International Business Report: Analysis of Toyota (HI5014, T2 2019)

This report provides a detailed analysis of Toyota's international business operations, focusing on key aspects such as foreign market entry strategies, competitive dynamics, and organizational structure. The analysis begins with an executive summary that outlines the dynamic nature of the multinational business environment and the need for firms to adapt to competitive forces. The report then delves into Toyota's foreign entry strategy, highlighting its use of equity modes of investment, particularly cross-nation and cross-continent strategies. The competitive dynamics section examines the market forces Toyota faces, including competition from firms like Ford, Hyundai, and Honda, and the growing demand for compact cars and SUVs. The report also explores Toyota's organizational structure, emphasizing its divisional structure with global hierarchy and product-based divisions, and its impact on knowledge management and innovation. The analysis concludes by summarizing Toyota's approach to knowledge management and its commitment to innovation as key drivers of its success in the global automotive market. The report references relevant academic literature and industry data to support its findings and provides a comprehensive overview of Toyota's international business strategies.

Running head: ANALYSIS OF TOYOTA
ANALYSIS OF TOYOTA
Name of the Student
Name of the University
Author Note

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Executive Summary
The business environment of a multinational firm can be understood to be extremely dynamic.
This is the reason; the enterprise would be required to undertake considerate initiatives in
order to ensure that they are successfully being able to deal with the different forces in the
competitive environment. The firm which has been chosen for the purpose of the analysis can
be understood to be Toyota. The report follows a structured format whereby the different
aspects like the Knowledge management, Innovation, structure of the firm, the competitive
dynamics the firm operates in and the foreign entry mode which it makes use of is usually
adopted. In line with this, the report analyzed the performance of the firm with respect to the
different operations and it was found that, the firm has been performing considerably well in
relation to these market forces.

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Table of Contents
1. Introduction...........................................................................................................................3
2. Discussion............................................................................................................................3
2.1 Foreign Entry strategy.......................................................................................................3
2.2 Competitive dynamics.......................................................................................................4
2.3 Organizational structure....................................................................................................5
2.4 Knowledge management..................................................................................................7
2.5 Innovation..........................................................................................................................7
3. Conclusion............................................................................................................................8
4. References...........................................................................................................................9

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1. Introduction
A multinational organization can be understood to be an organization which controls
the overall functions of the business in more than one country which is other than the own
company. In addition to this, an organization can be known as the multinational organization if
its revenue comes from the different operations outside the country. Hence, the multinational
organizations which function tend to operate on a higher competitive base and dynamics. In
line with this, it is critical to ensure that, the firm is successfully being able to carry out their
overall international strategies, which would assist it in achieving long term success. The main
aim of the report is to highlight and understand the manner in which Toyota tends to carry out
its operations (Young and Ghoshal 2016). The report will follow a systematic format based on
which the overall foreign entry strategy, the competitive dynamics and the Organizational
culture and the innovation will be discussed. The Toyota Motor Corporation is a Japanese
multinational automotive manufacturer which is headquartered in Toyota. The company is
one of the largest automotive companies and is the sixth largest company around the globe.
In line with this, the firm comprises of 364445 employees (Toyota 2019). The report will help
in understanding the theoretical frameworks behind the concept and relate it to the firm`s
operations.
2. Discussion
2.1 Foreign Entry strategy
The foreign market entry strategies can be understood to be the manner in which a
firm chooses to participate in the international market (Ang, Benischke and Doh 2015). The
market entry strategy which is usually selected in the international market can be understood
to be varying with the degree of risk which the firm is willing to undertake in the field of the
organization. In association with this, it can be rightfully understood that, the foreign entry
mode which is usually chosen by an organization is usually based on the overall manner in
which it perceives the market, the different resources which a firm generally possesses and in
addition to this, it is also based on the overall manner in which the firm wants to target its
market (Markman, Gianiodis and Panagopoulos 2016).

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Moreover, the choice of the foreign market entry modes also depends on the return on
investment which the venture promises. There are two types of market entry modes which
can be categorized as the equity and the non-equity market modes. The non-equity modes
are the ones which comprise of the contractual agreements between the two firms and the
exports. On the other hand, the equity modes category comprises of the joint venture and
wholly owned subsidiary, where the firm would be required to enter the market and take
decisions accordingly (Hollender, Zapkau and Schwens 2017).
The foreign entry strategy which the Toyota has chosen for itself is the equity modes of
investment. With respect to this it can be mentioned that the organization has invested in
various nations and continents over time and with respect to this, it has been successfully
able to apply the Cross nation space strategy and the Cross continent space strategy. In the
cross nation strategy, the firm aimed to expand its overall operations all around the country
with the home of ensuring long term success (Toyota 2019). Additionally, it engaged in
considerable exports and established new assembly factories in various parts of the world in
order to see to it that the firm is being able to expand its product offerings worldwide. Hence,
in line of this, it can be mentioned that the firm started to target the international market by
first focusing on the national level markets and this was then followed by the expansion to the
global level. The firm used methods like exporting, joint ventures and the own subsidiary
establishment.
2.2 Competitive dynamics
The competitive dynamics can be defined as a term which can be used to describe the
line of actions as well as the reactions which a firm generally undertakes to be a part of the
competitive business environment (Ashkenas et al. 2015). The individual competitive action
becomes the key indicator of the competitive dynamics as it can be stated to be a set of
strategies which are usually undertaken by the firm. In line with this, it is crucial to understand
that, the firm cannot have stagnant strategy and as the different forces which are present in
the business environment keep changing (Murphy 2018). Hence, every action taken from the
firm tends to give an elicit response from the various competitors and with respect to this,
carrying out a competitive dynamics with respect to the overall operations of the firm is

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crucial. The most accepted model of the competitive dynamics can be taken to be the AMC
Model which is Awareness, motivation and the capability (Chen and Miller 2015).
The competitive dynamics which Toyota is currently in can be understood to be related
to the manner in which the different firms tend to react in the international market. The
competitive market of the Toyota can be understood to be governed by the presence of the
various marketers like the Ford, Hyundai, Honda, Nissan and General motors (Gao, Yu and
Cannella Jr 2017). It is the age of the electric and compact cars and with respect to this, the
compact cars can be understood to be one of the most popular segments of the automotive
market and the demand is expected to grow in the coming years. The compact SUV market
has been growing to a great extent and hence, the different firms have been coming together
and coming up with their own cars which are standardized in designs (Toyota 2019). The
Chevrolet can also be understood to be a segment giving considerable competition to the
operations of Toyota. Moreover, as stated previously, the concept of the Compact cars is also
becoming considerably popular and the different manufacturers to compete in the
environment have been coming up with various strategies and techniques such as coming up
with the customized models to attract the customers.
2.3 Organizational structure
The organizational structure is understood to be the overall manner in which an
organization generally carries out its overall expectations, experiences, philosophies and the
values instilled. It determines the manner in which the organization is determined and
classified and also lays down the manner in which the firm has been carrying out its
operations. The structure of the firm generally tends to determine the Organizational culture
as well. The culture of the organization can be defined as the values and overall philosophies
have the capacity to guide the member behavior and also have the capability to express the
inner workings and overall interactions with the outside world. The culture is largely based on
the shared customs, beliefs and the written as well as the unwritten rules which have been
developed over time and can be considered to be valid. According to Blackburne and
Buckley (2017), the organizational structure determines the hierarchy of work which takes
place and additionally assists in carrying out the overall operations of the firm.

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The organizational structure of a firm has an impact on the overall way in which the
different people and groups interact with one another and is a determiner of the way in which
the firm tends to function in the long run (Coetzee et al. 2016). The business managers
should always keep in mind that the organizational structure of a firm is such that it motivates
the different employees and ensures that they are being able to increase the productivity of
the firm.
The business structure of Toyota tends to define the responses of the employees and
prepares them to face the different challenges which the different firms generally face in the
long run. As the firm is a global leader in the industry, it tends to utilize its organizational
structure in a manner such that the human resource capabilities can be maximized with
respect to the innovation. The organization also benefits from the culture in terms of problem
solving (Noe et al. 2017). The organization is also greatly inclined towards the overall concept
of learning. The various features of the Organizational structure of Toyota can be stated to be
targeted with respect to the overall business goals and strategic directions. In line with this, it
is crucial to understand that, the firm runs with the aim to maximize the efficiency in the
various operations of the firm (Toyota 2019). The firm runs on a divisional organizational
structure and comprises of the aspects like Global hierarchy, Geographical divisions and the
Product based variations. With respect to this, it can be mentioned that, the firm maintains its
global hierarchy even after the change in 2013 and the decision making mechanism lies in the
global hierarchy only.
The next division of the firm can be stated to be the Product based divisions which
determine that, there are various divisions inclined towards its product lines and the first
aspect functions in North America and Europe which is then followed by all regions and lastly,
the other operations lie in the hands of the Lexus International and the Unit Center. This
simply reflects that the firm tends to support the various developments of brands and the
product lines (Donate and de Pablo ). Hence, this structure can be understood to provide
greater flexibility to the firm along with the capability to respond to the various market
conditions. This facilitates business growth and encourages resilience.

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2.4 Knowledge management
The knowledge management can be largely expressed as the systematic management
of the resources of a firm so that the strategic as well as the tactical requirements of the firm
can be dealt with easily (Webb 2017). The knowledge management procedure comprises of
various initiatives and systems which enable an individual to share, refine, assess and create
procedures and processes which bring about long term success. Toyota is fully aware of the
fact that, knowledge creation may provide out to be largely benefit for the firm in the long run
and with respect to this, the firm tries its level best to collect, organize, summarize, analyze as
well as synthesize and take the final decision (Girard and Girard 2015). The management of
the knowledge at Toyota comprises of the knowledge to see to it that, the creation of
knowledge, sharing of it and the overall security takes place in a timely manner ( Hislop,
Bosua and Helms 2018). Hence, the firm introduces a knowledge vision, handles the
conversations well, displaces the knowledge reformers, establishes the appropriate content
and globalizes the local knowledge.
2.5 Innovation
The innovation can be understood to be the creation of new ideas, creative thoughts
and new imaginations in the form of a device or a method of doing things. The innovation is
often perceived as an application of better solutions that assist in meeting new requirements
and in line of this also assist in ensuring that the new solutions for the markets are identified
and designed adequately (Tidd and Bessant 2018). In order to drive innovation and to reduce
the overall mobility, the Toyota has largely partnered with the Softbank. The Softbank with the
help of a special artificial intelligence system aims to ensure that it will be able to engage in
transportation solutions. Additionally, the firm aims to focus on the delivery services and deal
in data assessment. As the market is changing, the firm goes beyond its existing domain to
deal with the different factors (Toyota 2019). Moreover, Toyota also engages in adequate
continuous improvement activities which help it in ensuring that it will be successfully able to
become self-sufficient in nature (Biemans 2018).

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3. Conclusion
Therefore from the given analysis, it can be rightfully identified and defined that, the
Toyota as a global leader in transportation has been performing considerably well and in line
with this, when the performance of the firm was judged in various domains like the Innovation,
Knowledge management, structure, foreign entry mode and the competitive dynamics was
examined it could be understood that the firm has been carrying out its overall operations very
well. The report highlighted the overall operations of the firm in the right manner and in
relation to this, it is being successfully able to engage in a long term relationship with the
different employees and additionally secure a sound position in the competitive environment.

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4. References
Ang, S.H., Benischke, M.H. and Doh, J.P., 2015. The interactions of institutions on foreign
market entry mode. Strategic Management Journal, 36(10), pp.1536-1553.
Ashkenas, R., Ulrich, D., Jick, T. and Kerr, S., 2015. The Boundaryless Organization.:
Breaking the Chains of Organizational Structure. John Wiley & Sons.
Biemans, W., 2018. Managing innovation within networks. Routledge.
Blackburne, G.D. and Buckley, P.J., 2017. The international business incubator as a foreign
market entry mode. Long Range Planning.
Chen, M.J. and Miller, D., 2015. Reconceptualizing competitive dynamics: A multidimensional
framework. Strategic management journal, 36(5), pp.758-775.
Coetzee, R., Van der Merwe, K. and Van Dyk, L., 2016. Lean implementation strategies: how
are the Toyota Way principles addressed?. South African Journal of Industrial
Engineering, 27(3), pp.79-91.
Donate, M.J. and de Pablo, J.D.S., 2015. The role of knowledge-oriented leadership in
knowledge management practices and innovation. Journal of Business Research, 68(2),
pp.360-370.
Gao, H., Yu, T. and Cannella Jr, A.A., 2017. Understanding word responses in competitive
dynamics. Academy of management review, 42(1), pp.129-144.
Girard, J. and Girard, J., 2015. Defining knowledge management: Toward an applied
compendium. Online Journal of Applied Knowledge Management, 3(1), pp.1-20.
Hislop, D., Bosua, R. and Helms, R., 2018. Knowledge management in organizations: A
critical introduction. Oxford University Press.
Hollender, L., Zapkau, F.B. and Schwens, C., 2017. SME foreign market entry mode choice
and foreign venture performance: The moderating effect of international experience and
product adaptation. International Business Review, 26(2), pp.250-263.

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Markman, G., Gianiodis, P. and Panagopoulos, A., 2016. Factor Market Rivalry and Inter
Industry Competitive Dynamics (No. 1611).
Murphy, M.J., 2018, July. Competing for Emerging Markets: A Resource Dependence Model
of Foreign Market Entry Mode. In Academy of Management Proceedings (Vol. 2018, No. 1, p.
18681). Briarcliff Manor, NY 10510: Academy of Management.
Noe, R.A., Hollenbeck, J.R., Gerhart, B. and Wright, P.M., 2017. Human resource
management: Gaining a competitive advantage. New York, NY: McGraw-Hill Education.
Tidd, J. and Bessant, J.R., 2018. Managing innovation: integrating technological, market and
organizational change. John Wiley & Sons.
Toyota 2019. Global website [online]. Available at: https://global.toyota/en/ (Retrieved on: 02
Sept. 2019)
Webb, S.P., 2017. Knowledge management: Linchpin of change. Routledge.
Young, C. and Ghoshal, S., 2016. Organization theory and the multinational corporation.
Springer.