Toyota: Dominating Global Automobile Market for Years

The company, by the name Toyota, is among the largest known companies that produce and sell vehicles throughout the world. It has over a long time dominated the automobile market and made large profits at the expense of all the other firms that deal with similar products. There are several things about Toyota Company which are identified and discussed in this report, and all of these are based on the market standings.

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In terms of the market standings, the report overview explains five economic variables that have got influence on the performance level of the Toyota Company in its daily operations. The main economic variables discussed in the scope of this report are currency fluctuations on international operations and how these currency fluctuations are affecting the present day business as well as the future profitability of this firm (Ahmad, 2004). Also, incorporated in the report are the impacts on performance and profitability brought about by technological advancement, the effect of globalization on the international business operations, the reduction of cost through the economies of scale and lastly the domestic and international issues that touch on the labor and wages of the Toyota Company employees.

Above all things, the report has got a recommendation on the path to be taken based on the current economic situation of Toyota Company to address the issue better and prepare the company for a greater business future and appealing outlook. The recommendations I this case are based on the risks associated with the economic variables and through consideration of all the opportunities and weaknesses the Company has as a result of the current financial situation. Toyota Company has been able to get a lot of profits and grow immensely out of becoming so prominent in the world and thus being in a position to carry out automobile businesses with a great reputation than nearly all the other firms. This is because it is flexible enough and makes the highest quality of vehicles whose costs are relatively affordable to the customers. The fame that the company has as well as the reputation it has acquired is one of the greatest strengths that are making the company continue standing out in the automobile market (Deakin, 2014). There are several opportunities in the daily operations of Toyota Company domestically and internationally. One of these opportunities is the enormous growth of this company in terms of automobile productions and sales. This is because it can get into new markets with all the types of automobiles to fit and or suit the preferences of the customers and as a result, it has continued to enjoy the highest competitive advantage against the business rivals.

The other opportunity and strength of Toyota automobile company are that it has good leadership in place and all the dimensions of the organization. With this kind of leadership and the systems used in production, effective production as well as the total quality control, the Toyota Company can open more branches in all the parts of the world and thus this has fostered a great growth of the company from time to time (Deakin, 2014). The views of the customers are listened to and taken seriously so that where there are issues with the company, the problems are ironed out effectively to allow for delivery of the best quality as well as allow room for customer satisfaction in a diverse number of ways. This is all aided by the Toyota Company having the best team of managers in place in all the departments. This has placed more reputation on the automobile company over the years now.

It is essential to understand a few things about the Toyota Company as one of the largest manufacturers of vehicles in the world, and it has achieved this since it started operating in the year 1933. The founder of Toyota Company was Kiichiro Toyoda, and it has got its headquarters based in Tokyo's Toyota City and Aichi. It is predominantly known for the manufacture and sale of vehicles or rather automobiles, but there are other products in which it deals. For example, the Toyota Company is also involved in robot supply to the customers or organizations that require them. Besides, Toyota is a financial service provider to so many customers. Through this diversification, the firm has been able to grow so fast and has continued to maintain enormous performance in the global market due to the high-quality services and products it offers to its customers (Greimel, 2019). Looking at technology and its advancements from time to time, it has played a vital role in the general achievement of Toyota to become the number one Company in automobiles globally and being trusted by many people as a result of improved products. Due to this, the company continues to increase its sales daily, and its profitability keeps on rising by significant percentages.

Despite the fame that Toyota has gained, it has still had to go through a lot to achieve this success. Expanding to the global and international markets was not an easy thing for Toyota to go by but rather a series of trials and failures. For example, producing the automobiles for global sale was not anything easy for Toyota basing this on the fact that the actual production takes place in Japan and then the produced automobile parts get assembled in far countries which include Thailand, South Africa, and Australia among several others. It has failed so many times, and an example was in the year 1970 when no growth in global production took place (Deakin, 2014). This was not only the case with global and or international production of Toyota's automobiles but also on the local production since it remained low until the years of the 1980s and this was the first time this company made ten million vehicles which made it a leading automotive dealer in the whole world. The need to increase the global vehicle productions crossed the minds of Toyota when there were decreased trade relations with it and the customers. It was necessary for this increased production to sustain the competitive advantage.

There has been a massive growth of the Toyota automotive company every time. The brands of vehicles it deals with have continued to increase, and the models have been advanced from time to time. In present times, Toyota can have over fifteen vehicle brands produced and sold locally and globally. Moreover, this organization employs over 340 000 people in the various channels it has all over the world. In other words, it has become a source of employment for many people out there, and it is making good progress as one of the best vehicle manufacturers across the world (Deakin, 2014). It makes all types of vehicles, including cars, buses, luxury cars, trucks, passenger vehicles and so on. Understanding the financial status of the company is also a good thing, and from the records about this company, it has over 25 million dollars profit which is considered 20% rise as per the past data. Their recent financial report indicated that the company recorded an operating profit of $25 million US dollars.

Economic Factors Influencing Profitability and Performance of Toyota Company

There are several economic factors that have been affecting the profitability and the performance of the Toyota Company for a long time now. The impact of these factors has either been positive or negative (Bowen, 2015). They are essential to consider and lay strategies that will reduce their negative impact on the performance of this great company in the future. As stated earlier, listed and discussed down here are the main five economic factors that have influenced the level of profitability and performance of the Toyota Company greatly;

International and Domestic Issues Linked To Wages and Labor

Every business that operates internationally and wants to open more branches employs all the efforts to operate in the areas where the labor is easily available, and at the same time, the wages to the employees are low. The existence of the Toyota automotive company in Japan and the U.S has been challenged by the labor and wage issues in a significant way. In Japan, for example, there are no proper rules and regulations regarding the wages and labor and thus at times the workers of Toyota got mistreated with low wages and working a lot in the production industry (Deakin, 2014). Turning to the US, it has a lot of employees -employer rules and regulations that govern the wages of the employees, and all must adhere to the way they are in favor of the employees. In the US, however, strict laws have led to Toyota's excellent services and quality products while it is a different case for Japan.

Therefore, the unfavorable wage and labor regulations forced the Toyota Company to want to relocate to Mexico, where the labor is available easily and at low costs or rather wages. This migration of the production plant to Mexico has had a high impact on the profitability and performance of the firm because there was low quality of production due to weak laws on labor and wages (Catalan Vidal, 2016). However, the only thing that has made it possible and easy to make profits and perform well in areas where employees are paid well since they work well with the motive to give high-quality automotive products.

Currency Fluctuations and Their Influence on Toyota's International Operations

The international operations of the Toyota Company have also been affected in a big way by the fluctuations of the currency resulting from an imbalance in the exchange rates. The profitability of the Toyota Company has been affected by the changes in the exchange rates (Greimel, 2019). For example, the difference in the value of the Asian currency will consequently affect the profits realized by the company. Increased value of the currency in an outside country like Africa means that when this currency is converted into, for example, the Japanese yen it may lead to no profit for the company. The customers are also affected by the changes in currency exchange rates and this affects their buying behaviors unanimously.

Toyota Company came up with measures to help them deal with the fluctuating currency rates without creating more branches of the business in other parts of the world (Bowen, 2015). The improvement of the quality of their automotive means an increased cost and more profits, therefore. These strategies to deal with the changes and fluctuations in the prices of vehicles and the exchange rates led to a positive impact on the profitability and performance of the company with newer and better brands being introduced in the global and local market.

Globalization on the international business operations

Globalization is the other important variable that has played a vital role and contributed a lot in placing the Toyota Company at the level it is today in terms of profitability and its performance. The Toyota Company has not remained confined to operate just within the localities of the United States and Japan but it has instead spread and opened more branches in other parts of the world like Asia, Australia, Mexico, Africa, and Thailand among others.

Because each of these branches operates differently in its different environment and with a different currency, it has been easy for the Company to grow and realize a lot of profits within a very short time (Greimel, 2019). As a result of the diversification and expansion to various parts of the world, the company has continued to gain a competitive advantage over the other firms dealing with automotive and this is because of the recognition it has and the quality of products which it offers to the customers which give it the highest reputation thus making it one of the leading manufacturers and sellers of automotive in the world.

Cost Reduction by Using Economies of Scale

It is one thing for a company to ca...