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How does Toyota Prius gain from Globalisation

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Introduction

Globalisation is the growth of a business to a worldwide scale. This allows them to trade anywhere in the world due to advancing technology and greater openness. This has made it easier for firms to buy their supplies from a wider range of businesses and sell their products anywhere in the world. Different governments and businesses have different views; many believe that freer trade between nations will offer prosperity and growth for all countries and businesses. The Toyota Prius is a hybrid electric car, developed and manufactured by Toyota Motor Corporation. The Prius was the first mass produced hybrid vehicle and was first sold in 1997 in Japan. It was later introduced worldwide in 2001. The Prius is sold in more than 40 countries and regions, with its largest markets being those in Japan and North America. Toyota announced in 2007 that it had sold 1 million hybrid vehicles globally, and 757,600 of those were Prius. According to the United States Environmental Protection Agency, the 2008 Prius is the most fuel efficient car sold in the U.S. The UK department for transport also reported the Prius to be one of the least CO2 emitting vehicles on sale in the UK. The Prius has had a global effect as it has reduced CO2 emissions by 4.5 million tonnes as compared with the conventional vehicles they have replaced. Demand for the Prius in 1997 was low, because the product was innovative; Toyota used the creaming/skimming pricing strategy which meant that the price of the product was too high. ...read more.

Middle

The disadvantage with this is the costs will increase in the short term, but in the long term, it may enable customers to become loyal and can lead to advertisement as satisfied customers will tell other people, allowing Toyota to gain a strong reputation. A strong reputation is advantageous for Toyota because according to Porter's 5 forces there is always a constant threat of new entrants and substitutes, a strong brand reputation may make customers brand loyal and hence they will not turn to substitutes allowing Toyota to increase market share, sales and profits. Toyota has overtaken US rival General Motors to become one of the world's biggest carmakers. According to Toyota and GM business figures, Toyota sold 2.348 million vehicles in the first three months of 2007, which is more than that of GM's 2.26. Toyota has enjoyed outstanding sales due to the success of the Prius and has become market leader. Due to Toyota being market leader, it gives them power to be able to bargain with suppliers and gain raw materials cheaper, this is shown as one of Porters 5 forces. They can also benefit from economies of scale, and are able to gain competitive advantage over their competitors as they can spend larger amounts on research and development. By being allocatively efficient, they can produce exactly what customers want, allowing them to be confident that the product will sell. Production of the Prius started in 1997 and currently takes place in Tsutsumi plant in Aichi, Japan. ...read more.

Conclusion

Therefore Toyota can not carry out the cheaper secondary research method and so a large amount of capital investment is necessary. Conclusion Global businesses like Toytoa have a major role in determining future trends in the world economy because they try to make a profit exploring new markets to attract customers and make a profit. When Toyota start making a profit, it can attract other businesses into the market due the to the PSM. Competition increases and businesses try to cut costs leading to the most efficient businesses controlling the market. The larger businesses move and explore other innovative ideas tyring to move to the market in a different direction trying to gain higher profits. This can be shown as a cycle : Appendix 1 - taken from hybridcars.com Manufacturer Toyota Honda Honda Ford Lexus Toyota Model Prius Civic Accord Escape RX 400h Highlander Price $20,875+ $20,650+ $29,990 $26,780+ $49,060 $33,595 - $39,855 MPG (city/hwy) 61/50 48/47 30/37 36/31 31/27 33/28 Safety: brakes, air bags, crash test rating Antilock brakes, two air bags; good/excellent Antilock brakes, three air bags; good Antilock brakes, four air bags; good Antilock brakes, two air bags; good/excellent Antilock brakes with brake assist; front dual-stage airbags; no test ratings yet Front-seat side airbags, 1st, 2nd row head curtain airbags; four-wheel antilock disc brakes with Brake Assist; no test ratings yet Environmental (greenhouse rating) 10/10 10/10 8/10 8/10 9/10 9/10 Performance 76 hp @ 5000 rpm 93 hp @ 5700 rpm 255 hp @ 6000 rpm 133 hp @ 6000 rpm 268 hp @ 5600 rpm 268 hp @ 5600 rpm Release Date 2000 2002 January, 2005 December, 2004 April, 2005 June, 2005 Webliography ?? ?? ?? ?? ...read more.

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