Case Study

Cole, R. E. (2011). What really happened to Toyota? MIT Sloan Management Review, 52(4), 29-35. Retrieved from http://search.proquest.com.library.capella.edu/docview/875531966?accountid=27965

The General Motors answered that the Australian Dollar, high cost of production, limited and small domestic market and possibly the extremely challenging and fragmented market in the world are the

Global competition from Chinese auto manufacturers has adversely affected the American auto industry. Chinese manufacturers like Toyota have advanced rapidly and are now able to mass produce and sell cars at a cheaper price than some of the American auto manufacturer. Besides, Toyota has

While the American auto industry is solidly “the big kid on the block”, the rise of affluence in other regions of the world such as China and India have created an entire new market for automobiles. The native auto makers in those countries such as the Chinese “Chery” obviously have the upper hand in targeting customers in those regions. The American Company Chevy had first hand experience with the pitfalls of trying to compete in foreign countries when it introduced the Chevy “Nova” to South America. The urban legend is that the marketing team failed to realize is that the cars name “Nova” translates loosely into Spanish as “No Go” which is an unfortunate name for a model of car. It sold poorly.

So far the Toyota Motor Corporation of Japan has surpassed all the American Auto Industry such as Chrysler, Ford and General Motors. Toyota has also topped the world ' most admired Vehicles Industry according to Fortune Magazine. There are various factors that have made the American Auto Industry to face stiff competition. The following are some factors:

Market entry strategy involves the essential requirement for a company to get into international level. The need of involving other companies whereby two companies join together is referred to as joint venture entry. They get into a similar market and make the same production with the aim of sharing risk and at the same time they share the profit according to their terms of agreement (Kretzberg, 2007). Therefore, Lincoln Electric Company has a chance to join with other company to venture in the Indian market.

Global competition resulted in decreased market share for American automobile makers and jeopardized company profits as a lot of foreign brands approached the American market. The overall market share of General Motors fell from 28.2% in 2000 to 17.6% by 2014. (Investopedia, 2015). The remaining duo of the big three automobile makers lost

The Japanese could modify their manufacturing process with low-cost skilled labor along with raw materials obtained at a cheap rate. The Japanese focuses on quality products for their customers and as the gas prices increased demand shifted to smaller vehicles where the Japanese were already designing and rolling out to customers. The aggregate effect of these changes improved Japanese company’s ability to market their

reliability. These are all very good reasons for consumers to buy a Japanese car as opposed to an

Global COMPETITION in the industry: Global competition has expended in the auto industry because of an increase in global trade. This has resulted in the decline of sales in the American auto industry whilst sales in the Asian industry especially China has increased. In 2009 sales in the U.S. hit their lowest point meanwhile, it doubled in Asia generally, especially in China. (loc.gov. 2014). One of the reason for this decline in the American Auto sales is because the Japanese automakers have altered the U.S. manufacturing models and are selling it in the global market at a less expensive rate. The price and innovation is attracting a lot of customers’ to this part of the world leaving the American industry to suffer.

Whereas previously the battle between the ‘big three’ hit the headlines regularly, it is now the emergence of Toyota as a serious threat that has left Ford, GM and Chrysler reeling. Their failure to adapt quickly has let in the competition from abroad and Ford’s financial results have suffered. This is particularly so in the traditionally strong markets for Ford, such as the SUV (Sports Utility Vehicle) and truck markets in the United States. Other manufacturers have started to target these markets which has caught Ford off-guard.

Over the years, the U. S. auto industry's market has been experiencing fluctuations due to many reasons including: price, quality and foreign competition. General Motors Corporation (GM) which had been the leading car and truck manufacturer had been experiencing declining market share and facing stiff competition from both U.S manufacturers and foreign imports such as the Asian auto producers that included Toyota, Honda and Nissan. The main reason for increased foreign competition was that foreign cars were more fuel efficient, smaller, less expensive, and often more reliable than their American counterparts.

In this report I aim to analyze and compare the motives and strategic operations of US and European car manufacturers that have recently set up production plants in Emerging Markets and Asia Pacific regions.

The purpose of this report is to examine if the reasoning behind well-known car manufacturer, Toyota’s loss of revenue and leading market position is alone as a result of extensive product recalls following a fatal crash of a Lexus ES 350 on August 28th 2009. The journal article, “Toyota Crisis: Management Issue?” (Yuanyuan Feng 2010) provides an outline of the key factors that triggered the 2009 Toyota crisis, and explores whether the fall in the company’s returns by 19% were caused purely as a result of the recall and safety concerns, or something much deeper.

Toyota is a key player in global automotive market. Its structure constitutes if various production plants in different locations and a very strong branding which helps it capture a major market share. Like other enterprises, Toyota has several strengths and weakness which makes it what it is now. Toyota heavily invests in Research and development which helps it come up reputable product line which is spread out throughout the world because of its strengthening global distribution network however its recent product recalling, loose grip in key geographic areas and wrong allocation of resources shows that even a strong brand like Toyota has its weaknesses.