Operations Management - Toyota Corporation In China Coursework

Operations Management - Toyota Corporation In China - Coursework Example China is such market. In the past, the Chinese market was quite attractive for organizations in different industries; the specific market has been very popular especially for firms operating in the manufacturing sector. This market has attracted the interest of Japanese firms, which have been aware of the market’s prospects, mostly because of its size. However, through the years, the terms of operations in the Chinese market have been differentiated. The increase of wages and taxes has reduced the level of profit. Still, the Chinese market is quite important for firms operating in the manufacturing industry. Toyota has entered the Chinese market about 30 years before. Initially, the growth of the firm in the specific market has been impressive. However, gradually, the firm’s performance in China has been declined, a fact which has been mostly related to the failures in the firm’s operational strategy. The recent efforts of the firm to upgrade its operational stra tegy and develop a research and development unit in China are expect to highly benefit the organizational performance offering to the organization a competitive advantage towards its rivals.Introduction Because of the continuous expansion of globalisation, the decisions of firms to expand their activities internationally are highly depended on the perspectives available in regard to business activities in each country. China can be characterized as one of the strongest countries worldwide in terms of its financial perspectives. The last decade, the rapid development of entrepreneurial activities across China has led to the increase of the country’s competitiveness in the global market. At the same time, the fixed exchange rate, which the country’s policy makers have initiated, has further supported the development of the country as a popular destination for businesses of all types (Horch 2009). However, the fixed exchange rate in China has not helped towards the control of inflation, which in 2008 has reached the level of 8.5%, the highest level since 1996 (Rongala 2008). The relationship between the fixed exchange rate and inflation in China explains the following phe nomenon: firms and capital from many countries worldwide have entered the Chinese market in order to enjoy the benefits of the country’s fixed exchange rate policy (Horch 2009). However, through the years, the increase of inflation, which resulted because of the above policy, led to the increase of manufacturing costs across the country (Rongala 2008). As a result, manufacturing cos