Mitsubishi Motors

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Table of Contents

The diversity of consumer needs
Globalization
Decreased Sustainability

Mitsubishi Motors is a motor vehicle production company based in Tokyo, Japan. It is a large scale industry that has been recognized worldwide. Its first motor vehicle production was in 1917. It was incorporated in 1970 and became a public company in 1988.

It is currently run as a partnership business under the Mitsubishi Family (comprising of Mitsubishi Corporation, Mitsubishi Heavy Industries and the Bank of Tokyo Mitsubishi). Mitsubishi Heavy Industries and Mitsubishi Corporation together own about a 30% shares in Mitsubishi Motors.

Mitsubishi Motors aims at providing quality vehicles to its clients by producing vehicles that are safe as well as eco-compatible without compromising any benefits of convenience. The company currently markets passenger vehicles as well as light commercial trucks in Japan and parts of Asia and North America. The company sells about one million cars annually in more than 160 nations worldwide.

The Lancer, Galant, Eclipse, Outlander, SUVs and trucks, are manufactured at its industrial plants in Asia, Europe, and the United States. Approximately eight models have been reserved solely for sale in Japan. The company has research and development facilities in the United States, Germany, and Japan. Approximately 80% of sales come from outside Japan. Mitsubishi Motors Company also runs a financial services division which is in charge of overseeing the financing of car sales.

Mitsubishi Motors Company is currently under the umbrella of the Mitsubishi Family after Daimler Chrysler‘s stake in MMC was sold to the Mitsubishi Family in 2004. The Mitsubishi Motors Company still maintains a fruitful relationship with Daimler Chrysler in terms of exchange of technological knowhow and marketing strategies.

Mitsubishi Motors Company is a small stakeholder in the global motor vehicle manufacturing industry. It was ranked as the fifth largest Japan based automobile manufacturers and the seventeenth largest worldwide based on production. Currently, Toyota tops this list.

Mitsubishi Motors Company has liaised with other motor vehicle manufacturing companies in order to increase sales and boost exports. These companies include PSA Peugeot Citroën, Colt & Lonsdale, Proton, Volvo and Hyundai which eventually pulled out of partnership with Mitsubishi Motors Company for different reasons.

Mitsubishi Motors Company currently employs a total of 31,003 people globally and has an 8% employee growth rate. In the year 2002, the company recorded net profits of 24.02 billion dollars. This year, Mitsubishi Motors posted a 55 million dollar profit for the period between April-June. Compared to last year, quarterly sales have risen by almost seven percent to 5.5 billion dollars.

Other sectors that have strongly contributed to the success of Mitsubishi Motors Company are the crude oil producers and metal ore manufacturers. The availability of fuel directly affects motor vehicle sales depending on fuel prices and metal production directly impacts the manufacture of cars.

Mitsubishi Motors Company has faced a number of challenges over the years. These challenges have greatly affected production and sales of vehicle brands not only in Japan but around the world. Some of these pressing challenges include globalization, individualization, and increasing competition. These are greatly changing the face of the motor manufacturing industry.

Moreover, the demands for more safety requirements as well as voluntary commitments to the conservation of the environment by industry have contributed to the problems faced by the company. It is important to appreciate the value of different business strategies. This is accomplished by identifying the cause for adopting these strategies (the cause) and the outcome of applying them (the effect). Some of the challenges and their possible solutions are highlighted below.

The diversity of consumer needs

Today’s consumers want products that satisfy their individual needs. They no longer settle for standardized products. In addition, due to growing competition, there is greater emphasis on the cost of the products provided rather than their quality.

It would, therefore, be more ideal for Mitsubishi to adopt a strategy to downsize their target group so as to attract more customers on the basis of product quality. That is, serving the broad needs of fewer clients. One way of achieving this is by shortening the life cycle of products in the market. This will ensure greater variety thus reaching out to the individual needs of consumers. Strategies should also be established to counter the power of the consumer by expanding services so that the clients do not seek for services from rivals.

Globalization

Over the years, there has been an increase in globalization due to the liberalization of markets. This has given Mitsubishi the opportunity to expand its horizons but has also offered the same opportunity to competitors and new players in the market. Currently, Mitsubishi faces great competition from rivals such as Toyota and Hyundai. Competition also means that Mitsubishi must greatly consider the individual tastes of clients.

Standardized products have no room in the current world market. The traditional boundaries of motor industries have also been removed. This has been seen through digitalization which has led to the establishment of horizontal and vertical alliances between companies. Therefore, traditional stakeholders like Mitsubishi have taken a great blow because of this new trend.

The possible solution to this challenge is positioning the company where negative influential forces are weakest. Mitsubishi could greatly benefit by exploiting these changes by creating alliances with potential parties, investing in products that differ from their rivals, scaring off new entrants by elevating the fixed, competitive costs and creating wider product accessibility.

Mitsubishi can also appoint heavy weight teams that will facilitate newer and faster processes. These processes are more efficient in integrating subsystems into new car designs.

Decreased Sustainability

In order to cater to the needs of individual clients, Mitsubishi has had to shorten the lifecycles of its products in reaction to the fast changing demands of its consumers. Currently, the average product life cycle is three years, compared to the eight year cycle a few years ago. This has increased the cost of production of new models over a short duration. Moreover, short cycles do not give products the opportunity to stabilize in the market. This has ultimately led to lower profits for Mitsubishi.

An effective solution to this challenge would be the implementation of a new strategy. One effective strategy would be for Mitsubishi to focus on the broad needs of fewer clients. This is called a tradeoff. Mitsubishi would be able to make profits by supplying a specific group of consumers by focusing primarily on one area of production.

This could be achieved by Mitsubishi focusing more on larger commercial vehicles like trucks, which have a longer cycle span, and greatly reducing the manufacture of smaller family cars. It is also important that Mitsubishi comes up with company activities that reinforce each other. This is known as creating fit. His will prevent competitors from imitating Mitsubishi’s activities because they would be set in such a way that one activity cannot run without another. This way, competition is minimized.

Unfortunately, the value of these strategies has not been appreciated. Tradeoffs have not been openly welcomed. This is because they concentrate on specific areas of the business, reducing the company’s safety in diversity. In addition, establishment of fit may take many years. This may be viewed as a liability because a lot of time and dedication are needed to create this environment.

It is important For the Mitsubishi Motor Company to identify its weak points and come up with sustainable strategies to counter the challenges that they face. If the company does not put the appropriate measures into place, it will no longer be considered one of the great stake holders in the automobile industry in a few years to come.

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