GENERAL MOTORS AND TOYOTA

Analyzing GM and Toyota through Dynamic capabilities framework

[Name if the writer]

Table of Contents

Abstract4

Chapter I: INTRODUCTION5

Introduction5

Background of the study8

Purpose of the study9

CHAPTER II: LITERATURE REVIEW11

Introudction11

Path12

Visions Define Toyota's Path14

Process22

A Climate for Change25

Reconfiguration29

Leverage30

Learning32

Integration33

Toyota motors34

Position43

Enhancing features and technologies of Toyota: -44

CHAPTER III: METHODS48

Research Methods48

Data50

CHAPTER IV: DATA ANALYSIS51

Data Analysis51

Toyota Motor Corporation52

Strengths53

Strong financial performance53

Growing business in Europe54

Global brand55

Weaknesses55

Weak performance in Asia55

Poor performance of 'financial services'56

Opportunities57

Increasing demand for hybrid electric vehicles57

Opportunities in China and India58

Threats60

Rising raw material prices60

Declining demand for light vehicles in US60

Tightening emission standards61

General Motors Corporation63

Strengths63

Weaknesses64

Opportunities65

Threats66

CHAPTER V: CONCLUSION68

Conclusion68

Abstract

Chapter I: INTRODUCTION

Introduction

The purpose of the present paper is to analyze two firms Toyota motors and General Motors through Dynamic Capabilities framework. The focus of study is the overseas production operations of two Japanese and American and American automobile MNEs, Toyota and General Motors (GM), in Thailand and Australia The paper pays particular attention to the differences in firm size and organizational capabilities of these MNEs, as well as the impact of these characteristics on patterns of the firm's adaptive behaviour to certain crises in their local production operations. In international business, much attention has been directed to the international expansion of firms based on their use of resources and dynamic capabilities that have been built up in their home country to create a dynamic advantage over host-country firms (Hymer 1976, Vemon 2001, Bartlett and Ghoshal 1989). More recently, the organizational capabilities and dynamic advantages of Japanese and American and American manufacturing firms (in automobiles, electronics, etc.) have been analyzed as important factors in the establishment of overseas transplants (cf Abo et al. 1994).

The theoretical framework that MNEs apply home-country dynamic advantages in overseas expansion has been useful as a basic tool in analyzing the fundamental issue of the international operations of the firm However, this model, which emphasizes the application of country-specific resources, is often insufficiently capable of explaining the frequently encountered question of why firms from the same home country peruse different development paths and different strategic choices when managing overseas operations. (Fujimoto, 1998, 21-22)

First of all, we need an additional framework to explain the firm-specificity of individual MNEs. The existing literature tends to emphasize country-specific behavioural patterns and the performance of MNEs in general (e.g., advanced versus developing countries, Japan versus Western firms), while de-emphasizing the inter-firm differences of MNEs from the same home country. And yet, it is fairly common to observe significant differences in the local operational patterns of, for example, the two Japanese and American multinational automobile manufacturers, considered in this paper Thus, there is a need for us to turn our attention to firm-specific factors, such as firm size and organizational capabilities. (Fujimoto, 1998, 21-22)

Second, we need to stress the dynamic aspects of the MNEs' organizational capabilities. The commonly employed framework, which seeks to explain the dynamic actions of a local subsidiary by the application of resources developed in home countries, tends to regard local actions as passive responses to local environments and headquarters' policies. The autonomous capability-building processes of the local overseas operations have necessarily received ...