Question

Toyota's global complementation strategy

A) calls for plants to be devoted to the production of vehicles for only the local market.
B) dictates that parts plants be built to supply all of the needs for each vehicle production plant worldwide.
C) requires that a single parts plant, for example, for brakes, export brake components to all of its vehicle assembly plants worldwide.
D) mandates that plants can produce vehicles for export to markets that remain strong when the local market weakens.

Answer 1

Toyota's global complementation strategy is designed to optimize production and distribution by leveraging economies of scale and responding to dynamic comparative advantage, enabling flexibility in manufacturing locations to cater to both local and international markets.

Step-by-step explanation:

The question pertains to Toyota's global complementation strategy, which is integral to its success in international trade and automobile manufacturing.

This strategy can be seen in Toyota's approach to dynamic comparative advantage as the company strategically places its manufacturing and parts plants across various regions to optimize production and distribution. Toyota's strategy does not strictly adhere to any one of the listed options (A, B, C) but operates in a manner closer to option D, balancing between localization and globalization. Plants can produce vehicles not just for the local market but for export to other markets, leveraging the variation in demand across regions.

In the light of international trade, automakers like Toyota are an example of how large factories in different countries benefit from economies of scale, driving down average production costs while offering competition and variety to consumers worldwide. As international competition has increased, especially from East Asian and European manufacturers, American car producers have had to innovate and improve their offerings in response to this competitive pressure.