Toyota: Working With Suppliers

Paper Summary:

This paper discusses a proposal for Toyota to participate in an Internet-based marketplace. The paper first discusses Toyota's strengths relative to its competitors and relates that by joining this online venture, Toyota's friendly and conciliatory relationship with its suppliers could be transformed into an adversarial relationship. The paper considers, however, the possibility that Toyota could lose a chance to find a better relationship with new supply companies. The paper then looks at Toyota's opportunity to cut costs in Europe as well as the threat of the company losing its ability to remain competitive in Europe and losing the potential cost-savings of participating on the Internet marketplace. The paper offers recommendations to Toyota and believes that instead of trying to follow an older American model of competition at all costs, Toyota should continue to do what it does best.

Outline:
Summary
Strengths
Weaknesses
Opportunities
Threats
Defend the Option or Recommendation Selected
Summary Comments
Conclusion

From the Paper:

"Toyota treats the suppliers that provide the parts for its cars as partners, not as economic adversaries. In this practice, Toyota's philosophy stands in contrast to its American competitors. Toyota's major American competitors, GM and Ford, have both asked the Japanese automaker to become a part of an Internet-based marketplace that is designed to act as a virtual meeting-place where automakers and the industry's suppliers can do business. This will presumably create more competition and drive down prices at the exchange. Although the American companies are rivals with Toyota, the more companies present the exchange, the greater the chance to create economies of scale. The American companies hope to do business more efficiently and cut costs. Ford and GM are in competition to build the largest online marketplace to achieve greater economies of scale, and both are trying to woo other automakers, particularly Toyota."

Sample of Sources Used:

• "Case Study: Some Different Opinions About Working With Suppliers." 27 Apr 2008.
• Schepp, David. "U.S. Car Makers Fight Back." BBC News. 7 Jan 2003.http://news.bbc.co.uk/1/low/business/2637081.stm

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