, highlighting Toyota's joint ventures and collaborations versus NatWest's acquisition and merger strategies, and discusses the factors that are essential for success in international expansion.

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Contents
Introduction......................................................................................................................................2
Expansion strategy of Toyota..........................................................................................................2
Expansion strategy of NatWest.......................................................................................................4
Similarities and dissimilarities between the expansion strategies of Toyota and NatWest.............5
Conclusion.......................................................................................................................................6
References........................................................................................................................................7

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Introduction
The market expansion strategy plays an important role in maximizing the sales and
increasing the profitability of the company. The expansion strategy of any business organization
is also associated with launching of new product in the product or opening up new sectors or
branches in other locations. Expanding the business globally is also an important step which is
taken by the business for expansion. It also helps the company in gaining competitive advantage.
The companies had to undergo detailed market research before global expansion and investment
in any foreign market. This paper will highlight the business expansion strategy of Toyota, an
automobile manufacturing company of Japan and NatWest, a reputed bank of Britain. Toyota
was set up in 1968 and it is operating globally in different countries. The intensive growth
strategy helped the company to expand continuously and it also ensured continuous growth in the
market worldwide. NatWest bank was established with the merger of National Provonicial bank
and Westminster bank. It is a part of the Royal Bank of Scotland. The bank has many
subsidiaries and it holds direct subsidiary with NatWest Holdings. The human resources of the
banks i.e. the employees play an active role in global expansion (Sadoi 2015). A detailed
analysis of the expansion strategies of two companies are discussed in this paper.
Expansion strategy of Toyota
The operation of Toyota in the global market is a big challenge for the company. The
exchange rate of Yen is subject to rapid fluctuations. Moreover, Toyota and other companies
have also struggled for the high cost of raw materials, high price of gasoline and steep
competition from other companies in the US market. Toyota has served the US market through
rapid exports from Japan. Toyota has also made many innovations and improvement in regards

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to active and passive safety. The main strategy of the company is controlling the quality of
products through continuous improvement and zero defect products (Anderson 2013). Toyota
has also operated through joint venture operation with the other Chinese companies and thus the
company formed alliance with the other leading automobile companies. It has also formed joint
venture with General Motors and this has led to the internal development of the company.
Toyota has also focused on aggregation i.e. standardization of its products or utilization of the
existing economies across multiple locations (Jiménez, et al. 2017). Toyota also leveraged the
already existing products to the new location through research and development, advertisement
and management across multiple locations. The company has reported that more than 8.9 million
cars are manufactured worldwide out of which 4.1 million are manufactured in Japan. This rapid
scale of production has helped the company to enjoy higher efficiency, lower cost and quality
control. Toyota also had a long history in the emerging market, where it focused on local
production and promotion of export especially in the ASEAN market (Johannsen 2016). The
oversees market expansion of Toyota involved three major steps i.e. manufacturing in Japan and
exporting, producing in those regions which is demanded by the people and then to the current
stage where the company had global supply and production. These global production and supply
is also supported in different emerging markets and thus the increasing investment has boosted
up the production capacity of it can achieve maximum profitability through localization. The
intra regional and the extra regional export will also help the company for rapid expansion and
growth (Rothaermel 2015). The company has also collaborated with Mazda Motor Corp to build
$1.6 billion US plant. This plant will be capable of producing more than 300,000 vehicles and it
will employ more than 4000 people. Toyota’s main aim of collaboration was to concentrate on
electric cars. The two companies are trying to explore various areas of collaboration under 2015

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agreement (Simão and Lisboa 2017). Mazda has defended Toyota and the company has fallen
behind competition in case of electric cars. Thus, both the joint venture as well as collaboration
strategy has helped Toyota in global expansion (Camuffo and Wilhelm 2016).
Existing Products New Products
Existing Product
New market
Fig-Expansion Strategy and Product Development
Source-Author’s Creation
Expansion strategy of NatWest
NatWest is one of the leading bank of Great Britain and it has more than 960 branches
spread across Great Britain. It has also been awarded with the “best banking app” by the British
Bank Awards. As there was deregulation in 1980s and this was culminating the Big bang in
1986. This encouraged the bank to enter the security market. The merchant banking subsidiary
was formed in 1965 and the acquired stock broking firms for the creation of the investment
Market Penetration Product
Development
Market Development Diversification

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banking in the NatWest (Smirnova 2014). The home loans were established in 1980 and the
other initiatives included the launch of the Piggy account for the children in the year of 1983.
Moreover, the credit zone which is a flexible overdraft facility on the customers to pay the
interest rate. The advertising campaign also led to the development of new marketing approach
and this has helped in the business development. The bank expanded internationally and formed
the national Westminster bank of Canada and the NatWest Australian bank and it has also
opened several branches in the European and the eastern countries (Maniak and Midler 2014.).
The bank also merged with the Global bank AG and thus formed the Deutsche Westminster
Bank. In 1985, the Banco Natwest Espana was formed and the National Westminster bank was
thus incorporated in 1988. Six branches of this bank have merged with the National Westminster
bank by the Act of Parliament (Kumar et al. 2016). Merger and acquisition is one of the major
growth strategies for NatWest and this has led to the formation of the strategic union with the
different banks. NatWest was also forced to accept the takeover bid from the Royal Bank of
Scotland which is a very small bank. The merger of RBS and NatWest indicated that there was a
horizontal merger and the two banks were engaged in the same line of activity. NatWest also
planned to merge with the insurance company named Legal and General but it was not
successful. It has also received several bids from the Bank of Scotland but Natwest refused to
agree to the takeover. The bid of Royal bank of Scotland and the Bank of Scotland was valued at
around £23bn. NatWest is also a member of the Cheque and Credit clearing company limited and
thus it is trying to expand rapidly in other countries.
Similarities and dissimilarities between the expansion strategies of Toyota and NatWest
Toyota has followed joint venture as well as collaboration strategies. The company has
tied up with various automobile companies as well as Chinese companies to increase its

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profitability. The company has also been forging alliances with the smaller Japanese companies
from several years. This has been effectively consolidating the Japanese automobile sector.
Toyota has also built Corolla cars in Canada and it has also exported its vehicles to other
countries. Toyota’s car caters to the niche customers who are focused on various designs.
Moreover, the company is also focusing on fuel efficient gasoline engine (Lynch and Jin 2016).
On the other hand, NatWest has followed acquisition and merger strategy for expanding in its
home country as well as capturing the global economy. The bank had to face several challenges
and dilemmas when it thought of expanding forward. If NatWest follows this strategy, it can
progress towards establishing its goals and thus establishing a strong base in the foreign country.
It will also help to gain competitive advantage over other leading banks. The bank will follow
slow penetration strategy for expansion and this will be extremely beneficial and helpful for the
bank (Lynch and Jin 2016).
Conclusion
The paper has discussed the factors which are responsible to judge before overseas
expansion. Natwest has been able to establish a strong base in many countries and there are
many crucial factors which the company needs to consider. The external and the internal factors
play an important role in expansion and this was extremely beneficial for the company as well as
it can be used in planning for future expansion. Similarly, Toyota has also taken opportunities for
global expansion. The success of Toyota on the Japanese market as well as the international
market is due to its high quality products and constant innovation. This has fulfilled the needs
and demands of the customers and thus it has grown internationally in a short span.

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References
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internationalization strategies of Colombian banking services companies between 2000 and
2015. REBRAE, 10(3), pp.444-456.
Johannsen, H.H., 2016. Strategies For Continued Growth.
Kumar, B.R., Gera, S. and Saha, S., 2016. Wealth Creation in the Largest Banking Mergers-An
Empirical Analysis. Asian Economic and Financial Review, 6(4), p.206.
Lynch, R. and Jin, Z., 2016. Knowledge and innovation in emerging market multinationals: The
expansion paradox. Journal of Business Research, 69(5), pp.1593-1597.
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Technology Transfer and the Raising of the Thai Wage System. Meijo Asian Research
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Simão, L. and Lisboa, A., 2017. Green Marketing and Green Brand–The Toyota Case. Procedia
Manufacturing, 12, pp.183-194.
Smirnova, Y., 2014. Motives for mergers and acquisitions in the banking sector of
Kazakhstan. Economcs questions, issues and problems, pp.79-98.