Obviously, the recent trends in Toyota are basically determined by the influence of globalization on the policy and strategic development of the company. As a result, the management of the production as well as supply chain management are consistently affected by this process, which defines the current situation and further development of the company. It is worthy of mention that Toyota traditionally paid a lot of attention to the main trends in the global market since it was practically always oriented on the international markets since the local, Japanese market could not physically consume such amount of products supplied by Toyota and it could not provide the company with the leading position in global terms.
In this respect, it is particularly important to dwell upon the influence of globalization on the management of the production and its supply chain. Obviously, globalization produces a profound impact on the development of the company and, to a significant extent, defines its further development because Toyota needs to continue its international expansion and develop its production and supply chain worldwide. At the present moment, the company is widely represented in many countries of the world. Toyota has its plants manufacturing and assembling cars not only in countries, which are traditional target markets for its products, such as the US, Australia, South-Eastern Asia, the EU, but it also actively enters markets of other countries of the world, including China, Argentina, Mexico, and others (Volti, 2005). This means that Toyota attempts to develop its production chain worldwide or, to put it more precisely, the company has already realized that the ignorance of the potential of new markets can lead to the negative consequences to the market position of Toyota in the world market. What is meant here is the fact that the company heavily relies on its strategy of international markets expansion. As a result, it needs to localize the production in order to enter new markets and make its products cheaper and more accessible to local customers while importing products from other countries may be quite expensive or, at any rate, importing Toyota’s products from countries where the company traditionally had its plants, to new markets will make their price considerably higher compared to the price of products of the major competitors of the company. In such a way, the company uses the localization of production as one of the major tools that increases effectiveness of its supply chain management.custom essays
In this respect, it is worth mentioning that the process of globalization substantially facilitates Toyota entering new markets, especially those of developing countries. In fact, in the past, there existed numerous financial barriers which prevented Toyota from effective and successful entering markets of other countries, which had its own car manufacturing industry or where competitors had already had a well-developed network of production (Peters, 2002). In such a situation, the company was forced to localize the production in the markets Toyota wanted to enter. In such a way the company could overcome existing financial barriers.
Due to free trade and development of effective supply chain management, Toyota can easily enter new markets and, in such a situation, the company needs a well-developed production chain simply to be represented in a possibly larger number of countries since, because of the geographical distance, it is not always possible to sell its products at adequate price compared to that of competitors (Gitlow, 1997). At the same time, globalization and the elimination of financial barriers resulted in the larger opportunities to develop closer cooperation between different units of Toyota worldwide. Practically, this means that a company can choose relatively freely where and what it can manufacture since, being not bound to the demands of the local fiscal legislation as much as it used to be in the past, Toyota can unite the efforts of its plants situated in different countries to manufacture its cars. As a result, the company can adapt plants to the demands of the local market. For instance, Toyota successfully developed the production of such cars as Toyota Corolla and Toyota Yaris in Europe, while in the US it successfully focused on the production of SUV and 4×4 which were traditionally popular their.
Moreover, nowadays, the company can provide the supply of its products from different countries more effective, due to the lack of financial barriers, to make the manufacturing or assembling of cars in a particular country or region less expansive and more profitable.
At the same time, it is important to underline that the production process is highly dependent on the stable supply chain management and, in this regard, Toyota has achieved probably its largest success. To put it more precisely, Toyota was the company where the Just-in-Time strategy was first developed and successfully implemented. In fact, it is know-how of the company, which has increased the effectiveness of its supply chain management considerably. In fact, the Just-in-Time strategy implies the supply of equipment and materials for the manufacturing of automobiles in the amount that is needed at the moment. In other words, a plant manufacturing automobiles and all its unit receive only the material they need at the moment just in time to produce an item, for instance, an automobile or its part. In such a way, such an organization of the supply chain management provides ample opportunities to save time as all equipment and materials are supplied in time and, what is more, this strategy decreases the costs of production because the company does not need to waste costs on warehouses where equipment and materials that are not needed for the production process at the moment are stocked. In fact, this strategy is applied on all levels of the supply chain management starting from the development of projects of new products to the production and delivery of products to customers.