Filed under: Products and services, Management, Consumer experience, Competitive strategy, General Motors (GM), Marketing and advertising, Toyota Motor Corp. (TM)
Despite a weak economic environment, Japanese automaker Toyota Motor Corp. (NYSE: TM) is continuing its strong competition with rival General Motors Corp. (NYSE: GM) for the title of the world’s largest automaker. The auto industry competition has become even stronger as new rivals appear in China, Russia, South America and other regions. In its attempt to claim sole dominance of the auto world, Toyota plans to gain ground in new markets by focusing on finding more efficient methods to build its automobiles.
One example of Toyota trying to think “outside the box,” can be illustrated by a training practice put in place at the automaker’s training center located inside its Motomachi assembly complex. The company has been having some workers using golf balls in order to exercise and make their fingers more flexible. A part of the training involves workers using their concentration to make two balls they hold in each hand roll in opposite directions. Sounds a tiny crazy, but the practice is designed to improve their skills on tasks regarding the assembly line of vehicles they build.
This is all aimed at accomplishing Toyota’s plan of global domination. One thing that Toyota is aware of, and trying to improve upon, is its ability to run efficient operations in countries outside of Japan. Consider this… Toyota currently operates plants in 27 countries, with plans to build in even more locations. Where the potential trouble comes into play is the fact that key management jobs in each country are held entirely by Japanese executives who decide all the company’s major operations and strategic plans.
Katsuaki Watanabe, Toyota’s president, believes that it is “extremely important to have the same common Toyota Way infiltrated to employees in all corners of the world.” However, he sees it imperative that those plans should have their own independence as “each corner of the world, in each region, there are inherent characteristics that need to be respected.”
Toyota announced last year it plans to hit a target of 9.85 million vehicles sales worldwide in 2008, up 5% from last year, but is smart enough to realize that their possible weakness could be maximizing potential from its foreign managers.
Under this context, the Japanese automaker wants to extend the company’s success and operating principles in other countries and allow more leadership control to these factories at the same time. Foreign managers were asked by Watanabe to estimate which tasks they can deal with on their own, which they have the ability to accomplish with help from Japan’s executive, and which areas are still needed to be kept under observation by Japanese officials.
This month many workers from different Toyota plants took part in training required for jobs. Helped by interpreters and videos, the workers learned, for example, how to bend their knees and spray a water gun across a clear panel of Plexiglas during their work jobs in a plant’s paint shop.
Watanabe stated that the company’s experience in the United Says showed that Toyota could not simply force workers in other countries to embrace Japanese practices. Time was also a key improvement in Toyota’s strategy as “what took us 20 years is now concentrated down to five years.”
Earnings results for the past few months showed an improved performance in the company’s products. With this new strategy and its ambitious plans to defeat competition, it looks to be just a matter of time before Toyota beats GM to become the biggest automaker in global sales.
Eliza Popescu is a financial writer for the on the web investment advisory service Investor’s Observer.
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