RUNNING HEAD: THE CASE OF BUILDING WORLD CAR
1. Discuss the strategies implemented by the Toyota and Honda to achieve greater efficiency in car production.
One of the major strategy implemented by the Toyota to achieve greater efficiency is lean production system and continuous improvement process i.e. kaizen which is popular in terms of eliminating the waste in the different stage of manufacturing system by empowering employees and by developing smooth relationship with that of suppliers and manufacturers. On the other hand the key strategy implemented by the Honda for greater efficiency is economies of scale and cost leadership strategy.
According to H. Tri and L. Hai “the mission statement of the Honda is try to maintain a global point of view, with the dedication to supply the highest quality products at a reasonable price for worldwide customer satisfaction. Moreover, taking new challenges with the pursuit of initiative, technology and quality, Honda is pursuing their 2010 vision of striving to be a company society wants to exist through creating new value, globalization, and commitment for the future.”
As mentioned in the case, “for the first time, Toyota is creating a system that will give it the capability to manage the car production levels in Japan and the United States. It is moving towards a global manufacturing system that will enable it to enhance manufacturing efficiency by the fine-tuning global production levels on a quarterly basis in response to economic conditions in different markets.”
2. How do the automobile companies plan to simultaneously manage risk and gain efficiencies?
The major automobile company like Honda, Toyota and Ford is planning to design and then produce the car in one place and sold them globally. Japanese car makers especially Honda and Toyota are able to minimize the risk of increasing gas price by manufacturing the fuel- efficient, reliable well-made, small cars than their American and European counterparts. Beside this high steel prices and shortages of steel is forcing the automakers to look for the outsourcing of the resources and auto parts from the rapidly developing economies like China and India. In addition to this, today the auto industry or auto manufacturer is bearing huge cost in order to tailor the car models and need of the different consumers to different market. Therefore, Toyota and Honda are sharply curtailing development costs by maximizing the use of assembly plants, and preserving the assembly line efficiencies adopting the lean production system.
Automobile industry no matter what the country of its origin faces tremendous technological and market uncertainties’ risk which means introducing the new technology can be risky in terms of marketability of the product due to the requirement of huge investment. Beside these, manufacturing an automobile is a capital intensive project which has long and risky product cycles. Not only these but also automakers have to follow heavy government regulations and they are affected by globalization. “Globalization and industry consolidation are redefining automotive competitiveness. Companies now have access to markets around the world, giving them more options for vehicles production. For example Ford, Toyota and Honda has operations all over the world.”(Berry I.). But gradually auto industry now understands the need of the customers and individual manufacturing giant are now developing their unique market positioning to gain the sustainable competitive advantages. For example “GM and Ford sell vehicles with higher mileage in Europe and Asia that they do in the U.S. Ford’s Chinese vehicle fleet is one of the most well positioned to meet the new Chinese fuel economy standards for 2008. While fleets at GM, Nissan, Daimler Chrysler, and VW all required more than a 10 percent increase in fuel economy, Fords fleet would meet the new standard with only a 2 percent improvement”.
3. Discuss how the car companies use national differences to gain a strategic advantage in the global car industry
Today Japanese automakers especially Honda and Toyota are manufacturing highly fuel efficient lightweight car. Not only this but also they are highly concerned about environment. North America, Europe and Japan all are utilizing their own distinctive talents and core competencies to penetrate the market and gain market share. For example a Japanese car maker, Toyota is pursuing a both cost leadership and differentiation strategy to achieve the economies of scale. Because of their ability to successfully combine the cost leadership strategy and differentiation strategy, they are able be the most efficient automaker of the world. Both Honda and Toyota are able to differentiate themselves from their American and European counterparts in terms of design and quality.
Because of the recent change in the economic environment globally now the auto makers throughout the world are investing heavily in the research and development to cater the unique need of the specific customers scattered around the world. Now the auto industry realized that they cannot generalize the need of the customers and sell the traditional kind of car in traditional ways. Rather they have to uniquely defined the special need of the certain group of customers and design and produce the unique car to cater that particular need of the customers.
After the Japanese auto makers came to the United States they built huge manufacturing capacity in U.S. and their globally popular production tactic promptly became a kind of quality standard for the entire auto industry of the world including U.S. automotive industry. “These practices went well beyond the just-in-time (JIT) delivery of parts to a plant and included all aspects of lean manufacturing. The transplanted Japanese automakers, with their lean focus, realized that their success depended on developing a local supply base, which meant sharing with U.S. suppliers the innovative manufacturing-management practices and technologies that made similar plants so competitive in Japan.” (Jeffrey K. Liker and Yen-Chun Wu)
References:
Phatak, Bhagat & Kashlak, International Management, 2nd ed., McGraw-Hill Irwin, 2009
ReplyDeleteThis article is amazingly helpful and intersting,Thanks for sharing such an informational article with us.
keep updating.....
fire extinguisher mounting bracket
Thank you so much for such article that is full of interesting and helpful information.Used Audi A3 Cars For Sale
ReplyDeleteJapanese cars are excellent in quality Used Honda Odyssey Cars For Sale
ReplyDeletenice one Used Suzuki Swift Cars For Sale
ReplyDeleteNice blog, very interesting to read
ReplyDeletecloud based erp software in india
erp companies in hyderabad
erp software in hyderabad
Great article.Used Volvo S60 Cars For Sale
ReplyDeleteinformative blog Used Honda HRV Cars For Sale
ReplyDeleteknowledgeable.Used Volvo S60 Cars For Sale
ReplyDeletejust talking about it is cool.Used Honda Odyssey Cars For Sale
ReplyDelete