Toyota's Global Business Strategy

Term Paper 2011 6 Pages

Business economics - Operations Research


Toyota's Global Business Strategy

Toyota, to all intents and purposes, has become a model for the automobile industry. As Taylor & Kahn (1997) write, automobile manufacturers are not trying to compete with Toyota as much as they are trying to learn from it and, strangely enough, Toyota appears to be quite a willing tutor. This is evidenced in the fact that, on a bi-monthly basis, the top automobile manufacturers across the United States are given a tour of Toyota’s plants and production and manufacturing facilities (Taylor & Kahn, 1997). This, however, does not put Toyota in any immediate danger of its giving away its secrets to its competitors since, as Schonberger (2001) points out, Toyota’s lean manufacturing model is not an industrial model per se as much as it is a management philosophy. This management and manufacturing philosophy is, without doubt, the key to Toyota’s global success but, upon consideration of the reasons for its recent overtake of the U.S. market, one finds that it is a combination of both its decision to Americanize and its management philosophy.

Toyota has Americanized and, its Americanization is largely, although not entirely, responsible for its success in the U.S. market. As Naughton et al. (2005) explain, a change of leadership at Toyota led to the abandonment of its “cooperative competition doctrine,” as which outlined that Toyota’s presence in the United States would not be that of a competitor whose goal was to overtake leading American car manufacturers such as GM. Instead, Toyota was to maintain a “respectful distance” in order to avoid arousing both public and political anger as a direct outcome of its appearing to undermine U.S. symbols, in this case GM (Naughton et al., 2005). Therefore, even though it had the capacity and the potential to compete with GM and, eventually, to dominate the U.S. market, Toyota’s leadership made the strategic decision to avoid doing so.

Toyota’s decision to forgo its “cooperative competition” philosophy is not, in itself, responsible for its successful expansion of its U.S. market shares. Instead, the decision to Americanize is at the heart of its success. Fujimoto (1999), best explains this when arguing that Americanization allowed for the positioning of Toyota, not as a foreign competitor whose aim was the weakening of the American economy and the strengthening of the Japanese one but, as a domestic manufacturer, an American automobile manufacturer whose origins happen to be foreign. Indeed, its decision to hire American managers in its U.S. plants and offices and to give itself a quintessentially American image facilitated public and political acceptance of it as a constructive addition to the American economy (Fujimoto, 1999). The implication here is that Americanization effectively annihilated the protective barrier which domestic consumers generally impose vis-à-vis foreign competitors whom they believe function as a threat to the heath of the domestic economy and, by extension, to the livelihood of the domestic labor force (Fujimoto, 1999).

That Toyota’s decision to reinvent itself as an American company, to abandon its “cooperative competition” doctrine, is that one change which stands out as central to its recent successes on the U.S. market, is an opinion echoed by several (Taylor & Kahn, 1997; Fujimoto, 1999; Schonberger, 2001). Taylor & Kahn (1997), contend that success on the American market was not simply an outcome of its adoption of an American `image,’ but its highly successful embrace of the American management and competitive philosophy. This philosophy, tending as it does towards the brash, bold and aggressively competitive, is a key factor in the company’s emergence as a leading competitor on the U.S. automobile market. Not only does it communicate a sense of confidence which, in turn, generates consumer confidence in the company but it has fortified the `American’ image which Toyota adopted as a strategy for entrance into, and potential dominance over, the American automobile market (Taylor & Kahn, 1997). Accordingly, on the basis of the stated, it can safely be asserted that success is partially due to its decision to enter the American market as an American, or immigrant, company, rather than as a foreigner.



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toyota global business strategy



Title: Toyota's Global Business Strategy