Toyota and successful internationalization.

Today, Toyota is not only viewed as one of the top-quality firms in" rel="nofollow">in the world, but it is the world's most profit- able auto manufacturer. However, when Toyota began in" rel="nofollow">in 1937 as a spin" rel="nofollow">in-off from Toyoda Automatic Loom Works, its products were not perceived as high quality. The firm built its quality image with years of hard work. One key element in" rel="nofollow">in that success has been the firm's ability to adapt and change as its environment has changed. In the 1990s the firm was, and still is, the domin" rel="nofollow">inant firm in" rel="nofollow">in the highly fragmented Japanese automobile market. Toyota had in" rel="nofollow">international operations but most of its in" rel="nofollow">international sales came from the export of cars produced in" rel="nofollow">in Japanese plants. Profits were long heavily dependent upon the Japanese market and the captive set of distributorships the firm con- trolled. However, in" rel="nofollow">in the 1990s as the economic bubble in" rel="nofollow">in Japan burst, Toyota had to look in" rel="nofollow">internationally to in" rel="nofollow">increase sales. Initially, the firm dealt with its declin" rel="nofollow">inin" rel="nofollow">ing Japanese sales through greater in" rel="nofollow">international sales served by exportin" rel="nofollow">ing cars from its plants in" rel="nofollow">in Japan. The response by the political establishment, particularly in" rel="nofollow">in the United States, was fiercely negative. Toyota was criticized for providin" rel="nofollow">ing no jobs to the U.S. economy, while profitin" rel="nofollow">ing significantly from their open access to U.S. markets and U.S. distribution—somethin" rel="nofollow">ing that U.S. auto firms did not enjoy in" rel="nofollow">in Japan. Prior to the 1990s, the firm had manufacturin" rel="nofollow">ing facilities around the world; however, these efforts were not extensive. As a response to the political pressures in" rel="nofollow">in the United States that arose at the time, Toyota began to set up manufacturin" rel="nofollow">ing operations in" rel="nofollow">in the United States and other countries. Both Toyota and the U.S. government agreed to the voluntary guidelin" rel="nofollow">ine that 75 percent of Toyotas sold in" rel="nofollow">in the United States would also be produced there. Similar goals exist for other major regions of the world. Today, Toyota has a goal to hold 15 percent of the world's auto market and 15 percent of the U.S. auto market. In 2005, the firm had approximately 12 percent of the U.S. market. The firm has established six manufacturin" rel="nofollow">ing facilities in" rel="nofollow">in the United States to meet current demand, with future plans to build two more manufacturin" rel="nofollow">ing facilities to meet the expected sales growth and the goal of locally producin" rel="nofollow">ing 75 per- cent of autos sold in" rel="nofollow">in the United States. As a result of in" rel="nofollow">increasin" rel="nofollow">ing its in" rel="nofollow">inter-national focus Toyota, for the first time, will produce more cars outside of Japan than in" rel="nofollow">inside. Thus, Toyota has quickly become a truly global company. The difficulty for the firm has been main" rel="nofollow">intain" rel="nofollow">inin" rel="nofollow">ing the quality of the firm's products as it expands. The methods used to ensure this in" rel="nofollow">include: Reducin" rel="nofollow">ing the number of people on the board of directors from 60, a common number for Japanese organizations, to less than half. The expected effect is that the board (and the firm) will become more responsive to environmental change and make decisions more quickly. Addin" rel="nofollow">ing five new non-Japanese top executives to ensure that the firm adopts and main" rel="nofollow">intain" rel="nofollow">ins a global outlook. Creatin" rel="nofollow">ing the Toyota Institute to train" rel="nofollow">in managers around the world and to ensure that the global managers are usin" rel="nofollow">ing consistent methods. Flyin" rel="nofollow">ing group so workers from Japan to facilities around the world to ensure that the best methods are used in" rel="nofollow">in each of Toyota's geographically scattered manufacturin" rel="nofollow">ing plants. Usin" rel="nofollow">ing join" rel="nofollow">int ventures actively to ease market entry in" rel="nofollow">in new locations. Creatin" rel="nofollow">ing a Global Production Center to ensure state-of-the-art production methods are used around the world. One result of these efforts is that Toyota has become the most profitable firm in" rel="nofollow">in the world, beatin" rel="nofollow">ing out U.S. giant General Electric, which held the top spot for several years. The firm has been able to gain" rel="nofollow">in this position with a clear vision of its goal (to become a successful worldwide auto company), how it was to achieve this (focus on the customer needs, quality manufacturin" rel="nofollow">ing, and a commitment to in" rel="nofollow">innovation, even at the lower end of the market-place), and adaptin" rel="nofollow">ing the company as the environment changed. The more Toyota has in" rel="nofollow">internationalized, the greater its success. Today, it is one of the most in" rel="nofollow">internationalized auto firms in" rel="nofollow">in the world. Studyin" rel="nofollow">ing the success and methods of such firms offer other busin" rel="nofollow">inesses the chance to replicate this success.. The openin" rel="nofollow">ing case was about the success of Toyota. Research the major recent strategic actions of General Motors (5-10 major strategic actions over the last three or four years). Comparin" rel="nofollow">ing these actions to Toyota's, why do you thin" rel="nofollow">ink Toyota's performance is ascendin" rel="nofollow">ing while General Motors is in" rel="nofollow">in declin" rel="nofollow">ine?