The case details the globalization strategies adopted by one of the world's leadingautomobile majors, the Japan-based Toyota Motor Corporation (Toyota). It examinesthe company's evolution from being Japan's number one automaker to a formidablecompetitor in the global automobile market by 2003. It examines the rationalebehind Toyota's decision to concentrate on global expansion and studies thecompany's various globalization programs, focusing on the localization efforts. Thecase also analyzes the problems faced by the company within Japan and discussesthe steps taken to overcome them. Finally, it examines the results of Toyota'sglobalization strategies and discusses its future prospects in the light of intensifyingcompetition and demand saturation in its core markets, Japan and the US.
FLASHBACK OF TOYOTA
Japans SakichiToyota (Sakichi) diversified from traditional family business of carpentry intohandloom machinery in 1897. Toyota Automatic Loom Works (TALW) founded in 1926 formanufacturing automatic looms. Sakichi invented a loom that stopped automatically when any of the threads snapped. This concept (designing equipment to stop so that defects could be fixedimmediately) formed the basis of the Toyota production system (TPS) and later became a majorfactor in the companys success.In 1933, Sakichi established an automobile department within TALW and the first passenger carprototype was developed in 1935.Toyota established in 1937.Kiichiro Toyoda studied the US automotive industry during visit to Ford. In Japan he customize theFord production system where each process in the assembly line produced only the number of parts needed at the next step on the product line. This system was named Just-in-Time (JIT)Toyota flourished during the second world war by selling truck and buses to the army. The companylaunched its first small car (SA model) in 1947. During this period Toyota went into downsizing and