Strategic management of global company - Research Paper Example

22). The success of the company in both the Japanese as well as international market is the result of its aspiration to manufacture high quality products. Toyota enhanced its operations considerably in quality to go well with the domestic environment, and as a result has made a triumphal turnaround within US market. In addition, the increase in oil price surprisingly improved the demand for Toyota’s vehicles due to their light and fuel-efficient features. Form that time, global exporting business of Toyota had seen a stable development.

With the intention of avoiding import challenges, for instance, directives and import allowances, Toyota launched a 50/50 joint venture with General Motor during 1983 in US, and a completely owned production units in UK during 1989 and another in France during 1997, and a “50/50 joint venture with French automaker Peugeot in Czech Republic in 2002” (Christensen, 2013, p. 52). Aggressive steps have as well been taken in China, now the world’s rapidly developing car market. Toyota started its operations during the year 1954, with its head office situated in Tokyo, Japan.

It was the hub of designing activities, scheduling, manufacturing of prototypes and assessment of automobiles. It was in charge for each and every function, together with development, designing and assessing cars. Besides, the center is as well responsible of safety technologies, energy management and environmental fortification. During the year 1973, Toyota started the design center at Newport Beach, California. The businesses formed the European center for design to have improved knowledge of local pressures and inclinations of existing and prospective customers.

At this point, the group has made successful models such as “Yaris, Corolla, Corolla Verso, Avensis and Land Cruiser” (Rivenburgh, 2013, p. 92). Global Strategy of Toyota Any business that tryst to enter the foreign market primarily plans to get advantages of ‘economies of scale’ as well as location and knowledge-gaining result which could be realized by and increase product and service consistency. On the other hand, at this point challenges of localization arise inevitably because of demand for response by the company to local setting such as taste and inclination of buyer, local government policies and cultural features.

In the global business strategy matrix, “along two aspects of stress for cost cutback and stress for local reaction, transnational strategy has the maximum level along both dimensions” (Rivenburgh, 2013, p. 113). Among the four classic global business strategies, Toyota selects transnational Strategy. The best way to execute a transnational strategy is among the most difficult issues that big organizations are coping with these days. The necessity to compete with global rivals such as General Motors and Ford compelled Toyota to try to find better cost economies.

Nonetheless, deviations in customers taste preference and government directives across countries indicate that Toyota as well has to be receptive to local demands. As a result, Toyota deals with considerable stress for cost decline as well as for local awareness. To decrease cost by standardizing, Toyota has been speeding up the process of going toward smaller number of automobile platforms, with objective of developing a broad range of models on a restricted range of platforms that have