Posted: May 3rd, 2023

Toyota Motor Corporation Assignment

Toyota Motor Corporation has invested significantly in its foreign activities. The motivations for the foreign activities of Toyota includes taking advantage of the market opportunities. The company has the desire to increase their operations internationally to capitalize on the available market opportunities (Alkemade, et al., 2015). The automaker will significant market opportunities including the demand for products in the foreign market, changes in trends that supports products in the foreign operations, and the ability to gain market share in less competitive foreign markets. For example, Toyota’s capability to compete better in the emerging markets pushes their efforts increase the foreign activities (Miyakawa, 2017). Thus, capitalizing on the emerging markets is a huge driver for the foreign expansion plans of the company.
Another motivation for the foreign activities of Toyota is the diversifying of risks. The automaker is ready to diverse the risks of its business operations rather than investing in the local business only (Talebi, Tajeddin, Rastgar, & Emami, 2017). Companies usually becomes immune to the adjustments in purchasing trends for every market and they are less influenced by the external factors that affects the consumer behavior and the purchase of the products. Further, the economies of scale is a huge driver for foreign activities at Toyota (McQuillan, & Sharkey Scott, 2015). The productions of many units of automobiles would help to economize the distribution network of the company. The economies of scale advantage helps Toyota to product the cars at cheaper costs in certain markets because of low wages, favorable legislations, and flexibility among others.
Other motivations for foreign expansion of Toyota are the proactive and reactive reasons. The proactive reasons refers to the anticipation of changes in the business environment. For example, Toyota would be proactive in seeking increased profits because of pressure in products in the local market (Leković and Marić, 2017). The company could benefit from sales expansion potential. Toyota understands that its customers are global and there is a need to expand their business internationally rather than focus on the domestic market (Gbadegeshin, 2018). The approach helps the company to achieve increase sales through the capturing of new international market prospects and segments (Wu, et al., 2016). The desire for sales expansion is a huge incentive for exploiting the various markets because of the expansion of the consumer segments.
Toyota Motor might also seeking uniqueness and exclusivity. lnternational expansion of the business gives the company exclusive information about the foreign markets and consumers (Peces Prieto, & Trillo Holgado, 2019). Foreign activities and investments also guarantees the exclusivity of the market, which have not been exploited. Also, the international expansion could also be promoted by the drive to enhance the prestigious corporate image and brand of the company (Bouncken, Muench, & Kraus, 2015). The drive to obtain scarce resources such as low-cost workers and technological innovation also motivates the company to expand their activities into the foreign markets.
ln terms of reactive reasons, overproduction and competitive strikes inspires Toyota to expand their foreign activities. Toyota has also been responding to the customer demands in the foreign markets. Alternatively, Toyota Motor Corporation has been investing in foreign markets as a strategic decision to fight competitors to defense their market share (Chhotray, Sivertsson, & Tell, 2018). When a competing automaker expands into a foreign market, Toyota is expected to respond to protect their brand reputation and performance across the world.
To sum up, the management of Toyota Motor Corporation makes the decision to engage in foreign activities based on these motivations and determine if the reasons would be profitable to the marketing of their products and increasing profitability. The international markets have the potential to yield higher levels of profitability than the local markets. lt is possible to exploit the foreign markets because of having similar habits and consumption habits. The foreign markets are part of the emerging nations with strong economic potential.
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