2. Location
• HQ’s are in Toyota city in Japan- here key decisions are made
and its financial control.
• Production is located in Japan, Asia, Europe, North America,
South America, Africa and Oceania- the company often set up
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.
• Although based in Japan, Toyota produces most of its cars in
transplants in Georgetown, Kentucky and Burnaston,
Derbyshire.
5. Organisational Structure
• Headquarters: Toyota city, Japan- there is
easy access to Tokyo with its financial
market and excellent communication and
transport links. There are also regional
headquarters.
• Research and Development: Strongest in
Japan but also 7 R&D units/annies outside
Japan in regional markets.
• Production: All over the world (in every
continent)
6.
7. Driving force behind
Toyotas globalisation
• Lowering unit costs by accessing global
markets- this provides savings through
economies of scale.
• Avoiding trade barriers by locating
production in regional markets.
• Meeting the specific needs of customers
by locating in regional markets.
8. POSSIE
• Provides inward investment and creates jobs for
local people.
• Increase incomes and raised living standards among
employees
• Boost exports and help trade balance
• Develop and improve skill levels and expertise
among the workforce.
• Increase spending and create positive multiplier
effect among local economies.
9. NEGGIES
• Exploitation of workforce especially in LEDCS with poor
working conditions, low wages and long hours.
• Environmental pollution (in LEDCS)
• Lack of security with closure of operations as lower cost
locations attract investment elsewhere.
• In many LEDCS jobs are mainly low skilled in labour
intensive industries.
• Competition could leave to the closure of domestic firms.
• Lack of control with key decisions taken overseas at
company HQs.
12. LOCATION
• HQ in Delft, Netherlands
• 338 stores in 40 countries including
Sweden (17), US (38), UK (18)
• Does not show much of a presence in
developing countries
• Location of stores is vitally important as
should be near major roads/ freeways
and/or public transport
13. ORGANISATIONAL
STRUCTURE
• Financial control and strategic decision making is centred in Leiden, close to
Amsterdam.
• Almhult, the birth place of Ikea, has a key role as the companies design
headquarters.
• Nearly 2/3 of suppliers are located in europe.
• Suppliers transport finished products direct to Ikea’s 31 distribution centres.
• In order to minimise environmental impact, the company encourages the use of rail
transport.
• To remain competitive, Ikea has to be very price conscious.
• Ikea is privately held by a foundation, which in turn owns a group that controls the
companies that run Ikea’s individual operations.
• The need to be close to materials is evident in the location of plants in Finland and
Russia.
14. IMPACTS
• Ikea’s activities suggest that its economic and environmental impact is
generally positive.
• The company sets strict rules for its suppliers, proscribing child labour.
• It also tries to ensure that they pay fair wages, encourages the use of eco
friendly railways, rather than road.
• Globally, Ikea directly employs 118000 coworkers, with thousands of
others in supplying companies.
• It purchases its raw materials from more than 50 countries, principally
China, Sweden, Poland, Germany and Italy.
• In 2000, Ikea launched the Ikea way on purchasing home furnishing
products, a three-page ‘code of conduct’ for its 2,000 suppliers, focusing
on working conditions and environmental impacts.
18. Location of Nike’s HQ and
Branch plants
Nike’s global headquarters is located in
Beaverton, Oregon, USA
Nike employs 650,000 contract workers in 700
factories worldwide.
The list includes 124 plants in China, 73 in
Thailand, 35 in South Korea and 34 in
Vietnam.
More than 75% of the workforce is based in
Asia.
19. Organisational
Structure
The company is an example of a ‘vertical’
organisational structure across
international boundaries, characterised by a
high level of subcontracting activity.
This means that there is a strict hierarchy
that creates layers of officials within an
organisation.
Nike does not make any shoes or clothes
itself, it contracts out production to South
Korean and Taiwanese companies.
20. Positive Impacts on LEDCs
Outsourcing creates substantial employment
in Vietnam.
Nike pays higher wages than local companies.
Improves the skills base of the local
population.
The success of the global brand may attract
other TNCs setting off cumulative causation.
Exports are a positive contribution to the
balance of payments.
Sets new standards for indigenous companies.
Contribution to local tax helps pay for new
and improved infrastructure.
21. Negative Impacts on LEDCs
Concerns over the exploitation of cheap
labour and poor working conditions.
Suspicions have been raised over the use of
child labour.
Company image and advertising may help to
undermine national culture.
Concerns about the political influence of
large TNCs.
It is possible for investments to be
transferred to lower cost locations.
22. Positive Impacts on MEDCs
Positive employment impact and stimulus to
the development to high level skills in
design marketing and development in
Beaverton Oregon.
Direct and indirect contribution to local
and national tax base.
23. Negative Impacts on MEDCs
Nike does not manufacture in the US which
leads to indirect loss of jobs and negative
impacts on balance of payments as footwear
is imported.
Trade unions complain over an uneven playing
field because of the big contrast in working
conditions between LEDCs and MEDCs.
