Toyota Company: Factors Of Success, Capabilities, And Gov'T Support

Toyota founded in 1933 under the leadership of Kiichiro Toyoda, son of the founder of Toyoda automatic loom works ventured into the automobile business, after the second world war, the Japanese government implemented an industrial development plan with other larger firms. This guidance which is also known as "Gyosei Shyido" gave sight for Toyota into licensing, tax, permits and technological for the global market. Providing cheaper alternatives for selected industries and in this case, the automobile industry. Toyota Motors adopted a Keiretsu structure in its governance, coupled with the famously known for the lean and flexible approach introduced by Taiichi Ohno that witness the growth of Toyota to become the world's leader in automobile manufacturing in volume. Toyota also remains strict in the family ownership of the corporation partnered with external executives to enhance the brand's capabilities.

One of Toyota's strategy as observed by Professor Hugh Patrick (Director, Centre of Japanese economy and Business) in 1980, "Toyota exported more than one-third of its production to foreign countries without having any factories outside of Japan. " This was then further explained by Chester Dawson (Editor of business week): "In 1989 because of the stagnancy of Toyota in the lower range automobile models in order to compete with the more luxurious car brands such as BMW and Mercedes Benz, Toyota came out with Lexus, targeting the middle-income population. In the recent years, the Wall Street journal reported that Lexus has been recognized as a more popular brand surpassing Mercedes Benz. This is done by a similar latecomer strategy, leveraging on both Nissan and Honda's (Acura) versions of differentiation into the higher income range group. Witnessing the success of these groups, Toyota invested heavily into Lexus, more than a Billion USD and 6 years of research effort into producing the first Lexus. "

Toyota also targeted the Chinese market in both productions and in sales which till recently remain the main market for sales of more than a million units each year. (Reuters, 2015)Toyota's globalization strategy also relies heavily on their centralized management and the use of experienced staff and senior employees, Toyota entered the European market in 1990 to hold on to the European horizon and also the promotion of vertical integration. Toyota also built a specific car model for the European market and further noticed by Chen (2009) that also observe Toyota to be attracted to the market size, and potential of growth in a given market.

The key capabilities of Toyota lies in the production system which emphasizes on reducing waste and lean manufacturing process. The concept of "Jidoka" (automation with a human touch) and Just in time also serves as the basic philosophy of the production system in Toyota which impacted the global automobile market, which many automobile manufacturers are fond of learning and quoted "The world-class production system that changed the world".