Toyota
Toyota: A Transnational Case Study
Toyota is one of the worlds leading car manufacturers and is the third largest in the world. Although based in Japan, Toyota produces most of its cars in its transplants in Georgetown, Kentucky, and Burnaston, Derbyshire. Toyota is a typical transnational corporation who understand that considerable gains can be made by locating manufacturing plants outside their country of origin. Toyota expanded to Europe in 1992 in order to achieve the benefits associated with establishing a manufacturing base in another country.
Transnational corporations search out locations for their plants outside their original country because they can overcome costs such as transport and duties on imports and exports. Transnational corporations are the most important force causing changes in global economic activity. Companies often use transplants for routine assembly work which is known as 'backend work '. This allows the main company base to focus closely on the research and development aspect of the industry. This is the higher paid 'front end work '.
A company often sets up a transplant in an area where the raw materials required for the manufacture of their products can be found. This saves transportation costs and the company can avoid import/export tariffs.
One of the main reasons for companies setting up transplants is to gain a better understanding of the local market. It is beneficial for a company to manufacture the products in the country where the majority of them are sold. This ensures that local needs can be accounted for, and the product can be adapted according to what people in the market want. Another reason for setting up transplants nearer to the market for the product is to 'compete and co-operate ' with rival companies. Healthy competition is good for the company because it encourages them to improve their products and learn from the rival company 's mistakes.
This is true of many electronics
Toyota is one of the worlds leading car manufacturers and is the third largest in the world. Although based in Japan, Toyota produces most of its cars in its transplants in Georgetown, Kentucky, and Burnaston, Derbyshire. Toyota is a typical transnational corporation who understand that considerable gains can be made by locating manufacturing plants outside their country of origin. Toyota expanded to Europe in 1992 in order to achieve the benefits associated with establishing a manufacturing base in another country.
Transnational corporations search out locations for their plants outside their original country because they can overcome costs such as transport and duties on imports and exports. Transnational corporations are the most important force causing changes in global economic activity. Companies often use transplants for routine assembly work which is known as 'backend work '. This allows the main company base to focus closely on the research and development aspect of the industry. This is the higher paid 'front end work '.
A company often sets up a transplant in an area where the raw materials required for the manufacture of their products can be found. This saves transportation costs and the company can avoid import/export tariffs.
One of the main reasons for companies setting up transplants is to gain a better understanding of the local market. It is beneficial for a company to manufacture the products in the country where the majority of them are sold. This ensures that local needs can be accounted for, and the product can be adapted according to what people in the market want. Another reason for setting up transplants nearer to the market for the product is to 'compete and co-operate ' with rival companies. Healthy competition is good for the company because it encourages them to improve their products and learn from the rival company 's mistakes.
This is true of many electronics
Bibliography: 'Toyota at Burnaston ' sheet. 'Toyota comes to town ' Video 'The Japanese are coming ' Geography review www.bbc.co.uk/news Fig 2 adapted from model on www.kesgrave.suffolk.sch.uk/Curric/geog/linkmult.html