I. Introduction (Sector analysis)
Japan is located on the eastern edge of the Asian continent. Notably, it is made up of several surrounding islands. However, its central island is the Honshu that is situated in Japan’s capital city i.e. Tokyo. The country is considered as one that is the most seismically active in the entire globe. (Sansom, 1958, p. 12). The population of Japan as at its 2005 census was one hundred and twenty-seven million people placing it in the tenth position in the world. It should be realized that the 20th-century modernization of Japan that is extensively world class was built out of the manufacturing activities prevalent in the country. Its manufacturing industry is a world leader in terms of lucrative goods ranging from the production of motor vehicles to heavy industries. Therefore, the following article will discuss the automotive sector in Japan. It will mention how it has used the strategies of training or general staffing, production using economies of scale and using or developing new technologies.
B. General sector background
Presently, Japan is the leading producer of automobiles in the world thereby making it one of the largest, as well as, prominent industries of the world. It is a home to the leading automobiles such as Toyota, Nissan, Mitsubishi, and Subaru. Besides, it plays host to other types of motor vehicle manufacturers such as the power sports vehicle manufacturer, Yamaha together with heavy equipment e.g. Komatsu and Kubota. Notably, statistics point out that Japan is one of the top three countries in terms of motor vehicle production surpassing Germany. It made records of producing about thirteen million vehicles annually during the 1990s thus increasing its exports. The industry tremendously rose in the period between 1970 and 1990 consequently overtaking the United States. The Japanese investments have assisted in the growth of the automotive industry in different nations. (During, Oakey & Kauser, 2005, p. 45).
C. Patterns of ownership
The automotive sector of Japan is particularly owned by the eight large motor vehicle manufacturers and a series of affiliated suppliers. With this ownership pattern, they form the strongest corporate sector in the country establishing an essential backbone of the economy. M&A (Mergers and Acquisitions) is also an important phenomenon in the Japanese automotive industry. It is because an extended period has put the Japanese corporations to do things differently. Large companies in Japan have formed several business affiliations in different parts of the world used for the assembly of their automobiles. For instance, Nissan Motors, as well as, the General Motors have consolidated their position in the market through acquisitions and equity financing. (Financier Worldwide, 2016)
D. The importance of the sector to Japan’s economy.
The automotive industry in Japan is a fundamental economic, as well as, industrial force in the globe. It manufactures around sixty million motor vehicles annually and is also responsible for the consumption of almost half of the world’s oil production. The sector has directly employed four million people with much more on an indirect basis. Despite several vast entities experiencing challenges regarding low profitability and also overcapacity, the automotive sector in Japan has maintained its significance and influence in the world. It provides numerous benefits such as good remuneration; it possesses proper linkages with its supplies thereby giving it a large role to play in economic development. Besides, it has an enormous political influence thus having multiple mature markets abroad. Its utilization of economies of scale enables it to propagate mass production able to satisfy its market. (Harvard Business Review, 1984)
E. Key developments in the sector
The changes in time make it exciting to form a part of the automobile sector in Japan as a result of its ever increasing demands. There has been an increase in the demands of customers that are attached to the quality, safety and the reliability of the vehicles produced. Besides, the overcapacity in the world has continued to pile pressure on the sector for the maintenance and the reduction of motor vehicle prices. Significant structural changes have also been witnessed in the sector. This is through the realization of globalization as a result of the formation of business alliances and partnerships with not only the government but also academic institutions. Worth noting is the innovation that these developments have been accompanied with. The industry needs to produce very innovative automobiles to realize higher prospects. (Economywatch.com, 2016)
II. Strategy exploration
A. Strategy definitions
Rosow & Zager (1988) notes that the training procedure as applicable to different entities involves the development, as well as, learning undertaken by the workforce to ensure that their capabilities, competencies and also the skills match for the sustainability of the firm. The strategy of applying economies of scale means the reduction of the whole process of production to only the significant operational components. As a result, a firm would be able to organize its operations in a manner that only the best ones would be used. Through this phenomena, manufacturers have integrated their operations for purposes of competing in the global business arena that is excessively volatile. Lastly, the strategy of developing new technologies revolutionizes an entire industry. Technology is a system that has culminated into automation with the activities that were initially done by humans now being done by robots or just by the press of a button. This has significantly improved the productive quality and quantity of the automobiles.
B. Strategy focus
The strategies of employee training were timely used just when the Japanese manufacturing and industrial sector was just commencing its operations. Essentially, this was fundamental to ensuring that the available jobs and workforce complement each other. The strategy of training increased the comprehension of the business' modules that resonate with the expertise required. Economies of scale, have permitted the elimination of redundant processes thus enabling the integration of the central authority of the entities while including various independent units. To achieve this, the Japanese industry has focused on particular variations in functions, as well as, at individual levels through the articulation of particular visions that are shared by the whole firm. (Pratten, 1988, p. 98). The use of modern technology has unimaginably transformed the process of manufacturing in Japanese industry. This has culminated in many benefits that encompass cost-cutting, creation of speed, efficiency, flexibility and also precision. The strategy has increasingly pushed the growth in this sphere further.
III. Strategy analysis
A. Most significant stakeholder relationships
Secondly, economies of scale would tremendously assist in the specialization of work. It is because an entity would strive to reduce the unnecessary expenditures and to lay out redundant workers. It will also significantly aid in the elimination of work duplication. Lastly, technology has assisted in automation and invention of various software that now perform the tasks that were initially carried out by humans. ("Technology", 2006). The provisions of such solutions for the industries’ stakeholders enables the improvement in the production capacities.
B. Competitive position analysis
a. Delivery of services using the strategies
The application of the above strategies to the automobile industry of Japan would notably enable the efficient delivery of vehicles to every part of the world. This is because they define the principles that underpin the industries' current and also future investments thereby making sure that support is targeted at all the levels of the career. The strategies are adequately responsive to the requirements of different investors in the field. Essentially, to achieve maximum benefit, the approach towards the application of the strategies should note the significance that would promote the communication with primary stakeholders in the industry thereby maximizing on the dissemination of output. Norman (1979) mentions that the inculcation of new technology in processes of manufacturing would deliver high-quality cars. Also, the entire industrial process will be quickened enabling the sector to meet both its domestic and international demand for vehicles.
b. Weaknesses in the strategies
The strategies mentioned above have some weaknesses tied to them. The application of technology has replaced several jobs leading to the alteration of the balance between skilled, as well as, unskilled labor. For instance, a job that would have required the input of ten manual laborers would now be sufficiently replaced by a single machine operator. This would have the effect of widening unemployment levels in the economy. Besides, using technology in the entire industrial process makes the company to rely fully on the machines. Therefore, a breakdown or failure in any part would bring the whole process to a standstill. Lastly, inculcation of technology increases the entry barriers for numerous industrial segments. This is because technology has become an integral part of doing business and as a result, small entities that may not have the capital for implementing the technologies may be deterred from the manufacturing process.
Pratten (1971) writes that the use of economies of scale has often led to overproduction making the estimation of demand difficult. With this, prices would fall and after that the setting in of depression. Because of the excessive productions, the manufacturer will have a heavy reliance on various foreign markets. Such markets may be easily cut in times of war and other crises thereby making the business a risky one. Besides, economies of scale lead to unequal wealth distribution since incomes, as well as, wealth from any country such as Japan will be concentrated in the coffers of large producers. This leads to an unequal wealth and resources distribution thus making the rich richer while the poor more unfortunate. Lastly, economies of scale lead to large-scale production that would make the producer not capable of paying full attention to each detail available in all departments of the entity. As a result, costs always rise because of the workers dishonesty coming from their inefficiency.
Training, on the other hand, can at times be a waste of time and finances. For the training strategy, the entity will spend funds on the materials of training, hiring or promoting individuals to offer the training program together with paying wages to the trainers and trainees in the course of the learning. At times, companies conduct over-training that with time, become excessively stressful leading to stress and consequently a reduction in the performance of the job. Besides, during the training the sessions, the employees involved might lose interest and also become bored in the content that they are learning. With this loss of interest, the retention of this information would not be achieved. This is also the case when employees attend the same training sessions over and over again. Primarily, this may make them tune out and as such they would lose new information that may be added.
c. Potential developments that could change the sector’s outlook
Improving the livelihood of the workers in an entity holds the potential of influencing the entire process in a variety of ways. For instance, vacations, as well as, sick days undertaken by key employees should be figured in the production for purposes of preventing an adverse effect on the whole process of manufacturing. The identification of every working machine parts promotes efficiency and a continuous operation. Proper positioning of the manufacturing equipment may also boost the process of production. Lastly, a smooth operational supply and a properly managed inventory promote the scheduled production.
IV. Conclusion
a. Impacts of the chosen strategies
The chosen strategies mentioned above have the propensity of impacting on the profitability, new business activity and economic growth of the car manufacturers. This is because they will cumulatively lead to the improvement of the processes necessary for boosting the productive capacities of the industry. The application of new technology in the automobile improves the quality of the designs that are produced. In addition, it shortens the time of production thus enabling the entire industry to meet the demand. Lozano (2005) writes that economies of scale have, on the other hand, maximized on the profitability of the industries. This is because they can easily produce the motor vehicles at low production costs and then later sell them at a higher price.
b. Information learned from this paper.
The paper above has been extremely fundamental in passing information surrounding the strategies applicable to various sectors of the automotive industry in Japan. It is interesting how a company combines various processes for the realization of its goals and maximization of its profit capacities. Besides, it has been enumerated that the strategies not only have advantages to them but also weaknesses that if not well checked, could make the industry tumble. Therefore, a combination of these factors is necessary to ensure that the intended goals and aspirations of an entity are achieved.
c. Role of strategy
Strategies such as the ones mentioned above are significant to the operations of the automotive industry thereby providing the direction to be undertaken while at the same measuring the goals. Through the strategies, an evaluation of the daily progress of the car manufacturing activities can be conducted. They can also be used for the assessment of processes and making alterations whenever they are required. Several financial benefits, as well as, non-financial benefits can be accrued from the implementation of the strategies thus leading to a superior performance of the car industry. Therefore, the strategies would be significant for coping and managing the uncertainties that may be experienced in the automotive industries.
References
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