Toyota Motors and General Motors Companies Analysis - Report Example

MANAGEMENT OF TECHNOLOGY Students name: Institution: Instructor: Table of Contents Abstract. 3 1.0 Introduction 3 1.1Background and purpose 3 2.0 Globalization strategies 4 2.1 Market presence 4 2.2 Fuel efficiency 5 2.3 Maintaining a technological lead and joint ventures. 5 3.0 Manufacturing/technology interface 6 3.1 Technological production lines. 7 3.2 Manufacturing process and innovative technologies. 7 3.3 Computer aided design 9 4.0 Marketing/ technology interface 9 4.1 Market penetration 9 4.2 Market expansion 10 4.3 Product expansion 10 4.4 Fuel economy 11 4.5 Joint ventures 12 5.0 Organization structure 12 5.1 Organization structure characteristics 14 5.2 Strategic planning 14 5.3 Organization structure and external environment. 15 6.0 Conclusion 15 7.0 References 16 8.0 Appendices: 18 8.1 Unit production of General Motors by country and region (1997-2007) (Micheli, 2015). 18 8.2 Toyota sales by region (Stark, 2015). 19 Abstract. It is a report on two major automobile industries that are Toyota Motors and General Motors. The work mainly focuses on the companies’ way of keeping a competitive advantage. The purpose of the report was to analyze the globalization strategies of each company. Additionally, the report also explores the manufacturing, marketing and the organizational structures of companies. It was explorative in nature. The report compares the two businesses in all the mentioned aspects. Finally, it was concluded with the understanding and conclusion of how the companies obtain a substantial presence in the market. 1.0 Introduction 1.1Background and purpose The automotive industry is a range of organizations and industries involved in the development, design, marketing and selling of motor vehicles. It is among the sectors that have a significant influence on the economy by revenue. The automotive industry does not include the industries that are involved in the maintenance of automobiles such as motor fuel stations and auto repair shop. The term automotive represents the self-powered vehicle. Automotive industry began in the year 1890 with the pioneering the horseless carriage. For many decades, United States led in the production of automobiles in the world. In the year 1920, before the great depression, the world had about 32,028,500 automobiles in use and Unites States had produced about 90%. In this case, the report is about two world’s best automobile industries which are Toyota Motors and General Motors. 2.0 Globalization strategies The discussion and comparison of the strategies of globalization were accomplished as used by each company. One of the strategies for Toyota Company is market penetration. It was the primary intensive growth strategy that supports business growth and attracting and reaching more customers. Toyota offers products to every market segment; this enhances the fulfillment of the intensive growth strategy. For instance, the company has trucks, sedans, luxury vehicles and another product line to satisfy every customer. Another strategy is product development which is its secondary intensive growth strategy. It is a strategy that attracts customers to new products which are a form of rapid innovation. Toyota is well known for its innovation process, for instance, the Toyota Prius, which attracts customers concerned with the environment (Tri Putri, Mohd, Yusof &Irianto, 2014). 2.1 Market presence The market is also another strategy that enhances the globalization of Toyota Company (Micheli, 2015). It already had a global presence and for that reason, market development was supporting intensive growth for the organization. Nevertheless, Toyota grows by selling their products to new market segments. However, the company had a presence in most markets around the world as well as it also sells products to every market strategy. The intensive growth made the company popular in the whole world. General Motors, on the other hand, increases its international sales. It helps in maintain the company as among the best-known automotive companies in the world. It narrowly faces a challenge from Toyota. General Motors employees the use of brand restructuring strategy. It involves making Chevrolet, Cadillac and Buick as the core of the business that had great sales for the company. Other brands such as Saturn, Saab and Hummer will either be closed or sold. The decision based on the sales statistics of these brands which lagged behind in the market. Therefore, the introduction of new models and re-branding of these franchises will have a positive impact. 2.2 Fuel efficiency Fuel efficiency is a concern that General Motors is taking into account. Scientific research and the effects of global warming led industries to get involved in environmentally friendly practices. Fuel efficiency and environmentally friendly automobiles have been the thing that most customers want, forcing General Motors to meet their needs. Another strategy is cost cutting where General Motors reduce the cost of its brands to gain globalization (Beck, Raj & Britzelmaier, 2013). Consequently, it makes more sales than other companies. Comparing the two companies, it is evident that Toyota is more successful due to its globalization strategies that are effective. Although General Motors also has its strategies, those of Toyota are effective. 2.3 Maintaining a technological lead and joint ventures. There are other strategies that an organization can adopt for international growth or rather a globalization. Maintaining a technological lead is being the best in producing a product with the current technology recommended. For example Toyota as the leading automotive industry leads in the technology of design and engine development. Their products are attractive to customers, and that’s why they make many sales compared to other companies like General Motors. Another strategy is specialization. It involves dealing with a particular product or one line of a segment. Additionally, the company should have qualified personnel for efficient production of quality and reliable products making them a monopoly. Another strategy is through joint ventures where two or more organizations come together to become one. It is a combination of brains and labor meaning the outcome will be doubled. As a result, effective production of goods and services is enhanced (Routledge, 2015). There are also some global strategy forces. Figure 1.1: Global strategy forces (Roh, Hong and Min, 2014). 3.0 Manufacturing/technology interface Manufacturing/ technology interface is another aspect in the two companies (Underwood, 2012).Production systems are composed of processes of transforming purchased materials into products. The unit processes include processes such as forming, separation, finishing, assembly and packing. Also, the materials used to pass through the means. Toyota Manufacturing UK is a manufacturing operation of Toyota established in December 1989. The vehicle manufacturing plant is located at Burnaston and Derbyshire. An engine manufacturing industry based on Deeside. Processes at Burnaston include stamping, welding, painting, plastic molding such as bumpers and dashboards as well as assembly and aluminum, and casting. 3.1 Technological production lines. According to Toyota, when a car is ordered, a production instruction is issued to the production line. The assembly must be stocked with all needed parts to assemble ordered vehicles. Preceding processes need to be stocked with all types of components that were retrieved by an operator in the next process. Toyota uses technology in its manufacturing process. From the investigation, Toyota has a production line that must be followed to achieve the desired product. It is a technology that was innovated to eliminate errors in the manufacturing process. At its highest speed, a complete car comes out of the production line approximately after every 60 seconds. The Toyota Production system is flexible; customer-focused that produces quality products promptly. The competitive advantage from manufacturing comes from two sources. One is the manufacturing technology which is the knowledge of production processes. A unique and effective technology increases a competitive advantage. Another one is managerial integration involving the planning and controlling of the manufacturing process (Brettel, Friederichsen, Keller & Rosenberg, 2014). 3.2 Manufacturing process and innovative technologies. On the other hand, General Motors have diverse brands selling over 9 million vehicles in about 120 countries in the world. It is, therefore, evident that it has a quality and reliable manufacturing process. They are passionate about designing and selling best vehicles in the world. Their brands include Isuzu, Opel, Chevrolet, Baojun and Holdem among others. The company believes that the world’s best cars can only be made by great employees. The production process is guided by five principles; they include creating lifelong customers, innovation, making a positive difference, safety, and quality and delivering long term investment (Roh, Hong & Min, 2014). The company continues to develop innovative technologies to shape its future. For example, the innovation of technologies gas engines and transmissions. It will result in vehicles that are environmentally friendly which are attracted to many customers. Global warming has become a problem in the world and is caused by fumes emitted from fuel engines. Therefore, innovation of gas engines is a big step in controlling the situation. Nevertheless, they are also coming up with vehicle electrification with advances in batteries, power controls, and electric motors. They also want to be the leading in producing flex-fuel vehicles. In any new production segment, initial costs are always higher than later production costs. Figure 1.2: production learning curve (Stark, 2015).  3.3 Computer aided design Computer –integrated manufacturing started with computer-aided design. It is the use of computer software to draw desired designs. For instance in the Toyota Company, they use CAD to design the body of cars and even engines. Designing products using a computer is more efficient, accurate and faster than traditional engineering design. Computer aided manufacturing involves the computer instruction machinery as how to assemble parts of a machine to be manufactured. Technology has allowed the use of robots to complete action of computer controlled manufacturing. Robots are computer controlled (Beck, Raj, & Britzelmaier, 2013). 4.0 Marketing/ technology interface Marketing/technology interface is also another aspect common between the two automotive companies (Bickhoff, Hollensen & Opresnik, 2014). Marketing is the process of planning and executing the promotion, conceptualization, and distribution of goods and services that satisfy both individual and organizational objectives. 4.1 Market penetration There are essential four ways for the growth of a product into the market (Bickhoff, Hollensen & Opresnik, 2014). One is market penetration. It involves taking products to different markets in the world. For instance, Toyota Company has made sales to over 120 countries in the world selling millions of cars to these countries. It has penetrated the market reaching to the most remote countries, especially in Africa. 4.2 Market expansion Market expansion is where the number of markets to make sales increase by a significance margin. For instance, General Motors increased its market to many more countries including Japan, India, and African countries. Market penetration involves the strategy of improving cost and value (Bickhoff, Hollensen & Opresnik, 2014). Figure 1.3: Basics for growth (Stark, 2015). 4.3 Product expansion Product expansion satisfies different line segments (Stark, 2015). It involves developing various products that can meet the needs of individuals from varied segment lines. Toyota, for instance, has developed different types of brands and products to cover a wide range of needs from customers. It is among the best ways to market organization products as it will be attracted to many people hence enhancing its presence in the world. Lastly, is diversification providing a variety of products in the market. It assists the manufacturer in obtaining a wide range of market as products are available to satisfy a range of needs. It is evident in automotive companies because they manufacture different brands of cars that are suitable for different purposes. 4.4 Fuel economy Toyota used the fuel economy to market its products. American car manufacturers had decided that small cars be an entry level to the market. The vehicles employed a low level of quality to keep them cheap. Toyota Motors Company merged with Toyota sales to form a corporation. The idea of merging made the company improve its sales and market in the United States. Another marketing technology is logo and branding. In 1936, Toyota joined the passenger car market with a model AA and held a competition to establish a good logo. The logo was emphasizing speed for its new product line. It resulted in the change of its moniker to Toyota from the family name Toyoda. Changing the name and logo has greatly increased its presence in the world. Marketing efforts of Toyota in North America were emphasizing on the positive experience of ownership and vehicle quality. They used the slogan “you ask for it” “you got it.” The marketing strategy increased their sales in North America because we're attracted to Japanese vehicles. Management philosophy evolved from the company’s origin and is reflected regarding Lean Manufacturing and also just in time production. It was instrumental in developing the market for the company (Christense, 2013). 4.5 Joint ventures General Motors continue to grow in China. Its joint ventures in China are planning to set up five vehicle-manufacturing plants that are meant to support sales in the country. Although the establishment of the plants will consume billions of money, it will be a true, profitable venture in the long run. Another aspect is to deliver core operating efficiencies. General Motors aim is to improve relationships with suppliers and lower the costs for material and logistics. However, it is expected to provide better margins of profits since costs have been minimized. Lastly is continuing growing General Financial. The GM’s Financial, which has been making huge profits of billions, continue to invest to support the sales of new vehicles, crossovers, and trucks all over the world. It has rapidly increased the number of customers it serves in the United States, South America, Canada and Europe (Andrade, Pereira & Del Conte, 2015). 5.0 Organization structure Organization structure is the setting of the organization in the best way to meet its objectives. It is also an aspect that is in every organization and therefore cannot miss out in the discussed companies. A structure is organized according to duties and responsibilities in the organization. Toyota’s organizational structure is based on the business operations o the company around the world. Being one of the leading automobiles in the world, its organizational structure supports business goals and strategic direction (Christense, 2013). The ability of Toyota to maintain its presence in the world shows its effective use of the organization structure to maximize capacity and efficiency utilization. In essence, an organization structure is a contributor to the success of every organization. Figure 1.4: Toyota Organization structure (Roh, Hong & Min, 2014). 5.1 Organization structure characteristics Toyota’s organization structure comprises of some characteristic which includes global hierarchy, geographical divisions, and product-based divisions. It still maintains the global hierarchy despite the restructuring of its organization in 2013. In the current structure, it has increased the decision-making the power of business unit heads and regional heads. In other words, the decision-making process became less decentralized. The new organization structure has eight regional divisions namely Japan, Europe, North America, East Asia and Oceania, China and Caribbean. Each regional had reported to the headquarters. These divisions have led to the improvement of products and services. Toyota’s structure has a feature of the set of product-based divisions. The company has four of these divisions: Lexus International, Europe, and Japan, Toyota number 1 for operations in North America, Toyota number 2for all other regions and Unit center responsible for engine transmission and other operations. A feature of this organizational structure enhances the development of brands and product lines (Stark, 2015). 5.2 Strategic planning General Motors utilizes strategic planning to affect positive belief in its operational environment. It operated as one of the regional companies which mean that General Motor’s inequalities among regions and countries together with segmentation of markets would increase homogenous management. It respects the acquisition of resources of entrepreneurial corporations or competitors affecting its mission and vision.GM has a functional structure that is used o increase business efficiency as it acquires other companies and improves them as well as getting supplies to meet future demand (Stark, 2015). As a positive environment, it has improved several companies that were formed as assembler driven commodity with de-skilled workers. The organization structure meant that employees be closely supervised. CEO has absolute authority of making decisions unlike in Toyota Company. Here, there is a clear definition of responsibilities, benefit and rights of each. 5.3 Organization structure and external environment. General Motors lacks elasticity in situations such as change of external environment (Routledge, 2015). General Motors operation department together with their definite environment; the design of organizational structure may use the mechanic structure that is relatively stable. Technology in this context is the process in which raw materials are converted into products mechanical and intelligible force of service. As a result, the organizational structure should be designed to fit the characteristics of technology as well as nature that decides the nature and direction of organizational structures. It should use strategies and organizational structures corresponding to their external environment. If it depends on internal conditions and external environment, make appropriate changes to its function and objectives and constant change for development, expansion and survival. General Motors organization change is the practice of an organization to make adjustments to its functions and structures. It is by the changes of internal conditions and external environment so as to increase its competitiveness for development and survival. 6.0 Conclusion The automotive industry has evolved from the use of horses to the present use of cars which was pioneered by horseless carriage. It is one of the sectors that control the economy of the world. It has advanced technologically as computers are used to perform all the activities of manufacturing. From the design of cars using CAD (Computer Aided Design) to the use of computers in assembling parts of a vehicle with the help of a robot. Safety is a state that implies to be protected from any risk. Security in automobiles is critical and highly regulated. 7.0 References Tri Putri, N., Mohd. Yusof, S.R. and Irianto, D., 2014. The Delphi hierarchy process-based study of quality engineering in Malaysia and Indonesia automotive companies. The TQM Journal, 26(6), pp.566-576. Micheli, A.P., 2015. The Default Risk: An Empirical Analysis on the Automotive Companies. Management, 3(7-8), pp.169-178. Beck, V., Raj, R. and Britzelmaier, B., 2013. The effects of capital investment appraisal methods in automotive companies. International Journal of Sales, Retailing and Marketing, 2, pp.3-12. Berger, Suzanne, and Richard K. Lester. Global Taiwan: Building competitive strengths in a new international economy. Routledge, 2015. Underwood, R.L., 2012. Automotive foreign direct investment in the United States: Economic and market consequences of globalization. Business Horizons, 55(5), pp.463-474. Brettel, M., Friederichsen, N., Keller, M. and Rosenberg, M., 2014. How virtualization, decentralization and network building change the manufacturing landscape: An Industry 4.0 Perspective. International Journal of Mechanical, Industrial Science and Engineering, 8(1), pp.37-44. Roh, J., Hong, P. and Min, H., 2014. Implementation of a responsive supply chain strategy in global complexity: The case of manufacturing firms.International Journal of Production Economics, 147, pp.198-210. Beck, V., Raj, R. and Britzelmaier, B., 2013. The effects of capital investment appraisal methods in automotive companies. International Journal of Sales, Retailing and Marketing, 2, pp.3-12. Bickhoff, N., Hollensen, S. and Opresnik, M., 2014. Conclusion: Marketing and Railroad Companies. In The Quintessence of Marketing (pp. 137-137). Springer Berlin Heidelberg. Stark, J., 2015. Product lifecycle management (pp. 1-29). Springer International Publishing. Christensen, C., 2013. The innovator's dilemma: when new technologies cause great firms to fail. Harvard Business Review Press. Andrade, P.F., Pereira, V.G. and Del Conte, E.G., 2015. Value stream mapping and lean simulation: a case study in automotive company. The International Journal of Advanced Manufacturing Technology, pp.1-9. 8.0 Appendices: 8.1 Unit production of General Motors by country and region (1997-2007) (Micheli, 2015). 8.2 Toyota sales by region (Stark, 2015). Read More