History Of The Indus Motor Company Commerce Essay

History Of The Indus Motor Company Commerce Essay The assignment has been worked to look into the chosen organisation with regards to its environment effect on Indus Motors for achieving its objective in the diverse industries culture where the organization is based. Indus motor company is a joint venture between Toyota motor corporation, house of habib and Toyota tsusho corporation Japan, for manufacturing, assembling and marketing Toyota vehicles in Pakistan and the neighboring countries since late 80s. The dealership network the IMC has established is the only one which distributes Toyota and Daihatsu vehicles in the country. It was incorporated in Pakistan as a public limited company at commencing stage where as the commercial production took place in 1993 may, the stock exchange of Pakistan quotes the shares of the company Toyota motor corporation and Toyota tsusho corporation possess twenty five percent of the equity, house of habib own the majority shares in the organisation. The production facilities are located in the industrial area near Karachi called Port Qasim of around 100 acres. The current social, economic changes and their impact on Indus Motors Company Ltd A social change refers to the regulation of values, norms and customs of society. As IMC does believe in the customer satisfaction so they try to manufacture the product according to the need of customers. Their targeted market belongs to the upper class of the society. They think that the upper class people perceive the GLI as their status value. IMC believes that people are becoming more price conscious along with the need of car that consume low amount of fuel with high mileage coverage. The other social factors that is impacting a lot is the literacy rate of people is growing due to which people are becoming more quality conscious along with the price consciousness so that IMC is concentrating to improve its quality along with the diminish in the price. Some economics forces are also impacting the current scenario of IMC like as the inflation is increasing day by day the input cost of assembling cars in IMC is also increasing due to the import of CKD unit from Japan. It results in diminish the purchasing power of the people that affect their buying behavior. Due to taxation policy the Honda have the competitive advantage over IMC as it has given tax exemption till 1998 to its customers. Diverse approaches to strategy-making concepts of strategic change, search, choice and implementation Economic and management viewpoint on organization tactic can and should be incorporated. The intermediation hypothesis of the firm and models of market micro structure provide a basis for advancing the integration of management and economics perspectives. In particular, the theory allows for a combination of economic approaches work on competitive strategy with management approaches such as work on the abilities and resources of the organization. The article presents a combined strategy framework based on transaction costs and the intermediation theory of the firm. The impact of globalization on employment markets and practices The recent wave of mergers and acquisitions in the automotive assembly industry itself has triggered a similar round of merger mania in the auto parts segment. One of the more significant developments of recent years has been the transformation of the auto parts business into a separate industry in its own right. One of the more significant developments of recent years has been the transformation of the auto parts business into a separate industry in its own right. Even as the automobile business grows, it is also becoming more competitive. Currently, there is worldwide overcapacity in the industryand this has forced manufacturers to contain and even reduce costs. In the United States, for instance, the average monthly vehicle payment as a percentage of household income has dropped from 12.5 percent in 1980 to only 7.5 percent todaya 40 percent decrease. Emergent theories of corporate strategy and their relevance to IMC In the year 2000, Toyota rolled out its multi purpose vehicle (MUV) Qualis in India that was an instant success. Gradually It introduced Camry, Corolla and later in 2005, Innova. All these models created success saga for Toyota Kirloskar. Notwithstanding of its initial success, Toyota could manage to have meager 5% market share in Indian passenger car market that remained far away from its mission statement to grab 10% market share in Indian passenger car market by 2010. Analysts predicted that unless Toyota would enter into compact car segment, it would unlikely to have that much market share. SWOT, PEST and PESTEL tools and change management to different organizations development and their potential impact on the strategic business THREATS The government tax policies are threat to Indus motors. They have to pay 35% import duty on CKD kits that is imported from Japan. Honda motors are subscribed by 5% tax while Toyota has to pay 30% on its earnings. The major part of diminishing of the production and demand of the products is also due to the law and order situation. Political instability also affects the whole scenario of the automobile industry due to the inconsistency of tax and import duties. The substitute products of the Toyota products like Suzuki are also a big threat to the organization, as the demand for low price vehicles is increasing day by day so that the demand for Suzuki products are becoming more market oriented than Toyota. Due to the inflation and fluctuation in exchange rate also considered as the major threat for diminishing the demand for the companys products. The stern competitions in the higher sector market are also a threat to Indus Motors. OPPORTUNITIES As the political condition of Afghanistan is becoming more stable and the completion of motorways and expansion in the road networks is gaining the high impact on people so that the consumption of commercial vehicles is growing day by day that will lead to an inevitable growth in the transport sector. There is also a chance to expand market of Toyota Hilux in Nepal and Bhutan. According to sources from Indus Motor, if engineering board of Pakistan makes the industry specific deletion policy this will provide an opportunity for the development of vendor industry. WEAKNESSES Indus motor has not yet achieved appropriate economies of scale as compared to its competitors. Indus Motor and Honda Atlas motors are producing the same no of vehicles but Indus Motor gain huge cost. For Indus CKD kits account for 75% of their total Manufacturing cost, where as for Honda CKD kit account for 65% CKD kits cost for Indus is on the average about 25% higher than its competitor Honda Atlas. It is obvious that Indus is producing 5000 vehicles at higher cost as compared to its competitors. Indus Motor Company is producing so much lower units than its capacity as it has the total capacity of 20000 units, but at present they are producing around 5000 units. It means that they are not amortizing their fixed cost in best way. Their dealership network is weak, as they do not own this dealership network. STRENGTHS Its strengths are its location, its latest technology that is considered as no.3 in Asia. As far as its image is concerned in the market it is considered as the market leader within the industry because of its quality, brand loyalty and household product. Its capacity is also its strength that is currently about 20000 units per anum but it can be expanded up to 40000 units per year. Indus Motor Company has a extensive product range, which includes 20 vehicles. Which satisfy each and every segment of market. Its efficient and well-trained labor is also its big strength. Genuine spare parts can be easily available in the market and the resale value of Toyota also considered as its strength. Creative Suggestion System is also strength. New technologies and their impacts on people and process of IMC The kind of technology employed by an organization gives an important edge in terms of quality. Technology is of two types: labor intensive and capital intensive (state-of-the-art technology, for example). In case of Indus Motors, the company has installed capital-intensive technology. They are using conveyer belts to transfer a car during assembling from are station to another station. They have heat exchanger, spray booth, drying tower, etc. For measuring and checking of locally manufactured parts in order to maintain quality standard and to assist vendors in product development, a state-of-the-art Quadrant Measuring Machine was installed in 1997. In 1996, the company acquired new computer technology for the implementation of software and its applications, which provides a centralized database support integration between Manufacturing and Financial systems, and is assisting the company in providing meaningful data in time for management decision making. The impact on the business strategy of the external business environment Because of the continuous change in environment, there is an element of uncertainty in the environment. The environment has become highly complex and dynamic. Keeping this thing in mind, a company must look for a strategic fit between what the environment wants and what the company has to offer, as well as between what the company needs and what the environment can provide. Thats why before an organization begins to formulate strategy, the management must screen the environment and identify external environmental factors, which affect the organization. Importance of customer driven strategies in developing and implementing a successful business strategy Product which company offers is also resource of company. Larger the product mix, greater will be return on sale of product. Indus Motors company has analyzed needs and wants if its customer and has made available a broad product range to suit their need. All the cars in its product range are a beautiful brand of style, economy and technology. Now they are going to increase its product range by introducing Daihatsu Coure in year 2000 that also possess all the qualities, which its all the cars have. The Toyota has entered in the maturity stage of product life cycle and its market share has shrunk from 60% to 41%, but in spite of all this, Toyota is still enjoying brand loyalty and higher returns. This is obvious from the tact that company has earned its. 271.70 million pre-tax profits for the year 1998, and it announce to pay 15% dividend to the shareholders of the Company. The importance of management and leadership in developing and implementing business strategy Every successful business requires effective leadership to fully utilise the skills of staff in order to achieve the aims of the business. This isnt just a matter for larger businesses even if you only employ one or two people you still need to make sure that you make the most of their abilities and aptitudes. This requires a distinct set of management skills and the confidence to carry them out. You have to be able to motivate and develop your team, to communicate well with them and to build a business strategy that allows each individual to perform to the best of their abilities. Use of strategic alliances and joint ventures, and alternative routes to survive, prosper and avoid failure A strategic alliance, broadly defined, is a contractual agreement among firms to cooperate to obtain an objective without regard to the legal or organizational form the alliance takes. The aim of joint venture is progressive manufacture of Toyota vehicles and components parts with an initial annual capacity of 20,000 units expandable to 40000 units or more to meet the requirements and quality standard of the automotive industry for tile Twenty-first Century. Appraise processes by which organizations identify their goals and values Employee involvement can supplement strong corporate cultures to develop innovative organizations. Executives from forty successful companies responded to interviews on the organizations values and involvement practices. Structural equation analysis indicate that effective involvement measured by the use of employee problem solving groups, cooperative interaction, and employee influence was a critical mediating mechanism between people-oriented values and firm performance. These results suggest the complex challenge of developing a successful organization and guides for making an organization both value-driven and productive. Current and likely future demographic trends in the UK and internationally Toyota forcefully long-drawn-out manufacture ability over the history decade well in front of predictable order. Profits on export vehicles finished in Japan have as well be hit by a intensification Japanese yen. Toyota has a near chokehold on the US cross/low-emissions car sell thanks to the redesigned Prius. As the American Big Three thrash regarding to convene the 35-mpg authorization by 2020, Toyota has a beginning start. In late 2009 and early on 2010, on the other hand, Toyota initiate two disconnect but associated recall to a number of vehicle types together with the 2010 Prius that were single-minded by the U.S. general Highway travel protection direction as experience broken down speeding up. The succeeding bring to mind on January 21, 2010 unwavering that the beforehand assumed drivers floor mat issue was not to be answerable; somewhat, a more grave issue concerning the sticking accelerator pedal was at cause. as a result, the total universal digit of cars recalled by Toyot a stand at 9 million vehicles, extrapolative to a price that will go beyond $3 billion USD international. As of February 2010, over 30 lawsuit have been file alongside Toyota concerning accelerator harms. The impact of globalization and international trade on IMC With the globalization of markets, greater foreign competition, and the reduction of barriers to entry, it becomes all the more important to benchmark a companys financial indicators on a worldwide basis. World stock markets have recently witnessed a return to fundamental financial analysis. Globalization brings in new technology. On a selective basis, globalization indeed brings in new technology and opposition to globalization is not tantamount to becoming technologically isolated from the rest of the world. But today, almost no advocate of globalization is calling for selectivity. Importers have a strong financial interest in a globalize economy. But so do exporters dependent on imported parts and machinery. Industrialists with interests in ports, shipping, international warehousing and other aspects of international trade and commerce may also see globalization as beneficial to their sectors of the economy. Social trends and social problems in the UK The automotive industry currently faces huge challenges. The fundamental technological paradigm it relies on, volume production, has become progressively more unprofitable in the face of increasingly segmented niche markets. At the same time it faces increasing regulatory and social pressures to improve both the sustainability of its products and methods of production. The use of more sustainable fuel sources and new types of modular design with built-in recyclables. However, these technologies can only be fully exploited if methods of manufacture change. The book also describes new models of decentralized production, particularly the micro factory retailing (MFR) model, which provide an alternative to volume production and promise to be both more sustainable and more profitable. Patterns of change in social attitudes and their significance for organizations An financial, community, cultural, and emotional-psychological reproductive component that is predictable to serve up, conserve, and raise persons and community and even uphold nation. It is also predictable, through its own strategy, to continue to exist and flourish, cope and conquer, under the best and worst of state of affairs. It is unspecified and predictable by state, civilization, social organizations, and persons to be stable and dependable in the countenance of modify, be it good chance or disaster and complexity. unspecified to be muscular and kind, the flexibility of the relations is frequently taken for decided. In short, it is predictable to be a unwavering, confidential financial and social sanctuary net at all period and beneath all circumstances. In actuality it is certainly often the sole and eventual protection net, both in period of financial enlargement and disaster. The relevancy of business ethics and corporate social responsibility with regards to change The importance of ethics in business is seen all the way into the structural natures of businesses. It is not just a notion that you have; it is in the way a business operates that can show the importance of ethics in your company. The dedication to ethics must come from the highest ranks of the organization. In order to have a principled company, you must have a principled leadership. With the amount of pollution in the world today it is very important for business to be socially responsible in operation. For instance, my company has its own environmental department, which takes care of any environmental issues that may occur in our daily operations Organizational arrangements for supervising ethics and corporate In the procedure of production with the member of staff, the subject was not first and foremost one of principles, other than of two ethical principles in clash, sympathy and apprehension for a beneficiary human being and the principles central response to duplicity. The second govern the consequences because that goodness was matching with the principal ethics of the company concerned with preserving the influence makeup and reliability of the association quite than the individual benefit of the personality in the corporation . managerial behavior towards specific employees might be strong-minded by person decency that is unbreakable by secretarial ethical main beliefs additional anxious with the selfishness of the association than beliefs per se. Relationship between ethics and corporate governance Business ethics and corporate governance have become key factors influencing investment decisions and determining the flows of capital worldwide. In part, this is the result of scandals in both developed and developing countries. However, in a more positive sense, the growing demand for good governance also flows from the lessons learned about how to generate rapid economic growth through market institutions. From this perspective, the emphasis on anti-corruption and good governance is based both in moral standards as well utilitarian considerations of improved market performance. The impact of the increasingly competitive global environment and the needs for innovation, entrepreneurship in organizations All innovation begins with creative ideas . . . We define innovation as the successful implementation of creative ideas within an organization. In this view, creativity by individuals and teams is a starting point for innovation; the first is necessary but not sufficient condition for the second. Booming supervision in the new millennium requires on the rise new method and approaches to outfit the challenge and opportunity of this latest period of globalization. An entrepreneurial move toward is seen by numerous scholars and strategy makers as a main alternative to improve managerial routine in this period. The impression of entrepreneurship is multi-dimensional and moment again vague. different perspective have dissimilar implication for how entrepreneurship is connected to and assist support sustainable development (SD). This initial paper to WREMSD will effort to discover viewpoint from approximately the world on entrepreneurship, administration, and SD. The main goal are to give details diverse perspective on what is destined by the expression entrepreneurship in a universal background and to offer an general idea of SD in next of kin to entrepreneurship. The document argue that it is necessary that investigate and rule improvement completely takes explanation of the cont radictory perspective of entrepreneurship and make unequivocal the exacting viewpoint that they are attractive. No single description of necessity fully capture the idea, but by life form obvious about our sense of the notion and the original assumption, we can development our accepting of entrepreneurship and its associations to SD. Evolution of regulation of business activity The Toyota Industries Group will contribute to compatibility of environmental conservation and economic growth throughout its wide range of business activities, including automobile, industrial equipment, and electronic logistics. The Toyota Industries Group will continue to set challenging targets aimed at further reducing the environmental impact of its business activities, listening carefully to voices of its stakeholders such as customers, and acting in compliance with the letter and spirit of laws and regulations. The Toyota Industries Group will continuously improve its environmental management, placing environmental activities among its highest priorities. The Toyota Industries Group will aim to foster greater communication and teamwork within a wide range of partnerships, including those with customers and suppliers, in order to promote sustainable management of the environment. In addition, the Toyota Industries Group will act as an upstanding corporate citizen, taking an active part in the planning of activities that contribute to various regional communities as well as to our global society Enterprise and corporate concepts At the heart of The Toyota Way is a core belief that our workforce is a critical asset and that all permanent employees should benefit from stable employment. We also believe that our success as a sustainable organization depends on the commitment of employees who understand and work according to The Toyota Way. Employees crossways the industry are empower to think and pick up their behavior in ways that add charge to the selling and get them acknowledgment from their general management. Quality Control Circles or QCC, as it is generally known within the industry, is a motivational implement used by line employees at Toyotas invention vegetation. It is planned to give confidence workers to proactively recognize and respond to harms on the line. Toyota chains long-term employee growth through widespread programmer of universal and practical training courses. It begin at the very initiate of an employees occupation at the corporation with basic preparation about The Toyota Way. preparation courses are obtainable to office staff, as well as recruits in manufacture, retailer and the after sales system. Elements of the implementation process The corporate philosophy, rules set up and attitudes which control the resources usage is the main reason of Toyotas success in the world market. Through its admirable productivity the company has earn its repute in world in a very successful manner. Its basic approach of bettering its products and the way of delivery is customer friendly and driven towards market. Its way of authorizing its manpower is the critical human resource management systematic approach which improves the productivity, the innovation and on going improvement and the engagement of employees which the most likely will result into loyal employees. Where there is more job satisfaction hence for obvious reasons the productivity is precise and desired, in lined with the cost effectiveness. The company possesses a very achieving and profitable workforce in practice thorough out its outlets no matter where in the world. So as its suppliers have benefited from the practices in use where ever they have faced difficulti es. Understand continuous monitoring and improvement techniques Systematic and organized approach is crucial in the implementation, introduction and improvement of project management process which helps to resolve organizational short comings, helps the costs control, improves the shared understanding and more secure outcomes are obtained. With in the motor industry many organizations have decided to involve into software intensive areas and engage into several improvement programs. One of the main issues in such a context is project management for the better way towards success. Gradual approach is presented in this text for the introduction and improvement of project management. The steps are defined which are required to enhance the implementations of project management in software intensive organization and its core projects. The key factors are well been spoken upon success criteria, the ways and tools necessary to achieve better and systematic, global and in practice project management process. Kaizen events have become commonplace at companies that practice lean manufacturing. But these events are only a portion of the complete Kaizen process. Traditionally companies have focused on a project-based path to change. Organizations that work toward a state of constant improvement understand that Kaizen events are a tool that allows them to focus resources and employees on process improvements. By understanding the current process and the future state goals you can implement Kaizen. Creating a corporate culture of continuous improvement will allow you to adapt to a changing marketplace and exceed customer expectations. Establish KPIS and KGIS and scorecard to measure and monitor change within organization Diverse groups usually manage supply chain and logistics for a solitary commerce unit. fairly frequently third party logistic is used for incorporate the a variety of logistic armed forces under one crown. Fierce opposition and increasing client prospect have forced business to go for third party logistics. These collaboration typically achieve over human being vendor, as join up of services underneath one head assure better suppleness, ready efficiency the length of with better client happiness levels and bigger supply chain management, also the most central factor of cheap expenses. Key performance indicators (KPIs) are the full stipulation used to path business objectives. They are distinct within the background of the commerce actions editor and evaluate by Web Sphere Business Monitor. KPIs are shaped base on business goal. A industry objective is an decision-making statement of way in carry of a commercial policy. The industry point is a elevated goal that is experimental, computable, and results-oriented. For industry procedures model, the production objective is translate into a KPI that enable the association to measure some feature of the procedure next to a aim that they describe. Within Web Sphere Business watch, the KPI is compare against genuine results to conclude the level of achievement. A KPI is linked with a exact procedure and is normally represent by a numeric worth. A KPI might have a goal and permissible limits or inferior and higher limits, form a range of presentation that the procedure be supposed to achieve. A KPI can be consideration of as a metric with a objective. An example of a simple KPI is: standard time for answer to a customer question is less than two days. Principles of change and the organizational change process Any business or organization has to change its strategy almost constantly for the sake of competitive in the market with other organization and it is the requirement of todays business. The main factor due to which we need to change our business rapidly is globalization in order to survive. Sometimes technological changes take place on their own but they often they are change or introduced as components of larger strategic changes. Who will be threatened the most by changes is determined by an important aspect of changes technology and it will determine as well. For the success any changes in technology must be matched with the companys overall system or strategy and they should create a management structure to support it. Some companies change through negotiation and rewards to manage to overcome resistance. Other companies resort to handling, or using slight plans such as giving a confrontation organizer a well-known place in the change attempt. A final option is compulsion, which involves punishing people who refuse to accept or using power to ensure their collaboration. Although this method can be helpful when momentum is of the core, it can have lasting unhelpful special effects on the company. Change activities in providing level of assurance with in organization Quality assurance, in its broadest sense, is any action taken to prevent quality problems from occurring. In practice, this means devising systems for carrying out tasks, which directly affect product quality. A simple example of quality assurance is a cooking recipe. A recipe is a system for preparing a particular dish. It describes the ingredients and utensils necessary to prepare the food, the method of cooking it, how to test when it is ready, how to store it, and how to serve it. Cooking to a recipe produces better and more consistent results. And the same applies to using systems in other situations. Systems of various kinds are, of course, already an integral part of all organizations. But in most cases they do not thoroughly address quality as a separate and important issue. This changes when an organization embraces and pursues quality assurance. Quality assurance does not only apply to products. Services, and even non-production activities such as administration and sales, benefit from a quality assurance approach. Implementation of the chance process including resistance of change and practical management aspects Change management is the process, tools and techniques to manage the people-side of busine that will squeeze change as long as they are part of the process ss change to achieve the required business outcome, and to realize that business change effectively within the social infrastructure of the workplace. Market requirement bring evulationary changes in management for good competitor in business today. Now the world is moving in core of employee to empowerment, ownership, and accountability which has changes the automobile industry work force that will squeeze change as long as they are part of the process. Offerings from both the engineering and psychology fields are producing a meeting of thought that is crucial for successful design and accomplishment of business change. In other words, a business must constantly examine its routine, strategy, processes and systems to understand what changes need to be made. Increasing external and internal factors have made this strategy essential for endurance. However, an organization must also appreciate the implication of a new business change on its workers given their culture, values, history and ability for change. It is the front-line employees that ultimately execute on the new day-to-day activities and make the new processes and systems come to life in the business. Conclusion In the end it may conclude that if Indus motor want to survive in this era of Globalization they need to recheck their strategy day by day and they need invention of new ideas or applications for according to market demand. And if they apply the strategies which I recommend or they launch features which I discussed above then they can get more share of the market and compete other companies. They need to do some agreements or strategic alliance with the other companies it may good for