Toyota Motor Corporation

TOYOTA MOTOR CORPORATION

2007

Toyota Motor Corporation

Introduction

Living within an international industry has its benefits and challenges The obvious benefit often comes from the vast possibilities of development within the numerous interlinked markets . The only limits for expansion and growth are the company 's own creativity and capacity Nevertheless , living within an active international industry also has its issues . Globalization has displayed its power within the last decades , creating new markets that emerge from nowhere and influencing large and more powerful economies . Target market changes , the way people

br market their products changes and the overall philosophy of managing a corporation changes along with the growth of these new markets . In short , fluctuations , risks , changes and uncertainties are the defining characteristics of international industries . Nevertheless , true multinationals are those that can survive and thrive through the changes and uncertainties

In this , I am discussing the case of Toyota 's announcements which reflected one of such uncertainties in international industries . In 2006 , the worldwide known auto manufacturer stated that it would recall about 1 million of its new generation vehicles due to a newly discovered technical problem . This is certainly reflecting a poor job of designing and testing the product

Nevertheless , when such things occur , management must strive to regain corporate reputation using various means and programs . Mere apology will not suffice and Toyota is certainly aware of its responsibilities Within efforts to regain corporate reputation and cover for customer 's losses , the company has identified the need for US 925 million as a financial support to regain momentum from the unfortunate issue Cash Generation Possibilities

In such a condition , management of the corporation is demanded to generate the amount of cash required in short amount of time . Below are the cash generation possibilities for Toyota and its evaluation

Account receivables and short-term investments

Companies can gain quick cash from selling receivables to third parties and redeeming their short-term investments . This is a common practice and quite the frequent solution in a `crisis ' like the one happening to Toyota . Nevertheless , it has been revealed that the company cannot rely on current assets (including receivable and short term investments ) to provide them with the needed financing in this matter , because most of them are already committed to existing operations

Sales of corporate asset

In a tight financial situation , companies also used to sell some of their assets in effort to gain a better financial structure in the future . Nevertheless , in the case of Toyota , this is to in not a sound alternative because the amount of needed cash is not sufficient to call for selling corporate assets . We believed that a `softer ' alternative will be sufficient

Enhancing sales from potential markets

Toyota is within a major strategy of repositioning its business to target the Asian market . This is a reaction toward the saturated market of North America , Asia Pacific and Europe and the tremendous development of sales in Toyota 's Asian segment . In to realize the vision Toyota sold most...