Reference no: EM132915709

In January 2004, leading global automobile company and Japan's number one automaker, Toyota Motor Corporation (Toyota), replaced Ford Motors (Ford), as the world's second largest automobile manufacturer; Ford had been in that spot for over seven decades. In 2003, Toyota sold 6.78 million vehicles worldwide while Ford's worldwide sales amounted to 6.72 million vehicles (General Motors, the world's largest car manufacturer sold 8.60 million vehicles). According to reports, while Toyota's market share in the US increased from 10.4% in 2002 to 11.2% in 2003, Ford's declined from 21.5% to 20.8% during the same period. Reaching the No.2 slot was a major achievement for Toyota, which had begun as a spinning and weaving company in 1918. Ford was reportedly plagued by high labor costs, quality-control problems, lack of new designs and innovations, and a weak economy during the early 21st century, which made it vulnerable to competition. Toyota, aided by its new product offerings and strong financial muscle had successfully used this scenario to surpass Ford and affect a dramatic increase in its sales figures. In November 2003, Toyota announced its financial results for the half-year ended September 30, 2003. The company reported a 23% increase in net income (as compared to the corresponding period of the previous year) to $4.4 billion on revenues of $69.7 billion. This took Toyota way ahead of World's top three automobile makers (at that time) by sales, General Motors (GM), Ford Motors (Ford) and Daimler Chrysler. Its market capitalization of $110 billion (on November 05, 2003) was more than the combined market capitalization of these three players. Given the fact that in 2003, these top three companies were struggling to maintain their sales and profitability targets, Toyota's performance was termed remarkable by industry observers. Toyota had emerged as a formidable player in almost all the major automobile markets in the world. Interestingly, one of its strongest markets was the US, the world's largest automobile market and the home turf of Ford and GM. Toyota had emerged as a strong foreign player in Europe as well, with a 4.4% market share. In China, which the company had identified as a strategic market for growth in the early 21st century, it had a 1.5% market share. he other major markets in which the company was fast strengthening its presence were South America, Southwest Asia, Southeast Asia and Africa. Back home in Japan, it enjoyed a market share of over 43%. Analysts attributed Toyota's growing sales across the world to its aggressive globalization efforts that began in the mid-1990s. In June 1995, Toyota announced the 'New Global Business Plan,' aimed at advancing localization (of production) and increasing imports (through collaboration with foreign automobile companies) over a three-year period. A major objective of this plan was to increase Toyota's offshore production capacity to 2 million units by 1998. As part of the localization efforts, Toyota focused on increasing overseas production significantly by establishing new plants and expanding the capacity of the existing plants. Apart from this short-term global business plan, Toyota also came up with a long-term global business vision in June 1996, named the 'Global Vision 2005.' The major components of "Global Vision 2005"were, asserting a competitive edge in technology and accelerating globalization, while sustaining market leadership in Japan, by reclaiming its above 40% market share. As part of its globalization efforts, the company focused more on increasing the production of automobiles in the areas where they were sold... The Second Phase of Globalization Cho decided to focus more on localization - he believed that by doing so, Toyota would be able to provide its customers with the products they needed, where they needed them. This was expected to help build mutually benefiting, long-term relationships with local suppliers and fulfill Toyota's commitments to local labor and communities. Cho defined globalization as 'global localization.' Therefore, besides focusing on increasing the number of manufacturing centers and expanding the sales networks worldwide, Toyota also focused on localizing design, development and purchasing in every region and country... The 2010 Global Vision In April 2002, Toyota announced another corporate strategy to boost its globalization efforts. This initiative, termed the '2010 Global Vision' was aimed at achieving a 15% market share (from the prevailing 10%) of the global automobile market by early 2010, exceeding the 14.2% market share held by the leader GM. The theme of the new vision was 'Innovation into the Future,' which focused on four key components: Recycling Based Society; Age of Information Technology; Development of Motorization on a Global Sale; and Diverse Society By mid-2003, Toyota was present in almost all the major segments of the automobile market that included small cars, luxury sedans, full-sized pickup trucks, SUVs, small trucks and crossover vehicles. According to reports, while global vehicle production increased by 3.3 times since the early 1960s, Toyota's production had increased by 38 times. As a result of its localization initiatives, Toyota had 45 manufacturing plants in 26 countries and regions by this time, and sold vehicles in 160 countries

Q1. Using different models discussed in class comment on standardization vs. adaptation approach that Toyota has adopted over the decade.