Re: Toyota Eyes India Market, Builds School to Get Edge
Toyota Motor Company is eyeing the Indian auto market (Leeman 2008). The company has therefore decided to build a new plant in this country besides making changes to the nature and size of cars sold to the market. From the meeting which I attended on your behalf, I was able to note down few points that I consider for you to know so as figure out the company’s strategic direction. Firstly, the company has been built a school in the Indian market. The objective of building this school is to make sure that the company raises enough people who competent, talented and understand the company’s culture run the company and therefore enable it achieve its strategic goals within the Indian market. This is also important because it would enable the company to save on the staff recruitment which is usually caused by repetitive recruitment of employees because of the failure of existing employees to meet the company’s objectives.
Toyota’s management has decided to explore the Indian market because of the potential that this market has. Following global economic crisis, the company’s traditional markets like the United States are not proving to be reliable any more. This therefore makes it necessary for the company to explore other markets like India in order to sustain its global sales. India is predominantly a market for small vehicles (Aswathappa 2010). This is the reason why automobile companies like Suzuki Moto Corp and Honda Motor Co. continue to flourish in the market at the expense of Toyota. Suzuki for instance has a 50% market share in the market whereas Toyota’s market share is barely four percent. Indian consumers prefer small cars which also come at a lower price than large cars which are sold to other markets across the globe. The company would therefore come up with cars that effectively address the needs of the market and this would guarantee its success.
The establishment of the Toyota Technical Institute is a very important strategic move by the company to make sure that Indian auto market is fully exploited. This is because the market for vehicles in India has been growing at such a fast pace that companies engaged in the manufacture of these products are running out of professionals to help develop cars and hence meet the demand in the market. Since the market for cars in the country has been increasing with time, company has come up with a very ambitious strategic objective. The company plans to increase its annual sales of vehicles to four hundred thousand by 2015. In 2007, the annual sales by the company were fifty-four thousands (Murphy 2008). This challenging task would only be achieved if the company would be able to bring on board people who understand the company’s strategic goals and also appreciate its culture of hard work and persistence. Basically, this is the reason why the Toyota Technical Training Institute has been established to mould employees who would embrace the company’s vision and strategic goals.
Analyzing the needs of consumers and coming up with vehicles that effectively address these needs is also one of the most important points noted from meeting. Toyota had been used to supplying vehicles to big markets like the United States and China. In these markets, the demand for large vehicles is high as opposed to the small and low-cost vehicles. However, India is a market composed of people who appreciate small and low-cost vehicles. This therefore makes it necessary for Toyota to rethink its strategy as far as its product mix is concerned. The company cannot continue to large vehicles because in this market people only appreciate small vehicles which are affordable to them. This is the main reason why the company has come up with smaller and low-cost vehicles that are appealing to the Indian market.
Work cited
Aswathappa International Business 4E New Delhi: Tata McGraw-Hill Education
Leeman, J.J.A Export Planning Dusseldorf: BoD – Books on Demand, 2010. Print.
Murphy, J., (3 November 2008) Toyota Eyes India Market, Builds School to Get Edge. The wall street journal
