MGT2311 Business Environment Assignment Sample

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MGT2311 Business Environment Assignment

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Yip’s Model of Toyota

To reap the rewards of globalisation, corporate leaders throughout the world must know when to pull the trigger on global strategy drivers based on current industry conditions (Basu, 2017). Industry globalisation influences the usage of global strategy drivers in different ways (market, cost, government and competitive).

Yip’s Model of Globalisation Drivers

(Source: Clarke, Sheffield and Akehurst, 2020)

The Yip’s drivers for Toyota are as follows:

Market Globalization Drivers

  • Global customers
  • Common customer needs
  • Transferable marketing
  • Global channels
  • Lead countries

A variety of factors have contributed to Toyota’s rise as a worldwide automotive company. Toyota brothers Sakichi and Kiichiro were essential in Toyota’s early days, while Fujio Cho was a key figure in the company’s latter years as it developed its worldwide ambitions. Others have been more influential than others in the process of globalisation. In emerging nations, in particular, the desire for vehicle ownership has contributed to cultural uniformity (Basu, 2017). Car ownership has become a status symbol for the middle class in countries like China, India, and Brazil, making these countries attractive markets for Toyota. Manufacturing operations in low-cost nations, as well as joint ventures with other manufacturers that shared substantial parts across product lines, were key factors in Toyota’s success, as were the economies of scale (Nkomo, 2019). Toyota decided to consolidate these functions in its worldwide operations in its third globalisation initiative, despite the fact that technological advancements had some impact (Yusoofet al., 2016). Deregulation and the reduction of trade barriers aren’t mentioned in the case study, but they had a significant impact on how Toyota entered the Chinese market by forming alliances and joint ventures with other companies. International competition appears to be a major factor in the decision-making process. An ambition to compete at Ford’s level became instilled in the DNA of Toyota through Kiichiro Toyota’s experience there. Its newest stated goal is to overtake General Motors as the world’s largest automaker.

Cost Globalization Drivers

  • Steep Experience Curve
  • Economies of scale
  • Country Comparative Advantages
  • Decreasing communication costs
  • Decreasing transportation costs

As a result, Toyota’s generic strategy is a blend of both the cost-leadership and broad differentiation generic strategies. To be a cost leader, a company must reduce its operating costs and pricing. As an alternative, Toyota must focus on growing its business and product distinctiveness in order to maintain its competitive edge under the broad differentiation generic approach (Cortez and Penacerrada, 2010). Toyota’s global reach is bolstered by the use of these basic techniques.

Government Globalization Drivers

  • Compatible technical standards
  • Favourable trade policies
  • Common marketing regulations
  • Host government concern
  • Government-owned competitors& customers

Development in infrastructure and technology, as well as the generation of new commercial opportunities and cultural advancements, are all facilitated by foreign direct investment (FDI), which many developing nations rely on as a driving factor in their efforts to become more globally integrated (Cardamone, 2017). Export processing zones and free trade zones are required in low-income countries to attract FDI. Countries in these regions focus on the benefits of FDI while overlooking the societal costs, like as pollution. Inadequate working conditions, low pay, and poor waste management are just a few of the issues that plague most export processing facilities (Agusta, 2015).

Competitive Globalization Drivers

  • High exports imports
  • Independence of countries
  • KB Competitors from different continents
  • Competitors globalized

Key competitors of Toyota include “BayerischeMotoren Werke AG,”“Chrysler Group LLC,”“Daimler AG,”“Ford Motor Co.,”“General Motors Company” and “Honda Motor Company” (Liu and Hsu, 2016). Toyota’s R&D efforts, particularly in the areas of environmentally friendly car technologies, vehicle safety, and information technology, are some of the finest strategic advantages. Diverse production and assembly facilities are combining in order to become more efficient and to remain relevant in the face of fierce competition brought on by significant technological advancements (Bhattacheryay, 2021). Another change has taken place in the car parts sector, which was previously part of the parent company’s operation. Toyota, for example, uses just-in-time stock management, which is more efficient and less expensive than traditional techniques of stock management. In light of the growth of technology, the global financial crisis, and the rising demand for automobiles, automobile firms must be creative and cost-effective (Morgan and Liker, 2020).


Agusta, A., 2015. Regionalization of Japanese MNCs in Asia: The Case Study of Toyota (Doctoral dissertation, Universitas Gadjah Mada).

Basu, S., 2017. Corporate purpose: Why it matters more than strategy. Routledge.

Bhattacheryay, S., 2021. Multinational working capital management a study on Toyota Motor Corporation. International Journal of Finance & Economics.

Cardamone, C., 2017. Outcomes of FDI in Mississippi: The Cases of Nissan and Toyota.

Clarke, P., Sheffield, D. and Akehurst, S., 2020. Personality predictors of yips and choking susceptibility. Frontiers in psychology10, p.2784.

Cortez, M.A.A. and Penacerrada, N.T., 2010. Is it beneficial to incur environmental cost? A case study of Toyota motors corporation, Japan. Journal of International Business Research9, p.113.

Liu, K. and Hsu, H., 2016. A study of worldwide patent strength of competitors on advanced driver assistance system. JPO2598, p.1486.

Morgan, J.M. and Liker, J.K., 2020. The Toyota product development system: integrating people, process, and technology. Productivity press.

Nkomo, T., 2019. Analysis of Toyota Motor Corporation.

Yusoof, S., Iylia, F., MNSR, H., Zamziba, N. and Toriry, S., 2016. Relationship Between Economic, Political and Technology Factors: Case Study on Toyota Company. International Journal of Academic Research in Public Policy and Governace3(1), pp.53-58.


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