Integrating Technology in Organizations - Report Example

Management of Technology Integrating Technology in Organizations Course Code Student Name Date of Submission Introduction The automobile manufacturing industry has been dominated by two main companies; Toyota and General Motors (GM). Established in 1937, Toyota Motor Corporation (Toyota) is a market leading automobile manufacturer in the world. Operating in more than 27 countries and selling in over 170 countries, Toyota has gained notoriety for their development of the Toyota Production System that used a model of lean manufacturing (Toyota Motor Corporation, 2010). General Motors (GM) is one of the largest global car and truck manufacturer founded in 1908. GM operates through four major segments; GM international Operations, GM Europe, GM North America and GM South America (About General Motors, 2016). The company‘s automotive brands include Chevrolet, Cadillac, GMC, Holden, and Buick and has manufacturing and distribution operation in Canada, United States of America and Mexico. The technological development and innovation within GM and Toyota depend on the ability of the company to exercise effective strategic technological management. The aim of this report is to analytically compare between the two car manufacturers. The report would analyze and compare the companies’ approaches to globalization, implemented global strategies, decision making and marketing strategies. Global Strategy Global strategy is useful for Toyota and GM to develop competitive advantage within one large global market. Toyota has expanded its sales across the globe, covering over 170 countries while at the same time localizing their production bases. The company has variety of designs and nine R&D bases in different countries globally that focuses on the development and production design. Toyota gained consistent localization and globalization that overcome the issue of quality assurance. Toyota established an advanced digital technology of the Global Production Center in 2003 that majorly focus on training of the managers and employees in the factory’s IMV projects. The advantage of the technology is the visual training methods that every individual within the company can access in different countries (Jackson, 2009). At the same the technology has been used to improve production efficiency and quality, accelerate model changes for the overseas bases to respond to customer needs. Besides, owing to the innovative technologies in the company’s plants in Japan, the company has the ability to transfer various models from different bases that has linked plants in Japan and plants in overseas countries. Figure 1: The TOYOTA Way Liker (2009): Problem solving the Toyota way The major guiding principles of Toyota that portrays the type of company wishes to be that indicates values and methods that have to be embraces by all employees to achieve the ultimate goal of the global activities. Despite GM being the world’s largest automobile manufacturer, the company experiences pressure due to the increasing intensity of globalization to undertake technological innovation. GM has been slow to adapt to the needs of globalization and technology, making competitors such as Toyota to benefit from internet usage to reach the customers. GM operates in almost 55 countries and has invested over $50bn in high technology processes (Koerner, 2000). As a result, the application of new technology has simplified business processes and increased the speed for R&D and planning. However, there is a possibility that Toyota could surpass GM to become the largest global carmaker. This argument is backed up with the strong reputation of durability, reliability and high quality of the Toyota cars which has given the company a global reputation Manufacturing/technology interface Technological development is often characterized with high levels or uncertainty. Production focuses on the product system and focuses on competence. As production activities involve repeatable tasks, de-coupling technology development from production development reduces the risk of uncertainty. The interface that exists between production and technology development is important for every company. Production Learning Curve Toyota is straining to keep pace with the rapid expansion and technological changes that use geared by three major factors. High demand has resulted to the company increasing the production capacity to 3 million vehicles in the last six years (Magee, 2007). The company also wants to introduce Lexus into the luxury brand in Europe and develop new vehicle for emerging markets such as India and China. Finally, the rate of technological change calls for change in the manufacturing process and the products that makes the company to develop cars that are revolutionary. Therefore, the effective maintenance of learning and improvement provides Toyota with competitive advantage that competitors cannot imitate. Production learning has been the key to GM’s success in the automobile industry. For instance, when Fords focused its attention to reduce costs and standardize model T manufacturing process, General Motors gained from this step while Ford lost (Townsend, Janell, Tamer, & Marietta, 2010). GM made a quick respond to Fords steps to respond to customer needs by recognizing that the car design of the model T would become obsolete. Besides, unveiling the Chevy Bolt barred foreseen delays and stood to offer a head start in a new kind of electric car market. Although Chevy bolt was not the first electric car in the market, GM had the infrastructure and manufacturing capacity that outpaced Tesla. The Chevy Bolt was more significant to what was offered by Tesla. Figure 2: GM R&D sense-respon-learn model (About General Motors, 2016) Manufacturing Decisions The Toyota Motor Corporation’s operations management has the responsibility of making 10 decisions that promotes effective and efficient manufacturing operations. With a wide global scale, Toyota implements various strategies for the 10 critical decisions that integrate both local and regional conditions of the automotive market (Johnson, 2016). The critical 10 operations management includes product design, product quality management, design process and capacity, location, layout design and strategy, job design, supply chain management, inventory management, scheduling and maintenance. The operations management applies productive methods based on the target market and the considered business area. General Motors has undertaken huge steps in manufacturing and made decisions to build various manufacturing plants. The company has in the past years made decisions to reactivate its plant that initially produced Chevrolet Blazer, built a new plant in Bekasi, Indonesia. However, in 2015, GM announced that the plant in Bekasi would be closed down in the same year; Management Practices, Relational Contracts, and the Decline of General Motors (2014). As a result, production was affected resulting to the layoff of a huge number of employees. Globalization - Determining Manufacturing Location Toyota builds its manufacturing plants to suit the need of an individual market. Also, for the production of Lexus RX330, Toyota considers factors like production volume, employment, and capacity of a plant, quality, costs and production volume before allocating the production to a plant. Both Toyota and GM has to make site selection decisions that would impact the companies’ long term viability. However, the company with the best information and business process position itself on the road to success. The companies evaluate the sustainability of the locations, transportation infrastructure, and labor market conditions when selecting locations for their manufacturing plants. As argued by Liker (2009) automotive clusters provide an advantage on a site location decision for the car manufacturers as they impact on the capital investment decisions of the firms. Sources of Manufacturing Competitiveness The sources of Toyota’s manufacturing competitive can be measured in the product architecture perspective. The main effort of Toyota is to make better cars overcoming technical limitations. Toyota undertakes conscientious manufacturing (monozukuri) to reform the production technology field which makes the company’s cars better and of high quality. Other sources include improvement capability (kaizen) and evolutionary capability (Kennedy, 2003). As a result, Toyota has been considered the most efficient automobile manufacture that has implemented strategies that has yielded global success. GM obtains its manufacturing competitiveness from various sources. First, the company has a Global Manufacturing System that has flexible layouts and production process that are designed to build high0quality vehicles at competitive price also, the company has three recognized car assembly plant in Ontario that is ranked to be the most plant that is productive in North America (Roberts, 2016). Moreover, the new assembly plant, Lansing Delta Township is the first manufacturing facility to receive a Gold certificate in Energy and Environmental Design. These capabilities and sources of competitive advantage places GM at a better position to compete effectively in the global market. Marketing/technology interface Roles of Marketing in a Global Strategy Both Toyota and GM experiences three central roles of marketing in a global strategy. The first role is marketing configuration which involves various marketing activities such as product development, promotion, selection of channel, and marketing research (Magee, 2007). The companies can undertake the activities at the headquarters or disperse them to different divisions. This implies that the two companies have to focus on learning economies. The second role of marketing in global strategy is experiences through the nature and extent of the coordination between marketing activities performed by different divisions in different countries. As a result, the Toyota and GM can effectively fit the marketing activities across the countries. The last role of marketing is the linkage that exists between the firm’s activities (Wale et, al. 2012). The two companies benefits from marketing as it unlocks possibilities to achieving higher competitive advantage by coordinating global activities. International Marketing Strategies Toyota’s global marketing mix comprises of strategies that interact with the target market. The marketing mix is tailored to meet the variations that exist in the global markets. With diverse products, Toyota is able to identify organizational outputs for its customers. The product lines include Toyota and Lexus automobiles, Welcag series and Marine products among others. Toyota has main places that dealer distributes the products globally (Dahlgaard & Dahlgaard-Park, 2006). The two distribution strategies applied is dealership and retailers that enables the company to reach the target market. Toyota also have promotional strategies that covers tactics in marketing communications. The strategy that is market oriented is based on the conditions of the market and competitor’s prices. General Motors have applied strategies that are common to most automotive companies. However, instead of manufacturing and supplying vehicles to specific location or particular consumer, General Motors develops global platforms that attract multiple consumers from different countries (General Motors Corporation, 2016). GM applies a global marketing strategy that sees the whole market as one market. As Tubbs (2009) argues, GM is developing new products that are empowered to meet customer needs. The ‘Find New Roads’ strategy is the new Chevrolets approach to marketing that the company has aligned with the global vision. The strategy also enables GM to rally and be consistent with the brand themes. International Marketing Decisions Toyota has in the past gone through industry breakpoints by implementing a strategic global marketing decision making. The company suffered low growths during 1990’s. However, Toyota has been able to gradually increase its global sales and shifted its brand perceptions from boring to quality and emotion appeal. The company had braver marketing strategies and by using Lexus automobiles, the company has created an emotional appeal (Doz, Santos & Williamson, 2001). Toyota transformed from being sales led to marketing led by increasing its international marketing investment. Success of the company’s care is an evidence of successful and wise international marketing decisions. GM used dealership as the core international marketing strategy for its automobile. However, GM proposed the closing of almost 1,650 dealers by 2014. Despite having a slow pace towards the dealership termination, GM accelerated the terminations during 2009 bankruptcy proceedings (Market Overview, 2012). This decision was driven by adoption of a realistic assumption of the company’s market share, improve pricing, improve the product mix and reduce number of dealership and brands. Segmenting Industrial Markets The industry market segmentation for Toyota includes households and businesses. Toyota has implemented various models to tend for the needs of global consumers. When focusing on households, Toyota captures households with different levels of income. By identifying the target market through market segmentation, Toyota has efficiently marketed their products and has become the top car manufacturer in the world (Pascal, 2007). By having different models for different geodemographic and psychographic market segments, Toyota has been able to satisfy the needs of customers in the segments. As identified earlier, GM has four major industrial market segment; GM international Operations, GM Europe, GM North America and GM South America. The main aim of the industrial market segmentations is for GM to differentiate its prices for maximum competitive advantage. Segmenting industrial market has helped both companies to effectively allocate resources to obtain desirable market response and the achievement of business objectives. Both companies segments their markets depending on the demographic factors, operating variables, and situational factors. The nested approach enables Toyota and General Motors to meet the diverse need of the global consumers. other factors considered by the teo companies is the customer preferences along geographical regions by providing automoives that are geographically specialized. The products are directed to a particular population and bases on price, distribution channels and lifestyle. The segmentation assists the companies to become marketing oriented company. Figure 2: Different ways of segmenting markets Doz, Santos & Williamson (2001): From Global to metanational Organization/technology interface Toyota has structured innovation management and the organization to accelerate innovation. Toyota has fully dedicates innovation team that deals with innovation processes within the company. Moreover, the integration of R&D into the company makes innovation management to be faster and more efficient. The company fosters collaboration between the business departments and an exclusive focus of technology (Jackson, 2009). By allocating innovation teams and relevant departments within a division, Toyota ensures that members get the same information at the same time. Toyota is also able to meet the needs of global customers with the global design and R&D centers. Similarly, GM has a R&D organization that has improved the throughput performance of the current and new manufacturing systems (Beshear & Hayes, 2013). The company has made technical advances, implementation of activities and changes in the organization structure that has resulted to the achievement of various technological milestones. General Motors Organizational Structure-2012 Beshear & Hayes (2013): Racing ahead in innovation Conclusion The rise of new technologies and changing consumer preferences triggers the development of the automobile industry. These forces have resulted to four major technology driven trends in the automotive industry. These trends include autonomous driving, diverse mobility, electrification, and global connectivity. However, Toyota and GM has different ways of adjusting to meet the pressure to keep pace with technological improvements. Toyota gains its manufacturing competitiveness from the speed in which the company responds to the market. The company has a fast and versatile business process and effective decision making that makes it more efficient. Moreover, Toyota has been the world’s most innovative manufacturing firm that portrays high organizational performance through costs, innovation, quality and responsiveness. On the other hand, this report identified that although GM showed a slow response to the demand of new technology as compared to Toyota, the company is at a better position in the new technology areas. GM R&D center plays a critical role in the innovation process after GM realized that the company needed more innovative products to become competitive. Despite the different approached to technological development, GM might overtake Toyota as the largest car manufacture in the world. With an ambitious target, GM forces Toyota to make hard decisions to maintain its global position. References About General Motors | GM.com. 2016, Retrieved from https://www.gm.com/company/about gm.html Beshear, S, & Hayes, L 2013, 'Kentucky: RACING AHEAD IN INNOVATION,' Scientific American, 309, 6, pp. K.1-K.11 Dahlgaard, Jens J. & Dahlgaard-Park, Sue M 2006, “Lean Production, six sigma quality TQM and company culture”, The TQM Magazine, 18(3), 263-281. Dennis, Pascal 2007, Lean production simplified, 2nd edition, New York, NY: Productivity Press. Doz, Y., Santos, J. and Williamson, P. 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