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Investment Alternative Benchmarking for Bernard Lester - Case Study Example

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The global automotive industry documents the pressing strategy of players in forming alliances with each other to support growth. The two companies which will be evaluated in this paper namely, Toyota Motor Corporation (Toyota) and Ford Motor Company (Ford) have already faced various decisions regarding the strategic directions they are going to take…
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Investment Alternative Benchmarking for Bernard Lester
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Download file to see previous pages Before 1982, the company is strictly undertaking the production of vehicles while a sales arm named Toyota Motor Sales Company is in charge in marketing its products to end consumers. It should also be noted that there is a clash of culture between the two companies. While Toyota Motor Company prioritizes efficient cost management, the sales arm is concerned with customer satisfaction. Thus, the idea of merger between the two becomes somewhat impossible. However, in 1982 Toyota Motor Company merges with its sale arm forming a 120 billion yen corporation (Toyota in Merger 1982).
In the case of Lester, it should be noted that it is the sales arm of Shang-wa in the United States. Having formed a strategic alliance with each other, both companies are contemplating in combining their resources for their mutual benefit through a merger.
The decision of fusion between the two business organizations has been met by difficulties of how to merge their different cultures. In the end, however, the efforts come into fruition with the emergence of culture focused on efficiency and creativity (Dillon 2006).
Ford Motor Company lags behind Toyota in terms of car sales gaining it the reputation of the third largest automaker in the world. In 2006, the company has been reported to be in discussion for a possible merger with one of its competitor General Motors (Bunkley 2006). However, in the end, the automotive industry saw that this venture failed to materialize because of the lack of strong motivation and benefits which can be derived. Like the real world example from Ford, Lester as well as Shang-wa wants to be acquired by their competitors namely TEC and Avral, respectively. Like General Motors, these acquirers want to beef up their portfolio with companies which have already built a strength of their own.
The failure of the proposed merger between the Ford and General Motors did not change the status quo. Ford still operates and competes with General Motors and vice versa. Both business organizations retain the manufacture and distribution of their product lines as well as exercise autonomy in their decision making.
Step 2.
Toyota has been known in the business world because of its commitment in pursuing manufacturing and operational efficiency. Its quest in finding the most cost efficient manufacturing process is rewarded by its discovery of the lean manufacturing system which makes use of the Just-in-Time inventory system (Dillon 2006). In this manufacturing philosophy, Toyota eliminates wastage or non-value adding processes or resources within its value chain in order to economize. However, it also maintains the quality of its product by ensuring that creativity is not compromised within the manufacturing process. In the Just-in-Time inventory system, cars are manufactured based on consumer demand. Parts are semi-assembled and are finally put together by a team whose members have diverse specialization. Employee empowerment has also been important as Toyota allows their employees to take charge and make their own decision if the need arises. The decision of Toyota to merge with its distribution arm highlights its strategy of pooling resources in order ...Download file to see next pagesRead More
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