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Introduction
During 2008-2009, General Motors and Toyota have experienced sales decline and increase caused by economic crisis and unstable market conditions. Thus, in spite of these problems both companies were able to develop effective marketing strategies and increase sales volume around the world. In GM, and Toyota, multi-domestic production is carried out by import-substitution companies. Even if the auto market is limited to the home country, GM and Toyota adapt products to local needs of international markets. The success of GM is caused by effective marketing strategy aimed to expend its business in Asian and African countries. GM is looking to Chinas booming auto market to drive global sales growth as demand in North America and other developed markets slump (McDonald 2008). Global production involves the production of trucks for the global market by production-centre subsidiaries, and production of passenger cars for the world market. In both cases the car manufacturing technology is transferred from the home country, but as production-centre subsidiaries tend to be large some research activity is carried out there.
Discussion
Similar to GM, Toyota has opened research laboratories in the US, where there is a large supply of university graduates in engineering and auto industry. A two-way transfer of human resources and professional engineers takes place between the host and home countries. In the case of multi-domestic enterprises, Toyotas managers tend to be from the host country because products and services have to be adapted to local needs. For global products like trucks and passenger cars, a high degree of integration is necessary as knowledge is transferred from the home country, so the key posts are filled by home-country employees. When the scale of these companies is large, some managers may be sent to work at the head office in the home country. This structure of business helps Toyota to meet local needs, sustain sales and generate income ( GM Reports 2009).
The difference between GM and Toyota in the ratio of foreign direct investment is very large, even among manufacturing companies. The export ratio of the high FDI is much larger than that of the other groups, indicating that high technology products from international companies like Toyota and GM are highly competitive in the world market. GMs foreign production increases the export of components and the saturation and diffusion of the company brand: the fact of this high export ratio demonstrates that the FDI does not reduce employment in the home country. The ratio of research and development expenditure over sales for GM is much larger than for the other automakers as technology-intensive products are most appropriate for foreign production. In contrast to GM, Toyota, has been able to weather the downturn better because of its strong car line-up, but plans to cut its global sales target for 2008 (Gupta 2008).
The ratio of sales promotion expenditure over sales for the high international companies is much lower than for the other groups the ratio of head office personnel over workers is lower for the international companies, demonstrating scale effects. For GM, the sales growth rate (unconsolidated) is higher than that of the other groups. Foreign production contributed most to the growth of sales. In GM, successful multinational management involves the shift of the core competencies and practices of the parent company to its Japanese firms do not seek profits at once after an investment. This willingness to wait sometimes causes success with foreign partners in Asian countries. Also, Sales in Latin America, Africa and the Middle East rose 17.7 percent, while sales in its Asia-Pacific region grew 14.6 percent, GM said. Sales rose 2.5 percent in Europe (McDonald 2008).
In Toyotas, the success and sales growth is a result of successful HR management and market analysis. In Toyota, the top management team at subsidiaries is a mixture of Japanese expatriates and local managers, irrespective of whether the subsidiary is a joint venture or a wholly owned company. The board of directors is composed of Japanese full-time employees, part-time directors from Tokyo and local part-time managers. The management committee (or a group of departmental heads), responsible to the board, is the actual decision-making team. In Toyota, group decision-making is a very common practice at international subsidiaries and is a direct move of standard Japanese corporate decision-making. In the case of GM, controlling power may sometimes depend on the percentage of shares held, but even when ownership is less than 50 % the US side has controlling power if it provides the main resources or technology. Thus controlling power in GM depends on the number of resources one of the partners provides, not on majority ownership. If there is a serious conflict of interests this power to control is significant.
Toyotas and GMs involves the application of company- and location-specific benefits to increase sales and profit by diversifying the location of trucks and passenger car production. Considers that if a subsidiary company is not making a profit but contributes to an increase in consolidated profit, this local manufacturing facility can still be counted a success. This usually happens when the transfer price from the home country to the host country is high. Usually, marketing success is measured by the profit level of the subsidiary. Total sales for the month were 156,380, and GM sold 15,000 more cars, 11,000 more trucks and 3,000 more crossovers than it did during February (Williams 2009). Overseas manufactures of GM and Toyota is best suited to mass produced products. The products and production facilities of Toyota are designed in the home country and the latter are exported to the host countries. This allows not only economies of scale but also simple control of the production process on the global scale (Gupta 2008).
At Toyota, international marketing orientation helps employees to understand the meaning of working for the company, as Toyota would have them see it, and increases their identification with the job and the brand. In order to produce high-quality cars, Toyotas production equipment and modern automated machines are installed in overseas plants (Williams 2008). In all Toyotas subsidiaries, office workers and their heads of department share an open-plan office, therefore improving communication between colleagues. It is crucial for successful working relations that no differentiation exists between white-collar and blue-collar workers all wear the same uniform, including the director of the plant and the president of the local plant. It is important to note that Toyotas subsidiaries try to protect jobs and do not readily lay off employees. For this reason there are many job seekers for vacant positions, sometimes more than a hundred for one job. Similar to Toyota, GM recognizes that it is hard to establish sophisticated research laboratories or design departments in developing countries, and where the level of schooling is not high it is not as easy to introduce employee participation methods such as quality circles or suggestion systems. Even within the same country there can be differences in the degree of transplantation (although in developing countries these differences tend to be small because successful methods of management have to be applied at all subsidiaries) ( FAW-Toyota sales surge 2008).
For both Toyota and GM, international activities increase in scale and the degree of local procurement rises, expansion work is carried out to adapt products to local specifications. Another common feature of success is that GMs managers try to work only with other American companies and never with local partners. In the USA, managers meet colleagues and subordinates after work for a meal or a drink, but in overseas countries they tend not to do this. In the third world countries they often live in large houses in secure districts that are remote from the homes of their host-nation friends. Last years figure was 51 percent. Asian automakers had 44.6 percent of the market, while European brands had 7.8 percent (Ramsey and Ohnsman 2009). Both Gm and Toyota make their corporate creed clear to all people employed of their foreign affiliates and main phrases are posted on the walls. Market analysis and customers analyses are the main tools which help to remain competitive and increase sales during the economic crisis (Isidore 2008).
Conclusion
In sum, the examples of GM and Toyota depict that effective and efficient marketing strategies can help companies to level difficult market processes and increase sales during the economic crisis. The core of effective management is a balance between local and national production facilities and marketing needs. Technological change is rapid and GM and Toyotas technical managers, rotated every two years, are important agents in the transfer of new production methods to the affiliates. Though, it must be recognized that research activities need high-caliber professionals and considerable resources. Irrespective of the economy, it can be argued that marketing strategies have been successful because of a complex web of related methods of production and the existence of many u skilled workers. Also, such organizational processes as organizational control and market analysis, which reflect the degree of managerial domination, tend to control most affiliates. Both companies become successful by refining their technology and improving the quality of mass products, with the result that many competitors are driven from the market.
Works Cited
GM Reports 156,380 Deliveries in March. 2009. Web.
Gupta, P. GM trails Toyota in 2008 global sales race. Reuters. Web.
FAW-Toyota sales surge 129% in 2008. Web.
Isidore, Ch. Toyota catches GM in global sales.CNN Money. Web.
McDonald, J. GM Sales in China Rose 6% in 2008. Web.
Ramsey, M., Ohnsman, A. U.S. December Auto Sales Dive 36%, Drag Industry to 16-Year Low. Web.
Williams, CH. GM sales fell 45% in March from 2008, but rose 23% from February. Web.
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