Globalization introduction

The idea of taking away your business and investing funds from domestic market to international market, with the exchange of ideas, culture and knowledge is known as globalization. Globalisation is the process of involving economic integration; it involves the transfer of policies, transfer of people, cultural diversity, and transmission of knowledge across borders, relations. it is the process of making world shorter and making things moves closer to each other. Somebody sitting on one side has to world and having mutual interest can interact with other with somebody sitting in other part of the world.

Al-Rodhan, R. F. Nayef and Gerard Stoudmann. (2006). Definitions of Globalization: A Comprehensive Overview and a Proposed Definition. pg 3. Globalisation is a fluid process that is constantly changing with the development of human life. In today’s universe of business, internationalization and globalization are connected in the preparation of organizations in stretching their business to different parts of the world. The organization’s reasoning is to achieve elevated amount of targets, access to new plans and transforming new items ( hollensen, 2007:5).

Not all organizations have the capacities, even with the availability to think comprehensively as it obliges quality to help the expanding intensity because of the globalisation as organizations confronting the hardest rivalry they have ever known (Kotler, 2008:5 16). SME’s don’t dependably succeed in thinking all inclusive, more often than not due to their size keeping them from stretching their business over the world, as they may not have the obliged abilities, pieces of the pie and are insufficient effective to set a worldwide technique (knight 2000: 12-13).

One model has been produced which demonstrates in the most exact way, how Sme’s need to respond. The nine vital windows model has been created to plainly comprehend circumstance of organization (Solberg 1997:9). Organizations need to search at the readiness for internationalization to better break down their circumstance, if they are readied to go worldwide , and they need to take a gander at the industry to contrast moderately the organization’s circumstance and the industry circumstance.

Toyota history Toyota group is a conglomerate firm, which comprises of the primary companies like Toyota Moto Corporation and Toyota Industries Corporation which works together and share Toyota. Toyota Motor Corporation, or simply knows as Toyota was established in 1937 by Kiichiro Toyota. Toyota is one of the largest manufactures in the automobile industry of japan, with having more than 40% of market share.

The companies work with several non-automotive companies alone with Lexus, hino motors and Daihatsu Toyota launched its first model outside japan in 1957 in the USA, and by 1965 with the car like Corolla they have made a strong position and reputation in the domestic market of USA.

They entered Europe via Denmark in 1963. In terms of customer satisfaction Toyota is number one country in Europe. http://www. toyotabharat. com/inen/about/history. aspx By the end of 2012, the worldwide sales of Toyota Motor Corporation was on the top of the list with 4 million units. http://www. toyota-global. com/company/history_of_toyota/ in terms of sales, in 2011 it is the 3rd largest automobile manufacturer in the world, First two are General Motors and Volkswagen They sold 7352 thousand units as of 31st march 2012 with the increase of 44 thousand units over the previous fiscal year.

In terms of revenue, it is the 11th largest company in the world. Net revenue of Toyota on 31st march 2012 was $226,106 million (annual report 2012 pg 23-24) http://www. toyota-global. com/investors/ir_library/annual/pdf/2012/ar12_e. pdf In Forbes magazine (2013) ,Toyota group was on number 14 in the world most valuable brands. http://www. forbes. com/companies/toyota-motor/ Toyota global marketing strategies The world is not seen any more as a multitude of local markets , gathered to symbolize the global market, the world is a global market where consumers of different parts of the world purchase the same brands products .

There is a global market because of the global consumers and brands have now to respond to the global consumer’s expectations and set a strategy according to it. (Craig & douglas 1996:8) After the global oil crisis of 1979, the economy of world went down at a very brisk rate. To overcome this crisis shoichiro toyoda identified three main management tasks. Firstly to identify the market needs and to give them attractive products. Secondly to reinforce the dealers and the unity of the two companies which comes under Toyota.

Thirdly to implement the overseas strategy. In July 1981 after breakdown of talks with ford, and to boost its brand image in global market Toyota established a joint venture with general motors in February 1984 which was called as NUMMI. Equal amount was invested by the two companies and the plant was set up in west coast of USA. The plant will be producing 300,000 vehicles annually. (koichi 1994). Two main factors which boosted the demand of toyota’s cars were firstly they were light and secondly they were fuel efficient. This opened its way to the global market.

After USA, Toyota went into many countries for example. in Taiwan when its government published the law that automobile industry can be established with the alliance of foreign manufacturer, Toyota submitted an application in March 1980 to establish its new business. http://www. authorstream. com/Presentation/intruder2105-1935864-toyota-globalization-strategy/ Toyota follows the principle of kanban or JIT also known as just in time. It means continuous improvement of production along with the quality. It also means philosophy of the complete elimination of waste.

There are various type of wastes such as waste of over-production, waste of waiting time, waste arising from defective products, transportation wastes. By following JIT system Toyota overcomes all these wastes to meet the people’s needs and expectation on time. Toyota also introduced the new frame work for developing better cars knows as Toyota NEW GLOBAL ARCHITECHTURE. The TNGA provides the foundation for the growth that will propel the opening up of the next generation by strengthening Toyota’s international competitiveness[annual report 2012 pg 11].

In addition to this, in April 2013, Toyota changed their organizational structure to meet the global demand and to fulfill Toyota’s global vision. [Toyota annual report 2013 pg 5] Diagram To start analyzing Toyota’s global strategy we will use the nine strategic windows that we have discussed earlier. By this we will have an overview of Toyota within the automotive industry. According to the table Toyota uses the ninth strategy which is about strengthening the company’s global position. The automotive industry is global as all brands try to reach different parts of the world and do not want to limit themselves to their local markets.

Toyota is a recognized brand, a reliable automotive maker and has a huge brand image, so Toyota is prepared for internationalization and position itself in Market. If we pay attention to the internet sites of various countries, the Japanese automaker offers different products to each region and it is more adapted to the local demand. Toyota uses the adaptation approach. Some care are almost similar in various regions while some car and not even to be seen in other region. For example if we compare the two sites, Toyota UK site with Toyota American site, we will see there are only 3 cars that are common Yaris, the Prius and the land cruiser.

http://www. toyota. com/all-vehicles/ even the prices of all three cars are quite different in both these countries. The price of land cruiser in Europe is $85330, while price of same car in USA is for $70,486. The difference in price is due to interest of domestic market. People in USA prefer more SUV’s and crossovers while in Europe people prefer sedans, city car or small family compact car which are designed for cities. According to EPRG framework, Toyota is using a regiocentric approach to deliver its global product.

The regiocentric approach is about offering products to continental regions with similar economics and culture. Toyota is offering the same product’s to countries within north American continent, the same products to countries within Europe or to countries within Asia, as the economies of the countries included in those regions may be similar or really close to consumer’s culture, and their behavior. Toyota does not offer same product across regions, as it would not be adapted to the local demand. Toyota confronts significant pressure for cost reductions and for local responsiveness.

Toyota has been accelerating the process of moving towards fewer vehicle platforms, with goal of building a wide range of models on a limited range of platforms that share many common components parts. The company is reportedly working toward a goal of having just 10 platforms which are around 10 less than in 2000 (Hara 2004). Toyota adds local product features, tailoring the finished product to local needs. Thus Toyota is able to realize many of the benefits of global manufacturing while reacting to pressures for local responsiveness by differentiating its products among national markets.

There are three different approaches for global segmentation. Toyota uses the hybrid or universal segmentation. It means that Toyota agrees that different countries have different standards and consumer across the world reach differently to different product in terms of price, designs, or customs. Toyota mixes the macro the microenvironment to better deliver the expected product and satisfies the demand. For example etios car in India has different specification as compared to the same car in Brazil.

In India they have steel plates which protect underbody of car from stones, lose rocks and uneven roads, while in brazil to overcome the dust problem they have special dust proofing. [annual report 2013 pg12] Toyota uses the great strategy. In this strategy the selections of cars are selected according to the local demand while price of car is different in different regions. Toyota is placing regional general managers in charge of localizing car making in each region and by developing ties with local sales and R&D units, Toyota can ascertain the needs of each market and improve both quality and product appeal.

[annual report 2012 pg12] Another thing which worked in establishment of global image of Toyota is the advancement of technology. Advancement of technology has increased its competitive strength. It spends a large amount of money on research and development department (Koichi 1994). New ideas about designs, marketing and innovation have has permeated the upper levels of the company and are seeping down to everyone else (Taylor 2003). This is the example of global strategy adaption to changing marketing mix. 4P Porter’s theory

We will analyze Toyota’s 4P of porters to understand more about its global strategy Product: – Toyota sells its cars in various continents and in various regions of the world. It is a well-known brand in automobile industry. It has a large variety of cars for example city cars, suv’s, crossovers, but cars differ according to the different regions. Cars are different in Europe (England, Germany, and France) to those in America or in Asia (China, Japan, India) The type of a car are selected and kept according to the need of the domestic market.

Price: – Toyota cars cost different in different regions of the world. There is a huge difference in the price of the similar model. For example the price of land cruiser in USA cost $15000 less than the price of same car in Europe. There is difference in price because people in USA like to drive more SUV’S as compared to people in Europe. It keeps the price of its cars closer to the need and expectation of the people. Place: – Toyota sells its fleet of cars all around the world. It