Toyotas World Market Share - Case Study Example

Report on TQM Student’s name Institution of Learning TABLE OF CONTENTS 1.0 Introduction 3 2.0 A brief History of Toyota Corporation 4 3.0 Toyota’s world market share 5 3.1United States of America Market 5 3.2 European Market 5 3.3 Australian market 6 3.4 Toyota Qatar 6 4.0 Conclusion 12 5.0 References 13 1.0 Introduction In the modern day world, Middle East has become one of the regions where business has been booming. Many business enterprises have been set up which has resulted in infrastructure development and other economic and social development. One of countries enjoying this experience is Qatar. This is a monarchy state where no elections are held to elect the head of state or government. Instead, it is hereditary where the preceding Emir chooses who amongst his family members should succeed him. The economy of Qatar is mainly dependent on oil and natural gas that are mined in different parts of the country. These resources have made Qatar the wealthiest country in the world in terms of gross domestic product. This country has been voted severally as one of the best to do business. The government has set friendly requirements for investors as a way of promoting investors to come and invest in the country. Today, Qatar has a population of around two million people. However, out of the two million, local population represents about a quarter of that population. This is an illustration that this country is a haven for people of diverse culture and backgrounds. Some of the well known brands to have set up their business in Qatar is the Toyota Corporation from Japan. 2.0 A brief History of Toyota Corporation Toyota is an automobile company from Japan that was founded in 1933 by Kiichiro Toyoda. According to Shimokawa (2010), the company rose from humble beginnings, and two years after it began its operations, the company availed to market its first twenty vehicles. He has observed that this was the beginning of good times of this infant company. In the subsequent years, the number of vehicles produced increased. Furthermore, the company diversified its operations to include trucks, cars and buses. He says that, in 1937, Toyota company was incorporated a move which meant that it could receive a financial boost from the Japanese government. After several years of operations in Japan, the company’s management decided it was time to spread its operations in the world market. As a result, in the 1960s, the company established a new plant in the United States of America. A move to the United States made sure that the company was open to foreign direct investment. From this point on, the company has never looked back, which has resulted in the production of numerous car models than any other automobile company in the world today. 3.0 Toyota’s world market share 3.1United States of America Market Toyota’s products in the United States have been performing well since the corporation opened its operations. Casson (2011) is of the view that, by 1993, there were eleven factories in the United States of America. He says that this was an indication that the market was responding well and that the demand for cars was increasing. As at 2004, he had observed that the market share of Toyota cars stood at 20.6%, which was a rise from 1999 when the market share stood at 15.3%. According to him, sales volume has continued to go up year in a year out a situation that has tightened the grip on the Unites States of America market share. 3.2 European Market The opening of the United States plant provided an opportunity for the company to contemplate opening other branches in the world. According to Mababaya (2002) opening of new plants outside Japan was a calculated move aimed at increasing its market share in the world. He suggests that in Europe for instance the company has opened more than ten plants that are producing different models of its cars product. Some of these plants are located in both the eastern and western parts of Europe. Some of the country's housing these plants include France, United Kingdom, Poland and Czech Republic. According to him, the Toyota market share in the European continent by 2010 was slightly above twenty five percent. This was a huge improvement from the year 2000 when the market share stood at 4.4 %. 3.3 Australian market To increase its market share in Australia, Toyota has established the Altona Plant in the Southern part of Australia. However, unlike other plants in the world, the Altona plant has been set up to produce electric powered cars for this region and other neighboring countries. According to Wimmer (2012) Toyota’s share market in Australian market has been on the rise prior to the formation of the Altona plant. He says that the production of cars in this plant has helped the company dominate this market in great depth. He has observed that the market share of Toyota as of 2010 stood at 32.6%. In the other markets, especially Africa and Asian markets, the country has a major foothold compared to other car makers in those regions. Czinkota (2009) points out that, in the Sub-Saharan Africa for instance; Toyota has remained the market leader in terms of sales volume. He has observed that most of the vehicles sold in these regions are affordable to the majority of the middle class society, and therefore, the high number of sales. 3.4 Toyota Qatar In the contemporary Qatar, Toyota products are sold through Abdullah Abdulghani & Bros. Co. W.L.L which is the only authorized dealer. Therefore, any activities that Toyota has to conduct have to be done through Abdullah Abdulghani& Bros. Co. W.L.L. This company has been in existence since 1958. It was founded by three brothers who include, Abdullah Abdulghani Nasser, Abduljaleel Abdulghani Nasser and Abdulghani Abdulghani Nasser. The company’s cooperation with Toyota is stretched back to 1964 when the two companies signed a memorandum of understanding. This laid the foundation of Toyota’s presence in Qatar and in the Middle East at large. Wright (2001) is of the view that, in any business enterprises, the hardest task is to retain loyal customers rather than making new ones. It is because of this notion that many companies across the globe have been working hard to provide services that will make them retain and make new clients. New businesses are coming up, and therefore, the owners of the old businesses cannot afford to sit back and watch as others catch up with them. Toyota Qatar has witnesses an influx of new models from different parts of the world into its market. Some of the new models introduced by the competitors tend to be cheap compared to what they are selling. As a result, the company has been engaging in making special offers for selected models of cars. In this case, most of these vehicles are usually the ones that take a long time before they are sold. For instance, selling a Toyota Saloon may take a short time before customers comes for it. However, Land Cruiser may take a long time to sell. As a result, the company has been embarking on making special offers on these vehicles during certain periods of the year. This has ensured that customers can get their preferred Toyota car models at a competitive price. As a result, the company has continued to dominate the Qatari’s car market. The number of cars sold yearly has been going up all the years it has been in operations. According to Kaoru (2010), Toyota’s market share in the country and the region has increased rapidly since the company began offering cars at a discounted price. Another initiative adopted by the Toyota Qatar has been to offer free after sale service to their customers at an agreed time frame. Shimokawa (2010) has observed that after sale service has made many companies have a wide customer base. He says that free after sale service is an indication that the company is committed to ensuring that the goods it sells to its clients are of good quality and serviceable. Toyota Qatar has a policy whereby customers are given free after sale services for a period of two years. Since Qatar is a country with good and well developed infrastructure, it has been taking long for customers to bring back their cars for service. However, just because the company has offered to provide the free after sale service to such customers, they remain committed and loyal to the company. As a result, when such people dispose off their models, they normally go back to Toyota Qatar to get a new vehicle rather than go to another dealer whom they are not sure of the quality of their cars. Offering free after sale service to their customers has gone a long way in cementing its position as a market leader in car sales in Qatar and Toyota products in the region, as well. Toyota Qatar has adopted a policy through which its customers can acquire their cars on credit. This initiative has been made possible through the collaboration of Toyota Qatar and different commercial banks operating in Qatar. Under this agreement, a customer identifies his or her preferred car model after which he or she secures financial assistance from the bank. Most of the customers are workers whose salaries are channeled through these banks. As a result, the bank pays Toyota Qatar the amount required for such a car while the bank is left deducting the amount from the client salary. This initiative has worked very well for all parties. As a result, the number of car owners in Qatar has continued to sour with Toyota Qatar accounting for the highest number of cars sold per year. This initiative has not only benefited the Toyota Qatar company, but also the financial institutions offering loans to their clients because of the interest they earn on such loans that they lend to their customers. Furthermore, the company has been running various promotions and competitions where individual customers win fantastic prizes including a brand new car. The main aim of carrying out such competitions is to encourage many people to purchase their vehicles. While doing this, the sales volumes go up because a customer is of the view that he or she might win the car. However, the company has always remained cautious on when the car should be won. It is important to note that, the company is profit minded, and therefore, cannot allow a person to win the car when they have not realized their sales target. It is for this reason that the company always postpone the dates when the final draw is conducted. This is a calculated idea to make sure that the company does not operate at a loss in any given time. The company objective is to make more profits and will therefore, not give out the coveted prize before they can make the targeted profits. Another initiative adopted by the Toyota Qatar has to provide various Toyota models in the market. In the modern day Qatar, Toyota has introduced various models aimed at capturing different categories of its clients. This is an initiative began in the past when the country oil reserves were discovered. As a result of this oil, different classes of people emerged in the society, which meant that each class of people would have been comfortable with a particular model of cars. According to Casson (2011), in the modern day world, the preference for cars is different between the youth and the aged in the society. He has observed that a majority of the youths would go for flashy cars while the aged are comfortable with how cars are by the time they buy them. From the ancient times, this has worked well for Toyota Qatar because a majority of people has been frequenting their shops because they are aware that they will get their preferred models there. In an attempt to provide their clients with the best deals in the market, Toyota Qatar has been providing their clients with one year free insurance cover. This means that customers can enjoy one year without paying a cent to the insurer. This move has helped the company record continued growth in terms of sale volume, because not many of her competitors have been making use of this application and its concepts. Insurance for cars is an expensive affair, and therefore, whenever a company opts to pay for its client’s insurance covers for one year, then this becomes a motivating factor amongst potential clients. In addition, Toyota Qatar has been opening car wash centers where clients can have their cars cleaned. The ability of this company to set up high tech car washing centers has worked to its benefit. This is because as customers are attended to, they get a chance to look at other models available in the market. As a result, a customer may decide to have an impulse buying. This has resulted in more people opting to use their cleaning service because it is located near their shops. For many years, this has been the trend and has resulted in the company maintaining her dominance in the automotive sector in Qatar and the world at large. In the past few years, Toyota Qatar took a bold step and introduced a department that dealt with car rentals. This move though slow at the beginning has become a booming business in Qatar. It has managed to rival other existing rental cars. The advantage Toyota Qatar has had over other companies is that it rents its own cars, whereas other companies have to buy rental cars even from Toyota Qatar itself. As a result, clients have been having a first hand experience on the quality of cars Toyota Qatar is dealing with in its business. Such people who hire these cars have turned out to be major buyers of their cars. As a result of car rental business, Toyota Qatar has recorded significant growth in sales volume across the country. In the recent past, there has been a move aimed at opening more shops in the country. The Abdullah Abdulghani & Bros. Co. W.L.L the sole dealer of Toyota cars in Qatar has for many years since its inception been located in Doha. However, with competition increasing, the company has zeroed in on expanding its presence in different towns, in Qatar. As a result, it is able to reach out to many customers living outside Doha. This move has worked well because the new branches have recorded commendable sales, which have helped the carmaker maintain her grip on the Qatari market. 4.0 Conclusion Toyota Qatar has managed to withstand stiff competition from other car dealers in the country for a very long time. This is an illustration that effective and efficient leadership can play a big role in promoting a product in the market. In order to address the different age groups in the society, the company has illustrated that it is there to serve all people in the society. This has made it remain the market leader in this market. Toyota Qatar has also illustrated that offering free services to customers can make a company win a lot of clients in the market. Free insurance for one year may not be an expensive affair for such a company, but since other companies have not initiated such an idea, this company has won the hearts of many Qataris. 5.0 References Casson, M. (2011). Multinationals and World Trade: Vertical Integration and the Division of Labour in the World Industries. New York: Routledge. Czinkota, M. (2009). Emerging Trends, Threats and Opportunities in International Marketing: What Executive Needs to Know? New York: Business Expert Press, LLC. Kaoru, A. (2010). Japan and the Contemporary Middle East. New York: Routledge. Mababaya, M. (2002). The Role of Multinational Companies in the Middle East: The Case of Saudi Arabia. London: Universal-Publishers. Shimokawa, K. (2010). Japan and the Global Automotive Industry. New York: Cambridge University Press. Wimmer, E. (2012). Motoring the Future: VW and Toyota Vying for Pole Position. New York: Palgrave MacMillan. Wright, W. (2001). The Political Economy of Middle East Peace: The Impact of Competing Trade Agendas. New York: Routledge. Read More