Toyota Motor Corporation, Ltd.

I. Viewpoint The viewpoint of the CEO of Toyota will be applied.

II. Time Context Present Year

III. Objectives Toyota Motor Corporation’s objective is to identify ways to keep up and adapt with the foreign business cultures to successively expand by at least 10% before 2020.

IV. Statement of the problem Minor Problems: • Strategies to adapt with foreign cultures and anticipate its possible negative effects • While adapting to foreign cultures, Toyota’s products should maintain its products’ quality • Adaptation with the business environment

Major Problem: • Problems in expansion due to issues in foreign culture adaptation

V. Areas of Consideration

| |Finance |Marketing |Production/Operation |
|Strengths |Brand reputation valued at billions |Innovative culture |Industry leader in production and |
| |of dollars |Strong brand portfolio |sales |
| |Strong financial performance |Highly targeted marketing |“Toyota Production System” |
| | |Diversified product range |Has 40 production facilities in more|
| | |E-commerce |than 20 countries and regions |
| | |Promotion events |outside Japan |
| | | |Commitment to lean manufacturing and|
| | | |quality |
|Weaknesses |Recently lost its #1 position in |Toyota offers most of its |Has to continuously produce to |
| |sales volume in the US, falling |brands in US and Japan, where |maintain the production efficiency |
| |behind GM and Ford |as competitors get global | |
| | |efficiency | |
|Opportunities |Differentiated pricing (as location) |“Green” vehicles |New markets or services |
| |Increasing demand |New technology |New models |
|Threats |Economic stability |Increasing fuel prices |New emission standards |
| |Rising raw material prices |Increasing maintenance cost of |Competition in the automotive market|
| | |vehicles | |

VI. Alternative Courses of Action

Problem 1: Strategies to adapt with foreign cultures and anticipate its possible negative effects • Research the existing market channels and suppliers, of consumer preferences and current purchase behavior, and of domestic and foreign rules and regulations of other countries. • Alteration in advertising, marketing, product or service features, etc., should be guided by cultural differences. • Conduct studies and surveys about the countries’ culture before engaging business with them (tradition, beliefs, law)

Problem 2: Maintaining the products’ quality while adapting to different cultures • Experiment and try different approaches on how to achieve and maintain the products’ quality based on their cultures • Set high standards • Institute extensive training • Benchmarking

Problem 3: Adaptation with the business environment • Work faster. Greater opportunities come to organizations that can respond quickly. • Develop adaptive priorities and strategies • Conduct a seminar wherein the cultures and practices of other countries will be discussed.

Major Problem: Problems in expansion due to issues in foreign culture adaptation • Select the right management team • Conduct research on the cultural barriers (location, government, legal, etc) *Solutions for the minor problems are also applicable to the major problem

VII. Evaluation of Alternative Courses of Action

|PROBLEM 1 SOLUTIONS |Advantages |Disadvantages |
|Research the existing market channels and |Familiarity with the consumers’ behaviors |Risky |
|suppliers, of consumer preferences and |Compliance with the law |Costly to adapt the different preferences |
|current purchase behavior, etc. |Knowledge on the existing market | |
|Alteration in advertising, marketing, |New strategies and approaches will be |Changes in the products’ features could |
|product or service features, etc., should |tested and applied |affect its quality |
|be guided by cultural differences. |Innovation of ideas |Trial and error approach will be used to |
| | |check which strategy is more effective |
| | |As a new entrant in other countries’ |
| | |market, it will be difficult to cope with |
| | |the current competitors |
|Conduct studies and surveys about the |Awareness of the current market trend |Costly |
|countries’ culture |Information about the economic status of |Not all surveys are reliable (due to bias |
| |the country |and outliers) |

|PROBLEM 2 SOLUTIONS |Advantages |Disadvantages |
|Experiment and try different approaches on |It will result to many options |Risky |
|how to achieve and maintain the products’ |The results/approaches are tested |Time consuming |
|quality based on their cultures |More choices |Uncertain with the results |
|Set high standards |Improving performance |Workers will be pressured |
| |Encouraging innovation |Problems in attaining the high standard |
| |Reducing risks | |
| |Becoming more sustainable | |
|Institute extensive training |New skills will be utilized within the |Costly |
| |company |No guarantee that sufficient knowledge will be|
| |The workers will be efficient |shared by the trainer |
| | |The different learning speeds of individuals |
| | |who are usually forced to progress at a |
| | |compromise rate |
|Benchmarking |Performance improvement |It increases the diversity of information |
| |Enhancing competitiveness |which much must be monitored by management |
| |Increasing sales |this increases the potential for information |
| | |overload |
| | |It may reduce managerial motivation if they |
| | |are compared with a better resourced rival |
| | |It encourages management to focus on |
| | |increasing the efficiency of their existing |
| | |business instead of developing new lines of |
| | |business. |

|PROBLEM 3 SOLUTIONS |Advantages |Disadvantages |
|Work faster. Greater opportunities come to |Accomplishment of multiple tasks in a short|Possibility of skipping some points |
|organizations that can respond quickly. |period |Questionable quality |
| |Efficient |Did not review the finished task |
| |Meets deadline |Prone to mistakes |
|Develop adaptive priorities and strategies |New ideas |Not all strategies are successful |
| |Performance improvement |Uncertainty |
| |More choices | |
|Conduct a seminar |Awareness and understanding of others’ |Costly |
| |culture and business practices |The time spent away from your actual |
| |A wealth of knowledge will be presented by |business |
| |many speakers at one time in one place |No guarantee that sufficient knowledge will|
| |Can be the source of latest information, |be shared by the speaker |
| |trends, skills and techniques |The chance that the topics may not actively|
| | |help the business, and that the seminar |
| | |will be a waste of time |

|MAJOR PROBLEM SOLLUTIONS |ADVANTAGES |DISADVANTAGES |
|Select the right management team |Assets to the company |New employees need training |
| |Reduced risk |Problem of hiring the right person |
| |Performance improvement |More experience to the job demands higher |
| | |salary |

*Solutions for the minor problems are also applicable to the major problem

VIII. Conclusion

We need drastic change in order to respond to global competition. Maybe it's not just a leadership problem, but (one that is) an overall aspect of the company. The best way to adapt with foreign cultures and anticipate its possible negative effects is to change Toyota’s advertising, marketing, product or service features, etc., as guided by cultural differences. A huge advantage of this is that there will be an innovation of ideas that could help improve Toyota’s quality of service. To maintain the products’ quality while adapting to foreign cultures, setting high standards would reduce the risks of the products having defects. On the other hand, seminars would be a big help to be aware of the other countries’ culture and business practices. Toyota’s problems in expansion due to issues in foreign culture adaptation may be addressed through selecting the right management team. As a matter of fact, the major problem can be solved through the advised solutions for the minor problems.

IX. Recommendation

To reduce Toyota’s risks and cost of changing the advertising, marketing, product or service features, etc., they could outsource researchers from other institutions to study and remedy the possible effects of their plans and actions. They could also improve their products through manufacturing vehicles that are more affordable.